Coke plans $50m plant in Tongi
Author / Source : bdnews24.com
Dhaka, Jan 2: Global beverage giant Coca-Cola will set up a plant in Bangladesh to tap growing demand for soft drink, a top investment official has said.
“The company has already registered with the Board of Investment to invest about $50 million by 2013,” BoI executive chairman SA Samad told bdnews24.com. Coke’s industrial project will bring Tk 3.76 billion foreign equity and raise Tk 375 million working capital from the local market, according to the information it provided to the investment board.
The company has set its sight on starting commercial operation by Sept 2013 at a plant in Tongi where it will produce Coca-Cola, Sprite, Fanta, juice and juice-based drink, and packaged drinking water.
Currently Abdul Monem Ltd and Pran Group bottle the products.
The factory is expected to produce 222 million bottles worth Tk 9 billion a year.
Coca-Cola in 2009 submitted its first proposal to invest $51 million to expand its business in the country and submitted another proposal in 2010 expressing its intention to set up a modern production plant.
The second proposal said that the company wants to “set up an indirect wholly owned local subsidiary that will establish a new state of the art beverage manufacturing facility in Bangladesh.”
The company would take at least three years to complete the processes and the entire equity capital of this subsidiary will be funded by its foreign source, it added. The processes involved acquisition of suitable land and setting up facility, securing all required approvals, licences, consents and permission from the proper authorities.
Coca-Cola started business in Bangladesh with an agreement with Tabani, owned by a Pakistani national, in 1965.
After independence, Tabani was put under the Freedom Fighters’ Welfare Trust and it continued its business up to 2008.
The multinational giant used to sell Tabani the liquid concentrate of its brands and Tabani produced cold drinks and marketed them.
The global giant asked Tabani to increase its capacity in 1978 but it failed to do so and later it signed another agreement with Abdul Monem Group to produce the popular cold drink brands.
Tabani had the right to distribute its products in greater Dhaka and Rajshahi divisions while Monem entered into a contract to distribute them in Chittagong and Khulna divisions.
The companies at that time only produced regular glass bottle drinks and it continued production until 2001, when Monem introduced PET bottles in the market.
In 2003, Coca-Cola asked Tabani to improve its quality and set up an effluent treatment plant on the factory premises, but it did not.
Eventually, Coca Cola scrapped the contract with the Tabani in 2008 and now has come up with the investment proposal aiming to benefit from the expanding market.