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Tuesday, June 22, 2021
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Beverage firm remains optimistic in Mindanao

BULLISH. Coca-Cola Beverages Philippines Inc. remains optimistic about investing in Mindanao. In 2020, it made significant investments in improving its manufacturing facilities in Mindanao. (CCBPI photo)

FOLLOWING their expansion projects in Mindanao in 2020, Coca-Cola Beverages Philippines Inc. (CCBPI) remains optimistic about investing in the island.

"Mindanao is probably our least invested versus Luzon. And we wanted to take the opportunity in 2020 to cross correct a little bit," Gareth McGeown, CCBPI president and CEO, said during an online roundtable discussion on Tuesday, February 23.

Last year, the company announced that a significant amount of the $22 million or P1.065 billion investment in the fourth quarter of 2020 will go to the improvement of the facilities of its three manufacturing lines in Mindanao. This has allowed the beverage company to increase the production capacity of their manufacturing lines in Davao del Sur, Misamis Oriental, Zamboanga by 30 percent.

McGeown said the company would tend to look at the growth, capability of the people, and the future potential of a certain location before investing in it.

"Pre-2020 Mindanao already has the criteria to allow them to invest. We are really comfortable and happy with the performance of Mindanao and I think that will continue moving forward," he said.

Last year, McGeown said the company recorded double-digit growth in Mindanao in the last two years.

However, after investing heavily in Mindanao in the fourth quarter of 2020, the company said there are no investment plans yet for Mindanao in the first half of 2021.

"[As to the] additional investments in Mindanao, from the manufacturing point of view, none at the minute. But potentially in Q3 (third quarter) and Q4 (fourth quarter)," McGeown said, adding that they will be investing in some of their plants in Luzon for the first half of the year.

Antiono del Rosario, Coca-Cola Philippines president, also said there remains to be potential in the consumer market in Mindanao.

"We do see opportunities from a consumer standpoint in Mindanao. It is about trying to drive consumption, trying to make sure we are staying relevant with the consumers in Mindanao," said Antiono del Rosario, Coca-Cola Philippines president.

McGeown said in a previous statement that consumers in Mindanao are more open to trying new products compared to those in Metro Manila.

Meanwhile, the company will be investing around $63 million or P3.06 billion for 2021.

"This is our first tranche of investment in 2021... [and will] primarily go to continue to increase our capacity. This time around for Luzon. Last year, we heavily invested in Mindanao," McGeown said.

He said the company will be investing in improving the production capacity of its plant in Sta. Rosa, Laguna. They will also be investing in some of their logistic sites and their environmentally friendly trucks.

Del Rosario said the company will also continue to invest in its brands and digital transformation.

"One of the things we did in 2020 and will continue to be a focus area for us as we move to 2021 is to pivot. We started to see behaviors of consumers change as a result of the pandemic," he said.

Del Rosario said due to the pandemic more people have been staying at home.

"As a result of that, we have to pivot to make sure we are serving our consumers at home," he said. The company made their products available online for consumers to order and have it delivered to their homes.

From a brand standpoint, this means that they will continue to push their core brands like Coke, Royal, and Sprite. The company will also expand its footprint with its milk brand, Nutriboost, and its water brand, Wilkins.

Del Rosario said they are eyeing double-digit growth for these brands.

He said another area of investment is the company's digital transformation.

"We also doubled down on the investment on digital transformation not only in terms of how we market our brand but as well as reaching out to our consumers through e-commerce or food service aggregators. Our consumers are always looking for convenience and we want to be wherever they are," Del Rosario said.

Meanwhile, McGeown said as to the other tranches of investments for the rest of the year, the company will still have to observe the performance of the market.

"As soon the business continues to progress and do well, we will be asking for more investments to build capacity and capability across our system. A majority of it does go to production, capability, and capacity of mainly our manufacturing sites," he said.

McGeown said CCBPI remains optimistic about the Philippine economy and is committed to continuing to invest in it.


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