Coca-Cola Accelerates Expansion in China

The bottling facility will provide a strategically important platform for continuous growth of Coca-Cola in the Northwestern China where Xinjiang, with over 20 million consumers, is the largest province.

24/06/09 The Coca-Cola Company and its bottling partner, COFCO Coca-Cola Beverages Ltd., continued their expansion in China with the opening of two new bottling facilities this week in less developed central and western China. The new facilities are testimonies to Coca-Cola’s long-term commitment to China as part of a recently announced USD 2 billion 3 year investment plan aimed at bolstering further growth in one of the world’s largest and fastest growing beverage markets.

From consumers in China’s westernmost province, Xinjiang, will be able to consume locally-produced Coca-Cola products with the establishment of the new COFCO bottling plant, located along the historic Silk Road. The bottling facility will provide a strategically important platform for continuous growth of Coca-Cola in the Northwestern China where Xinjiang, with over 20 million consumers, is the largest province.

Yesterday, The Coca-Cola Company and COFCO officially opened another new bottling plant in China. Located in Nanchang, Jiangxi Province, this plant will provide refreshing Coca-Cola products to the 44 million consumers in this central province of China.

The new investment has directly created 796 new jobs at the two bottling plants, and is more broadly expected to create an additional 8,000 jobs with upstream suppliers and a wide variety of service providers.

Muhtar Kent, chairman and chief executive officer of The Coca-Cola Company, and Frank Ning, Chairman of COFCO Limited, opened the plant in Nanchang together with Hong Lihe, Vice Governor of Jiangxi province and the plant in Urumqi together with Wang Lequan, member of the Political Bureau of CPC Central Committee and party secretary of the CPC Xinjiang Committee. They were joined by Glenn Jordan, group president of the Pacific group, Doug Jackson, president of Coca-Cola China and Luan Xiuju, president of COFCO Coca-Cola Beverages Co Ltd.

“This RMB 210 million (USD 30.1 million) investment in Jiangxi and Xinjiang represents the Coca-Cola system’s strong commitment to China and to consumers throughout China including in the less developed areas in central and western China in creating job opportunities and building a better community," said Mr. Kent. “Our business in China grew 19% in 2008 and China is now our third largest market. By opening new plants in Jiangxi and Xinjiang, we will be able to increase our geographic presence, enhance our competitive edge in China and support local community development by sponsoring jobs, local procurements, and education."

Mr. Kent added: “In 2008, Coca-Cola helped bring the Olympic spirit to the consumers in Jiangxi and Xinjiang, through its sponsorship of the Olympic Torch Relay, where thousands of people got a chance to experience the Olympic spirit when the Olympic Torch passed through the capital cities Nanchang and Urumqi. Following the Olympic Games we are proud to be the Beverage Global Partner of Expo 2010 Shanghai China and keen supporter of the 2010 Expo. It is a privilege for us to work with the Chinese Government on what is going to be the biggest Expo event ever held and the largest public event in history.”

“COFCO has historically had positive relations with the Jiangxi and Xinjiang governments and people. The currently favorable investment climate in Jiangxi and Xinjiang has encouraged us to work with Coca-Cola in building and opening new facilities here, which we expect to lead to more collaborative opportunities between COFCO and these local communities and governments moving forward,” said COFCO Chairman Frank Ning.

“I represent the Xinjiang people in welcoming the China National Cereals, Oils and Foodstuffs Corporation (COFCO) and The Coca-Cola Company’s investment in Xinjiang and expressing their sincere congratulations in establishing the new bottling plant,” said Wang Lequan, member of the Political Bureau of CPC Central Committee and party secretary of the CPC Xinjiang Committee. “This well-known international brand will bring in progressive management concepts and boost the development of the local industry in Xinjiang.”

Following the plant openings in Xinjiang and Jiangxi The Coca-Cola Company and its bottlers now operate 38 bottling plants in Greater China, employing more than 30.000 people directly and indirectly creating around 300.000 jobs. Coca-Cola opened a new 90 million USD new research and development center in Shanghai in March 2009.

Coca-Cola and its bottlers in China have always been active corporate citizens, and been a part of the local social fabric. Over the past several years, Coca-Cola has actively contributed to the development of the local communities in Jiangxi and Xinjiang and more broadly across China. The Company has contributed to disaster relief efforts, and is a continuing sponsor of Project Hope, which aims to improve education for disadvantaged children. Since 1993, Coca-Cola China, in partnership with Project Hope, has built 59 schools, 100 libraries, donated more than RMB 60 million helping 60,000 rural children gain access to education. The Company has also invested 1 million USD in a project with UNDP & the Chinese Government to enhance clean water access and sanitation in rural areas.

Following last year’s devastating earthquake in the Sichuan region, The Coca-Cola Company has committed to donate US$12 million to build schools in the earthquake impacted areas over the next three years.