just On Call - Coca-Cola Co confident on China potential
Volume in China grew 6% in the second quarter
The Coca-Cola Co's CEO and chairman, Muhtar Kent, has talked up the soft drinks firm's potential in China following a strong second quarter for the company.
Speaking at the firm’s earnings conference yesterday (21 July), Kent said that China is a "complex" market but that the company has a “great portfolio” in the country.
Coca-Cola's volume sales rose by 6% there in the second quarter of 2010, helping the firm to offset a more troublesome North American market.
“In China we have grown our still beverages category, gaining volume and value share, and in sparkling beverages we saw sequential volume improvement through the quarter,” Kent said.
“We clearly expect China to be a strong growth country for the company. I want to remind everyone of 25 consecutive quarters of double-digit growth that we’ve had in China,” Kent told analysts.
Pacific group volume growth in the quarter was led by the Philippines, China and Southeast and West Asia, Coca-Cola said in its earnings release yesterday.
In China, juices and juice drinks in particular grew 21% in the quarter due to strong momentum from the firm’s Minute Maid Pulpy brand.
“We believe China will be a strong growth country for the next decade as well as beyond and we will continue to do what is right for the business in China by investing for the long term and also leading the industry in building strong brands across our entire portfolio, especially in sparkling beverages,” Kent said.
The firm has been keen to show that its failure to acquire Huiyuan Juice Group, China's juice market leader, has not held it back over the last 12 months.
In March last year, Coca-Cola announced plans to invest $2bn in China over three years. The money is being spent on new plant and distribution infrastructure, sales and marketing, and research and development, Kent said.
For the six months to 2 July, the company earned US$3.98bn, up 18% on the corresponding period a year earlier.
Sales came in at $16.20bn, a 5% increase from $15.44bn earned in the prior year. Operating profits rose 15% to reach $4.95bn.
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