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Coca Cola mulls new investments

DUBAI - Global soft drink giant Coca Cola, which has invested $500 million in assets in the Middle East, said it would press ahead with new investments aimed at boosting regional production capacity and gaining increased market share.

Ranked number one globally but positioned second in the region, the US multinational has set out ambitious targets and chalked out new marketing strategies in a bid to capture the number one slot. “We have ambitious targets but market conditions will dictate the duration of a time-frame to achieve this," said Gurtay Kipcak, Public Affairs & Communications Director, Eurasia & Middle East Division. “But I can tell you that Coca-Cola Light is already a market leader in its segment in the UAE. I am sure other brands fom our fold will follow suit in the near future," he added.

Coca-Cola Company is a market leader everywhere in the world except very few markets -Middle East being one of them, Kipcak pointed out. “Therefore, to gain our rightful position, we have developed new marketing strategies for the region. If I were to summarise, these include localisation, packaging innovation, and new products.”

While a new plant is under consideration in Lebanon where Coca Cola achieved a 50 per cent growth in revenues last year, there will be line extensions in Saudi Arabia that will be an additional double-digit investment apart from the $50 million spent every year in the region in the form of new coolers, new packagings, new products, advertisement campaigns, promotions or plant expansions, Kipcak pointed out. "Unfortunately I do not have the exact figure of the new investment."

"Soft drink business is a very dynamic sector. In order to meet the changing trends and market conditions we invest every year in every market. For example; we have introduced Arwa water and Coca-Cola Caffeine Free in the UAE this year. Sprite sleeve bottle was a new packaging. We have invested in music programmes in the UAE this year targeting the Asian population. So looking at investment only as plant building will be misleading. In short, we make continuous investment in every market we operate," he said.

He said Coca Cola's Eurasia & Middle East Division currently operates some 34 plants in 23 countries. Its Middle East region has 12 plants at present. "Since our plant investments were made for long-term business targets, we need to fulfil the current capacity first and then focus on adding new plants to cope with the market growth," he said.

On the soft drink brand's localisation drive, he said: "We are now much more closer with our consumers. We are signing sponsorships with local celebrities such as Adbul Majeed from KSA, Wahibi from Oman, sponsoring local music activities (UAE, KSA, Lebanon, Jordan), football teams in Lebanon, basketball in Jordan, Saudi National Football Team and many other initiatives in order to better connect with our consumers, share their passion to sports and music."

On new products, he said Coca-Cola Caffeine Free has been a huge success in Saudi Arabia and other AGCC countries. Arwa water has been relaunched in its new packaging in the UAE. QJ has been another success story first in Oman then in the UAE. "We are continuously monitoring new trends and consumer likes in order to respond to their needs on a timely manner," Kipcak said.

Coca-Cola re-entered the UAE in 1998 by opening a $30 million bottling plant in Al Ain. This plant, which currently employs around 600 people, also produces Coca-Cola products for Oman.

Ruling out any immediate major upgrade or expansion in the UAE to cope with the demand surge, he said the initial investment was made in line with a long term business expectation.