NEW YORK (AP) — Coca-Cola Co. said Tuesday it will spend $1 billion in the Philippines over the next five years to expand its presence in the fast-growing market, another step by the world's largest beverage company to focus more on emerging markets.
Coca-Cola will focus on boosting marketing and improving its delivery capabilities in the country. Coca-Cola said its operations in the Philippines have seen strong growth on the back of several new products during the first half of 2010.
Coca-Cola and rival PepsiCo Inc. have been boosting their international markets as overseas economies expand. The companies can sell more drinks as people have more disposable income as those emerging markets improve.
The moves also buffer weakness in the domestic market. Drinkers in the U.S., Europe and other developed markets have been tapering their purchases of soft drinks and other beverages in the weak economy. They're also shifting to juices and teas for health reasons.
Last month, Pepsico said it would invest $250 million in Vietnam in the next three years in both its food and beverage businesses. In May the company said it would invest an additional $2.5 billion in China in the next three years, in addition to the $1 billion investment it announced in 2008 and plans to complete this year.
The push announced Tuesday by Coca-Cola marks the second such effort this year by the Atlanta-based company to expand its business in the Asia-Pacific region. In March the company said it would spend $300 million to boost its presence in Malaysia.
"This investment is a proof point of our strong commitment to the Philippines, our confidence in the prospects of the Filipino economy and the continued growth of a broader and more affluent middle class in the Philippines," said Glenn Jordan, president of Coca-Cola Pacific Group. The investment was announced during a visit of Philippines President Benigno Aquino Jr. to the United Nations General Assembly in New York.
Coca-Cola employs more than 7,800 people in 23 plants and 42 sales offices in the Philippines. It is currently building a bottling facility in Misamis Oriental that will be one of the largest plants in the region when it begins operations next year, the company said.
In the last six months Coca-Cola has launched a new energy drink and a green-tea beverage and said it plans to expand its "Minute Maid" line of pulps and juices.
Coca-Cola has been present in the Philippines since the beginning of the 20th century and has been locally produced since 1912. The Philippines received the first Coca-Cola bottling and distribution franchise outside North America, and its bottling operation is among the 10 biggest Coca-Cola bottlers globally.
Shares of Coca-Cola rose 50 cents to $59.10. Shares of Pepsi rose 41 cents to $66.78.