Coca-Cola opens biggest bottling plant in China

The Coca-Cola Co opened its largest bottling plant in China on Thursday in northeastern Liaoning province, which will greatly improve the beverage giant's local distribution capabilities.

The Yingkou operation is Coca-Cola's 42nd bottling plant in China. It has an area of more than 170,000 square meters and involves an investment of $160 million.

The new bottling plant is expected to reach an annual production capacity of more than 5 billion servings of sparkling and still beverages, including Coca-Cola, Sprite, Minute Maid and Ice Dew, the company said.

"This new investment in Yingkou is also aligned with the government's call to develop the Bohai Bay Economic Zone areas and to strengthen our distribution system, especially among second- and third-tier cities," said Martin Jansen, chief executive of Coca-Cola Bottling Investments Group China and regional director of Coca-Cola Bottling Investments Group China-Singapore-Malaysia.

Since re-entering the Chinese mainland in 1979, the world's largest soft drink company has invested more than $5 billion in the local market.

The Yingkou plant is part of a plan drawn up by Coca-Cola and its Chinese bottling partners to invest $4 billion in new infrastructure, partnerships, innovation, sustainability and brand building over the next three years.

"The new investment is a part of our long-term commitment to invest in innovation, partnerships and a portfolio that will enable us to grow our business in a sustainable and responsible way," said Muhtar Kent, chairman and CEO of Coca-Cola.

China is Coca-Cola's third-largest market in the world after the United States and Mexico. Its sales volume expanded by 13 percent in 2011, maintaining double-digit growth for nine years in the past decade.

The consumption of Coca-Cola products in China now makes up about 8 percent of the company's global volume.

"China is a vast growth market for Coca-Cola. As we work to double the size of our global business, China will play a leading role," Kent said.

While Coca-Cola is expanding its production and distribution in China, its competitor, PepsiCo Inc, was selling part of its bottling business.

PepsiCo agreed in November to sell its interest in 24 soft drink bottlers in China to the Hong Kong-listed Tingyi Holdings Corp.