The Coca-Cola Company (KO) and its bottling partner COFCO Coca-Cola Beverages Ltd. continued their expansion in China with the opening of two new bottling facilities in July 2009, located in less-developed central and western China. The new facilities are proof the company’s long-term commitment in China as part of the recently announced $2 billion, 3-year investment plan, which is primarily aimed to strengthen further growth in one of the world’s largest and fastest growing beverage markets.
The bottling facility at Xinjiang is expected to provide a strategically important platform for continuous growth of Coca-Cola in Northwestern China, which is the largest province. Similarly, the company also opened another new bottling plant in Nanchang, Jiangxi Province. This plant will provide refreshing Coca-Cola products to the 44 million consumers in this central region.
Management states that by opening new plants in Jiangxi and Xinjiang, the company will be able to increase its geographic presence, and enhance its competitive edge in China, while supporting local community development through jobs, local procurements and education. The expansion of KO in China is a trend followed by many consumer companies seeking growth in emerging markets, due to sluggish performance in North America.
PepsiCo (PEP) also announced that, beginning in 2008, it would invest $1 billion in China over the following four years. The investment includes the expansion of manufacturing capacity and local research and development catering to new products tailored to Chinese consumers, in addition to building the company’s sales force and fund brand-building initiatives.
Campbell Soup Company (CPB) also expanded its Swanson broth to China, especially Shanghai, which is a leading soup market in China with highest per capita soup consumption — almost 72% of the population consumes a bowl of soup every day.
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