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A R500 million investment projects have been launched in Babelegi, Hammanskraal-north of Pretoria today. The projects were opened by the Minister of Trade and Industry Dr Rob Davies and Global Chief Executive Officer (CEO) of Nestlé Paul Bulcke. The projects include the construction of a 16 000 square metre factory for the manufacture of Milo and Cheerios breakfast cereals and the addition of new production lines for the manufacture of Maggi Noodles.

Nestlé has been granted approval in accordance with Section 12 I Tax Allowance Programme of the Income Tax Act. Minister Davies has approved the tax allowance deduction for nestle of R168 million for Nestle in terms of their investment and training needs.

The 12 I Tax Allowance Programme allowance is geared towards providing investment support in new manufacturing assets and training to employees involved in such projects

Speaking at the launch of the projects, Minister Davies said that South Africa and the rest of the African continent have a significant role to play in food security around the world and in many food deficient countries.

He said Agro-processing is one of the three main focuses identified by African Trade Ministers and that the continent can take a lead in deepening productive capacity towards securing food for the continent and the rest of the world.

Davies urged African businesses to add more value to their agricultural products and to create more capacity in the regulatory environment so that more value added products can be manufactured in Africa.

“This investment is one of the several investment opportunities that has taken place recently in South Africa by a global multinational company in the Agro-processing area and its reflecting the fact that we as South African government are trying to position ourselves and deepening the presence of agro-processing in our country and companies,” added Minister Davies.

The Babelegi investment alone has created more than 130 permanent jobs within the two factories and 300 indirect jobs over a 20 month period during the construction phase.

Nestle’ Global Chief Executive Officer Paul Bulcke said the company has a long history in South Africa and Africa, and that consumers and their employees holds a very important key role in their products and services.

“About 40% of our products are sold in emerging economies and are expected to grow up to 50% in 2020. We have been present on the African continent for more than hundred years, and we see great growth opportunities for the future,” said Bulcke.

Trade and Industry’s (the dti’s) 12 I Tax Incentive Programme grant has approved 14 projects to the investment value of R22.4 billion 2011/12. The projects will create almost five thousand direct and indirect jobs. These approved projects are all within the priority sectors identified in the Industrial Policy Action Plan (IPAP); eight are in the chemical sector, two in agro processing sector, two in the paper and pulp sector, and two in the bio-fuel sector.