Betting big on India, which it believes could be a big contributor to its growth in the future, beverages giant Coca-Cola said on Tuesday it would pump in an additional $3 billion (about R17,000 crore) over the next eight years. That would take the Atlanta, Georgia-headquartered firm?s total investment in the country to $5 billion (around R28,500 crore) by 2020. India was the seventh-largest contributor to the $46.54-billion beverages major?s global volumes of 26.7 billion unit cases that it sold worldwide in 2011.
Coca-Cola, which re-entered India in 1993, had indicated in November last year that it would invest $2 billion over a five-year period. On Tuesday, it confirmed it had put to work $2 billion between 1993 and 2011. ?Coca-Cola will invest $5 billion in India between now and 2020, which is part of a $30-billion global investment plan,? CEO and chairman Muhtar Kent said on Tuesday, on what is his second visit to India. Kent observed that while India ranked seven in terms of contribution to the company?s volumes, the idea was to make it the fifth largest among Coca-Cola?s markets worldwide. Compared with Coca-Cola, PepsiCo has lagged behind in scaling up its business in India. Since 2008, PepsiCo has invested $1 billion in two tranches, the first in 2008 and the next September 2010.
Kent said the money will be used for new bottling and refrigeration plants, trucks and marketing expenses, ?We have examined our business here and are absolutely confident this is the right decision considering the vast opportunities in India,? he added.
The Coca-Cola chairman and CEO described the India story as one of a “remarkable turnaround”. “The per capita annual consumption of our products in India is only 12 bottles per person, per month. In China, the number is 38, in Kenya it is 40 while the global average is 92. Therefore, India has near-limitless growth potential,” Kent said. The cola player intends to cash in on the potential for the growth of the non-alcoholic ready-to-drink beverages market in India. Coca-Cola has seen volumes grow for 23 straight quarters with the company clocking double-digit growth in 17 quarters.
The company also plans to launch its innovative “plant bottle” in India and other countries this year. According to Coca-Cola, the plant bottle is the first recyclable PET plastic beverage bottle made partially from plants. Plant bottles are currently made through a process that turns sugarcane into a key component of PET plastic. “We plan to launch plant bottles in this part of the world sometime in the near future. We are also looking to increase the sugarcane component from 30% to 100%,” Kent said.
