Coca-Cola to expand soft drink production in Argentina with US$1.2 billion investment
The investment is an increase on its previous US$1 billion over four years, will was used to a new bottling plant in the north of the country, and the construction of two new distribution centers.
Coca-Cola has been present in Argentina for 75 years and operates 10 production plants and four bottling companies. The company offers a range of brands, including Coca-Cola, Coca-Cola Light, Sprite, Fanta, Powerade, Cepita, Bonaqua, and Aquarius. The company said the investment was to ensure “truly sustainable growth with a positive socioeconomic impact, compatible with environmental protection”.
“We are aware of the responsibility that touches us as a business sector at this momentous moment for the country and, therefore, we renew our commitment to Argentina,” said Joao Marcelo Ramires, president of the South Latin America Unit of Coca-Cola.
"Basically this investment is to confirm an investment plan that was initiated when President Macri took office, so it was a three-year plan for the 2016-2018 period for US$1 billion,” Esteban Agot Carreño, Executive Director of AFAC (Association of Argentine Manufacturers of Coca-Cola) told Infobae (article in Spanish).
A boost to Macri
The announcement is seen as a boost to President Mauricio Macri’s government, which has been under significant pressure recently after the country’s central bank raised interest rates to an eye-watering 40%, making it the highest in the world.
In an article in Reuters, Coca-Cola stated: “[It is the] responsibility of the corporate sector in this transcendental moment for the country.”
As we reported previously, the mood in Argentina had undergone a positive shift following Macri’s election in 2015. Indeed, as recently as October 2017 global food giants were eyeing Argentina as a land of opportunity: Laurent Freixe, CEO of Zone Americas for Nestlé, told attendees at the Nestlé Investor Seminar in September 2017 that Argentina “[…] is back in the global economy. We see good opportunities there. We have a good footprint there and good teams [in place].”
In its November 2016 Packaged Food in Argentina report, Euromonitor International noted that retail volume sales declined slightly in 2016, and big chain supermarkets and hypermarkets, such as Jumbo, Coto and Carrefour, responded by offering significant discounts.
