Coca-Cola to Invest $500 Million in Indonesia

Coca-Cola to Invest $500 Million in Indonesia
Coca-Cola to Invest $500 Million in Indonesia

The Chairmen of The Coca-Cola Company and Coca-Cola Amatil (CCA) commemorated Tuesday the expansion of the Coca-Cola Amatil Indonesia (CCAI) Cikekodan Plant in Bekasi, West Java.

This marks the first of several major investments being made as the Coca-Cola system in Indonesia invests US $500 million to accelerate growth in the next three to four years.

This incremental investment, according to the company, builds on the US $1.2 billion the Coca-Cola system has invested in Indonesia in the last 25 years.

“We consider Indonesia a dynamic and promising market and one of the growth engines to achieve our long-term vision,” said Muhtar Kent, chairman and CEO, The Coca-Cola Company.

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The Coca-Cola Company last October announced plans to create a joint venture with Coca-Cola Amatil’s local Indonesia subsidiary to invest US $500 million in return for an ordinary equity ownership interest of 29.4%, with the funds invested into CCAI operations in Indonesia to support accelerated expansion of production, warehousing and cold-drink infrastructure.

This investment will have a multiplier effect on local jobs, taking the Coca-Cola system’s total direct and indirect employment in Indonesia from approximately 60,000 to a total of 135,000 within three to four years. The investment is subject to CCA non-associated shareholder and Indonesian regulatory approvals.

In the past three years alone, CCAI commissioned 18 new production lines, deployed 150,000 coolers and built three distribution centers to increase capacity and build local capability with total investments exceeding US $300 million.

Between now and 2020 the global nonalcoholic ready-to-drink beverage category is expected to grow in retail value by approximately $300 billion. Indonesia represents one of the fast-growing segments of this global opportunity.

With a population of more than 240 million people, the country boasts the world’s fourth largest population and a large, emerging middle class with underdeveloped consumption rates of nonalcoholic ready-to-drink beverages.

The Coca-Cola system has been operating in Indonesia for 88 years. Currently, the Coca-Cola system markets 16 brands, operates 10 bottling plants across the country, directly employs more than 12,000 Indonesians with more than 200 sales and distribution centers, and serves directly more than 520,000 large and small retail outlets every week.

RMN News

Rakesh Raman