MEXICO: FEMSA 2010 investment nearer US$300m - analyst
A bigger investment from FEMSA in 2010?
FEMSA could invest nearer US$300m to grow its business this year, up from the $180m the firm estimated earlier this week, according to a senior industry analyst.
Earlier this week, FEMSA executives said that around $180m will be used to expand its manufacturing infrastructure and launch new products to grow revenues but would not provide more specifics. The news follows Heineken's purchase of FEMSA's beer unit, FEMSA Cerveza, earlier this month.
Speaking to just-drinks today (22 January), an analyst with a major Spanish bank in Mexico said he expects FEMSA to invest the bulk of the money to boost production in Latin America where the company is keen to up the presence of juice brand Jugos del Valle. FEMSA jointly acquired Jugos del Valle with The Coca-Cola Co through its Coca-Cola FEMSA unit in late-2007.
“I can see them expanding or buying new factories in Central or South America to expand Jugos del Valle in those markets,” the analyst said.
“I think the $180m figure is conservative,” he added. “They have been improving their profits and they are keen to grow in Latin America this year.”
He added that many future product launches will be for non-carbonated drinks where the company sees the greatest growth potential.
FEMSA did not return messages seeking comment.
According to the US Department of Agriculture (USDA), about 70% of the 2.5bn litres of fruit and vegetable juices sold in Mexico in 2009 were produced domestically. Mexico exported US$266.99m worth of...
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