4 Coke Bottlers Line Up Rs 100 Crore Investment

Four independent Coca-Cola India bottlers today said that they will be investing more than Rs 100 crore over the next three years to expanding their capacity to produce beverages as well as packaged water. These bottlers -- one each from Punjab, Uttar Pradesh, Gujarat and Jammu -- met mediapersons in the presence of Coke officials.

Coke outsources about a quarter of its volumes from such independent bottlers, while around 75 per cent of the requirement is met by Hindustan Coca-Cola Holding Pvt Ltd, Coke's bottling arm in India.

One of the leading bottlers in the north, the Kandhari group of companies, will be investing about Rs 40 crore for making tea and coffee formulation which Coke plans to launch by the end-2002. The group has already invested about Rs 30 crore in the last two years in upgrading its capacity.

 

"We will start manufacturing Sunfil for Coke soon," Varinder Pal Singh Kandhari, executive director of the Kandhari group, said. The group feeds about 100 per cent of Coke's water business in Himachal Pradesh, 75 per cent in Punjab and about 56 per cent in the Delhi market. He said that talks are on with Coca-Cola India for taking a stake in Hindustan Coca-Cola Holding Pvt Ltd.

According to Sanjeev Agarwal, managing director of Moon beverages, Coke's bottler for Uttar Pradesh and parts of Delhi, the company will be investing about Rs 30 crore in its water as well as beverages business. "We plan to focus on upgrading our water bottling capacity by investing Rs 20 crore in the next year," Agarwal said.

The other independent bottlers for Coke who are also planning to increase their capacity include the Ahmedabad-based Kalthia group and the Jammu-based IFCA Bottling Company Ltd. Both the bottlers were earlier with Cadbury Schweppes which was acquired by Coca-Cola following a global acquisition in 1998.

Coke, which launched its Kinley brand a year back, claims that it has already captured a 30 per cent share of the packaged water market, while the Ramesh Chauhan-promoted Bisleri controls about 40 per cent of Rs 1,200 crore market. "We will have 40 per cent of the market in the packaged water segment over the next couple of months," Sanjiv Gupta, senior vice-president of Coca-Cola India, said.

He said that Coca-Cola India will break even by the end-December and it will start earning profits from 2002. "Our turnover grew by 100 per cent in the last three years and our volume grew by 50 per cent during 1998-2000," he said. He said the company earns major portion of its revenue from water business, while carbonated soft drinks did not grow much during the current year.