Nestle India has ended its 12-year contract with the lone third party producer of Maggi noddles, Kolkata-based SAJ Food Products.
This move is seen as an effort by Nestle to focus on quality following the ban imposed by the Indian food safety regulator over safety concerns.
A Nestle spokeswoman was quoted by the Economic Times as saying: "As part of a standard process, where we review our overall capacity every two years on the basis of volume projections, we took the decision to bring the co-manufacturing with SAJ to an end."
Nestle stated that the contract is being ended as the company has invested in capacity expansion of its own facilities, in order to cut down reliance on third party manufacturers.
"This is because we have started utilising the production capacities and manufacturing facilities in our own factories post investments made in Nanjangud and Tahliwal," the company spokeswoman added.
SAJ Food Products' group firm Aparna Agency will continue to serve as Nestle's distributor, as it has for over two decades.
SAJ Food Products chairman KD Paul told the publication: "We have gained a lot of insights in terms of quality control and best practices from Nestle as their contract manufacturer and the relationship will continue now as their distributor."
Nestle's latest move indicates that it intends to have complete control over the manufacturing process of the noodles, and not depend on contract manufacturers as it plans to relaunch the noodles into the Indian market by the end of this year.
India's food safety regulator, the Food Safety and Standards Authority of India (FSSAI), banned the sale of Maggi noodles after it detected higher-than-permissible levels of lead, and high quantities of mono-sodium glutamade in tests carried out on a batch of products.
Following this, Nestle destroyed close to 27,420t of Maggi noodles, valued at around $50m.
The company challenged the Indian food safety regulator's ban and approached the Bombay High Court in August, which ordered the regulator to complete re-tests within six weeks, in court-appointed laboratories. The court also lifted the ban on Maggi.
