Coca-Cola Co. opened Tuesday its 11th Chinese bottling plant, only days after the previous one.
Hangzhou BC Foods Co., in eastern Zhejiang province, is a joint venture with China National Cereals, Oils & Foodstuffs Import & Export Corp. and two other partners.One, BC Development Co., is a joint venture between China International Trust & Investment Corp., the country's main venture capital entity, Swire Group of Hong Kong and Coca-Cola.
The plant has US$5 million in fixed assets, but the breakdown isn't being disclosed. Capacity is given as 4 million cases a year of soft drinks in both returnable glass and PET plastic bottles.
Last week, Coke formally opened a similar joint venture in Anhui province, Nanjing BC Foods Co., with partners including BC Development and the state cereals entity.
Both produce Coke, Fanta, Sprite and some local soft drinks, nearly all
from locally sourced ingredients, according to Coke's Pacific group president John Hunter. U.S. and West German production technology is used.
Atlanta-based Coca-Cola is stressing the transfer of technology in its growing number of Chinese operations.
"Even the small percentage of flavors and raw materials sourced overseas are purchased in (Chinese yuan) through the Coca-Cola concentrate plant in Shanghai," Mr. Hunter said. "Therefore, the bottling plants do not have to use foreign exchange for their purchases."
The plants were intended to cut foreign exchange outlays by substituting locally produced soft drinks. In addition, Coke said about US$2 million worth of concentrate has been exported to Southeast Asia and that such sales will be emphasized.
The various Coca-Cola plants also are estimated to generate nearly US$30 million a year in tax revenues for the Chinese government.