Coca-Cola invests $180m in construction of new Yunnan plant

Coca-Cola (Yunnan) Beverages has invested ¥1.2 billion ($180 million) in the construction of a new production plant in Southern China.

The 195,000 square metre site will treble Coca-Cola’s production capacity in Kunming from four to 12, replacing an existing site in the city upon completion.

The plant will be used to manufacture brands including Coca-Cola, Fanta, Sprite and some local lines such as Ice Dew and Ice Dew Chunyue, delivering 423 million unit cases a year and helping to quench thirst in the soft drinks giant’s third largest market.

The construction of the new plant forms part of Coca-Cola’s wider programme of investment in the Chinese market – including a $4bn cash injection over three years designed to expand its operation in the country.

In August, Coca-Cola broke ground on a new $56m plant in Hebei province, east of Beijing, which would be capable of producing up to 250m unit cases of still and sparkling beverages every year.

It also invested a further $50m in the construction of a second plant in Hunan province, adding to the bottling facility that it built back in 2002. The new plant would house four production lines for water, four lines for sparkling drinks and one line for juice, the company said, as it prepared to increase its output in the region by 160m unit cases every year.

Between 1979 and 2014, the US-based company invested around $9 billion in growing its presence in China, according to local media outlet Shanghai Daily.

Coca-Cola China and Korea vice-president Marcelo Boffi was quoted by the newspaper as saying: “China is the third largest market for Coca-Cola globally and is pivotal to our global sales growth. Since we announced a new $4 billion investment plan in China in 2015, we have been actively delivering on our promise. The ¥1.2 billion new plant will help further strengthen Coca-Cola’s market leadership in the southwest region.”

And Glen Walter, CEO of Coca-Cola Bottling Investments Group China, added: “The new plant will become an important production base for Coca-Cola in China’s southwest region.

“This investment will not only provide strong support to Coca-Cola’s sustainable development in Yunnan, but also boost economic development locally by increasing job opportunities and enhancing collaboration.”