Hindustan Coca-Cola suspends production in two more plants

Hindustan Coca-Cola Beverages (HCCB), India bottling arm, has suspended production in two more plants in Andhra Pradesh and Meghalaya.

"Output in Visakhapatnam (Andhra Pradesh) and Brynihal (Meghalaya) plants are on hold for the past few weeks. It is a standard practice by the company during low demand seasons, like winter," a company source said.

HCCB also halted production in its Kaladera plant, in Jaipur district of Rajasthan on January 25. Labour unrest, that followed the suspension of work in the plant, led HCCB to petition against union leaders belonging to Centre of Indian Trade Unions (Citu). HCCB has also brought allegations against three contractors in a court.

"After it stopped production, HCCB told us it was due to revamping and upgradation. But, they are offering Voluntary Retirement Schemes to employees. The company is also moving some of the permanent employees (to other locations)," Yashpal Singh from Citu's Rajasthan unit told the Business Standard.

The plant employs 115 permanent and 170 contractual labourers.

A company executive said, "Most of these plants will be operational by the end of February, as summer this year is expected to arrive early." Just like in Kaladera plant, movement of inventory is going on in the two plants in Visakhapatnam and Brynihal.

Coca-Cola has suffered considerable loss of business during last year due to milder summer.

It had to cut production by some four to six percent during last summer. The season accounts for nearly 40 percent of the yearly sales for the company. "Although, sales have grown during winter, it is unlikely to compensate for the loss earlier", he said.

Coca-Cola India procures beverages from 57 manufacturing units in the country. Out of which, 24 are owned by its bottling subsidiary HCCB, 24 are owned by franchise bottlers and the rest nine belongs to co-packers.