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NEWS UPDATES 17 March 2010

Coca-Cola sets up new bottling plant in Malaysia

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US soft-drink giant Coca-Cola Co is setting up a 123,024 sq m bottling plant at Bandar Enstek’s techpark in Nilai, Malaysia due to attractive logistics costs and a “tight timeline,” reported the StarBiz.

In an e-mail to StarBiz Tuesday, Coca-Cola Pacific Group communications director Kenth Kaerhoeg said: “Our selection of location was mainly driven by a list of criteria, including transportation/logistics costs for raw materials and finished products and ready to develop freehold land with a tight timeline to have the plant operating by end-2011.”

He said that after conducting comprehensive studies of alternative locations, the beverage giant reached a “very strong conclusion” on having the plant located close to Kuala Lumpur and Port Klang. “Also we have good water and electricity source and suitable environment.”

Coca-Cola had a ground-breaking ceremony, graced by Prime Minister Datuk Seri Najib Razak, at the site yesterday to officiate the construction of the plant. It hopes to have the plant operational before the transition agreement with Fraser & Neave Holdings Bhd (F&N) expires in September 2011.

“With the ground-breaking today (yesterday), the construction will commence straight away in order to have the plant operational in time for 2011 when we take over from our current bottler, F&N,” said Kaerhoeg.

He said the Malaysian beverage market had great growth potential for Coca-Cola. “More than 60 percent of the population is under 30 years old and this is an important indicator for a beverage market that is still underdeveloped.”

Kaerhoeg declined to reveal what was the company’s share in the local beverage market. “We do not disclose market share for individual markets,” he said.

At the event Tuesday, Coca-Cola Pacific Group president Glenn Jordan said the beverage company would be investing more than 1 billion ringgit in Malaysia over the next five years to boost its presence in Southeast Asia.

“Our planned investment includes a new greenfield plant and its associated equipment, sales and merchandising assets, production innovation, in-market activations, sales infrastructure and marketing.”

The plant was expected to create 600 to 800 new jobs, he said, adding that more than 90 percent of raw materials would be sourced locally.

“Economic impact studies from our other markets indicate that each job in the Coca-Cola system creates 10 additional jobs at the supplier, distributor and trade levels. As a result, we expect to create 6,000 to 8,000 jobs overall.”


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