It’s wrong for us to say that India is slowing down: Muhtar Kent, Coca-Cola

28 Jun,2012

Muhtar Kent

By A Correspondent

 

Unfazed by the economic slowdown and talks of policy paralysis, Muhtar Kent, global chairman and CEO of beverage maker Coca-Cola, on Tuesday announced a fresh investment of $3 billion (approx Rs17,000 crore) over an  eight-year period for expanding its bottling, cooling, and distribution operations as well as accelerating its pace of growth in India.

 

“Whether or not the government makes policy changes, we continue to announce investments in India,” Mr Kent said, adding that the company’s focus would be on ‘continuing to be flexible, and work with more speed than ever before’.

 

“Yes, there are some issues in the world economy. But it’s wrong for us to say that India, or China, or Brazil or any emerging market is slowing down. As you go up, the oxygen gets thinner. What’s being created today at 6-7 per cent GDP is incrementally much higher than it was some years back… what’s more important is sustainable growth and not growth that can’t be controlled, ” he added.

 

The $3-billion investment is over and above the $2 billion, the maker of Thums Up cola and Kinley water had announced last November. The company has invested $2billion in India since 1993, when it-entered the country.

 

Mr Kent said he expects India to be among its top 5 markets soon’, up from its current No 7 ranking. “This is a realistic goal. India’s demographic, economic and social trends are all huge drivers of growth. Six years ago, we were not strong here, not at all… but India has been a remarkable turnaround story,” he said.

 

The CEO, who got a pay package of $21.2 million last year, up 10 per cent from the previous year, flew down in his private jet with close family and friends on what is his first India visit as Chairman on Monday night. During his three-day India stay, he is visiting the Taj Mahal in Agra, making a flying visit to Amritsar to meet a handful of key bottlers and attending a Coke Studio concert in Delhi. Thrown in between is a town hall meeting with Coca-Cola employees, a few market visits and a visit to the beverage giant’s headquarters in Gurgaon. Unlike rival PepsiCo’s Chennai-born global CEO and Chairman Indra Nooyi who’s a frequent visitor to India – a key growth bastion for both cola majors – Turkish American Kent had not visited India since he took over the corner office at Coca-Cola’s headquarters in Atlanta in 2008.

 

Coca-Cola’s portfolio in India includes aerated drinks Coke, Thums Up, Fanta, Sprite and Limca, Kinley water and Minute Maid juices. Even after two decades of being here, the beverage maker’s top-selling drink here remains Thums Up, which it acquired from Ramesh Chauhan-owned Parle Bisleri.

 

But Mr Kent said the choice depended on ‘the consumer’. “We remain “constructively discontent and we believe we are just getting started. We need to make sure we provide choices to consumers… responsible choices. And help create solutions for over-nutrition and under-nutrition,” he said.

 

Like most food and beverage firms worldwide, Coca-Cola too is trying to transform itself as a ‘health and nutrition-focused company’. But over three-fourths of Coca-Cola’s revenues continue to come from sugary aerated drinks . “We let the consumer decide what he wants…. and we label our products responsibly.” said Mr Kent.

 

Like its American rival PepsiCo, Coca-Cola too, has been depending on India for driving double digit growth. For fiscal 2011, for example, Coca-Cola said its global volume grew 5 per cent, aided by key emerging markets such as Latin America, India and China. A consistent growth performer, Coke’s India business has been growing for the last 23 quarters, of which 17 were in double digits.

 

Source: The Economic Times

Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

 

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