Coca-Cola invests $4-billion with China
With Chinese bottling partners, it invests in new infrastructure, partnerships, brand building and sustainability programs.
August 22, 2011
by Canadian Packaging Staff
The Coca-Cola Company and its Chinese bottling partners have announced a new investment of US/Cdn $4 billion over the next three years, commencing 2012.
Along with previous investments, Coca-Cola and its bottling partners Swire Beverages Ltd. and COFCO Coca-Cola Beverage Co., Ltd. will now have invested US/Cdn $7-billion between 2009 and 2014 in the largest and fastest-growing consumer market in the world.
“China is one of our most important growth markets in the world as we work to achieve our 2020 Vision goal of doubling system revenues and servings this decade. The new investment is a part of our long-term commitment to invest in innovation, partnerships and a portfolio that will enable us to grow our business in a sustainable and responsible way,” states Muhtar Kent, chairman and chief executive officer of The Coca-Cola Company, during a visit to Shanghai. “Besides our infrastructure and capabilities, the new investment will also focus on enhancing the consumer experience, ensuring product affordability and building brand loyalty which deliver sustainable growth.”
In its second quarter 2011 financial results, Coca-Cola posted strong worldwide volume growth of six per cent in both the quarter and year-to-date, with growth across all five geographic operating groups, including in China.
“In the first six months of 2011, sales in China topped one billion unit cases—double the rate sold five years ago when the company first delivered one billion unit cases for a full year. China had an outstanding performance in the latest quarter, supported by strong growth in the Coca-Cola brand and Minute Maid Pulpy, the number one juice brand in China,” Kent says. “These achievements are driven by a renewed focus on core brands, continued distribution gains and expansion of cold drink equipment, all made possible by our continued investment and dedicated execution over the years.”
Kent adds that the Coca-Cola China system opened five plants in the cities of Urumqi, Nanchang, Wuhan, Luohe and Hohhot in 2009-2010.
In 2011, the system has already opened a new plant in Sanshui (Guandong province), will open another plant in Yingkou (Liaoning province), and break ground on a new plant in Shijiazhuang (Hebei province) later this year.
“The three new Coca-Cola plants benefit the local economies and communities, where 940 jobs will be created directly and 9,400 jobs indirectly. The total investment of these three new plants amount to RMB 1.5 billion (approximately US/Cdn $230 million and will bring new technology and economic growth prospects to the local communities,” Kent explains.
With the recently opened plants, the Coca-Cola system now operates more than 40 plants in China employing more than 48,000 people. Consumption of Coca-Cola products in China now represents approximately seven per cent of the company’s global volume.
As well, the week of August 22, 2011 marks the opening of the 100th Coca-Cola Project Hope school located in Dongjintuo in Chongqing City. “We work hard to demonstrate our long-term commitment not only through our business investment, but also by supporting China’s broader development goals,” Kent says.
The Dongjintuo Project Hope School was part of the Sichuan earthquake reconstruction program in which Coca-Cola has donated RMB 80 million (approximately US/Cdn $12 million) after the disaster struck the region with an 8.0 Magnitude quake on May 12, 2008 killing an estimated 68,000 people.
With the reconstruction of 50 new schools to be completed by the end of 2011, a total of 118 Project Hope schools will have been built by Coca-Cola across the country to help provide a better learning environment and support for youth development, especially in the earthquake-hit areas.
Along with the immediate disaster relief, the Coca-Cola China system has donated more than RMB 100 million (approximately US/Cdn $15 million) for the Sichuan earthquake relief and reconstruction work.
The Coca-Cola China System
Coca-Cola is one of the most well-known international brands in China, with a leading position in the soft drinks market. Since the re-entering of China in 1979, Coca-Cola has invested more than US$5 billion in the local market. To date, Coca-Cola has established a total of 41 bottling plants in China. The Coca-Cola system currently employs more than 48,000 people. For more information visit www.coca-cola.com.cn.
About The Coca-Cola Company
The Coca-Cola Company is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands. Led by Coca-Cola, the world’s most valuable brand, the company’s portfolio features 15 billion dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply and Georgia. Globally, it is the largest provider of sparkling beverages, juices and juice drinks and ready-to-drink teas and coffees. Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy the company’s beverages at a rate of 1.7 billion servings a day. With an enduring commitment to building sustainable communities, Coca-Cola is focused on initiatives that reduce its environmental footprint, support active, healthy living, create a safe, inclusive work environment for associates, and enhance the economic development of the communities where it operate. For more information about the company, visit www.thecoca-colacompany.com.