Companies

Coca-Cola Co sees fizz in China

By Ding Qingfen (China Daily)
Updated: 2010-11-08 13:56

China is the world's second largest beverage producer and China is Coca-Cola's third largest market.

By 2010, Coca-Cola will have 42 plants nationwide and after 2011, when the three-year plan will have been implemented, the company will continue to invest and expand, said Kent, without giving details.

"We are sure China will become our largest market. It's a matter of time."

Two of the new plants the company opened recently are located in China's central and western regions. The company spent 600 million yuan opening a bottling plant in Wuhan in October last year. Wuhan is the capital of Hubei province, also in the central region.

The company has earmarked more investment projects and is opening new factories in the central and western regions as the government calls for more investment in those less developed areas, Kent said.

As the economy of the nation's central and western regions prospers and the labor costs in the coastal area keeps growing, many international businesses are moving to, or setting up new factories in, the central and western areas.

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The world's second largest laptop maker Acer Inc said early this month that it will set up a second China operating headquarters in Chongqing municipality. The company is also planning a global manufacturing center in the western municipality. Pfizer, the world's leading pharmaceutical, also announced in October it would set up a research and development center in Wuhan.

Coca-Cola had offered to purchase Huiyuan, the nation's largest juice maker but the proposal was turned down last year by the Chinese government over market monopoly concerns. "We are not seeking mergers and acquisitions at the moment - not just in China, but also in other parts of the world. We are focused on organic growth, growing our own brand without buying new brands," Kent said.

The chairman said there are three major things he is most concerned about regarding the Chinese side of the business. "Firstly, when the economy grows so fast, we have to hire and retain a lot of people, but retention is a big problem. Secondly, when the business grows so fast, we need to make sure the growth is sustainable in terms of packaging and brands. The third thing concerns the focus of the business," he said.

In June, Kent was elected as chairman of the US China Business Council. He led a delegation this month to discuss with Chinese government officials how to better promote the commercial and economic ties between the two countries. The two nations need "more communication, more investment from each side", he said.