Coca-Cola boosts investment in Vietnam by $300 million

Coca-Cola boosts investment in Vietnam by $300 million

Coca-Cola Co. (KO) said it plans to invest about $300 million over the next three years in Vietnam, looking to use the money to build sustainable growth in the emerging market.

Mutar Kent, CEO of Coca-Cola

The increased investment, starting next year, will bring the total commitment in the country by Coca-Cola and its bottling partners to $500 million from 2010 to 2015, the company said.

"Vietnam's economy has maintained healthy growth in recent years, and this new financial commitment is more than an investment in Coca-Cola's expansion in Vietnam, it is also an important acknowledgement of our belief in the long-term potential of this key market," Chief Executive Muhtar Kent said during a visit to Hanoi.

The additional spending will go to new infrastructure, jobs and brand building.

Through its investments over the last three years, the company has increased local manufacturing and distribution capacity with new filling lines and the installation of new cold-drink coolers with local customers.

While posting solid results in North America, Coca-Cola's once-reliable growth engine in China is showing some signs of slowing. But Coca-Cola is continuing to get robust growth from India and Russia.

In its home market, Coca-Cola is facing stronger competition from rival PepsiCo Inc. (PEP), which is trying to revitalize its North American drink business by pumping more advertising into its top brands, like Pepsi-Cola and Mountain Dew sodas.

This month, Coca-Cola said its third-quarter earnings rose as it sold more drinks globally, although its business showed signs of losing momentum due to China's cooling economy and Europe's ongoing challenges.

Shares closed Thursday at $37.09 and were down nine cents premarket. The stock is up 6% this year.

Wall Street Journal