Nestlé To Build $43 Million Factory in Ukraine Amid Ongoing War With Russia

The company said on Monday it would build a new factory in the Volyn region of Ukraine.

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By Gabrielle Bienasz

Nestlé Wagner GmbH I Getty Images
Nestlé HQ in Germany.

Nestlé will invest $42.88 million in a new factory in Ukraine, despite Russia's ongoing invasion, Reuters reported.

"This is an important move for Nestlé, taken in a very challenging time for the country," Nestlé executive Alessandro Zanelli said in a statement, per the outlet.

Active conflict zones are not intuitive, or common, areas for corporate investment, per Reuters. One study analyzed investment in conflict zones and found that companies with more consolidated ownership are more likely to invest there. (Nestlé is based in Switzerland and is a publicly traded company.)

Nestlé said it has a strong presence in Ukraine with over 5,000 employees. After the invasion, the company said it would provide employees with money and emergency help amid the conflict. It also discontinued its Russian brands and presence.

The company said it plans to create 1,500 jobs with the new factory in Smolyhiv, which is on the Western side of the country, and will manufacture spices, soups, instant food, and cold sauces, per Reuters.

Russia's invasion of Ukraine, which President Vladimir Putin began in February, has been widely condemned internationally and has generated several corporate responses.

In support of Ukraine. U.S.-based companies like Slack and Grammarly changed their logos to the colors of the Ukrainian flag. The Salesforce Tower in San Francisco was lit up yellow and blue. Elon Musk via his company SpaceX is reportedly still providing satellite internet to soldiers in Ukraine.

The invasion, however, shocked oil and gas markets and drove up prices in the U.S. and worldwide this year.

The economy of Ukraine itself has also been damaged, contracting by some 45% due to the invasion, according to The World Bank. Ukraine became a part of the Soviet Union in 1922 and became independent again in 1991 after the USSR fell.

Nestlé said it wants to help Ukraine during these rough times.

"We aim to create a food and culinary hub, ensuring incremental jobs and serving the needs of Ukrainians and all European citizens with high-quality products," Zanelli's statement added.

Gabrielle Bienasz

Entrepreneur Staff

Gabrielle Bienasz is a staff writer at Entrepreneur. She previously worked at Insider and Inc. Magazine. 

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