Coca-Cola to expand soft drink production in Argentina with US$1.2 billion investment

By Stephen Daniells

- Last updated on GMT

Image © The Coca-Cola Company
Image © The Coca-Cola Company
Beverage giant Coca-Cola will invest US$1.2 billion in Argentina over the three year period 2019-2021 to upgrade existing facilities, and construct new production lines.

The investment is an increase on its previous US$1 billion over four years, will was used to a new bottling plant in the north of the country, and the construction of two new distribution centers.

Coca-Cola has been present in Argentina for 75 years and operates 10 production plants and four bottling companies. The company offers a range of brands, including Coca-Cola, Coca-Cola Light, Sprite, Fanta, Powerade, Cepita, Bonaqua, and Aquarius. The company said the investment was to ensure “truly sustainable growth with a positive socioeconomic impact, compatible with environmental protection”​.

“We are aware of the responsibility that touches us as a business sector at this momentous moment for the country and, therefore, we renew our commitment to Argentina,”​ said Joao Marcelo Ramires, president of the South Latin America Unit of Coca-Cola.

"Basically this investment is to confirm an investment plan that was initiated when President Macri took office, so it was a three-year plan for the 2016-2018 period for US$1 billion,” ​Esteban Agot Carreño, Executive Director of AFAC (Association of Argentine Manufacturers of Coca-Cola) told Infobae​ (article in Spanish).

A boost to Macri

The announcement is seen as a boost to President Mauricio Macri’s government, which has been under significant pressure recently after the country’s central bank raised interest rates to an eye-watering 40%, making it the highest in the world.

Argentina’s National Congress in Buenos Aires © Getty Images VelhoJunior
Argentina’s National Congress in Buenos Aires.  Image © Getty Images / VelhoJunior

In an article in Reuters​, Coca-Cola stated: “[It is the] responsibility of the corporate sector in this transcendental moment for the country.”

As we reported previously​, the mood in Argentina had undergone a positive shift following Macri’s election in 2015. Indeed, as recently as October 2017 global food giants were eyeing Argentina as a land of opportunity: Laurent Freixe, CEO of Zone Americas for Nestlé, told attendees at the Nestlé Investor Seminar​ in September 2017 that Argentina “[…] is back in the global economy​. We see good opportunities there. We have a good footprint there and good teams [in place].”

In its November 2016 Packaged Food in Argentina ​report, Euromonitor International noted that retail volume sales declined slightly in 2016, and big chain supermarkets and hypermarkets, such as Jumbo, Coto and Carrefour, responded by offering significant discounts.

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