Coca-Cola Amatil (CCA) is growing strongly in Indonesia and will invest heavily in 2013 with new infrastructure, products and pack sizes.
CCA said around 50% of group CAPEX will be invested in Indonesia and Papua New Guinea in 2013 to increase production capacity and cold drink cooler penetration “as demand for commercial ready-to-drink beverages rapidly increases”.
Today Coke’s anchor Asia-Pacific bottler reported trading revenues (including beverages, food and services) down 3.5% year-over-year to AUS $2.323bn (US $2.105bn).
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EBIT fell 6.9% to AUS $373.9m in H1, with CCA blaming a 10.1% decline in Australian beverage earnings as grocery channel sales were hit by aggressive pricing from rivals.
But Indonesian earnings and volumes rose 15%+ driven by faster growth of the core brand portfolio and successful new product launches – new Minute Maid Pulpy flavour variants, for instance.
Terry Davis, CCA MD, said:“We remain very positive about the prospects for Indonesia and will continue to invest ahead of the curve.”
“We have a very strong pipeline of new products and packs to be launched over the next 12 months and this is being supported by up-weighted investment and execution of consumer marketing by The Coca-Cola Company,” he added.
Major new investments
Major investments include the installation and upgrading of eight production lines, the commissioning of a new beverage production facility in Jakarta and a new 32,000m2 warehouse.
One-way pack production capacity is up 45% since December 2012 and CCA will install around 60,000 new cold drink coolers in Indonesia in 2013.
And despite the Australian downturn, CCA is now targeting 1% of addition EBIT growth from alcoholic drinks from 2014, having just inked a deal with Molson Coors to distribute its beers in the country, and another to distribute C&C Group’s beers and ciders in New Zealand and the Pacific.
Via a joint venture with Casella, CCA has access to a low-cost brewery in Australia, and has already signed a distribution agreement for Swedish brand Rekorderlig – the country’s No.1 off-premise cider.
Davis said:“CCA is now well positioned as the only independent and large-scale manufacturer, distributor and full service provider for premium international alcoholic beverage brands in Australia.”