08 Aug 2014 Coca-Cola raises African investment to $17bn

The new expenditure will raise investment in the region to $17-billion from 2010 to 2020, the Atlanta-based company said in a statement. It also announced the initiative at this week’s US-Africa Business Forum in Washington.

CEO Muhtar Kent is expanding in Africa to capitalise on a growing middle class with more money to spend on high-end soft drinks and juices. Nigeria and Kenya, among the major economies in the region, consume fewer than 50 servings of Coke’s beverages per person each year, compared with the 745 servings per individual consumed in Mexico.

“Even as we see tremendous growth potential in Africa, we know that the strength and sustainability of our business are tied directly to the strength and sustainability of the African communities we proudly serve,” Kent said in the statement. [You can read it here}.

Coca-Cola is increasingly relying on overseas markets to maintain growth as it contends with sluggish demand for drinks such as juice and Diet Coke in North America.

The new investment will also be channelled into Coca-Cola’s cooling and distribution equipment and production, its supply chain across the continent, as well as supporting programs for safe water access, sustainable sourcing and the economic empowerment of women, the company said.

The company will also be launching a new initiative dubbed “Source Africa” with the New Alliance for Food Security and Nutrition and Grow Africa, to get more consistent and sustainable local ingredient for its products.

It intends to focus initially on sustainable mango and tea production in Kenya; mango and pineapple production in Nigeria and mango in Malawi.

It plans to expand “Source Africa” to Ethiopia, Senegal, Tanzania and Mozambique in the future.

“In Africa, we believe we can do more to source agricultural ingredients locally, with significant supply potential that’s underdeveloped and underutilized,” Kent said.

Kent also announced that the Coca-Cola Africa Foundation will expand its Replenish Africa Initiative to reach an additional four million African people through 2020. The program, which works with public and private partners, supports clean water access and sanitation initiatives across the region.

The new target is in addition to an existing goal of reaching two million people by 2015.

Coca-cola is one of the oldest investors in Africa, having established its presence in 1928.

Caption: Muhtar Kent with a 5by20 entrepreneur in South Africa.