Coca-Cola Unbottles China Plan

Source: By Ma Zhenhuan (China Daily)

The Coca-Cola Co, the world’s largest soft drinks maker, plans to accelerate its investing into China to meet demands arising from the country’s increasing middle-class population and urbanization, a top executive said.

“China, during the past few years, has done a lot to stimulate its internal consumers market,” said Martin Jansen, CEO of Coca-Cola Bottling Investments Group China.

“Therefore, though China’s economic growth might slow down a little bit, I’m confident that over the next couple of years, it will still outgrow the world in terms of economic growth. And it is fantastic for China, its people, and for companies which are doing business in China like us.”

In August last year, the company announced it would invest an additional $4 billion into China in the next three years, starting in 2012. Jansen said the investments will be put both into new plants and existing operations such as bottling lines, warehouses and coolers.

The money will also be used in human resources development, IT projects and products promotion, said Jansen, who is also the regional director of Coca-Cola’s Bottling Investments Group in China, Malaysia and Singapore.

As for the new plants’ locations, he said they will depend on where the demand for the company’s products is strongest.

He said he is optimistic that China will become the biggest market for Coca-Cola by 2020. The country, with a population of more than 1.3 billion, contains great opportunities for beverage companies, he said.

“At the moment, the consumption of our products per capita in China is still lower than other places,” he said. “So if we can continue our growth momentum, actually before 2020, China will become the largest market of Coca-Cola globally. It is going to happen. The question is: When?”

“With China’s rapid urbanization, more people are moving from the rural areas into cities and towns, and that comes with a change of lifestyle as well, as people need packaged beverages as they move on the go.”

Coca-Cola has various bottling plants in rural markets in northern, central and western China – in Shanxi, Sichuan, Hubei and Yunnan provinces, Chongqing and in the Guangxi Zhuang autonomous region.

To meet the growing demand for Coca-Cola products, Jansen said the company has developed a distribution plan that allows them to be distributed to towns and villages in an economical way.

“Over the years we’d developed market execution partners to reach the Chinese retailers,” he said. “It strongly supports the distribution network and makes the Chinese consumers easily reach the series of products of the Coca-Cola Company. It is oftentimes that in small towns and villages, more people are buying our products.”

He said there is less competition in rural China than in big cities.

Despite the global economy’s troubles last year, Jansen said the company’s performance in China was better than expected.

By December 2011, the Coca-Cola Company had 41 bottling plants in China, and they employed more than 48,000 people.

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