Fiji and New Zealand handed Coca-Cola Amatil (CCA) a severe blow in their 2012 profit results with both countries noticeably losing sales and demand for alcohol and beverages due to economic slowdown.
But the world’s largest beverage producer has had its accountants scratching for answers in Papua New Guinea and Indonesia as the two boosted their sales to compensate for losses in Fiji and New Zealand.
So high is Coca-Cola’s optimism in PNG that it has invested in a new A$28 million warehouse in Lae, the country’s second largest city and home to an ever-growing industrial estate.
CCA anticipates the PNG expansion will yield dividends over the long-term with significant growth in the next 10 years.
“The acquisition of this warehousing facility is strategically important for our fast-growing PNG business as it adjoins our existing manufacturing and distribution operation,” said Coca-Cola group managing director, Terry Davis.
“The acquisition provides us with much needed warehousing space to guarantee future expansion for both manufacturing and distribution in PNG for the next 10 years.”
After acquiring former San Miguel assets and breweries in Samoa and Fiji last year, Coca-Cola moved to pick up new San Miguel assets in Jakarta with plans for a further A$45 million expansion in the region to cater for West Papua.
Coca-Cola noted that the new Paradise Beverages (Fiji) Limited (new name after Foster’s Group Pacific was acquired) “is delivering ahead of expectations” with new product launches and increased production capacity.
Since the full acquisition last September, Coca-Cola has commenced marketing Fiji Bitter Draught in Fiji, launched a new low-carb beer Vailima Pure and introduced new premium rum and Bounty Mojito from the Fiji Rum company.
Coca-Cola noted that whilst production capacity and output achieved in Fiji has been exceptional over the last quarter of 2012, the same cannot be said about sales of its products.
“We are delighted with the opportunities created by the acquisition, its potential exceeds our initial plans for the business. The upgrading of the facilities will give us more production capacity and the ability to produce export quality beer. We have also launched a number of new products in the local market already.”
Davis said a new premium beer Corona was being introduced in Fiji for sales through the Coca-Cola distribution network and two others—Coors Light and Blue Moon—in New Zealand.
The new acquisitions in the South Pacific of old Fosters and Miguel assets—have helped Coca-Cola lift its earnings by 4-5% before significant items.
He said that while the trading environment in Australia remains challenging, Coca-Cola maintained its edge and lead over competitors with innovative range of products.
“CCA has continued to outperform its peer group and we expect to again deliver increased group revenue and volume growth in 2012.” Island Business