Coca-Cola plans 3 new plants in China

Updated: 2010-04-28 09:39
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BEIJING: Coca-Cola will open two new bottling plants and start building another one in China this year, as the company believes China will become the largest market for soft drinks in the near future, the US soft-drink giant said Tuesday.

The two new plants to be opened this year are located in South China's Guangdong province and Hohhot, in north China's Inner Mongolia autonomous region, said Muhtar Kent, chairman and chief executive officer of Coca-Cola, who has come to China for the upcoming opening of the Shanghai World Expo.

"We will also construct a new facility, which will be one of the largest plants we have in this country, in central China's Henan province this year," said Kent, adding that all three plants are part of the company's 42-billion investment package announced last year.

The investment package is for the period 2008 to 2011. Last year, Coca-Cola inaugurated three new factories, in northwest China's Xinjiang Uygur autonomous region, east China's Jiangxi province and central China's Hubei province.

"Our $2-billion investment program is on track," Kent said, adding, "We will also increase the capacity of some existing factories here, equipping them with new production lines as well as new trucks, warehouses and coolers."

Besides investment in production, Kent said significant investment will be made in marketing, distribution, logistics and brand innovation.

With a business roadmap to 2020, Kent said China's actual non-alcoholic ready-to-drink market is probably the second largest in the world today, although it now ranks third among Coco-Cola's markets around the world.

"I think China will overtake the United States to become the world's largest non-alcoholic ready-to-drink market in a fairly short period of time," Kent said. "It's not a question of if, but only a question of when."

He also expected China to become one of the company's top growth markets in the next 10 years, citing the double-digit growth in China in the first quarter of this year and fourth quarter of last year.

"Without any doubt, we are, with our investments, innovation and partnerships, completely aligned with the prospects of China's future development," he said.

Stressing Coca-Cola has no plan to acquire any other brands in China, Kent said the company is focusing on "organic growth."

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With Coca-Cola, Sprite and Minute Maid Pulpy already billion-dollar brands in China, Kent believes Coca-Cola's other brands will also grow into billion-dollar brands in China in the coming years.

"China probably has such a potential that even brands that don't exist today would become billion-dollar brands by 2020 for Coca-Cola," he said.

Kent also described the Shanghai World Expo as a wonderful event.

"We are very honored to be part of the event," he said. "It will bring us closer to the ideals of Chinese consumers and to Chinese views about their country, their future and how they see themselves in the context of the world."

Scheduled to take up the post of chairman of the US-China Business Council in June, Kent promised to do his best to help sustain the healthy business relationship between the two countries in the years to come.