Coca-Cola FEMSA to invest $1 B more

Coca-Cola FEMSA, the largest public bottler of Coca-Cola products in the world, said it will continue investing the remaining $1 billion commitment over a five-year period in the Philippines after the Mexican-owned company expressed strong confidence on the Duterte administration.

Trade and Industry Secretary Ramon M. Lopez said President Duterte met with Coca-Cola CEO John Santa María Otazua at the recent APEC Meeting in Lima, Peru. Lopez said he intentionally held the announcement up until yesterday’s Trabaho, Negosyo, Negosyo at Kabuhayan Employment and Livelihood Summit where Otazua was one of its guests.

According to Lopez, the meeting between Duterte and Otazua at the sidelines of the APEC Meeting has resulted in a commitment from the Coca-Cola FEMSA to invest $1 billion over the next five years or until $2022 under the Duterte administration.

“Coke-FEMSA Group manifested strong investment confidence in the new Duterte administration,” Lopez said.

The new investments will go towards funding new lines and distribution centers throughout CocaCola FEMSA’s manufacturing and commercial footprints in the Philippines, therefore generating substantial employment and creating more microbusiness opportunities in the company’s supply chain, Lopez said.

According to Lopez, Lopez said the investment is in line with the government’s poverty alleviation and inclusive growth agenda.

In February this year, Fabricio Ponce, CEO Coca-Cola FEMSA Philippines, said the company was investing $170 million in 2016 for the acquisition of additional two pet lines and 2 tetra lines that will bring its investments to $800 million by 2020 given the company’s increasing market share and demand for carbonated drinks.

Ponce said the company has been investing between $160 million to $180 million annually since it started in the country in 2013 as part of its commitment to invest a total of $1.2 billion until 2020.

More or less the company had already invested $200 million. This means, it has only $1 billion remaining to invest in the next five years.

The investments in additional lines in 2016 will bring its existing capacity by 20 percent. The new lines, which equipment are going to be imported and assembled locally, were to be installed at its existing plant in Canlubang, Laguna or in other plants in areas that need additional capacities.

Coke-FEMSA’s expansion in the country is part of the world’s number one soda producer’s goal to go to places where it needs to improve its presence. Coke operates 22 plants around the country.

Ponce noted that its investment in the Philippines was very important in turning around its local operations. After the Philippines, Coca-Cola FEMSA will start working on its expansion in other Asian countries.

“For us this venture is very important because if we can turnaround this company we will show to Coca-Cola company and our shareholders that we can grow our business. So this is really a test,” he said.

He expressed confidence of securing steady growth in its Philippine operations.

So far, Coca-Cola has been doing very well in the Philippines.

Coke is the country’s dominant beverage brand with 65 percent market share for sparkling (carbonated drinks) category. Company sales are expected to perform better this year with 5 percent growth from a modest 2 percent growth in 2015.

“People are spending so our business is growing a lot,” he said.

Ponce further said the Mexicanowned Coke FEMSA has been working on its expansion program in Asia after it concentrated in Latin America.

He said Asia is very important in its growth strategy as it put a balance in its portfolio of investments in South America where some countries are not doing well.