Coca-Cola anticipates investments in Brazilian market
Valor Econômico
Driven by a record sales growth of 11% in 2010, more than twice the 5% registered in the world, Coca-Cola Brasil plans to invest R$ 2.5 billion (US$ 1.5 billion) this year. The value is 13.6% greater than the R$ 2.2 billion (US$ 1.3 billion) invested in 2010. According to the CEO of the company in Brazil, Xiemar Zarazúa, the sales are being driven by the improvement in the income in the country and the growth of the consumption of class C. The company is giving more emphasis on the distribution of PET and glass packaging products than in cans, whose final cost is higher.
The heated demand caused, for instance, the increase in the market share of the soft drink Coca-Cola grow 38.9% in 2009 to 40.8% in 2010. But Zarazúa highlights the growth in the sales occurred in their 150 products. With that, in 2010, it was necessary to make investments in advance. Even though it was planned to invest R$ 2 billion (US$ 1.2 billion) in the period, the company ended up spending R$ 2.2 billion (US$ 1.3 billion) because it was necessary to enlarge the current plants to guarantee the growth of the supply. "We managed to anticipate many investments planned for 2011 and 2012, mainly in production lines and trucks. When we look at the R$ 2.5 billion (US$ 1.5 billion) [planned for 2011], it is mainly investment in infrastructure, with the enlargement of plants and erection of new ones", said Zarazúa, who avoided saying in advance the number of plants that will be opened this year or the where they will be installed.
Between 2010 and 2014, the company plans to invest R$ 11 billion (US$ 6.5 billion). The CEO explains that, besides the 150 products the company already produces, it also studies launching brands or acquiring others on the market. The executive pointed out the company has invested to bring the products closer to the new consumers of class C. "The Brazilian now has better purchasing power to try new things. Among them, the different types of soda have relevant power", said Zarazúa, remembering that between 2005 and 2009, the company invested R$ 6 billion (US$ 2.9 billion) in the country. All the movement led Coca-Cola Brasil to end 2010 with record earnings of R$ 17.7 billion (US$ 10.1 billion) and a sales volume of 10.6 billion liters.
Zarazúa stressed out the growth of the sales volume in Brazil was among the three largest in the world in 2010, when compared only to the largest markets such as the United States, Russia and India. He also recalled the FIFA World Cup had an important role in such growth. Such is true that the growth of the company in the second and third quarters of the year was strong despite the summer being the period of greater consumption for the sector. Besides the increase of 7% in the last quarter, the sales volume of the company in the country increased 13% both in the second and in third quarter, always compared to the same period in 2009. "Brazil has had an important role not only for Latin America, but worldwide. The growth Brazil has had has been historic", said Zarazúa. In 2005 the sales volume of the company in the country increased 10%, going to 9% in 2006; 16% in 2007; 7% in 2008; and 4% in 2009.