Nestle SA Reg Shs. Ser. B Spons (ADR) (OTCMKTS:NSRGY) finally closed at the end of the last trading session with a loss of only 0.61% but the implication of the intraday price action from the longer term perspective was much bigger. The stock was viciously rejected from the higher levels, very close to the 52 week high around $79.99 and the daily candle took the form of a Graveyard Doji with a huge upper shadow. The bearish implication is obvious from the name of the candle pattern itself. The volume of the day at 493,000 was higher than the daily average of 378,000.
The backfire that Maggie Noodles faced in the Indian market hasn’t affected the ambitions of Nestle SA Reg Shs. Ser. B Spons (ADR)(OTCMKTS:NSRGY) by an inch. As per the reports, Nestle has decided to expand its noodle line and beverage factory in the Malaysian market. It has invested a total of CHF 87 million for the same purpose in Malaysia.
Insights of This Investment Decision
Malaysia is considered as one of the largest markets for Nestle in the world. To make sure that the investment doesn’t go bad, it has put the money in Shah Alam, the city where Nestle has its largest manufacturing site in Malaysia. Almost 50% of company’s workforce in Malaysia works at the same site.
Nestle has made a total investment of CHF 66 million on the newly opened factory, which is the eighth property of the company in Malaysia. It has always received excellent support from the Malaysian market, which has prompted the company to expand its product line here. As the lifestyle of people in Malaysia continues to change, Nestle has noticed increasing demand of Milo, Nestlé Omega Plus and Nescafé in the country. Reports claim that the newly established factory will primarily focus on developing these drinks and distribute them in the Malaysian market.
Along with these drinks, Nestle has also decided to expand the production and distribution of Maggie Noodles in the Malaysian market. Maggie as a product doesn’t need any introduction. In Malaysia, Nestle sells over 1.7 million single packs of Maggie noodles every day. As the market is inching higher day-by-day, it has also decided to invest about CHF 21 million to enhance the production of new Maggie Noodles line called Maggi Curry Noodles.
The senior management of the company is confident that this investment will take Nestle to newer heights in Malaysian market in the coming months.
