May 17, 2020

Nestle opens new global procurement hub in Malaysia

Nestle supply chain
Nestle procurement
Procurement
James Henderson
2 min
Nestle has opened a new procurement hub in Malaysia
Nestle has selected Malaysia as one of its three sites across the world for its global procurement hub, it has been announced at a press conference.

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Nestle has selected Malaysia as one of its three sites across the world for its global procurement hub, it has been announced at a press conference.

The company’s Malaysian CEO, Alois Hofbauer, said a new 23,000 sq ft hub would service over 100 countries worldwide.

"We are very delighted to have this hub at Nestle Malaysia. We are participating in the success of this hub,” he commented.

“We are getting great quality, raw and packaging material at the very best prices so that we can pass this on to Malaysian consumers.”

The Malaysian hub will act as Nestle’s location to serve the Asian market, and is one of three global hubs, known as Nestrade.

He added: “The hub in Malaysia will source required ingredients, materials and services from around the world to supply the needs of over 100 countries globally.”

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The company has some 130 staff in Malaysia to oversee and conduct procurement activities for Nestle markets across the globe.

Overall, Nestle employs more than 5,000 Malaysians.

Second International Trade and Industry Minister Datuk Seri Ong Ka Chuan said the decision was a boost to the country’s ambition to become a preferred investment destination.

“Malaysia is well-positioned as an attractive destination for businesses. To date, more than 5,000 foreign corporations from 40 countries have established operations here in Malaysia,” he commented.

He said Nestle Malaysia's investments exceeded RM1.1 billion ($270mn) over the past five years.

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Jun 16, 2021

EU and US agree end to Airbus-Boeing supply chain tariffs

supplychain
Boeing
Airbus
tariffs
3 min
Supply chains embroiled in Airbus-Boeing dispute will no longer be impacted by $11.5bn tariffs imposed on food and beverage, aircraft and tobacco

The EU and US have agreed to resolve a 17-year dispute over aircraft subsidies, suspending tariffs on billions of dollars' worth of goods that have plagued procurement leaders on both sides of the Atlantic. 

Under an agreement reached by European Commission Executive Vice-President Valdis Dombrovskis and US Trade Representative Katherine Tai on Tuesday, the tariffs will be halted for a period of at least five years. 

It will bring an end to punitive and disruptive levies on supply chains that have little to do with the argument, which became embroiled in the trade battle. Businesses on both sides of the dispute have been hit with more than $3.3bn in duties since they were first imposed by the US in October 2019, according the EC. 

The US imposed charges on goods upto $7.5bn in response to a World Trade Organisation ruling that judged the EU’s support of Airbus, its biggest aircraft manufacturer, unlawful. A year later in November 2020, the EU hit back. The WTO found the US had violated trade rules in its favourable treatment of Boeing, and was hit with EU duties worth $4bn. 

In all the tariffs affected $11.5bn worth of goods, including French cheese, Scotch whisky, aircraft and machinery in Europe, and sugarcane products, handbags and tobacco in America. Procurement leaders on both sides of the fence were forced to wrestle with tariffs of 15% on aircraft and components, and 25% on non-aircraft related products. 

Boeing-Airbus dispute by the numbers  

  • The dispute began in 2004
  • Tariffs suspended for 5 years 
  • $11.5bn worth of goods affected by tariffs
  • $3.3bn in duties paid by businesses to date 
  • 15% levy on aircraft and 25% on non-aircraft goods suspended

Both sides welcome end to tariffs 

European Commission President Ursula von der Leyen branded the truce a “major step” in ending what is the longest running dispute in WTO history. It began in 2004.

“I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed. This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” she added.

Both aircraft manufacturers have welcomed the news. Airbus said in a statement that it will hopefully bring to an end the “lose-lose tariffs” that are affecting industries already facing “many challenges”. Boeing added that it will “fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected”. 

The US aerospace firm added: "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action."

This week’s decision expands upon a short-term tariff truce announced in March this year. The EC says it will work closely with the US to try and further resolve the dispute, establishing a Working Group on Large Civil Aircraft led by each side’s trade minister.

Airbus last month signalled to suppliers that post-pandemic recovery was on the horizon, telling them to scale up to meet a return to pre-COVID manufacturing levels. “The aviation sector is beginning to recover from the COVID-19 crisis,” said Airbus chief executive Guillaume Faury, adding that suppliers should prepare for a period of intensive production “when market conditions call for it.”

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