Nestle today inaugurated a new state-of-the-art milk factory in Erguna, near Hulunbeir, in the Chinese Inner Mongolia Autonomous Region. The ceremony took place in the presence of the regional authorities and Mr. Peter Brabeck-Letmathe, Chairman and CEO of the Nestle Group.

Since the Nestle Group began investing in China two decades ago, the Company has opened 21 factories in 18 different sites across the country and today employs about 13,000 people. In 2006, Nestle had sales of CHF 1.9 billion in China.

The new milk powder factory is situated in an area of high-quality natural grasslands and will help Nestle to cope with increasing consumer demand for the Company's milk products. Today, Nestle buys fresh milk from some 40,000 Chinese farmers and provides them with an overall regular income of around CHF 500,000 per day, fostering a rural sustainable development for the communities concerned. At least 200,000 people benefit directly and indirectly from Nestle milk activities in China. In addition to being a reliable and regular buyer of fresh milk, Nestle has provided daily technical assistance to the farmers over the last 20 years, helping them to increase the quality, quantity and efficiency of their fresh milk production.

Mr. Brabeck-Letmathe said: "I am proud of this pioneering new investment that we have made in the Inner Mongolia Autonomous Region and I want to express my gratitude to the authorities, both at national and local level, for their continuous support and fruitful cooperation."