Factories Rejoice As Nestle Resumes Maggi Production In India

Earlier this month, markets saw a riot of consumers lining up to purchase their favorite instant noodles that had made the comeback of the year. Maggi had deserted the food aisles for over 12 weeks and this overwhelming response was anticipated.

Resuming Work

But Nestle India is on a roll and has some more good news for the country. The company announced today that it has resumed production of the noodles at all five facilities in India. Starting from its Tahliwal plant in Himachal Pradesh, Nestle has re-oiled its wheels at plants in Nanjangud (Karnataka), Moga (Punjab) Bicholim (Goa) and Tahliwal and Pantnagar in Himachal Pradesh as well.

“The company has resumed manufacturing of Maggi noodles at its Tahliwal (Himachal Pradesh) factory. With this, the company has resumed manufacture of Maggi noodles at all five noodle manufacturing facilities,” Nestle stated in a BSE filing.

Financial Stings

Maggi faced a painful ban by FSSAI in June. The ban followed exceeding levels of lead and MSG in the noodles.

Following the ban, Nestle India had to take various measures that included burning approximately INR 320 crore worth of noodles. The total financial blow bared by the company mounted up to a colossal INR 450 crore!

In addition to the losses faced, the Consumer Affairs Ministry had also filed a class action suit against Nestle India, seeking about INR 640 crore in damages for alleged unfair trade practices, false labeling and misleading advertisements.  

Catching Up

Clamoring beneath the ban, Nestle India on October 29 reported 60.1% regression in net profit at INR 124.20 crore for the third quarter that ended in September 2015.

Its net sales also fell down to 32.12% to INR 1,736.20 crore from INR 2,557.80 crore of the July-September quarter in 2014. It had reported a standalone loss of Rs 64.40 crore in the second quarter (April-June) for the first time in last 15 years due to the ban on Maggi.

But the re-launch of this loved product shows that the company will make up for these fiscal looses in no time. This was evident by the response Snapdeal’s Maggi flash sale received. The website sold 60,000 kits within 5 minutes!