Coca-Cola opens largest production facility in China

An opening ceremony was held in Liaoning Province Thursday to inaugurate global beverage leader Coca-Cola's new bottling plant, its 42nd and largest production facility in China.

With an investment of 1 billion yuan (160 million U.S. dollars), Coca-Cola Liaoning (Central) Beverages Co. Ltd. covers an area of over 170,000 square meters in Yingkou city, said Muhtar Kent, chairman and CEO of The Coca-Cola Company, at the event.

The company plans to invest in nine production lines in the new plant, four of which are already in operation.

Coca-Cola's third bottling plant in Liaoning, the new site should reach an annual production capacity of 1.2 million tonnes of sparkling and still drinks including Coca-Cola, Sprite, Minute Maid and Ice Dew upon completion, according to Kent.

It is expected to directly create 500 jobs and generate an additional 5,000 job opportunities in supporting industries, the CEO said.

The new plant is part of Coca-Cola plans to invest 4 billion U.S. dollars in China over three years and underscores the company's confidence in this fast-growing beverage market, he added.

"China is a vast growth market for Coca-Cola. As we work to double the size of our global business in this decade, China will play a leading role," Kent told those gathered at the ceremony.

Since 1979, Coca-Cola has invested more than 5 billion U.S. dollars in the Chinese market, including 3 billion U.S. dollars from 2009 to 2011.

The new plant comes as Coca-Cola's expansion in China continues to accelerate and indicates the company's faith in China's beverage market, Kent said.

Although China has announced a lower expectation of economic growth, there is no sign that foreign investment in the country is waning.

According to the Ministry of Commerce, the actual foreign investment was 7.726 billion U.S. dollars in China in February, 0.9 percent down from last year, while 1,603 new companies had been set up in the month, up 38.6 percent.

China is one of the fastest-growing markets for Coca-Cola, with volume expanding by 13 percent in 2011, maintaining double-digit growth in nine out of the past 10 years. Consumption of Coca-Cola products in China now represents approximately 8 percent of the company's global volume, Kent said.

"Coca-Cola's increasing investment in China indicates the country's labor force is still competitive, and the demand of industrial transfer into China is still increasing," said Xiao Xingzhi, dean of Economic and Development Research Institute of Dongbei University of Finance and Economics.

Big international companies like Coca-Cola are eyeing China's increasing domestic demand, he said.

Coca-Cola is optimistic about China's rural areas, which the company plans to attach more importance in its future blueprint, said Martin Jansen, Chief Executive Officer of Coca-Cola Bottling Investments Group China and Regional Director of Coca-Cola Bottling Investments Group China-Singapore-Malaysia.