Growing Coca-Cola in China

For the past six months Glenn Jordan, president of Coca-Cola Pacific Group, has visited nearly as many cities in China to promote the soft drink company's rapidly expanding presence.

Following two days of talks with global think tanks in Beijing this month, Jordan said China's economy is quickly recovering from this year's worldwide economic woes.

Jordan told China Business Weekly that he is confident about Coca-Cola's future in China, where the company has enjoyed double-digit growth for each of the last five years.

That growth included a 19 percent increase in business for Coca-Cola in China in 2008.

"It is the engine driving our business growth worldwide," Muhtar Kent, chairman and CEO of The Coca-Cola Co, said recently.

Kent praised the 4 trillion yuan stimulus package implemented by China's central government to encourage business development.

"We think China's economic stimulus package has been planned and implemented exceedingly well," Kent said, according to Xinhua News Agency.

"Although the world economy is going to shrink by about 3 percent in 2009, China will continue to grow by 6 percent to 8 percent," Kent said.

Jordan, too, praised the stimulus package.

"Although we knew that the stimulus package would not have a direct effect on Coca-Cola, it contributed to our decision to accelerate a longer-term investment plan in China," Jordan said.

Within days of the November announcement of the stimulus package, Coca-Cola decided on an ambitious three-year investment strategy for China.

"It is a $2 billion investment package scheduled to be used for building new plants, supporting innovation and expanding market assets and activation, as well as building a competitive edge with stronger sales teams," Jordan said.

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

In June, Coca-Cola opened two bottling plants in Nanchang, Jiangxi province, and Urumqi, Xinjiang Uygur autonomous region. The projects cost Coca-Cola 210 million yuan.

"But we haven't stopped there," Jordan said.

Coca-Cola also is building a $19 million bottling plant in Inner Mongolia scheduled to open in 2010, he said.

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

"Within the next three years, across China, we will undoubtedly create a large number of job opportunities along with our other business projects," Jordan said.

"After operating in China for more than 30 years, we are well aware of the importance of making our business strategy meet the country's economic needs," he said.

For example, he said the location of the three new bottling plants in central and western cities met the government's call for more business development and jobs in those regions.

Jordan said the company also is focusing on marketing opportunities at the Shanghai World Expo in 2010.

After signing the official sponsorship agreement for the Expo with the Shanghai World Expo Coordination Bureau in 2007, Jordan said Coca-Cola has developed a marketing campaign for the event.

"It will be a great opportunity for Coca-Cola to connect with the 70 million visitors expected to attend the Expo," Jordan said.

(China Daily 07/13/2009 page7)