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Local Coca-Cola pushes expansion amid pandemic

Coca-Cola, the country’s largest beverage manufacturer in the country, has not been spared from business slowdown due to the pandemic, but announced the construction of three manufacturing facilities in Mindanao as part of its  $95 million investments this year on top of the P1 billion state of the art pet manufacturing facility, stressing they believe in the growth opportunities in the Philippines where they have operated for the past 108 years. 

Gareth McGeown, president and CEO of Coca-Cola Beverages Philippines. Inc. (CCBPI) and Winn Everhart, Coca-Cola Philippines President and General Manager, said this during a virtual press conference and what it means to invest in a time of pandemic.

At the height of the pandemic, CCBPI, the local bottling arm of Coca Cola Philippines, has announced an additional $22 million investment in its local operations for 2020, augmenting the $73 million investment already earmarked for the year. The incremental capital infusion will go to new production lines to be established throughout the Philippines, as well as people development via job protection and generation.

McGeown said the $95 million investment will go into the construction of production facilities of CCBPI across the country. McGeown three Mindanao production facilities will be constructed in Misamis Oriental, Zamboanga City and Sta. Cruz in Davao del Sur.

McGeown said that the extra production capacities in these areas are purely based on the demand. “I think it’s a potential growth market for us the three locations in Mindanao,” he said.

At present, the company has 19 operating manufacturing facilities and over sales and distribution centers across the country employing roughly 17,000 people.

For its P1- billion pet manufacturing  facility investment,  a pioneering state-of-the-art food grade recycling facility remains as a top priority and will soon rise in General Trias, Cavite.

PETValue will deploy cutting-edge technologies and industry-leading best practices to employ the safest and most advanced recycling process for plastic bottles made from PET (polyethylene terephthalate) material. PETValue will help ensure that used PET plastic bottles—packaging that is 100% recyclable, and therefore not “single-use”—will be given new life and function as they are collected, processed, and used again and again within a circular economy. PETValue is a joint venture of CCBPI and Indorama Ventures, a global integrated leader in recycling.

 Construction of the facility has encountered some delays though because some technical people have difficulty flying in during the harsh lockdown, but the company committed to finish the project, which is expected to be running around this time of year next year.

McGeown said that not all markets received this kind of aggressive investment plan, but the pandemic gave them more fuel to push for more investments because of business opportunities in the future. He stressed it is not the figures that matter most this time, but people.

Just like other businesses, Coca Cola’s operations was not spared from the impact of the quarantines due to the pandemic.

Everhart explained of market shifts during this pandemic. What was a 50-50 household and out of home (restaurants, offices) consumption ratio pre-COVID has changed to largely majority household consumption of their products as movements have been restricted.

Now, he said, consumption at home is now at 75 percent to 90 percent. The natural consumption pattern of a consumer just in general was about two liters per day.

Winn noted of ups and downs in any operation, but they have data to support that in those times of crisis they can still commit to longer term plans for the Philippine business.

He said that March and April were easily the worst months in the Philippines, but they were able to align operations eventually and as people understand how to operate better.

They are not yet getting to where they had been pre-COVID though but stressed, “We do believe that relative to the rest of world, the Philippines is much more resilient.”

McGeown also said they have to implement measures to preserve cash flows, which enabled them to protect people and save jobs.

He called the pandemic a speedbump in 2020, but was confident of growth next year.

Even as the company was saving cash flows and ensuring their workers are safe from the virus, McGeown noted that the company never missed out on the provision both physical and emotional PPEs to their workers.

“We have been able to maintain the manpower and keep everyone employed so we’re able to protect them,” he said.

They have also provided full benefits and extra medical benefits because working from home may not be that easy. The company believes that physical and emotional PPE investments in people, culture, value chain and partners will help them forward.

The company has also provided close of P1 billion credit terms and run promotions to strengthen their supply and value chain in support of their partners as they protect the mom and pop or the sari-sari stores.

“Our priority is to restart and regrow the mom and pop stores,” said Everhart.

They have also realigned P150 million in advertising budgets to go into communication campaigns and messages of what it means to work at home and interact through the day.

This also enabled them to shift marketing strategies and accelerated digital communications for its wide array of product portfolio.


Source: Manila Bulletin (https://mb.com.ph/2020/08/28/local-coca-cola-pushes-expansion-amid-pandemic/?utm_source=rss&utm_medium=rss&utm_campaign=local-coca-cola-pushes-expansion-amid-pandemic)

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