Coca-Cola to build capacity in India after ‘robust’ growth in 2023

New Delhi: Beverage major Coca-Cola has said it will re-invest a “significant portion” of its capital investment increase to build capacity for its India business, and in Fairlife, an American brand of dairy drinks.

“Driven by our underlying cash flow generation and current balance sheet strength, we have ample flexibility to both reinvest in our business to drive growth and return capital to our shareholders. A significant portion of our expected capital investment increase is to build capacity for Fairlife and for our India business, both of which experienced robust growth in 2023,” John Murphy, president and chief financial officer of The Coca‑Cola Company, said during the company’s fourth-quarter and full-year 2023 earnings call on Tuesday.

In 2024 the company expects to generate about $9.2 billion in free cash flow with about $11.4 billion in cash flow from operations, and lower capital expenditure of about $2.2 billion, it said in its forecast.

The company said developing and emerging markets grew by 2% in 2023, driven by growth in India and Brazil, which partially offset the suspension of its business in Russia in 2022.

Global unit case volume grew 2% for the quarter and 2% for the full year. Net revenues grew 6% to $45.8 billion and organic revenues grew 12%, driven by 10% growth in price-mix and 2% growth in concentrate sales.

“Unit case volume grew 2% for the quarter. Developed markets were even as growth in Mexico and Germany was offset by declines in the United States and Chile. Developing and emerging markets grew 4%, driven by growth in Brazil and India. For the full year, unit case volume grew 2%. Developed markets grew 1%, driven by growth in Mexico and Germany. Developing and emerging markets grew 2%, driven by growth in India and Brazil, partially offset by the suspension of business in Russia in 2022,” the company said in its earnings release.

In 2023 the company gained value share in total non-aerated, ready-to-drink beverages, led by share gains in India, the Philippines, South Korea and Japan.

The beverage major has been ramping up capacity in India. Earlier this year, Hindustan Coca-Cola Beverages Pvt. Ltd (HCCB), a bottling subsidiary of The Coca-Cola Company, said it was building several new plants in Telangana and Maharashtra. In December, HCCB announced plans to invest ₹3,000 crore to set up a juice and aerated drinks facility in Gujarat. HCCB is Coca-Cola’s largest bottler in India, with 16 operational factories.

Coca-Cola works with bottling partners who manufacture and distribute its beverages in designated markets. It has 11 bottlers in India that operate 54 plants across the country.