With $4b investment, Coca-Cola aims for growth in China

27 Aug

Fanta Strawberry. Available to buy online in Australia from Moo-Lolly-Bar. To go there just click on this link!Coca-Cola Co. and its Chinese bottling partners will invest $4 billion in the world’s fastest growing economy over three years from 2012 amid plans to build more factories and win market share from rival PepsiCo Inc.

The money will help build bottling plants, fund distribution and develop new cold drinks for the maker of Fanta, Nestea, and Glaceau Vitaminwater, Coca-Cola spokeswoman Zhao Yanghong said yesterday.

The world’s largest soft-drink maker is investing to focus more on “one of our most important growth markets in the world,’’ Chief Executive Muhtar Kent said in a statement yesterday.

China sales for Atlanta-based Coca-Cola topped 1 billion unit cases in the six months through June, double the rate of 2005, when it sold that amount for the whole year, the statement said.

“China is a real important market for them,’’ Ben Cavender, an analyst at China Market Research, said. “In order to stay ahead of Pepsi, they need to keep investing as the competitor is investing a lot of money in the market as well.’’

Coca-Cola said in June it was in talks with China’s government to sell shares in Shanghai.

The company posted worldwide volume growth of 6 percent in the second quarter, and aims to double system revenue by 2020.

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The company, whose Sprite brand is China’s top-selling soft drink, will open plants in the northern cities of Yingkou and Shijiazhuang, the statement said.

Coca-Cola has 40 plants in China employing more than 48,000 people and about 7 percent of sales volume is made in the country, it said.

The maker of Minute Maid juice will have invested $7 billion in China between 2009 and 2014 with its two Chinese bottling partners, according to the statement.

PepsiCo in May last year said it planned to invest $2.5 billion in China over a three-year period. It had in 2008 announced the company would spend $1 billion through 2010 in the world’s most-populous nation.

Coca-Cola is the dominant soda maker in China with 61.5 percent of the market last year, followed by Pepsi in second place at 29 percent, according to London-based researcher Euromonitor International.

Article posted by Spencer Samaroo, Managing Director, Moo-Lolly-Bar
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Source and Photo: Boston.Com

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