Coca-Cola To Buy Local Brands, Lines Up Vrs

The segments identified include water, juices, iced tea and packaged milk amongst others.

The cola major has also completed its management restructuring under which over 1100 employees have accepted a voluntary retirement scheme offered by the company.

The company is also negotiating a VRS scheme for employees in the recently acquired Chennai and Mumbai bottling plants and expect 40 employees in Chennai to accept the offer.

Coca-Cola India president Alex von Behr said, "We have been allowed to look in for acquisition of Indian brands in the new non alcoholic beverages area that we are getting in."

If acquiring a strong brand is cost-effective than building a brand on our own, we'll do that," Behr said while speaking to reporters here yesterday.

 

However, Behr made it clear that acquisition is only one of the option and they could also go in for greenfield projects or contract manufacturing agreements with Indian players.

Commenting on the management restructuring programme, Coca-Cola India vice president (human relations) Nalin Miglani said, "We have achieved the optimal staffing after out VRS programme and do not intend to further reduce the number of staff."

The company had about 7,200 staff which had been brought down to 7,000.

According to Behr, Coca-Cola India will break even within the next two-four years. He however, mentioned that the company's profitability in India will depend heavily on the excise duty structure, which is currently at 40 per cent. "If government reduces the excise duty, we may achieve break even early," he said.

The company's turnover from Indian operations was Rs 2,900 crore in calendar 1999, which was up by 10 per cent from the previous year. He also pointed out that Coca-Cola has a market share of 56 per cent currently in the Indian market and its sales has grown by 18 per cent in the first six months of this calender year.

Behr said the company, which has acquired 37 bottling units from its franchisee, is not planning any further acquisitions of bottling operations. "Having completed these acquisitions, we have now 75 per cent company owned bottling units including 11 greenfield projects," he said.

Coke launched 'Kinley' brand of purified water in the three south Indian states -- Karnataka, Andhra Pradesh and Tamil Nadu on Thursday. "We will launch Kinley in rest of the country in the next three months," Behr said.