Monday, March 17, 2008

India to be among top 5 markets: Coke

Betting big on India's potential to emerge as its top five markets in the world, Cola giant Coca Cola on Monday committed to more 'incremental' investment on top of Rs 1,000 crore (Rs 10 billion), it is pumping in the next three years.

"We are bullish on India. It is a matter of stimulation... as the growth comes, you have to put in incremental investments," E Neville Isdell Chairman and CEO of US-based multinational Coke told PTI.

"We are investing $ 250 million (Rs 1,000 crore)... this will not be the last. More investments will come," Isdell, who is visiting India as part of pushing business in tandem with a pleasure trip, said.

Dubbing Coca Cola (India) as a 'profitable' venture that is adding to the balance sheet of the global giant, the CEO said, "We have arrived in India. But we have not arrived to the level where we want to."

"It is a question of long-term commitment. India figures in the global growth strategy of Coke. We are going to make it among the top 10 countries for Coke and then later among the top five," he said, but did not give any time frame on whether the first milestone would be achieved in five years or less.

Stating that India is currently at number 17 in the list of countries where Coke is present, Isdell said the country had emerged among the best markets for the company during the year 2007.

Recounting the tough time Coke faced in India owing to the pesticide controversy, Isdell said the company had learnt its lesson from the fact that despite it not doing anything wrong, the perception was contrary.

"...It (pesticide) was not correct. But the perception took the form of reality and it was our credibility that took us out of it. We are doing well but we have to align with the society," he said.

Asked about the acceptability of Coke in India and if it was getting hurt by a spate of controversies ranging from pesticide to water depletion being caused by the cola giant, Coke's worldwide CEO said, "We re-entered India in 1993 and had not become integral part of the society (at that time)."

Listing out various corporate social responsibilities activities initiated by it since then as part of making itself more acceptable in India, Isdell said that though Coke was water-neutral and ground water usage was 'zero degree', the company was taking a series of measures including providing rain harvesting and other water-related facilities.

Having visited one such facility in Gujarat on Sunday where Coca Cola (India) has created a big over-head water tank for the villagers, Isdell said the resistance that it faced was 'nothing new' in India.

The company had faced major problems in France and Japan in fifties and both the countries are now major markets for Coke.

Isdell, who is likely to meet Finance Minister P Chidambaram during his visit, said the company was not affected by the appreciation of rupee. "We are a local brand, not importer," he said but listed inflation, which is ruling over five per cent now as an area of concern but the government is addressing the issue.

Asked about the impact of the financial crisis and recessionary pressures in the US, Isdell said "we will be affected but not as much as others. We are better placed than any other company."

"80 per cent of our business comes from non-US countries. We have been named among the top 10 US brands in 2007," he said adding the company's growth would be global, even as there could be some impact in Mexico.

Listing India as a major growth story for the MNC, the company said that Coca Cola (India) had posted profits for the last six straight quarters and the outlook is also good.

Although he declined to give financial details of Indian operations, Isdell said he is quite enthusiastic about the prospects and said the strategy would include introducing more products in the domestic market.

India was also being assessed as a hub for global sourcing for one or two items for the worldwide operations but parried the queries on details. So much so, that he demonstrated his confidence about the success here saying "our race to make India among top 10 markets is on."


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