HOHHOT, Oct. 29 (Xinhua) -- Coca-Cola, the world's number one soft drink producer, is to increase investment in China, which has a great potential to become its biggest market.
Muhtar Kent, chairman and chief executive officer of the Coca-Cola Company, made the remarks here Friday in an interview with Xinhua News Agency after announcing in this capital city of Inner Mongolia Autonomous Region the opening and near completion of three new bottling plants in China.
The combined investments in the three plants in Hohhot, Luohe of Henan Province and Sanshui of Guangdong Province amount to 1.6 billion yuan (about 240 million U.S. dollars), continuing the company's rapid expansion in one of the world's largest and fastest growing beverage markets.
The new investments are part of a three-year expansion program of Coca-Cola in China, which involves two billion U.S. dollars, a latest display of the company's long-term commitment to its business in China.
Kent described the implementation of the accelerated investment as "very good" as "we are ahead of schedule by the end of 2010."
"We continue to invest heavily, expanding our existing plans, expanding our distributions, warehouse, and our brands. We have lots of investment plans," said the CEO.
"Without a question China will become the first (market) because our business is about people. More consumers in China will mean more business," said Kent. "It's growing the fastest. It will happen. It's not important when it will happen. What is important is that it is growing and strong."
China is now the third biggest market of Coca-Cola following the United States and Mexico.
"To be competitive, you have to have speed, entrepreneurial spirit, and flexibility. You need to have belief in the future and have investment capability quickly. China has all these," said Kent, who became chairman of the US-China Business Council (USCBC) in July.
"Changes are always never easy. China is changing very fast. Everyone should digest that change at the level of development," said Kent. "We are very confident about the future of our business in China. We'll set up more distributions, more products, more innovation, and more plants and more bigger plants."
"Wherever I have gone to China, I've been to a lot of places, there have never been more willing supportive local governors, mayors, local investment incentive bureaus," said Kent. "There is a great entrepreneurial spirit in Chinese government officials to promote investment. That is what we always see. We see that absolutely continues."
"There is a great spirit of drawing investment and that's why we continue to invest," Kent said.
He said that Coca-Cola has built factories very quickly in China, quicker than most other places in the world. The factory in Luohe City, Henan Province, with an investment of 900 million yuan, was built in eight month.
"The quality of the Chinese infrastructure has developed at a phenomenal rate in the last 10 years," said Kent, adding that with quality road and train systems, Coca-Cola is able to expand business in terms of factory capacity and more job opportunities in China with more convenience.
On the 12th five-year plan (2011-2015) China is going to implement next year, Kent said that China is moving towards a more balanced growth model.
"Now infrastructure is in place. There is a tremendous accumulation of reserves. There are a lot of urbanized people in China. It has to be also a balanced growth that is not only led by export growth but also by local domestic consumption. That will create a sustainable growth model," said Kent. "That will benefit the consumer product companies that are successful in China."
He said that Coca-Cola considered itself a local business in China because "we source, produce, distribute and hire locally. This will benefit our business and benefit China with what we are doing."
In 2009, Coca-Cola opened its 90-million-U.S. dollar pan-Asia innovation lab in Shanghai. Some products innovated in China, such as Minute Maid, is not only well received in the China market but also 10 other markets including Viet Nam, the Republic of Korea, and Latin America.
"We actually created a new R&D center for Pan-Asia," said Kent. "This is much more than just China."
"In the future we expect from that center innovative beverages that can be launched in China and also can be successful in other parts in Asia and other countries in the world," he said.
Kent is also scheduled to lead USCBC board members on an official trip to Beijing over the coming days to meet with senior government officials. The delegation will exchange ideas with various officials to help promote and improve commercial relations between China and U.S. corporations.
Kent hoped that USCBC could help promote better commercial and economic ties between the two countries, and help improve the current bilateral commercial and economic ties with more investment from each side.
"There is no place in the world that doesn't have certain barriers, small or big. The important thing is to minimize those barriers and to move forward," said the USCBC chairman. "The world has benefited from globalization. China has been a big beneficiary of globalization. China's open door policy has been a big benefit also to creating a better globalized atmosphere."
The Coca-Cola Company is the world's largest beverage company. Its accumulated investment in the Chinese mainland is expected to surpass four billion U.S. dollars by 2011 since it re-entered the market in 1979.