Surging demand: Coca-Cola to start 3 new plants in Pakistan

Published: June 18, 2014
SHARES
Email
Coca Cola MENA chief Ferguson says he expects sales growth of around 20 per cent in Pakistan this year. PHOTO: FILE

Coca Cola MENA chief Ferguson says he expects sales growth of around 20 per cent in Pakistan this year. PHOTO: FILE

CAIRO: Coca-Cola Co expects to start production in at least three new factories in Pakistan and two in Egypt over the next 18 months, seeing double-digit percentage growth in sales for both markets this year, its Middle East and North Africa president told Reuters.

Surpassing Egypt for its sales growth, Pakistan will see three new plants open in the next 18 months in Karachi, Multan and Islamabad to serve the domestic market with sparkling drinks such as Coke, Fanta and Sprite.

“We watch the needle in Pakistan and almost every month we red-line on what our capacity is,” Ferguson said, adding he expected sales growth of around 20 per cent in Pakistan this year. “We’re just scratching the surface there.”

Investing $500m in Egypt

The US soft drinks maker’s investment is a particular boost for Egypt, which is desperate to attract foreign direct investment after three years of political and economic turmoil that has seen its foreign currency reserves shrink and budget deficit swell to around 14 per cent of GDP last year.

“Egypt is going to be one of our key anchor countries,” Curt Ferguson said on Wednesday, citing the country’s large and growing population as a big positive. “For sure the other key anchor will be Pakistan.”

As part of a $500 million investment plan announced for Egypt in March, Coca-Cola will start constructing a new juice plant in 6th of October city near Cairo next year in a joint $100 million dollar project with Saudi Arabia’s Aujan Coca-Cola Beverages Company.

The $500 million will be spent over the next three years, Ferguson said.

The beverage group is in talks to buy a plot of land between Cairo and Alexandria to build a plant for sparkling drinks and water which should go online next year, Ferguson added.

The rest of the $500 million will be used to increase production at existing plants such as its concentrate factory in Cairo, the only one of its kind in the Middle East, and to cover capital spending.

In Egypt, the company wants to redevelop production lines and keep distributing tens of thousands of Coca-Cola branded fridges to small supermarkets every year. Just to keep its business ticking over, Coca-Cola needs to spend more than $75 million a year in the country on such costs.

The Cairo concentrate plant exports more than 30 per cent of its produce and Coca-Cola wants to double exports from this facility within about three years, Ferguson said, sipping a can of coke light in the regional headquarters in Cairo.

When asked about recent tax increases in Egypt, Ferguson said Coca-Cola could live with the tax rates and understood Egypt’s need to increase its revenues, but added lower taxes and clear, well-organised economic reforms would help investors.

“Business needs certainty,” he said, listing recent presidential elections as helping stability in the country. “The clearer, the easier, the lower the tax rate, you’re going to attract the most investment. It’s that easy.”

Bottling factory in Palestine

Coca-Cola has also purchased land in the Palestinian Gaza Strip for a bottling factory for which it has already paid $20 million and which should go online in the first quarter of 2015, Ferguson said.

The company hopes US Secretary of State John Kerry might open the Gaza plant, Ferguson said, adding the group had received all necessary permits from Israel, which has imposed a blockade on the Gaza Strip.

Kerry has not visited the Gaza Strip since becoming Secretary of State.

Further expanding into the region, Coca-Cola has started building its first factory in Qatar for $40 million, to be finished before an expected surge in demand for the 2022 soccer World Cup in the desert country. “It’s us and nine stadiums,” Ferguson joked of the construction.

Facebook Conversations

Reader Comments (18)

  • nkhan
    Jun 18, 2014 - 10:04PM

    Now thats a postive news… Thank you for trusting us….

    Recommend

  • Coca Bola
    Jun 18, 2014 - 11:18PM

    @nkhan: No no….Thank You for drinking our sugar water.

    Recommend

  • fizzy
    Jun 19, 2014 - 12:11AM

    Bottled poison.

