Fri, March 06, 2009
China > China & World

Coca-Cola to invest more than $2 bln in China over next three years

2009-03-06 16:17:50 GMT2009-03-07 00:17:50 (Beijing Time)  Xinhua English

by Xinhua writers Quan Xiaoshu and Yan Hao

SHANGHAI, March 6 (Xinhua) -- Coca-Cola Co., the world's largest soft drinks maker, said Friday it will invest more than 2 billion U.S. dollars over the next three years in China, as the company saw "the fastest growth" here across the world even amid the current global economic downturn.

"The investment will be used on new bottling plants and distribution infrastructure, and marketing," Muhtar Kent, Coca-Cola's chief executive officer, said on Friday at the inauguration of its Global Innovation and Technology Center in Shanghai.

He said "the company enjoyed the fastest growth of business in China, which, although the third largest market, is very important to Coca-Cola."

These new investments are in addition to the 2.4 billion U.S. dollars that Coca-Cola has offered to pay to take over China Huiyuan Juice Group, the country's leading pure juice maker, said Kent.

"We remain committed to proceeding with the Huiyuan acquisition and are currently focusing on the regulatory process," Kent said, "We are working closely with the Ministry of Commerce on the matter".

Three major shareholders of Huiyuan, which hold approximately 66 percent of the Hong Kong-listed company's shares, are said to have accepted the offer. But the offer needs to be approved by the ministry according to the newly-issued Anti-Monopoly Law.

Coca-Cola has been awaiting ministry approval since the offer was announced last September.

"If it is approved, our investment will exponentially grow. Even if it's not, it would still mean that we are going to invest a tremendous amount," Kent said in an exclusive interview with Xinhua here on Friday.

According to Coca-Cola, it has invested 1.6 billion U.S. dollars in the past 30 years in China. The country has been not only its third biggest business in the world, but also the fastest growing market.

In the fourth quarter last year, Coca-Cola saw a global sale's growth of five percent, however, its increase in China was 29 percent, the largest double digit growth in 21 consecutive quarters in the country.

The CEO said he will come back in three months to witness two new factories opened by Coca-Cola's partners. One in northwest Xinjiang Autonomous Region and the other in Jiangxi Province.

"There will be many more to open in the next few years as already planned, because we need more production," Kent said.

"The new investment of Coca-Cola shows that multinational firms have strong confidence on China's economy," said Chen Jing, head of the Minhang District of Shanghai municipality.

The new research center unveiled Friday costs 90 million U.S. dollars and has already hired about 100 top scientists who will develop innovative new products and packages, said Coca-Cola.

"We are of course excited about China's 1.3-billion-population market, but we are also very excited by the intellectual capability of our Chinese employees and engineers who are going to work in this research center," Kent said.

"No individual, company or country is immune from this crisis," said the CEO. "But we are more resilient in the current crisis and we will continue to grow in China this year and in future years."

Kent told Xinhua that Premier Wen Jiabao gave great details about China's 4-trillion (588 billion U.S. dollars) stimulus package during the Davos Forum in January.

That certainly gives confidence as China's leadership is treating this crisis with tremendous seriousness and intends to ensure that China can continue its momentum and dynamism even in the midst of the current economic crisis, Kent said.

Currently Coca-Cola employs more than 33,000 employees in China and indirectly have created 300,000 jobs with its suppliers.

"We are proud to support 1.9 million customers we visit every week with our distribution system. That's what we bring to China," he said.

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