12 July 2012

Kenya: Coke Invests Sh1.2bn to Meet High Demand

Demand for plastic bottled soft drinks is averaging 35 per cent annually oustripping the local supply capacity, Coca Cola said yesterday. Nairobi Bottlers Ltd, the only bottlers of plastic sodas (PET) in Kenya, said this when they commissioned a new Sh1.2billion PET plant in Embakassi with a bottling capacity of 28,000 bottles per hour.

The company, a subsidiary of South Africa Bottling Company (Sabco) runs one of the largest Coca Cola bottling plants in Africa with nine bottling lines. Nairobi Bottlers CEO Peter Pech said the new line was put up to try and stay ahead of demand noting that back in December, the company had to bring in products like Dasani water and some soda brands from neighbouring Tanzania to supply the market. "PET was growing faster than what we expected," Pech said during the commissioning of the new line. "PET grew by 35 per cent (and) we reached our maximum capacity that is why we invested in this capacity. We are more than doubling the capacity."

The company has another line that bottles 22,000 bottles an hour but could not cope with the demand in the market. The company ordered a new line from German firm Kron back in August 2011. The line was delivered in April this year and took about two and half months to install. Citibank financed about $10million (Sh840m) while the company sourced an additional $5m (Sh420m) internally.

Country Finance Manager Nick Macharia said the company will next start making its own free form plastics for bottling its drinks as the current suppliers are unable to meet the company's demand. The company will spend $10m (Sh840m) for the project and an additional $2m (Sh170m) to upgrade its fleet. Its Nakuru warehouse will also be expanded. Nairobi Bottlers is an amalgamation of the former Flamingo Bottlers of Nakuru, Machakos Bottlers and the Nairobi plant as the company moved to centralize production and cut duplication of overhead costs.

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