    Recommend

  • Sajjad
    Jun 19, 2014 - 12:34AM

    I never knew its costs $500m to setup a coca cola plant.

    Recommend

  • Showbaaz
    Jun 19, 2014 - 5:57AM

    its needed after all the work the punjab police have been doing. Did anyone else see the footage of them on the news freely helping themselves to cokes which they hadnt paid for in Lahore.

    ET, dont block this comment, everyone saw it.

    Recommend

  • whats in the name
    Jun 19, 2014 - 7:58AM

    America has given a lot of technological innovations to the human race along with europe. But Of all the american inventions, the one’s which is a curse on humanity is the cola aereated drinks and fast food like mc donalds, kfc and burgers. These innovative (junk) foods, humanity could have done away without. By the way this comment coming from an ultra liberal…

    Recommend

  • sADAF sALEEM
    Jun 19, 2014 - 10:22AM

    Now this is an emblem of growth and employment. Looking forward to her more such news :)

    Recommend

  • Faisal
    Jun 19, 2014 - 10:45AM

    Doesn’t know about this topic much but it sounds strange when the local brand Pakola wrapped up its business sighting unfavorable circumstances and here we are with such a rosy picture.

    Recommend

  • Dr Usman Ghani
    Jun 19, 2014 - 11:06AM

    ‘Booming’ Cocacola not only symbolizes us as living in neo-colonial, neo-imperialist consumerist society but also our helplessness against the burgeoning US corporate sector in our poorly fed and ill-literate society. Everyone knows the tactics such companies employ through ads, political influence, bribe, monopoly and creating commercial empires through hegemonizing minds as well as the entire commercial setup of small, local and indigenous companies.

    Recommend

  • huma
    Jun 19, 2014 - 11:30AM

    How is the making and selling of sweet colored fizzy water a sign of economic improvement? It would have been if coca-cola was Pakistani owned but it is not.

    Recommend

  • N.Sid
    Jun 19, 2014 - 1:12PM

    They should come with a warning sign, just like cigarettes. Drinking Coke is injurious to health.

    Recommend

  • mantharia
    Jun 19, 2014 - 1:23PM

    Coke in Pakistan taste different then any where else in the world ????
    we all know why !!!!!!!
    Coca-cola company should look into that , they should bring high rank government officials under wings to stop Khakhi cola business . (home industries) selling poison in bottles .

    Recommend

  • ishrat salim
    Jun 19, 2014 - 3:05PM

    They should have been increasing their normal bottling plant capacity….but unfortunately, Coca Cola has more profit margin, who cares for less & the humanity ?

    Recommend

  • Jun 19, 2014 - 3:22PM

    Soft drinks are poison and surging demand is not a POSITIVE development. They contribute to many conditions and considering the poor health provision for the majority of the population this is very bad news :-(

    Recommend

  • Moiz Omar
    Jun 19, 2014 - 4:36PM

    I have always preferred Coca-Cola over Pepsi even when my sister use to work for Pepsi.

    Recommend

  • Zain
    Jun 20, 2014 - 5:50AM

    While in US, Soft Drinks, like Coca Cola have been loosing business steadily due to Health Awareness and local US population now moving away from the Soft Drinks. The Soft Drinks business is down by 10% from a decade ago. Same is true for Cancer Causing Tobacco, and Cigarette business, they are loosing business in US and Europe, due to health concerns of the Local population in US and Europe, while these multinationals are making record profits in Developing companies. It would have been better if we had US and European investment in Green Energy like Wind and Solar panels manufacturing facilities, and Cell phone and Cars manufacturing, instead of Soft Drinks and Cigarettes.

    Recommend

  • Ahmad
    Jun 21, 2014 - 1:20AM

    With all due respects, these soft drinks have no nutrition value, and in fact have several side effects. It is just wastage of money.. and hazardous to health..
    Just drink plain old clean water..
    Please do not forget the KISS (Keep it simple,.. ) principle..

    Recommend

  • Humza
    Jun 21, 2014 - 4:39PM

    Pakola Forever!

    Recommend

More in Business