MEXICO: Cott acquires El Riego operations
Cott Corporation's Mexican business has acquired the assets of the El Riego company, providing it with production capabilities in the non-carbonated beverage segments in Mexico.
The Canada-based retailer brand soft drink provider said yesterday (22 August) that it has bought Puebla-based El Riego for US$2.1m along with rights to its spring water source.
The acquisition will help increase offerings in the non-carbonated beverage category and support Cott's presence in the Mexican market, said the company.
International president Wynn Willard said: "This is a small but strategic acquisition for Cott. In keeping with our international business strategy, the El Riego operation is a prudent investment that will greatly improve our ability to service our customers with an expanded portfolio of high-growth beverages."
Cott Mexico managing director Julio Cesar Hernandez Melean added: "We are building strong relationships with leading retailers in Mexico and we expect that the acquisition of El Riego will enable us to continue to grow our business with them."
The company has said that the El Riego operation will include two bottling lines with capabilities in both PET and glass. The water source will produce mineral water, still water and flavoured beverages.
Cott Corporation CEO Brent Willis said: "This acquisition in Mexico is one more step in our strategy of building momentum behind our more profitable and faster-growing international business. I am proud of our Mexican management team and their early successes addressing the needs of our retailer partners."
Last month, the soft drinks company said that operating income for the three months to the end of June plunged to US$6.2m from $23m in the corresponding period a year earlier. Sales for the period were also down, though less markedly, to $498.4m from $502m.
While volumes dipped by 6.4% to 340.3m eight-ounce equivalent cases, the company blamed the continued declines in the carbonated soft drink segment in North America, ongoing product rationalisation, and the impact of increased pricing by some US customers.
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