Hindustan Coca-Cola Beverages Pvt Ltd (HCCB), Coca-Cola India's bottling arm, is in negotiations to acquire the bottling operations of Bhutan Beverages, its co-packer in Bhutan. The move is part of Hindustan Coca-Cola's strategy to re-align its manufacturing capacities.
The Bhutan Beverages plant in Pasakha caters largely to demand in the eastern states like Orissa, Bihar and West Bengal, apart from the local market. The plant is expected to be re-located closer to the markets it serves in India once the deal is finalised.
“HCCB is currently re-negotiating the co-packing agreement (in Bhutan) which may include shifting of the bottling line closer to the markets it serves in India. However, the Bhutan bottler will continue to service the markets in Bhutan,” said a company spokesperson.
HCCBPL has been buying back excess capacities of its bottlers in India which were set up when the company was pushing for volumes three years ago. The company has already acquired the bottling unit of its Andhra Pradesh co-packer, with another similar buy-out of the north Bareilly co-packer in the offing.
As reported by ET earlier, Hindustan Coca-Cola plans to buy back 12 excess capacities in the country, including those at Balia, Kanpur, Aurangabad and Rourkela, at an investment of Rs 150-160 crore.
“As a part of this restructuring, the company is in process to re-align the manufacturing capacities for more efficient asset utilisation across the entire geographical spread of the company's bottling operations,” the Coca-Cola India spokesperson added. Following the buy out of the excess capacities, the company could re-locate or expand capacity, depending on demand in that market.
This re-alignment exercise is part of Coca-Cola India's three-year roadmap (2007-09) to drive and tap demand and improve efficiencies in manufacturing, logistics and distribution.
The Coca-Cola Company, the Atlanta-based parent company of Coca-Cola India, has outlined an investment of $250 million over the next three years for bottling restructuring, mobilising an additional salesforce of 1,000 people, purchasing coolers and refrigerators and ramping up the logistics and distribution network in India.