Nestlé Announces It’s Shutting Down Its Factory
Nestlé is closing down its only factory in Myanmar due to worsening regional conflict.
Business is more than business when it comes to chocolate and politics. They are both complex and layered, they can be sweet or bitter, and they are sometimes in the middle of battles. Recently, politics made food distributor and producer, Nestlé (also famous for chocolate), have to leave the country of Myanmar due to the deteriorating political environment. Nestlé is more than just a big company there, it is an employer and helps with financial strength.
But, according to CNN, Nestlé’s sole factory in Myanmar is leaving the country’s largest city of Yangon. Nestlé will look into a more sustainable business model amid Myanmar’s growing political strife. Since a military takeover drove out the country’s democratically elected leader in 2021, Myanmar has been plagued by violence and instability.
Since the coup started, thousands have died across the country, and there are serious shortages of food, fuel, and other necessities due to the collapse of the economy. However, Nestlé said that even though it is removing the factory from the country, it will continue to distribute its food from other places like Thailand, Malaysia, and the Philippines.
Many companies, like Nestlé, have already left the country due to a military coup in 2021 when its democratic president was ousted. Violence and strife have ravaged the country so badly that companies no longer want to have a presence there, due to putting workers in harm and appearing to support a political nightmare. The entire economy has collapsed, people are starving, and there is a shortage of basic supplies.
Nestlé says it will continue to support as many of its soon-to-be-former employees as the company exits the country. Companies like Kiran Saki, Total Energies, and Chevron have vacated the country within the last two years. Nestlé is resetting and figuring out a new way to help continue to have a sustainable presence–meaning it is physically leaving and figuring out how to distribute from afar.
Nestlé is a Swiss-based company and said it would cease all operations in Myanmar after the changeover to civilian control in 2013. Nestlé created the neighborhood unit; the factory produces things like instant coffee. A total of 138 people work there together.
The military declared on February 1 that the state of emergency would be extended by another six months. The declaration functions as the official justification for granting the armed forces the authority to assume control of the government, effectively delaying the next general election.
Under the current situation, business conditions in Myanmar have gotten worse. Businesses working in the nation have had difficulty locating enough foreign currency to pay for imports due to tougher currency restrictions. Chocolate is not just the only product that Nestlé produces and distributes. It also produces and distributes many brands. These are only a few: Gerber, Perrier, Toll House, Carnation, Haagen-Dazs, and Friskies.
Around the world, food production companies like Nestlé are under stress from political strife, failing economic environments, and climate change. Creating food under this stress is difficult, as the company must become integrated into the country. When the country fails, the companies that call it home can as well.
