MEXICO – Coca-Cola FEMSA, the world’s largest Coca-Cola franchise bottler by sales volume, has announced plans to expand its capacity to meet growing demand by setting up new production plants in Mexico and Brazil.
CEO Ian Craig shared that the company is executing a capacity expansion plan initiated last year, aiming for a 15 percent increase in capacity by the end of 2025.
Craig explained that Coca-Cola FEMSA is focusing on maximizing its current facilities by adding production lines and increasing the capacity of existing assets.
“Eventually, we will need a new plant to serve the southeast territory of Mexico. As long as we can keep adding lines to our facilities, that’s the way to go,” he stated during the company’s second-quarter results presentation.
This year, Coca-Cola FEMSA has installed seven new production lines at its facilities. This includes two lines each in Mexico, Brazil, and Guatemala and one in Colombia.
These expansions are part of the company’s broader strategy to enhance its production capabilities before establishing the new “greenfield” sites in Mexico and Brazil.
In the second quarter ending June 30, Coca-Cola FEMSA reported total revenue of 69.45 billion pesos (US$1.18 billion), a 13.1 percent increase year over year.
The company’s gross profit rose by 17.2 percent to 31.96 billion pesos (US$547M), while adjusted EBITDA increased by 21.7 percent to 13.92 billion pesos (US$238.3M).
The Mexico division saw a 7.9 percent year-on-year increase in total volumes to 599.5 million unit cases, with a case defined as 192 ounces of finished beverage.
Brazil’s volumes rose to 269.4 million unit cases, reflecting a 12.1 percent growth. In May, Coca-Cola FEMSA temporarily shut down one of its production sites in Brazil due to severe local floods.
Coca-Cola FEMSA’s portfolio includes 134 brands, and the company operates 56 manufacturing plants and 251 distribution centers. The expansion plan and new plant setups are expected to further bolster its production capacity to meet rising consumer demand in the region.
Meanwhile, The Coca-Cola Company reported a 3 percent increase in net revenue to US$12.4 billion for the second quarter of 2024.
This growth was driven by a 9 percent increase in price/mix and a 6 percent rise in concentrate sales.
The Coca-Cola Company also saw a 2 percent rise in unit case volume for the quarter, with international markets playing a significant role in this growth.
The company has updated its 2024 guidance, now expecting organic revenue growth of 9 percent to 10 percent, up from the previous forecast of 8 percent to 9 percent.
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