The Belgian said true innovation based on research and development and science and true innovation into skin health are responses to that challenge. "We have extended our boundaries of nutrition to health science. Skin health makes sense to us," he said.

Localization is vital for Nestle's growth in China. Bulcke said the company came to China for the long term and will not be affected by the rising cost of labor in the country. "Our commitment is not linked with cheap labor, but linked with consumers," he said.

Nestle has invested close to $500 million every year in new equipment and new machines in China and will continue to do that in the future. "Our business is worth about $7 billion but we still have a lot of room to grow," said Rolland.

Nestle operates 33 factories in China, with 90 percent of its products sold in the country manufactured locally. The top priority for Nestle is food safety and customer trust. Bulcke says the company is eager to share its knowledge with local industry and policymakers.

As part of its efforts to strengthen Nestle's food safety research in China, Nestle opened a food safety research center in Beijing on March 25.

The Nestle Food Safety Institute will work with authorities to provide a scientific foundation for food safety polices and standards, including the early management of food safety issues and collaboration with local research institutes and government agencies in relevant areas.

The localization strategy will continue despite an upcoming change in management.

Decorvet has decided to leave Nestle after 23 years of service..

John Cheung has been appointed chairman and chief executive officer of Nestle in the Greater China Region. Cheung, from Hong Kong, has been regional president for Nestle's Wyeth Nutrition business. "He understands the country and is part of this country and has proved his leadership skills," said Bulcke.