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Coke to build $100M plant at PPSEZ

An attendant checks bottles on a production line at the Coca-Cola factory in Nilai on the outskirts of Kuala Lumpur
An attendant checks bottles on a production line at the Coca-Cola factory in Nilai on the outskirts of Kuala Lumpur last year. AFP

Coke to build $100M plant at PPSEZ

Coca-Cola will build a second factory in Cambodia, investing $100 million into a new plant in the Phnom Penh Special Economic Zone that will more than triple its current output, company officials said yesterday.

The news comes on the heels of a meeting in November during which Prime Minister Hun Sen and one of Coca-Cola’s regional representatives announced that the American beverage behemoth would expand its factory in the Kingdom.

Lina Lim, public affairs manager for Cambodia Beverage Company Ltd, Coca-Cola’s Cambodian distributor, said yesterday that construction of the plant would begin in May or June, taking about a year until it is fully operational.

“We didn’t really focus on Phnom Penh Special Economic Zone [at first], but after studying the price, area, and so on and so forth and [after] comparing, we can answer that PPSEZ was the one that met all the criteria that [Coke] was looking for,” Lim said.

According to company statistics, Coca-Cola produced 20.52 million unit cases in Cambodia in 2014, with 24 beverages in each case. Its new factory, however, aims to produce 42 million unit cases alone, more than tripling total capacity.

Coca-Cola’s current and only factory in the Kingdom, which dates back to 1993, has not kept up with rising demand, having had to more than double its output from 10 million unit cases in 2012 to 21 million last year.

“The current plant that we have is a little bit small, so we need a bigger plant to conduct our operations,” Lim said, adding that Cambodia’s rapid growth and relative stability were further spurs to investment.

Revenue for Cambodia Beverage Ltd was also up 21.4 per cent from 2013 to 2014 to $78.19 million.

The plant, which will add about 300 workers to Coca-Cola’s Cambodia operations' current payroll of over 650, will also add a number of unspecified Coke products to its existing roster in an attempt to diversify its portfolio.

Ministry of Commerce spokesman Ken Ratha said Coca-Cola’s expansion plans were “another step in the growing American investment in Cambodia”.

“Relations between the two countries are improving,” he said.
“We are trying to promote more American business to Cambodia,” Ratha added, citing an upcoming Cambodian business delegation to the United States composed of Commerce Minister Sun Chanthol and other business leaders.

The chief executive of PPSEZ, Hiroshi Uematsu, declined to comment at the time due to ongoing discussions with Coca-Cola.

The Phnom Penh Special Economic Zone, a 357-hectare sliver of land located on the outskirts of the capital, currently has 77 companies, which have invested $365 million so far.

The SEZ is modeled as a “one-stop shop” service centre where companies can sort out their legal, infrastructure, and logistical issues in one place.

The PPSEZ, Cambodia’s most developed special economic zone, is also aiming to list on the Kingdom’s fledgling stock exchange by mid-year.

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