Coke to add fizz to beverage market

Coca-Cola Beverages Vietnam Ltd’s corporate communications representative Tran Ngoc Anh Thu told VIR that the company had just invested over $3 million into installing its second Danang-based purified bottle water production chain, with a capacity of up to 6,000 500ml-bottles per hour.

Thu said the company sought to carve out a firm niche in Vietnam’s central region with more projects to be implemented in Danang, because Coca Cola’s revenue in central Vietnam had witnessed double digit growth over the past few years.

Coca-Cola Beverages Vietnam’s total staff number in the central region has doubled against 2009 and is expected to increase by 50 per cent by 2013.

“Further investment will also be invested in Coca Cola’s facilities in Hanoi and Ho Chi Minh City. Details of this plan will be trumpeted from now to the year’s end,” Thu said.

In early September 2009, Coca-Cola International chairman and chief executive Muhtar Kent told Prime Minister Nguyen Tan Dung that Coca-Cola planned to double investment in Vietnam  during 2010-2012, from $200 million already invested in the country in between 1994-2009.

These projects would include scaling up the manufacturing capacity of its Vietnam’s operations, staff recruitment and training,  strengthening existing brands and continual product development through innovation, Thu said.

The move was reported to meet local soaring demand for Coca Cola’s products despite Coca-Cola having three factories in Vietnam producing a total of 608 million litres per year. The move will also  secure Coca Cola’s larger market share in Vietnam, given stiffer competition from its direct rival PepsiCo, according to the Vietnam Beer Alcohol Beverage Association.

In January this year, PepsiCo, the world’s second-largest food and beverage business, commenced construction of its $73 million production facility in northern Bac Ninh province-based Vietnam-Singapore Industrial Park. The facility will churn out popular carbonated and non-carbonated beverage brands including Pepsi, 7-Up, Mirinda and Sting. The project is part of PepsiCo’s $250 million investment plan, pledged in August, 2010, in Vietnam to be implemented until 2013, bringing its total investment in the country to over $500 million since PepsiCo products were first launched in Vietnam in 1994.

Thu said: “Coca Cola has been doing what it pledged two years ago, not because its rival is struggling to devour Vietnam’s potential market.”

According to the British Business Monitor International Company (BMI) in its Vietnam Food and Drink report for 2011’s first quarter, Vietnam continues to be one of the most promising soft drinks markets in the region. Per capita consumption of soft drinks in the country is low, at 9 litres per annum, compared with 70 litres in the Philippines and 15 litres in China. The soft drinks sector was dominated by multinationals Coca-Cola and PepsiCo, which jointly command an 88 per cent share of the market, BMI said.