Coke to maintain China growth fizz

Two more new facilities in the pipeline this year, says top executive (video)

Tianjin - Coca-Cola's $2-billion China expansion plan is right on track with two more new facilities in the pipeline this year, a senior executive of the global beverage maker told China Daily on Monday.

"Everything is well on track. We opened three plants last year, with two new ones coming this year," said Glenn Jordan, president of Coca-Cola Pacific Group.

The company broke ground for its biggest plant in the country in Louhe, Henan province, this year. The investment for the biggest bottling plant of Coca-Cola is about 900 million yuan ($132 million).

Coca-Cola will also open a new bottling plant in the Inner Mongolia autonomous region this year, with investment touching 100 million yuan.

In the wake of the global financial crisis, the beverage giant announced an ambitious investment plan last year, pledging to pour in $2 billion over the next three years to cement its footprint in China.

The bold plan is part of Coca-Cola's long-term development strategy, with the investment going to production facilities, sales and market infrastructure, research and development, marketing and people development, all of which are keys to the continued success of its China expansion.

Behind the bold expansion plan is Coca-Cola's confidence in and commitment to the Chinese market, Jordan said.

In his eyes, golden business opportunities will stem from the huge and promising Chinese market because of the nation's rapid urbanization and its thriving middle class.

"China will eventually become our single largest market perhaps by 2020," said Jordan.

"The rapid growth of (the) middle class and urbanization in China, the economic growth of the country, and lifestyle changes to a faster pace, will lead to a higher demand for ready-to-drink beverages," Jordan added.

Last year, Coca-Cola opened three new plants in China, with the total investment surpassing 1 billion yuan.

With bottling partners, Coca-Cola now operates 39 plants in China.

Jordan said that to tap market potential, Coca-Cola would broaden product offerings thorough innovation.

Roughly one-third of the company's investment will go to innovation and research and development.

In March 2009, Coca-Cola opened its $90 million Innovation and Technology Center in Shanghai.

The technology center and three bottling plants are expected to create at least 8,000 direct new jobs.

Energy efficiency and environmental protection are also top priorities on Coca-Cola's agenda. The firm has done a lot to figure out ways to conserve energy and water.

Jordan stressed that Coca Cola attaches great importance to energy and water conservation throughout the value chain from sourcing to transport to packaging and product manufacturing.

China Daily

(China Daily 09/14/2010 page15)