9 May 2008
Nairobi — Soft drinks transnational, Coca Cola, on Thursday announced a Sh3.1 billion expansion of its Kenyan franchise.
A statement put out by the firm said the outlay represented the largest capital expenditure by the company in Kenya so far.
The cash will be used to scale up bottling lines at the firm's factories in Nairobi, Mombasa, Kisumu, Kisii and Eldoret.
Common legacy
The bottling plants are owned and managed under license by Nairobi Bottlers, Coast Bottlers, Equator Bottlers, Kisii Bottlers and Rift Valley Bottlers, respectively.
These are separate entities whose only common legacy is the marketing, brands and processes they share.
Said Mr Adeola Adetunji, general manager for the East Africa franchise: "This is an expression of our confidence in the Kenyan economy. Our business was adversely affected by the post-election violence. We are pleased we can now see progressive stability in our operating landscape."
His firm viewed Kenya as a viable investment destination in the long term and was confident its latest investment would yield positive returns.
Mr Daryl Wilson, managing director at Nairobi Bottlers said the new lines, procured from German firm, Krones AG, would improve capacity, increase efficiency in production and ensure improved packaging.
The firm is just cooling off after a controversial consolidation of its Kenyan franchise that saw the closure of its plants in Nakuru and Machakos.
The two regions are now served by Nairobi Bottlers, in which South African firm Sabco has become a key shareholder in what is called anchor bottler in Coke lingo. The move sparked off a lot of resistance, some of it bordering on xenophobia.
Another key investor in the local Coca Cola franchise is Centum, a listed investment firm.
Face assault
On the marketing front, the firm is likely to face a major assault on its territory by East African Breweries' Alvaro, a malted juice variant that was launched earlier in Kenya.
Coca Cola has been putting more accent on volumes growth through diverse packaging, seen in the ascendancy of cans and plastic bottles and the stretching of brand clusters.
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