Coke bottlers ramp up output capacity in BT4-bn investment

Haad Thip, the Coca-Cola bottler for 14 southern provinces, will commence construction of a Bt1.4-billion bottling plant in Surat Thani in the third quarter with the start-up of operations set for next month. 

ThaiNamthip, Coke’s bottler for the rest of the country, will spend Bt2.6 billion to add four production lines for cans and for glass and plastic bottles for both sparkling and non-carbonated beverages. The first line will start running this month.

“We are investing in new state-of-the-art manufacturing facilities that will sharply increase our production capacity to support our system’s distribution advances, product innovations and marketing campaign successes,” Patchara Rattakul, chief operating officer of Haad Thip, said yesterday.

The Bt4-billion combined budget will be the largest ever allocated by the Coca-Cola system, comprising Coca-Cola (Thailand) and its two local bottlers, in a single year of operation during its more than 60-year history in the country. 

It will increase Coca-Cola’s production capacity by 35 per cent and strengthen the system’s leadership as the country’s top non-alcoholic, ready-to-drink beverage business.

The company posted record sales growth of 23 per cent last year.

Antonio Del Rosario, general manager of Coca-Cola (Thailand), said the parent firm continued to make important, long-term commitments to Thailand, which is the second-fastest-growing market in the world for its brand.

Pornwut Sarasin, vice chairman of ThaiNamthip, said Coca-Cola, as of January, had reinforced its leadership in the sparkling-beverages category with 55.5 per cent of the market and in the ready-to-drink juice category with 16.5 per cent.

“Across the system, we are investing in the latest technology with faster and more efficient production lines that are also capable of handling new products and packaging innovations that can meet evolving consumer needs, while also supporting our commitment to environmental sustainability,” he said.

ThaiNamthip is opening this month a super-high-speed line at its Rangsit plant for sparkling beverages – just in time for the high-demand summer season, he said. During the course of the year, three more lines will be put into operation for sparkling and non-carbonated beverages. 

The company has invested heavily in implementing major advancements to the supply chain and to its distribution capabilities in the past few years. One of the keys to success was ensuring that the right product is in the right place at the right time and in the right condition, Pornwut said. The company also focused on innovations to reduce logistics costs and improve the margins of the outlets that sell products.

 

Route-to-market 

“We have moved completely from a conventional ‘route-to-market’ to unconventional ways to maximise the efficiency of our distribution. 

During the last three years we increased logistics efficiency and asset utilisation by 50 per cent, reducing waste in energy and in resources. And we now sell 99 per cent of all beverages loaded on to our delivery trucks visiting stores, up from 65 per cent in 2010.

“These important gains are being made possible through new ‘route-to-market’ systems that the company has introduced that allow us to take orders before a delivery truck is loaded and dispatched, ensuring that there is no wasteful haulage of goods that are not sold,” he said.

The company increased its sales, logistics, production, distribution and customer-service headcount by 500 people and increased customer-call-centre capabilities in Bangkok and upcountry.

Del Rosario said Coca-Cola offered nine brands and more than 20 products. The sparkling brands alone are available in more than 20 pack sizes – the greatest number in the market – to better meet customer and consumer needs. 

“We will lead with our sparkling portfolio as well as expand our still products in order to contribute to our global ‘Vision 2020’ to double the size of our global business by the year 2020,” he said.

Coca-Cola has consistently been strengthening its leadership position in sparkling beverages and registered 5 percentage points of share growth over the previous 12 months and 8 points over the previous 24 months. The sparkling-beverage category was estimated at Bt44 billion last year, while the non-alcoholic, ready-to-drink beverage market was estimated at Bt169 billion, according to Nielsen.