Sector News

Indian Coca-Cola bottler funds its biggest ever plant to quench summer demand and boost recycling

May 11, 2024
Consumer Packaged Goods

Anticipating higher demand in the upcoming summer months, Coca-Cola’s independent South Asian bottler, SLMG Beverages, has invested ₹700 crores (US$83 million) to advance capacity at its biggest bottling facility in Uttar Pradesh, India. The bottler has also partnered with Dalmia Packaging to build a PET recycling plant for food-grade plastic with an annual capacity of 36,000 tons by investing up to ₹100 crores (US$11 million).

The joint venture has identified the land between Indian cities Lucknow and Kanpur for setting up the unit and is in the process of ordering the machinery, as it expects to start production in two years. As per estimates, the recycling facility will be able to produce 24,000 tons of plastic to produce PET bottles, which will account for 20% of its sales.

Meanwhile, the bottling plant in Amethi city has a total manufacturing capacity of 4,600 bottles per minute, with seven production lines fully operational and the last line set to go live by the second week of May.

The unit can produce beverages in cans, tetra packs, plastic bottles and a line for packaged drinking water. SLMG Beverages has also announced an additional ₹200 crore (US$23 million) investment for further capacity expansion at the plant.

The bottler says it “aims to grow more than the industry growth rate of 15-16%.”

Consumer and recycled content demand
With seven plants and 41 crore bottling capacity per day in Uttar Pradesh, SLMG supplies 90% of Coca-Cola bottles in the state. It caters to demand in the Indian states of Uttarakhand, Bihar and Madhya Pradesh. Overall, the bottler serves these states with more than 300 million people through its 1.5 million outlets and a network of over 1,500 distributors.

Coca-Cola India launched 100% recycled PET (rPET) beverage bottles in October. “We seek to drive a circular economy for our packaging to reduce waste and carbon emissions,” said Enrique Ackermann, vice president of technical and innovation at Coca-Cola India and Southwest Asia.

“We’re working to increase recycled content in our packaging, expand our use of refillable bottles and collect packaging for recycling through our World Without Waste initiative.”

But the beverage giant is allegedly “struggling” to source plastic at a “reasonable price” in Asia. Speaking to Packaging Insights earlier last year, a The Coca-Cola Company spokesperson said that the ongoing challenges around meeting the supply demands for sourcing high-quality food-grade rPET globally are “well-known.”

SLMG is banking on its partner Dalmia Packaging to handle the plastic sourcing for recycling, given “its collection and value maximization expertise.” The partners intend to drive cost efficiency by deploying AI to transport finished goods.

By Radhika Sikaria

Source: packaginginsights.com

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