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Coca-Cola opens new production facilities
Soft drink, anyone?: Two workers keep an eye on bottled coke at Coca Cola Amatil Indonesiaâs Cikedokan plant in Bekasi, West Java, on Tuesday
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span class="inline inline-center">Soft drink, anyone?: Two workers keep an eye on bottled coke at Coca Cola Amatil Indonesia's Cikedokan plant in Bekasi, West Java, on Tuesday. Coca-Cola Amatil (CCA) and The Coca-Cola Company (TCCC) officially opened two production facilities as part of an investment worth US$500 million to expand its business in Indonesia in the next three years. JP/Ricky Yudhistira
Coca-Cola Amatil Indonesia (CCAI), part of US beverage manufacturer The Coca-Cola Company (TCCC), expects to boost production with an investment of US$500 million.
In an effort to increase its annual goal, the company inaugurated Tuesday two new production lines at a plant in Cikedokan, Bekasi.
CCAI president and CEO Kadir Gunduz said the new facility would increase the plant's capacity to 60,000 bottles per hour, helping the company attain its target of 450 million liters of beverages per year from the Cikedokan factory.
In 2014, the 10-hectare plant produced 20 million liters of beverages.
'Our 10 bottling plants in Indonesia produce various beverages, including carbonated drinks, bottled tea, juice and isotonic drinks. Our carbonated beverage brands, such as Coca-Cola, Fanta and Sprite have a 60 percent market share in the country,' Gunduz said.
Gunduz said he did not recall specifically how much the company invested in the new machinery. He said the company was in the process of adding three new facilities at the plant, such that the total would be five.
In October last year, TCCC made an announcement about its plans to invest $500 million in Indonesia. The move followed the recent acquisition of the company's minority stake by Atlanta-based beverages giant Coca-Cola Co. through its Australian affiliate, Coca-Cola Amatil Ltd. (CCA).
The investment would be used to build new factories and warehouses, upgrade the production capacity of existing factories and buy cold storage units.
CCAI currently runs 10 manufacturing facilities in Sumatra, Java and Bali, totalling to 35 production lines, with four more to be added in 2015, increasing its overall production capacity to 2.18 billion liters each year.
The firm operates 84 distribution centers, reaching 1.6 million customers nationwide. It employs around 12,000 people.
Indonesia, along with Papua New Guinea, accounted for 68.2 percent of CCA's sales revenue last year.
In the last 25 years, Coca-Cola invested a total $1.2 billion inIndonesia.
Between now and 2020, Coca-Cola Amatil Group chairman David Gonski said the global non-alcoholic ready-to-drink beverage category was expected to grow in retail value by approximately $300 billion, with Indonesia representing one of the fast-growing segments.
'With a population of more than 240 million people, Indonesia boasts the world's fourth largest population and a large, emerging middle-class with underdeveloped consumption rates of non-alcoholic ready-to-drink beverages,' Gonski said.
At Tuesday's event, Coca-Cola Company chairman and CEO Muhtar Kent said the additional investment reaffirmed the company's belief in Indonesia, which promised a bright future for the consumer market.
'We consider Indonesia a dynamic and promising market, which is one of the company's growth engines to achieve our long-term vision. We believe by creating more jobs and, where possible, sourcing locally, we can contribute to Indonesia's economic growth,' Kent said.
In his speech during Tuesday's event, Coordinating Economic Minister Sofyan Djalil said the government fully supported Coca-Cola's commitment to invest more in Indonesia as evidence that foreign direct investments would increase significantly due to higher confidence in the country's economy.
'Coca-Cola is a foreign investor that has confidence in Indonesia, because they see a growing demand in the country due to an improving economy,' Sofyan said.
