Coca-Cola On Investment Spree

Coca-Cola Co. (KO: 49.53 -0.38 -0.76%) and its bottlers are planning to invest more than $5 billion in Mexico over the next five years. The investment is primarily targeted at developing infrastructure, technology, social and environmental programs, marketing, training and products with special emphasis on employment generation.

The new investment is expected to revive Mexico’s economy, which is facing the brunt of the recession due to reduction in imports by the U.S., its primary trade partner. Further, a decrease in tourism due to the swine-flu epidemic has worsened the condition.

Recently, Coca-Cola established a new plant for a juice company Jugos del Valle in Tepotzotlan , Mexico . The total investment for this plant amounted to $200 million, which is expected to generate employment opportunities for about 1,500 people. In addition, the plant is expected to have 20 bottling lines and an annual production capacity of 140 million beverage crates.

In July 2009, Coca-Cola Company and its bottling partner had undertaken expansion in China with the opening of two new bottling facilities, in the less developed central and western China. Coca-Cola also invested more than $2 billion in Russia.

The company’s arch rival PepsiCo (PEP: 57.52 +0.03 +0.05%) already announced plans to invest up to $3 billion in Mexico over the next five years to stimulate growth of beverage brands along with Sabritas and Gamesa snacks. About $2 billion of the Mexican investment will fund the overall research and development, manufacturing, distribution, marketing, and advertising activities. Approximately $1 billion will support the Pepsi beverage system in Mexico. Also, a part of the investment will support the introduction of key Mexican traditional brands into the U.S. market.

PepsiCo has started investing $1 billion in China over a period of four years beginning 2008 for the expansion of manufacturing capacity. The investment would also fund local research for development of new products tailored for Chinese consumers, in addition to expansion of its sales force and for brand-building initiatives.

PepsiCo also plans to invest $1 billion in the Russian market as part of its strategy to drive additional growth in key developing markets. Additionally, the company also plans to boost its manufacturing and distribution capacity in Russia