Coca Cola shuts 3 manufacturing plants in India as demand wanes

Hindustan Coca Cola Beverages, the bottling arm of Coca Cola India, the Indian arm of Atlanta-based beverages major, has suspended manufacturing at three locations in the country citing raw material shortage and lack of demand.

The company suspended manufacturing operations at Kaladera near Jaipur in Rajasthan, Vishakhapatnam in Andhra Pradesh and Brynihat in Meghalaya, citing absence of ''long-term economic viability'', which may affect at least 300 employees.

''Like with any other manufacturing organisation, we are going through a process of consolidation where new state-of-the art facilities are being built and existing production capacities are being optimised. These decisions are taken in keeping with plant capacity utilisation considerations, based on the market demands and projections,'' HCCB stated in a release on Wednesday.

The company also pointed to non-availability of raw materials for a plant's capacity to become unviable.

On the closure if the Kaladera plant in Rajasthan, Cocoa Cola India said while the company has currently suspended manufacturing, it is continuing with all other operations at Kaladera. The company said it is retaining the licence to produce at the Kaladera plant and may utilise its latent capacity should there be a change in demand and volume.

Coca Cola India also said the company remains committed to continuing with the community and the rain water harvesting work that it has been doing since 2003.

HCCB has 54 plants in India of which 24 are franchise plants, 25 are company-owned and 5 are co-packers. Coca Cola India sells a range of soft drinks, including Coca-Cola, Thums Up, Fanta, Limca, Sprite and Maaza.

Coca Cola had, in 2012, announced plans to invest about Rs28,000 crore ($5 billion) along with its partners in India by 2020 on various activities, including setting up of new bottling plants.