PUTRAJAYA (Sept 21): Nestle (Malaysia) Bhd announced today its commitment of RM6 million per year to planting three million trees in the next three years through Project RELeaf — a reforestation initiative in Malaysia contributing to the company’s global pledge to achieve zero net greenhouse gas emissions by 2050.

The project aims to scale up Nestle’s efforts to restore riparian and forest ecosystems, contributing to establishing wildlife corridors, mitigating human-animal conflict and protecting critical water supplies.

Nestle Malaysia chief executive officer (CEO) Juan Aranols said the company’s pledge to achieve zero net greenhouse gas emissions by 2050 reflects its ambition to contribute to a greener future.

“By restoring critical forest ecosystems, we will help to preserve ecosystems and protect biodiversity. These are vital to ensure supply chain sustainability while protecting the environment as both elements are interconnected in nature.

“That will enable us to continue making a positive impact on both the planet and the people as we will continue to empower local communities and support livelihoods via purchasing of seedlings and their involvement in planting activities,” he said in conjunction with launch of Nestle Malaysia's Project RELeaf in Taman Rimba Alam here.

By widening Nestle’s reach in Sabah and expanding for the first time in Malaysia, the project will also help to develop greater awareness among local communities of environmental topics as well as provide additional sources of income to improve their livelihoods.

Nestle, which has allocated around RM6 million per year for the project, will plant three million trees across the Kinabatangan Wetlands and Merisuli Forest restoration areas in Sabah, as well as in forest reserves along the Central Forest Spine in Peninsular Malaysia.

Following the project, Nestle Malaysia will collaborate with the Ministry of Energy and Natural Resources, Sabah Forestry Department, Malaysian Nature Society, Tropical Rainforest Conservation and the Research Centre, Kinabatangan Orangutan Conservation Project, palm growers, local communities and entrepreneurs for community-based seedling production and tree-planting operations.

Project RELeaf is the next evolution of the Kinabatangan RiLeaf Project, a partnership with Yayasan Sime Darby and the Sabah Forestry Department.

As of September 2020, one million trees had been planted across more than 2,700ha of degraded forests.

On the outlook for the company, Aranols said Nestle is cautiously optimistic about delivering a better financial performance for the upcoming quarters.

He said earnings for the second quarter ended June 30, 2020 (2QFY20) were negatively impacted by the movement control order (MCO), and the group’s HORECA (hotel, restaurant and café) channels were hit hard. 

“We see in 3Q those sectors have [been] recovering, which is very good news, but we also note that we have to be cautious because the economic situation is a little bit uncertain — not only in Malaysia but globally.”

“We all know that this (MCO) has had a big impact on the growth of the economy, so I would say we are cautiously optimistic, I think we have everything in place to recover, going back to a normal situation with this new normal. Overall, we are a resilient performer,” Aranols told reporters.

Nestle’s net profit for 2QFY20 slipped year-on-year and in quarterly terms as the food and beverage manufacturer contended with Malaysia's Covid-19-driven MCO, which led to restrictions on Nestle's out-of-home business channels.

Net profit slipped to RM105.53 million from RM156.89 million a year earlier, while revenue fell to RM1.22 billion from RM1.34 billion.

Moreover, commenting on the impact of the MCO on Nestle’s raw material cost, Aranols said: "All in all, it is manageable. There is an impact but not too dramatic."

He added: “Despite Covid-19, we continue to do the right things for the future, we continue investing ... we are doing everything to run the business, continue and defend our market share."

At time of writing, shares in Nestle had risen 20 sen or 0.14% to RM139.20. The group's market capitalisation stood at RM32.6 billion.