NEW DELHI (Reuters) - Coca-Cola Co announced a further $3 billion in investment in India over the next eight years on Tuesday as the world’s biggest soft drinks maker seeks to expand in a country where its flagship brand trails rival Pepsi.
The investment by Coca-Cola and its bottlers, on top of a $2 billion five-year plan announced in November, will hearten Indian officials who are trying to restore investor confidence after growth fell to a nine-year low in the first quarter.
Coca-Cola’s announcement comes days after Swedish retailer IKEA, the world’s largest furniture maker, said it would invest 1.5 billion euros ($1.9 billion) to open 25 stores in Asia’s third-largest economy over 15 to 20 years.
“We have increased the investment here because we think, there’s potential here to stay ahead of the curve,” Coca-Cola Chairman and Chief Executive Muhtar Kent told reporters in the Indian capital.
Coca-Cola and its bottlers have spent some $2 billion since the company returned to India in 1993 after pulling out in 1977 when a government ruling would have forced it to share its secret formula.
Coca-Cola lags rival PepsiCo’s brand Pepsi in India’s $10 billion beverages market and it has been trying to aggressively raise its market share - cutting some prices in the summer season for the first time since 2003.
“The brand that has been doing well for Coca-Cola is Thums Up,” said an analyst with a foreign brokerage, who did not wish to be named, referring to a local cola brand owned by the Atlanta-based company.
Kent said Coca-Cola, which also sells brands such as Minute Maid juices and Nestea, was on track to meet its target of doubling its business in a decade with global investment alongside its bottlers of $30 billion in the next five years.
Shares in Coca-Cola closed down 0.23 percent at $74.77 on the New York Stock Exchange on Monday.
Reporting by Anurag Kotoky; Editing by Matthew Tostevin