Coca-Cola in new China push

magicboy

Coca-Cola in new China push
http://www.ft.com/cms/s/0/e262565c-0a73-11de-95ed-0000779fd2ac.html?nclick_check=1

By Patti Waldmeir in Shanghai Published: March 6 2009 17:37 | Last updated: March 6 2009 17:37

Coca-Cola will invest $2bn in China over the next three years and expects to maintain double-digit growth in that market, Muhtar Kent, chief executive, said on Friday in an interview.

News of fresh spending by Coke in China – which has recently become the drinks maker’s third largest market behind the US and Mexico – comes as debate grows over whether Beijing is spending enough to stimulate domestic consumption and ward off a precipitous slowdown in the Chinese economy.

Coke’s $2bn investment will exceed the company’s total investment in China since 1979, which amounts to $1.6bn.

The company’s announcement comes at a time when Coke is waiting for a decision from the Chinese authorities on whether it can proceed with a proposed $2.4bn takeover of China Huiyuan Juice group, a Hong Kong-listed company that boasts a 42 per cent share of China’s pure fruit juice market and is one of China’s best known drinks brands.  

The deal, which would be the largest foreign takeover of a Chinese company, has come under nationalist-inspired criticism on the internet and in the press and will pose the biggest test so far of China’s new anti-monopoly law which took effect last August.

Mr Kent said Coke remained in close contact with the regulatory authorities, but refused further comment.
Investors are watching the decision closely for signs of hostility toward foreign takeovers of well-known brands.

Mr Kent yesterday opened Coke’s new $90m headquarters complex in Shanghai, which includes its largest research and development centre in Asia.

He said Coke had so far “only scratched the surface” of the Chinese market.

Coca-Cola volume sales in China grew 29 per cent in the fourth quarter of last year.

China’s per capita consumption of ready-to-drink beverages remains only about a third of the global average, he said.

With 300m-350m Chinese expected to join the ranks of the middle class by 2020 – and with China expected to account for a large chunk of world urbanisation of 1bn by 2020 – Coke’s China growth will remain strong in spite of “some slowing down of the economic pace”.

He said he expected China to take over as Coke’s largest market in about a decade, noting that the company had recently brought that date forward to around 2018, from 2020-2025 previously.

Mr Kent said he remained “cautiously optimistic” about Coke’s global business during the current economic crisis, but “excited” about long-term prospects, noting that beverages are a defensive business in a downturn.

magicboy

认领了。

gy214

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