Swire Coca-Cola Limited Plans to Buy Coca-Cola Indochina

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News this week has suggested that Hong Kong-based business conglomerate Swire Pacific Ltd wholly owned subsidiary (Swire Coca-Cola Limited) will acquire the packaging and distribution operations of Coca-Cola Co in Cambodia (and Vietnam).

Swire Coca-Cola Limited Plans to Buy Coca-Cola Indochina
Image Credit: Phnom Penh Post

The deal is reported to be worth $1.02 billion in cash if Swire Pacific Coca-Cola Ltd does acquire Coca-Cola Indochina from Coca-Cola’s (KO) subsidiary in Japan. It will also signal Swire Coca-Cola’s first investments in South East Asia.

On Swire Coca-Cola Limited website on July 17th 2022, they said that a deal had been reached and Patrick Healy, Chairman of Swire Coca-Cola said, “This expansion of territories is part of a broader strategy to expand the global scale, volume, and revenues of our bottling business.”

“The transactions will be Swire Coca-Cola’s first investments in South East Asia, giving Swire Coca-Cola a leading position in one of the world’s fastest growing beverage markets. After closing, Swire Coca-Cola will own and operate Coca-Cola Beverages Vietnam Ltd., which has three bottling facilities in Vietnam and Cambodia Beverage Company Ltd., which has one bottling facility in Cambodia. Upon completion of the acquisition, Swire Coca-Cola’s franchise population will expand by 15% to 876 million people.

The Khmer Times reported that Coca-Cola officially opened a new $100 million plant in Phnom Penh in early December 2016 to expand its production capacity to meet increased demand for its beverages in the Kingdom and ASEAN. the plant is located on 12.5 hectares of land, in the Phnom Penh Special Economic Zone.

In terms of production, the plant has an output of 54,000 plastic recyclable bottles and 60,000 cans in an hour.

Swire Coca-Cola added that Cambodia and Vietnam have “young demographics, robust urbanisation trends and pre-pandemic GDP growth and thus open up significant opportunities.

“We are excited by the enormous growth potential of the non-alcoholic beverage markets in Vietnam and Cambodia, which are valued at over US$6 billion and forecast to grow at over 6% CAGR until 2036,” said Karen So, Managing Director of Swire Coca-Cola.

The SCMP also reported that Swire Pacific is one of Asia’s oldest conglomerates, and the company reported a profit of US$675.1 million for 2021. Swire Coca-Cola, the group’s beverages division, reported a record profit in 2021.

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