Breaking ground on its new $100 million factory in the Phnom Penh Special Economic Zone yesterday, Coca-cola is aiming to double its output at the new facility over the next six years, to cater for the rising demand in the Cambodian market.
The Post’s Ayanna Runcie sat down with David Wigglesworth, general manager of Cambodia Beverage Company Ltd, Coca-Cola’s Cambodian producer and distributor, this week to discuss the company’s expansion plans and the growth potential in the local market.
Why have you chosen to build this plant at the Phnom Penh Special Economic Zone?
We came down to PPSEZ for a couple of main reasons. Number one, we think our future growth will be in the rural areas. We needed connections to the highways and we needed connections to the railways, which we will get at the PPSEZ.
Also, we are very particular about how we impact the environment and PPSEZ has passed the environmental impact studies. Plus, we needed to remove ourselves from the neighborhood, as you see in this [exisiting] factory, we are very much a shift driven business, the factory works in three shifts and it does clearly have an impact on the neighbourhood. So removing ourselves from the neighborhood is important. The other reasons are flood prevention and access to good water.
Are you planning to introduce other Coca-Cola products after the factory is built?
The answer would be yes. When? That’s an interesting question. Because Coca-Cola globally is a full beverage business now, we sell everything from the carbonated beverages that everyone knows, distilled waters, milks, juices, teas, coffees – we sell a lot. What we introduce here would depend on Cambodian tastes. That work is ongoing, but in the immediate we will be expanding our water facility and our isotonic beverages.
So you are researching “Cambodian tastes?”
We have, but we would never announce that stuff for competitive reasons. All we know is that we will expand and that the priority of what we do depends on Cambodian tastes.
Do you think that Coca-Cola’s expansion here will set a trend for other American companies?
Generally we don’t comment on what other companies will do. And we run a different business model than most US companies. We are predominantly servicing local business; we are not here for export. One hundred per cent of what we do is for local consumption. For us, the strong GDP growth over the past couple of years, plus political and economic stability are the main reasons for us reinvesting in the country. Other US companies that serve the local community I believe will follow suit.
What potential do you see in the Cambodian market?
One hundred per cent it is a growth market, we have always grown in Cambodia over the past 15, 20 years, particularly in the last four years we’ve had very strong growth. We only see that continuing and expanding as the younger generation starts to enter the middle class. At the moment, our high volumes are coming from urban areas we see rural being the big future in Cambodia.
Generally, Southeast Asia’s local capitals compare to the rest of the world, but Cambodia is one of the higher performing ones.
Do you foresee any challenges in making this new plant a success?
The challenges will be that the economic and political stability continues and that GDP continues at a healthy growth of 7 per cent or greater.
Do you have further expansion plans for the future?
The manufacturing site we are building is being built in phases. So the first phase is what we are doing now and throughout the next three years we will continue expanding within that site. We will also continue expanding warehouses throughout the rural areas .
This interview has been edited for length and clarity.