Sunday, September 18, 2005
COCA-COLA (THAILAND) LTD
COCA-COLA (THAILAND) LTD
COCA-COLA (THAILAND) LTD: Domestic sales total 11.6 million baht a day and business is expanding steadily despite the recession
For many Thai consumers and retailers, Coca-Cola is indeed the Real Thing. Thailand contributes one percent of the beverage empire's sales worldwide and is among its top twenty sources of revenue in country terms.
‘We don’t focus on our competitors. Beating the competitor is not our objective. Appealing to consumers and making the retailer profitable is . . . and that’s the best explanation of why we have been successful’MIKE BASCLEchief executive for Southeast and West Asia
With the 50th anniversary of its presence in Thailand approaching next year, Coca-Cola (Thailand) has big plans and hope expansion of this prosperous market.
But when the company expanded rapidly across Asia just after World War II, Thailand was given no particular importance, said Mike Bascle, chief executive for Southeast and West Asia.
Although the current recession has reduced the annual value of Thailand's soft drink market from 22 billion baht to 18 billion, Coca-Cola claims a 60.6% share.
For many investors, the question is whether to increase or reduce their stakes in Thailand andthe region.
"From our position, the answer is simple: we continue investing at, or in some cases even ahead, of our traditional level," he said.
Coca-Cola increased its stake in Thai Pure Drinks early this year from 44% to 49% for an estimated 1.9 billion baht.
Thai Pure Drinks is the local bottler of Coca-Cola products and claims about 90% of the market for both bottling and distribution of Coca-Cola products.
Coca-Cola has also strengthened its marketing, hard capital and personnel in Thailand, which is the regional headquarters for 13 countries including Malaysia, Singapore, Vietnam, Pakistan and Sri Lanka. India and China are handled separately.
"Of the 13 countries, Thailand accounts for more than 50% of our business. That's why we continue to investment in the company and the people," Mr Bascle said.
Instead of laying off employees, the company is hiring new staff to prepare for an anticipated economic recovery. Since the crisis began in July last year, it had increased its staff in Thailand by 9%. Over the past three years, the increase was 55 %.
Coca-Cola's operations in Thailand follow the pattern in all 200 countries in which it operates. The parent company provides technical know-how for bottling plants. The local company imports concentrate for Coca-Cola from the main plant in Atlanta, United States, mixes it with local content and water, and distributes the product,.
The concentrate is imported from Atlanta, rather than made locally, to ensure the secret formula is not leaked to rivals. All other products are made in Thailand. Bottling is handled by Thai Pure Drinks in Bangkok, and Haad Thip in Hat Yai, which serves southern Thailand.
Haad Thip, with one factory, has about 10% of the market. Thai Pure Drinks controls the rest, operating from seven bottling plants covering the rest of the country.
Even so, Coca-Cola and its bottling partners have been hard hit by the sudden contraction of the domestic market.
"We haven't reached the target and you cannot blame the company for not achieving it. But in comparison with other companies, we are pleased and proud of our success," he said.
Mr. Bascle focuses on growth potential. "Look at Thailand's economy, climate, population and other factors. There are many similarities between Thailand and the Philippines, but we have twice, the per capita consumption in Thailand.
"This gives me hope that the Thai operations can be doubled here, as two countries under similar conditions are consuming in different patterns," he said.
Coca-Cola believes that by helping its partners weather the weakened economy it will be in a better position to take advantage of the eventual turnaround.
"The way we are handling the downturn is by helping our partners. Liquidity is not an important issue for us, but we raised our equity in Thai Pure Drinks to address its liquidity issue," he said.
"The old methods were created for a certain economic climate but we are in a totally different world today and it may be quiet for some time. Let's rethink the, way we talk to consumers, the way we merchandise and promote our products, and even the way wc manufacture and distribute them," he said.
Consumer research had to be carried out more frequently than before the crisis, a strategy that has apparently paid off judging from its market share.
