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Coca-Cola plans $2 bn investment in India

Coca-Cola plans $2 bn investment in India
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First Published: Mon, Nov 14 2011. 11 17 PM IST

Photo: Bloomberg
Photo: Bloomberg
Updated: Mon, Nov 14 2011. 11 17 PM IST
New Delhi: Coca-Cola India Pvt. Ltd and its bottlers plan to invest $2 billion (around Rs 10,000 crore) over the next five years, their biggest since the world’s largest beverage company re-entered the country in 1993.
Photo: Bloomberg
“The Indian market has passed a certain threshold and investment will only get bigger. Only top-tier countries in the world attract such investment,” Ahmet C. Bozer, president of the Eurasia and Africa group of the Coca-Cola Co., told reporters at the India headquarters in Gurgaon.
Bozer heads 90 emerging markets under six business units including Turkey; the Middle East and North Africa; Russia, Ukraine and Belarus; India and South-West Asia; Central, East and West Africa, and South Africa.
The money, which will come from the company and its bottlers, will be used for expanding manufacturing assets in the country, laying new lines and updating old ones.
The investments will go into building the supply chain, transportation, brand building and marketing, said Atul Singh, president and CEO, Coca-Cola India and South West Asia.
“We have a retail outlet base of 1.5 million, we need to double this,” Singh said. The company has invested $2 billion in the country in the last 18 years, he said. The money will be a mix of local and foreign direct investment (FDI).
“The money will be invested by Coca-Cola India as well as its bottlers,” he said, declining to give the percentage share for each. Currently, Coca-Cola India has 13 franchise bottlers and one company owned bottling operation.
Bozer expects the region’s demographics to favour growth.
“There will be migration to urban centres and 50% of the new middle class will happen in Eurasia and Africa. However, 90% of this will come from India and sub-Saharan Africa,” he said. “The real activity will happen here. India will be the determining factor in the success of Eurasia and Africa.”
According to Bozer, 16% of Coca-Cola’s total revenue comes from Eurasia and Africa. “Of this, 13% comes from India alone.” Worldwide, the company and its bottlers plan to invest $30 billion over the next five years.
India is expected to rank among Coca-Cola’s top five markets by the end of the decade.
“We have seen 21 consecutive quarters of growth with 15 of them being in double digits,” Bozer said.
In the July-September quarter, “the company saw 19% growth,” Singh said, without giving revenue figures. Elaborating on the potential for the company in the country, Singh said that the annual per capita consumption of Coca-Cola beverages in India is 11, which is one-third that in China.
shuchi.b@livemint.com
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First Published: Mon, Nov 14 2011. 11 17 PM IST
More Topics: Coca Cola | Beverage | Soft Drink | Investment | India |