The factory, which produces vermicelli and other pasta products, was launched in April 2025 after around 30 months of construction and project preparation, with the investment decision taken back in 2022. Initial capital expenditure amounted to approximately €43 million, and Nestlé has already reported that these investments are generating returns based on production performance.
The company explains the decision to further increase investment by pointing to Ukraine’s competitive cost of processing raw materials into finished products, as well as stable production performance, which together create favorable conditions for expanding capacity.
We decided to continue investing in this production facility and to expand it. We plan to increase total investment to €70 million by the end of 2027, Zanelli said.
According to the company’s plans, the factory’s capacity will allow for the production of around 40 tonnes of vermicelli per year, which represents a significant output for a single production line. The products are intended not only for the Ukrainian and European markets, but also for export to the United States and Mexico, underscoring the project’s international focus.
Nestlé also notes that every pack of vermicelli sold by the company is produced either at the Smolyhiv plant or at its facility in Kharkiv. On an annual basis, the company invests around €10 million in modernization, quality improvements, and equipment maintenance.
The expansion of investment became possible after the factory began production in mid-2025 and demonstrated profitability and strong operational performance. The decision to proceed with additional funding also reflects the company’s confidence in the manufacturing business environment in Ukraine, despite the challenges facing the country.
The new Smolyhiv factory was built next to an existing production site in the region and has become part of Nestlé’s broader strategy to develop a regional European food production hub.
What this means for the market
- Investment: Increasing total investment to €70 million strengthens Nestlé’s presence in Ukraine as a strategic player in the food industry.
- Exports: The facility is export-oriented, including shipments to the United States and Mexico, supporting the expansion of Ukrainian-made products under a global brand.
- Local processing: The decision to integrate new capacity in Ukraine highlights the country’s competitive advantages in manufacturing logistics and raw material processing.
- Modernization: Ongoing annual investments in modernization and maintenance enhance productivity and product quality.
Nestlé has been operating in Ukraine for more than 30 years and runs several production facilities across the country. The new plant in Smolyhiv is part of the company’s strategy to expand local manufacturing, support exports, and create additional industrial capacity within Ukraine.
