Coca-Cola to increase investment in Zimbabwe by $65 million

The Coca-Cola Company (TCCC) has pledged to increase its investment in Zimbabwe by US$65 million over the next three years as the Southern African country seeks to attract foreign investment following years of Western sanctions and the recent change in leadership.

The Managing Director, Coca-Cola East and Central Africa, Mr Ahmed Rady met with President Mnangagwa and Vice President Constatino Chiwenga separately on Thursday to discuss its plans and future investments in the country.

Mr Rady was accompanied by the heads of Coca-Cola subsidiaries in Zimbabwe – Delta Corporation Chairman Mr Canaan Dube, Schweppes Chairman Mr Sternford Moyo and the company’s Managing Director, Mr Charles Msipa as well as the Chairman of Mutare Bottling Company, John Gould.

Speaking to the media following the closed door meeting with the president, Mr Rady described his encounter with Mnangagwa as tremendous. According to the Coca-Cola MD, “We shared with them some of our business plans and future investments we are doing as well as our plan to make Zimbabwe an export hub, especially for our beloved Mazowe, many other juices and new innovation products that we will reveal soon.

“We also discussed how we can together go into integration of local production and the sourcing of local raw material especially oranges for our orange juice and maize, and hopefully in the future coffee and many other ingredients that we use in our portfolio of products,” he said.

Mr Rady noted that the acquisition of SABMiller by AB InBev will not affect Coca-Cola operations in Zimbabwe.

“We are working with our local markets Delta, Schweppes, Mutare Bottling Company,” he said.

“The shares of SABMiller have been moved on to some of our local partners here and across Africa.”

Delta Corporation, Zimbabwe’s largest brewer and a bottler of Coca-Cola products was given notice of intent to terminate bottler’s agreement by Coca-Cola in October 2016 following the big beer merger of 2016, which saw AB InBev acquire the assets of SABMiller worldwide. Prior to the merger, SABMiller held 40% of Delta’s shares. Delta in turn held 49% shares of Schweppes Zimbabwe. Both companies were on the verge of losing their ability to bottle Coca-Cola products since AB InBev became the majority shareholder in Delta Corporation and had to divest of its stake in Coca-Cola. The soft drinks giant announced in October 2016 following the merger between AB InBev and SABMiller to buy all of SABMiller’s stake in Coca-Cola Beverages Africa (CCBA) and other assets held by SABMiller outside of CCBA. These include bottling operations in Zambia, Zimbabwe, Botswana, Swaziland, Lesotho, El Salvador and Honduras now held by AB InBev. Coca-Cola is expected to make an announcement in 2018 on the refranchising of these bottling operations.

The loss of revenue from Coca-Cola will cost Delta nearly a third of its revenue. The company has been issuing cautionary statements to its shareholders since it received notice to terminate bottler’s agreement from Coke.

Zimbabwe’s Acting Minister of Industry, Commerce and Enterprise Development, Patrick Chinamasa said that Coca-Cola appealed to the government to avail at least 2,000 hectares of land for agriculture for production of oranges, coffee, tea, among other agricultural products.

“We have discussed the issue about allocating land to them to produce oranges. They have asked for 2000 hectares of land and we have committed ourselves to accede to their request,” the minister said.

According to Zimbabwe’s Herald Newspaper, the government has already attracted $11bn in foreign direct investment after it announced sweeping investment reforms that are underway for Zimbabwe to attain a middle income economy by 2030.

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