On June 4, Coca-Cola became one of the first American companies to open in the formerly shrouded Burma with the launch of its new bottling operation on the outskirts of its former capital. The move is expected to create more than 22,000 local jobs by “investing in local manufacturing, employing local people, engaging local suppliers and distributors and supporting community investment programmes,” according to a statement.
Making history
To say that Coca-Cola made the most of the opening of its first facility in the country for over 60 years is to put it conservatively. The presence of Madeleine Albright, the former US Secretary of State, who hailed the day as a “momentous occasion” in the Burma’s economic re-emergence, set the tone while Muhtar Kent, Coca-Cola’s chairman and chief executive went even further – even equating the launch with the fall of Communism in Europe.
“It’s a great moment in history, just like it used to be when we opened up our business in east and central Europe … right after the fall of the Berlin wall,” Kent said of the planned US$200m investment over the next five years.
“For the people of Myanmar, Coca-Cola embodies the optimism of a bright future, with the promise of better days and better lives ahead. We are privileged to be a part of their journey.”
Quick expansion
And now, barely a fortnight after the opening ceremony, Coca-Cola’s local partner, Pinya Manufacturing, has said it plans to expand the production lines at the plant by the end of this year.
“At present, our production line is short. If we manufacture a product, we have to halt another product. So we will expand the factory and we are negotiating how many production lines should be expanded,” Aung Win, Pinya’s commercial director, said this weekend.
The expansion is part of Coca-Cola’s five-year plan, although local observers did not expect it to be planned so soon after the opening of the plant, which will manufacture Coca-Cola and Sprite for the local market.
PepsiCo’s plans
Meanwhile, Coke’s arch-rival, PepsiCo, is in the process of planning an entry into the country. Speaking on CNBC soon after Coca-Cola’s opening, Indra Nooyi, chairman and CEO of PepsiCo, said Burma’s strategic potential is huge.
“It is a country whose story is just beginning to unfold. We will enter Burma in a very interesting and responsible way… and we have decided to do very important nation-building activities.
“By working on skills development, sustainable agriculture and bringing our products in and developing a distribution infrastructure, our growth model is [working] for Burma, and with Burma, while also making economic sense for PepsiCo.
Taking a loosely veiled dig at Coca-Cola’s earlier theatricals, she added: “That a much better model than just coming in and imposing Western standards and structures on Myanmar.”