Coca-Cola adds more life to Philippine operations
As in any relationship, it was unwavering trust and loyalty that kept alive the partnership between the Philippines and Coca-Cola that has gone on for over 100 years.
The iconic Coca-Cola brand, which continues to share happiness with every Filipino today, first made its presence felt in the country 103 years ago when it opened a bottling plant.
Not only was the plant the first venture of The Coca-Cola Co. in Asia, but also the beginning of an eventful journey in what would become one of its most dynamic and largest markets.
Today, Coca-Cola remains entrenched in the local culture, on the back of the continued trust placed by the company in the country and the patronage of the local market.
“Having been in the Philippines for more than a century, Coca-Cola has become a part of the Filipino heritage. We are proud to have grown with the country and the people,” The Coca-Cola Co. chair and chief executive officer Muhtar Kent said.
“Now and in the future, we will continue to build our presence in the country, as we find win-win opportunities that will allow us to better serve Filipinos. All our undertakings will create shared values for Coca-Cola and the communities that we proudly serve,” Kent added.
Kent—along with other top executives of the Coca-Cola Co. and Femsa, its current bottling partner here—was in the Philippines recently for a three-day visit during which he cited the country’s significance in the company’s global operations and long-term, sustainable growth plans.
In his courtesy call to President Aquino, Kent bared the company’s plan to invest another $1.2 billion between now and 2020 for the expansion of its Philippine operations, spurred by the steady growth of the Philippine economy, conducive investment climate, rising consumption and disposable incomes.
“We’re currently in a $1.2-billion [investment] program between now and 2020 in the Philippines. That investment means we will hire more people, add more factories, more lines, capacity, and [beef up our] distribution [network]. We will also have this capital investment program to help our partners and that of course tells you that we still believe in the future here,” Kent said in an interview with the Inquirer.
The planned investment will be on top of the $1.5 billion that the company spent in the Philippines from 2010 to 2014.
“We are adding more production because we believe in the future of this country. Part of the reason why this investment is taking place is because the Philippines is one of the healthiest, fastest growing economies in Asia. Based on the current political leadership of the country, we, as investors, are certainly appreciative of the work that’s being done in terms of better governance,” Kent said.
The Coca-Cola chief stressed, however, that the company was not just committed to expanding its business here, but just as determined to widen the scope and range of its existing sustainability programs. He said these were not merely corporate social responsibility (CSR) projects that are often difficult to sustain and which often entailed high costs to run. Rather, these programs have become part of the company’s operations.
One of these programs in the Philippines is the Sari-Sari Store Training and Access to Resources (STAR) Program being run by Coca Cola Philippines and Technical Education Skills Development Authority (Tesda).
The STAR program allowed Coca-Cola to address the most common barriers women face to succeed in the marketplace. It offered access to business skills training courses, financial services and connections with peers and mentors, along with the confidence needed in building a successful business. Since its inception in 2011, the program has impacted the lives of over 36,000 Filipinos in the sari-sari store business.
“I was at the graduation ceremony of our STAR graduates. There were some 1,000 prospective women entrepreneurs and we are partnering with Tesda to provide training for them. Then connect them with [micro finance institutions to provide access to] credit to open sari-sari stores. They have been successful in generating more profit than before and they are spending some of that incremental cash on their communities, on their children and in hiring more women. That’s the signature program we’re very proud to partner with,” Kent said.
According to Kent, the STAR scheme formed part of the 5by20 program being implemented by Coca-Cola globally. Under this program, the company has committed to enable the economic empowerment of 5 million women entrepreneurs across the globe by 2020. This, he added, is the biggest program of any kind for women entrepreneurs in the world.
“By the end of 2015, we should pass the 1-million mark for this 5by20program. This program is being implemented across Africa, Asia and Latin America, mostly. But I have to say that the program with Tesda is one of the most successful ones. We have many learnings from the Philippines that we can take to other countries, learnings about curriculum training, about how to partner with women after they graduate, how to connect them to credit and how to follow their progress,” Kent said.
The 5by20 program formed part of the company’s sustainability programs that are anchored on the “three W’s” namely women, water and wellbeing. For water, Coca-Cola has a commitment globally to become water neutral by 2020 and in the Philippines, that date will come in earlier, between 2017 and 2018. For wellbeing, the company continues to implement programs advocating an active healthy lifestyle particularly among the youth. Locally, there are initiatives to promote sports like basketball and soccer.
Globally, Coca-Cola remains aggressive in implementing new measures that will enable the company to grow further and generate value for its stakeholders, employees, customers, retailing partners and for consumers.
“The macroeconomic conditions of the world are very volatile so we announced a major productivity program and we are investing in our brands, while our bottling partners like Femsa are also implementing a major investment program that matches our investments in brands that generate growth across borders,” Kent said.
Being present in more than 200 countries, it is thus crucial for a global brand like Coca-Cola that the markets they operate in would have a conducive business and investment climate that would help facilitate seamless trade across borders. And such initiatives being pushed by the member economies of the Asia-Pacific Economic Cooperation bloc are deemed crucial in ensuring more dynamic trade activities.
“The Asean is a huge market of 600 million people and one of its goals is to have free trade between Asean members and this helps all economies. This basically lifts all the players up to have a more dynamic trade environment. However, not every economy is growing at the same pace in the bigger Asia region and one of the goals of the Apec meetings is to see how everyone can learn from each other, to share best practices, and to execute some of the learnings. I think the Philippines has a lot of learnings to offer to many other economies and share during the Apec meetings because the country is doing so well,” Kent explained.
The Philippines is the host of this year’s Apec meetings, which will culminate in the Economic Leaders’ meeting this November.
“Apec essentially helps boost investment climate and that helps. A friendly investment climate is really important for a global company and we find the investment climate very friendly here in the Philippines,” he concluded.
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