Coca-Cola committs to another $4.0bn investment in China
Coca-Cola (NYSE:KO) announced Thursday it will invest another $4.0 billion in its Chinese markets over the next three years to build new plants and schools.
At the end of 2014, the giant beverage company will have invested a total of $7.0 billion in the market since 2009, largely on the construction and operation of over 40 bottling and manufacturing plants it has there.
"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," said CEO Muhtar Kent.
"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."
The company, which manufactures 3,500 beverages, including brands like Fanta, Sprite, vitaminwater, Powerade and Georgia, will also open its 100th Project Hope school in Dongjintuo in Chongqing province, as part of Coca-Cola's earthquake reconstruction program, to which it has donated over $15 million to date.
Coca-Cola said it will build an additional 50 schools by the end of 2011, for a total of 118 schools across the country.
Coca-Cola posted worldwide volume growth of 6% for both its second quarter and year-to-date results. In the first six months of the year, the company said it sold over one billion unit cases of its namesake drink in China, which represents 7% of the company's global volume.
Coca-Cola even saw its Minute Maid Pulpy juice become the number one juice brand in the country, just two years after its March 2009 bid for Huiyuan Juice Group was rejected for being anti-competitive, proving its brand in China can grow organically, without the aid of acquisitions
According to reports, the company is no longer looking for acquisitions, and is focused solely on organic growth in China, where it sees significant potential.
Between 2009 and 2010, the company opened five plants in Urumqi, Nanchang, Wuhan, Luohe and Hohhot. This year, it opened another plant in Sanshui in the Guandong province, and will open another two in Liaoning and Hebei provinces.
The three new plants will create 490 direct jobs, and another 9,400 indirect employment opportunities, the company said.
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