COCA-COLA Femsa Philippines Inc. is investing up to $800 million between now and 2020 for the continued upgrade of its facilities and distribution centers in the country.
According to Coca-Cola Femsa CEO Fabricio Ponce, the fresh capital outlay was meant to cater to the growing demand for its beverage products in the Philippines, its biggest expanding market in the region.
“For 2016, our investment will mainly be in the expansion of our production and distribution capability and our market assets, together with a significant support to the welfare and development of our associates across the country,” Ponce said.
The company also hopes to turn around the company’s financial performance this year, as it targets to post $20 million in operating income.
Coca-Cola Femsa estimated that it broke even last year after being in the red in 2014.
“This company in 2014 lost money and now (we want to) turn it around and make it successful and generate more value. (Last year) was break even. So our shareholders will reinvest all profits and they are (looking to invest) $800 million up to 2020. Our strategy is to be able to create more value and reinvest,” Ponce said in a briefing on Tuesday.
These strategies will be necessary given current global economic conditions that may affect the company’s profitability such as the economic slowdown in China and the geopolitical tensions in the Middle East. There is thus a need to tap the potential growth areas in other countries like the Philippines.
The upside here, according to Ponce, is that Coca-Cola Femsa expects an increase in demand due to the hot weather and the upcoming national elections, which historically boosts spending.