Swire Coca-Cola to expand production in China market

Beverage giant set to invest in factory infrastructure for business growth

Swire Coca-Cola Ltd, a bottler of Coca-Cola beverages, will invest more than 5.5 billion yuan ($854 million) in factory infrastructure in China in the next five years, and plans to expand nearly 20 production lines to cash in on the rapid growth of its businesses in the world's second-largest economy.

The company said it will continue to invest in sustainable development projects in the fields of new products and packaging, carbon reduction and water saving.

It has invested no less than 900 million yuan to build a new plant in Zhengzhou, capital of Central China's Henan province, the largest single investment Swire Coca-Cola has ever made in the Chinese mainland, the company said.

A ceremony was held in Zhengzhou on Saturday to lay the foundation stone at the plant. Covering 124,000 square meters, the new plant, which is equipped with cutting-edge and digitalized production technologies, will be put into operation in about two years, with the annual maximum production capacity seen reaching 1 million metric tons.

"We attach great importance to the dynamic and fast-growing market in China. The factors including policy support, convenience in development and booming domestic demand have attracted the company to put its strategic focus on China," said Karen So, managing director of Swire Coca-Cola, as she underlined the new plant in Zhengzhou embodies the company's determination to continue to increase its investment in China.

The Chinese mainland has become the most important engine powering the continuous growth of Swire Coca-Cola. The company's revenue in the Chinese mainland hit 13.47 billion yuan in the first half, up 25 percent on a yearly basis, and profits from this area accounted for nearly 70 percent of the company's overall profits.

Dang Jian, chief executive officer of Swire Coca-Cola on the mainland, said China is the second-largest beverage market in the world, and apart from soda, items like pure water, tea, and fruit juice have also taken up a big market share in China. Moreover, some new kinds of beverages, such as energy drinks, have witnessed rapid growth in recent years, Dang added.

The company will continue to concentrate on the beverage market and add production lines to its plants across the nation in accordance with the demands of consumers, he said.

Dang is bullish on future prospects in China, and the company has invested in nine production lines since last year despite the challenges posed by the COVID-19 pandemic.

Dang added the new plant in Zhengzhou will become a new demonstration bottling factory for Swire Coca-Cola in China, which will also drive the new growth of the company in digitalization and green development.

As the fifth largest bottling group in the Coca-Cola system globally, Swire Coca-Cola has partnered with The Coca-Cola Company for more than 50 years. The company currently runs 18 plants on the Chinese mainland. It manufactures and distributes soda, tea, coffee, energy drinks and other beverages across the nation.

China's actual use of foreign direct investment rose 22.3 percent on a yearly basis to 758.05 billion yuan in the first eight months, according to the Ministry of Commerce.

Zhang Jianping, director-general of the Beijing-based China Center for Regional Economic Cooperation, said China's huge consumption market is attracting an enormous volume of foreign investment.

The implementation of a new round of opening-up measures, such as the Foreign Investment Law, shortened negative list for market entry and pilot free trade zones have created favorable conditions for foreign businesses to invest in the world's second-largest economy, he added.

Brands should support consumers' new consumption habits after the COVID-19 pandemic by elevating their in-home experiences, and innovating around nutritional benefits and low sweetness to make breakthroughs, said Roolee Lu, senior research analyst at research firm Mintel.