Financial Daily from THE HINDU group of publications
Thursday, Jan 02, 2003
Corporate - Outlook
Coke India targets South
Mr Alex von Behr
NEW DELHI, Jan. 1
COCA-COLA India has allocated $46 million for investment during the current year in the four southern States of Andhra Pradesh, Karnataka, Tamil Nadu and Kerala.
In an exclusive interview with Business Line here, Mr Alex von Behr, President & Chief Executive Officer, Coca-Cola India, said that the fresh investments were being pumped into the four States to facilitate further development in infrastructure, capacity expansion of the existing plants, expansion of the distribution network and implementation of packaging innovations.
The Atlanta-headquartered parent company had recently announced its decision to invest $100 million in its Indian operations in 2003. This marks the company's second phase of investments in India and the biggest in a single year in the country. Prior to this, the company's overall investments in India have been $800 million.
According to Mr von Behr, a significant portion of the $100-million investment is being ploughed into the southern region owing to the high potential for growth in those States. In the fast-growing bulk water segment, for instance, Tamil Nadu has emerged as the country's leading market, owing to factors such as the inferior quality of water and scarcity in the State.
Andhra Pradesh, on the contrary, accounts for 20 per cent of the national volumes of all carbonated soft drinks of Coca-Cola India. Further, Tamil Nadu is among the most significant markets for the orange-flavoured Fanta.
Coca-Cola India, Mr von Behr said, would continue to outsource about 30 per cent of its production and opt for contract manufacturing for its non-carbonated beverages business. "Our bottlers will be investing in machines, packaging and trucks,'' he said.
While Kinley toppled Bisleri as the market leader in the retail packaged water segment in the third quarter of last year, in the bulk water 20-litre jars business, it is still early days yet for Coca-Cola, Mr von Behr indicated.
Outlining the company's plans for packaging, Mr von Behr said that it was exploring possibilities of introducing additional pack sizes for Kinley. Another brand for which the company may opt for different packaging sizes is Maaza - the cola major's juice brand. "Economy pack sizes could be an option,'' Mr von Behr said.
The company, meanwhile, is open to the idea of acquisitions. While declining to comment on specifics, Mr von Behr said that the company was "constantly looking at strategic acquisition options". "Make or buy" are the two options that the beverage major weighs in various segments in its operations worldwide, depending on its strengths.
Another drive that will continue to gather steam would be affordability, Mr von Behr said. "We are prepared to compete and offer very affordable beverages across various categories,'' he said.
Stories in this Section
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |
Copyright © 2003, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line