Coca-Cola plant opens in China -- for a very long-term investment
Peking — "The pause that refreshes" has returned to China, albeit in a modest way. Coca-Cola has opened its first bottling plant in the People's Republic of China.
The plant, entirely owned by the China National Cereals, Oils, and Foodstuffs Import and Export Corporation (CEROF), has an annual capacity of 2 million cases , or 48 million of the 6 1/2-ounce bottles with the elegantly distinctive bulge.
Amid the crackle of firecrackers and the skyward launch of hundreds of red and white balloons, Coca-Cola's chairman and chief executive, Roberto C. Goizueta, CEROF general manager Jiang Jianhua, and other officials cut the red ribbon April 15 to open the sparkling white 3,300-square-meter plant.
If visions of a billion Chinese quaffing Cokes danced in the heads of Mr. Goizueta and his colleagues, they kept their hopes firmly under control. For many months, if not years, Coca-Cola will be a foreign-currency earner for China , available mainly to visitors using foreign-exchange certificates.
"We look on this as a long-term investment," said Dr. Peter Lee, operations manager for China of Coca-Cola's Pacific division. By "long term," he said, he meant longer, perhaps considerably longer, than 10 years.
In a press briefing preceding the opening ceremony, Mr. Goizueta described his company's arrangements with CEROF as "a typical franchise agreement." It provides for the American company to supply technical services and bottling equipment paid for over a period of years through sales of Coca-Cola concentrate to CEROF.
Mr. Goizueta indicated that wild horses could not drag out of him the price the Chinese are paying for it. Despite the modest beginning and the long-term nature of the investment (2 million cases a year, Mr. Goizueta indicated, is what a "little town in Georgia" might consume annually), the opening ceremony does represent a coup for the makers of one of the best-known US products.
Many joint ventures between Chinese and American companies have been proposed since China opened to the West, but very few projects have actually materialized.
Coca-Cola was sold in China before the 1949 revolution, and has been sold, mainly to tourists, since the normalization of US-Chinese relations in December 1978, but this is the first Coke bottling plant in China.
The new bottling plant has only 40 employees, all clad in spanking white uniforms and the distinctive Coca-Cola cap.
The whole operation, including the purification of Peking's stubbornly calcified and "almost brackish" water, seems antiseptically clean.
"The test of the training we've been giving will come," said one Coca-Cola officer," when the machinery has been running continuosly long enough to start breaking down -- say in another year or so. How quickly can the Chinese fix problem points and keep qua lity up?