Coca-Cola Invests US$4 Billion for Long-Term Sustainable Growth in China

Posted: 18 August 2011 | Coca-Cola | No comments yet

New infrastructure, partnerships, brand building, sustainability programs underline China commitment…

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The Coca-Cola Company and its Chinese bottling partners today announced a new investment of US$4 billion over the next three years, commencing 2012.

By the end of 2011, Coca-Cola and its China bottling partners Swire Beverages Ltd. and COFCO Coca-Cola Beverage Co., Ltd. will have invested more than $3 billion in China over the last three years, bringing the total investment to $7 billion between 2009 and 2014 in the largest and fastest-growing consumer market in the world.

“China is one of our most important growth markets in the world as we work to achieve our 2020 Vision goal of doubling system revenues and servings this decade. The new investment is a part of our long-term commitment to invest in innovation, partnerships and a portfolio that will enable us to grow our business in a sustainable and responsible way,” said Muhtar Kent, Chairman and CEO of The Coca-Cola Company, during a visit to Shanghai. “Besides our infrastructure and capabilities, the new investment will also focus on enhancing the consumer experience, ensuring product affordability and building brand loyalty which deliver sustainable growth.”

In its second quarter 2011 financial results, Coca-Cola posted strong worldwide volume growth of 6% 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 1 billion unit cases – double the rate sold five years ago when the Company first delivered 1 billion unit cases for a full year. China had an outstanding performance in the latest quarter, supported by strong growth in the Coca-Cola brand and Minute Maid Pulpy, the No. 1 juice brand in China,” Kent said. “These achievements are driven by a renewed focus on core brands, continued distribution gains and expansion of cold drink equipment, all made possible by our continued investment and dedicated execution over the years.”

Kent said that the Coca-Cola China system opened five plants in Urumqi, Nanchang, Wuhan, Luohe and Hohhot in 2009-2010. In 2011, the system has already opened a new plant in Sanshui (Guandong province), will open another plant in Yingkou (Liaoning province), and break ground on a new plant in Shijiazhuang (Hebei province) later this year.

“The three new Coca-Cola plants benefit the local economies and communities, where 940 jobs will be created directly and 9,400 jobs indirectly. The total investment of these three new plants amount to RMB 1.5 billion (approximately US$230 million and will bring new technology and economic growth prospects to the local communities,” Kent said.

With the recently opened plants, the Coca-Cola system now operates more than 40 plants in China employing more than 48,000 people. Consumption of Coca-Cola products in China now represents approximately 7% of the Company’s global volume.

This week also marks the opening of the 100th Coca-Cola Project Hope school located in Dongjintuo in Chongqing. “We work hard to demonstrate our long-term commitment not only through our business investment, but also by supporting China’s broader development goals,” Kent said. The Dongjintuo Project Hope School was part of the Sichuan earthquake reconstruction program in which Coca-Cola has donated RMB 80 million (approximately US$12 million) after the disaster struck the region.

With the reconstruction of 50 new schools to be completed by the end of 2011, a total of 118 Project Hope schools will have been built by Coca-Cola across the country to help provide a better learning environment and support for youth development, especially in the earthquake-hit areas. Together with the immediate disaster relief, the Coca-Cola China system has donated more than RMB 100 million (approximately US$15 million) for the Sichuan earthquake relief and reconstruction work.

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