Coke Plans Long-Term Lease Of Bottling Plants

Coca-Cola India is believed to have decided to give the company-owned bottling plants to its bottlers on long term lease. While bottling sources say they have been approached by the company, a Coke spokesperson, however, said there is no such proposal. He said the company has appointed Arthur Andersen to do an internal audit of its infrastructure and distribution network. "This is an internal matter of the company and has nothing to do with normal operations strategy, such as running or leasing of plants," he said. About 70 per cent of Coca-Cola's bottling plants are company-owned. The total number of bottling units of Coke is 53 out of which 37 are company-owned and 16 are franchised. Until 1998, a majority of bottling units of Coca-Cola were owned by franchisees and the number of company-owned units were only 21. However, in 1999, this increased to 37, though the total number of bottling units remained at 53. The company's bottling network includes 11 greenfield plants. The greenfield locations include Bhopal, Ahmedabad, Wada, Goa, Bangalore, Palghat, Dasna, Jaipur, Siliguri, Bhubanes- war and Vijaywada. Coke is providing modern technology and skill to the bottlers and suppliers, enabling them to meet the required quality standards. In this way the company contributes not only to the development of the soft drink industry, but also to the development of related industries and to the whole economy, according to a company source. The company has a long-term strategy to ensure cost and process efficiencies in all asp- ects of business to maximise returns on the infrastructure investment. The government has permitted the company to invest $830 million in the country. Over 70 per cent of this investment was used to build new infrastructure, including greenfield plants and strengthen existing manufacturing and distribution network, the source said.