"We don't have any specific research to improve our products, it's based country by country. If you taste Fanta Orange, Fanta Strawberry or Fruit Punch here you will see there is a difference. These products are formulated differently in each country to suit the local taste," Mr Bascle said.
The only exception is Coca-Cola itself. Everywhere it conforms to the same formula.
Information technology plays a very crucial role. With many outlets, drivers and other employees there has to be a way to keep track of each part of the business.
Coca-Cola is helping local bottlers by installing the BASIS system, a worldwide standard accounting system for the industry Thai Pure Drinks is installing the system which is expected to come into use mid-1999.
"This will give them daily sales by brand, by store, by package anywhere and everywhere in the country. It will be reported electronically every second, and the company will have the ability to know what's selling and what's not selling - and where," he said.
Coca-Cola meets the development cost of the system, and local bottlers pay for the installation.
In Thailand, the parent company and its partners employ about 10,000 people, but as many as 500,000 people rely on Coca-Cola products in one way or another for part of their livelihood.
"We don't focus on our competitors. Beating the competitor is not our objective. Appealing to consumers and making the retailer profitable is ... and that's the best explanation of why we have been successful," Mr Bascle said.
This year, Coca-Cola reached one billion sales per day worldwide. In Thailand 11.6 million purchases are recorded daily.
"This means there are about 500,000 per hour, every hour, 24 hours a day, seven days a week in this country," he said.
By 2001, Mr Basele wants the figure to increase by at least 50%, but concedes much will depend on the economy.
Coca-Cola (Thailand) LtdEstablished: 1949Major shareholder: Coca-ColaMain businesses: Manufacturer and marketer of carbonated soft drinksSubsidiaries: Thai Pure DrinksNumber of employees: 10,264 (including subsidiaries)
WorldwideHeadquarters: Atlanta, Georgia, USANumber of countries: 200Number of employees: 26,000 (excluding subsidiaries)1997 gross revenue: US$18.87 billion1997 net profit: $4.13 billion
COCA-COLA (THAILAND) LTD: Domestic sales total 11.6 million baht a day and business is expanding steadily despite the recession
For many Thai consumers and retailers, Coca-Cola is indeed the Real Thing. Thailand contributes one percent of the beverage empire's sales worldwide and is among its top twenty sources of revenue in country terms.
‘We don’t focus on our competitors. Beating the competitor is not our objective. Appealing to consumers and making the retailer profitable is . . . and that’s the best explanation of why we have been successful’MIKE BASCLEchief executive for Southeast and West Asia
With the 50th anniversary of its presence in Thailand approaching next year, Coca-Cola (Thailand) has big plans and hope expansion of this prosperous market.
But when the company expanded rapidly across Asia just after World War II, Thailand was given no particular importance, said Mike Bascle, chief executive for Southeast and West Asia.
Although the current recession has reduced the annual value of Thailand's soft drink market from 22 billion baht to 18 billion, Coca-Cola claims a 60.6% share.
For many investors, the question is whether to increase or reduce their stakes in Thailand andthe region.
"From our position, the answer is simple: we continue investing at, or in some cases even ahead, of our traditional level," he said.
Coca-Cola increased its stake in Thai Pure Drinks early this year from 44% to 49% for an estimated 1.9 billion baht.
Thai Pure Drinks is the local bottler of Coca-Cola products and claims about 90% of the market for both bottling and distribution of Coca-Cola products.
Coca-Cola has also strengthened its marketing, hard capital and personnel in Thailand, which is the regional headquarters for 13 countries including Malaysia, Singapore, Vietnam, Pakistan and Sri Lanka. India and China are handled separately.
"Of the 13 countries, Thailand accounts for more than 50% of our business. That's why we continue to investment in the company and the people," Mr Bascle said.
Instead of laying off employees, the company is hiring new staff to prepare for an anticipated economic recovery. Since the crisis began in July last year, it had increased its staff in Thailand by 9%. Over the past three years, the increase was 55 %.
