$4bn Chinese investment is just the beginning, says Coca-Cola

By Helen Glaberson

- Last updated on GMT

Related tags: The coca-cola company, Investment, China

Soft drinks giant Coca-Cola is investing $4bn (€2.8) in China in a bid to double revenues in the region by 2020.

“With the consumer fundamentals and our strong position in China, we're just getting started,”​ a spokesperson for The Coca-Cola Company (TCCC)​told BeverageDaily.com.

This is the company’s biggest planned investment in the region since its $2bn commitment in 2009.

Key strategies and initiatives in China are to expand the firm’s portfolio and packaging operations, continued investment in distribution, and “aggressive​” investment in cold drink equipment, said the spokesperson.

Over the last three years, TCCC and its China bottling partners Swire Beverages and COFCO Coca-Cola Beverage have invested more than $3bn in China, bringing the total projected investment to $7bn between 2009 and 2014.

Fast growth

TCCC said is very optimistic about the future of the Chinese market, which is the largest and fastest-growing consumer market in the world, according to the spokesperson.

“With the rapid growth of the middle class and the general public having more disposable income, the China market potential is enormous and will continue to be an important growth engine for TCCC,​she said.

In its second quarter 2011 financial results, Coca-Cola posted 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 1bn unit cases - double the rate sold five years ago when the company first delivered 1bn unit cases for a full year,”​ said Muhtar Kent, chairman and CEO of TCCC.

The firm said its healthy performance over the latest quarter was supported by the strong growth of its Coca-Cola brand and Minute Maid Pulpy, the largest juice brand in China.

This February, Minute Maid Pulpy became TCCC’s first brand from an emerging market to reach the $1bn sales mark.

Further investment

In 2009-2010, Coca-Cola’s China division opened five plants in Urumqi, Nanchang, Wuhan, Luohe and Hohhot. Earlier this year the firm opened a new plant in Sanshui (Guandong province) and two more in the Liaoning and Hebei province later this year.

"The total investment of these three new plants amount to RMB 1.5 bn (€159m) and will bring new technology and economic growth prospects to the local communities,"​ Kent said.

Including the newly opened plants, the firm has 41 facilities in the country.

Consumption of Coca-Cola products in China now represents approximately seven per cent of the company's global volume.

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