Coca-Cola to invest $500 M in VisMin

MANILA, Philippines - After the expansion of its manufacturing facility in Canlubang, Laguna, Coca-Cola FEMSA Philippines is investing around $500 million next year to strengthen its distribution network in Visayas and Mindanao, a company official said yesterday.

Juan Dominguez, Corporate Affairs director for Coca-Cola FEMSA Asia Division, said that with the growth of its distribution network in Luzon, sales growth in Visayas and Mindanao is expected to follow suit.

The fresh investment pipelined for next year, the company said, would improve the distribution networks in Visayas and Mindanao through expansion of its retail network and improvement of related infrastructure and equipment such and warehouses and coolers.

“We have grown our distribution infrastructure significantly in Luzon and that expansion will come to Visayas and Mindanao during the course of next year,” said Dominguez on the sidelines of the inauguration of the company’s expanded manufacturing facility in Laguna.

Specifically, Coca-Cola FEMSA would expand its distribution network in Mindanao provinces such as Zamboanga, General Santos, Davao City, Cagayan de Oro, and Misamis Oriental. In The Visayas region, more distribution outlets would be established in Bacolod, Cebu and Iloilo.

“We will have improvements in both markets assets such as warehouses and coolers. We would also be investing in developing the market in the region by tapping more sari-sari stores and retailers,” said Dominguez.

Last year, the company undertook several expansion and acquisition activities to expand its operations in Visayas and Mindanao. These include the addition of two new bottling lines to its Misamis Oriental plant, rebuilding of its Tacloban plant and acquisition of a manufacturing facility in Davao del Sur.

The Davao del Sur plant, acquired from San Miguel Corporation used to be a bottling facility serving the tolling needs of various companies.

Dominguez said the company is bullish about growth prospects in the Philippines as Filipinos have a strong affinity with the brand. In terms of per capita consumption of soft drinks, the country is also the fastest growing in Asia.

The Philippines alone, makes up 20 percent of Coca-Cola FEMSA’s volume sales.

 “We believe firmly in the Philippines and capturing the growth of the Philippines. It is the fastest expanding market in Asia and Filipinos are consistently loving our brand for many years. We want to expand our presence in the market geographically and with the products distributed as well,” said Dominguez.

The company yesterday inaugurated its expanded manufacturing plant in Canlubang Laguna, which now houses three new bottling lines.

The $95 million expansion project also involves the expansion of the water treatment facility, construction of nine new trucking bays, expansion of the syrup room, and construction of a new resin injection operation area.

The additional facilities in the plant cover 3.30 hectares in the 15-year- old plant that remains as one of the largest manufacturing facilities for Coca Cola in the Philippines.

The three new bottling lines installed in the Canlubang plant use German and Italian technology and are considered to be the fastest bottling lines in the world.

The Canlubang plant now has nine bottling lines, ramping up its annual production capacity to 265 million cases from 170 million previously.

 “Continued investment reaffirms our commitment to the economic growth of the Philippines,” said Juan Ramon Felix, CEO of Coca-Cola FEMSA Asia Division.

The expanded Canlubang plant is meant to manufacture for the Luzon market but with the popularity of the 300 mililiter Mismo bottle, it may serve part of the demand of the Vsayas market as well.

Coca-Cola FEMSA Philippines  now operates 22 plants and 47 sales offices across the country and employs 8,000 workers.

Coca Cola FEMSA acquired what was then Coca-Cola Bottlers Philippines in an all-cash transaction of $688.5 million in January 2013, resulting to the formation of Coca-Cola FEMSA Philippines.

By its third year of incorporation, it would have invested around $1.7 billion in its Philippine operations.

Almost two years after its incorporation, the company has enhanced its existing production lines as well as its sales and delivery model. It has also employed 2,000 new workers.

In his keynote speech at the inauguration of the expanded Canlubang plant, President Aquino recognized the operational improvements done by the company, particularly in its contribution to post-typhoon Yolanda rehabilitation efforts in Tacloban as it rebuilds its plant in the devastated province.

 “Your constant presence in the Philippines shows continued investor confidence in the Philippines,” said Aquino. “You can be sure than in the government, you have a steady partner.”