Coca-Cola's operations in Thailand follow the pattern in all 200 countries in which it operates. The parent company provides technical know-how for bottling plants. The local company imports concentrate for Coca-Cola from the main plant in Atlanta, United States, mixes it with local content and water, and distributes the product,.
The concentrate is imported from Atlanta, rather than made locally, to ensure the secret formula is not leaked to rivals. All other products are made in Thailand. Bottling is handled by Thai Pure Drinks in Bangkok, and Haad Thip in Hat Yai, which serves southern Thailand.
Haad Thip, with one factory, has about 10% of the market. Thai Pure Drinks controls the rest, operating from seven bottling plants covering the rest of the country.
Even so, Coca-Cola and its bottling partners have been hard hit by the sudden contraction of the domestic market.
"We haven't reached the target and you cannot blame the company for not achieving it. But in comparison with other companies, we are pleased and proud of our success," he said.
Mr. Bascle focuses on growth potential. "Look at Thailand's economy, climate, population and other factors. There are many similarities between Thailand and the Philippines, but we have twice, the per capita consumption in Thailand.
"This gives me hope that the Thai operations can be doubled here, as two countries under similar conditions are consuming in different patterns," he said.
Coca-Cola believes that by helping its partners weather the weakened economy it will be in a better position to take advantage of the eventual turnaround.
"The way we are handling the downturn is by helping our partners. Liquidity is not an important issue for us, but we raised our equity in Thai Pure Drinks to address its liquidity issue," he said.
"The old methods were created for a certain economic climate but we are in a totally different world today and it may be quiet for some time. Let's rethink the, way we talk to consumers, the way we merchandise and promote our products, and even the way wc manufacture and distribute them," he said.
Consumer research had to be carried out more frequently than before the crisis, a strategy that has apparently paid off judging from its market share.
"We don't have any specific research to improve our products, it's based country by country. If you taste Fanta Orange, Fanta Strawberry or Fruit Punch here you will see there is a difference. These products are formulated differently in each country to suit the local taste," Mr Bascle said.
The only exception is Coca-Cola itself. Everywhere it conforms to the same formula.
Information technology plays a very crucial role. With many outlets, drivers and other employees there has to be a way to keep track of each part of the business.
Coca-Cola is helping local bottlers by installing the BASIS system, a worldwide standard accounting system for the industry Thai Pure Drinks is installing the system which is expected to come into use mid-1999.
"This will give them daily sales by brand, by store, by package anywhere and everywhere in the country. It will be reported electronically every second, and the company will have the ability to know what's selling and what's not selling - and where," he said.
Coca-Cola meets the development cost of the system, and local bottlers pay for the installation.
In Thailand, the parent company and its partners employ about 10,000 people, but as many as 500,000 people rely on Coca-Cola products in one way or another for part of their livelihood.
"We don't focus on our competitors. Beating the competitor is not our objective. Appealing to consumers and making the retailer profitable is ... and that's the best explanation of why we have been successful," Mr Bascle said.
This year, Coca-Cola reached one billion sales per day worldwide. In Thailand 11.6 million purchases are recorded daily.
"This means there are about 500,000 per hour, every hour, 24 hours a day, seven days a week in this country," he said.
By 2001, Mr Basele wants the figure to increase by at least 50%, but concedes much will depend on the economy.
Coca-Cola (Thailand) LtdEstablished: 1949Major shareholder: Coca-ColaMain businesses: Manufacturer and marketer of carbonated soft drinksSubsidiaries: Thai Pure DrinksNumber of employees: 10,264 (including subsidiaries)
WorldwideHeadquarters: Atlanta, Georgia, USANumber of countries: 200Number of employees: 26,000 (excluding subsidiaries)1997 gross revenue: US$18.87 billion1997 net profit: $4.13 billion
# posted by maplemar1 @ 8:19 PM 
