Coca-Cola’s Turkish Bottler Seeks New Markets as Debt Drops
By Ercan Ersoy
November 12, 2020
Coca-Cola Co.’s bottler for Turkey and nine other countries spanning Central Asia and
Middle East plans to enter new markets after reducing debt to the lowest level since its
stock exchange debut 14 years ago.
“Our main focus is to expand our franchise, growing our core business further with the
addition of new territories,” Burak Basarir, the chief executive officer of Coca-Cola
Icecek AS, said in an interview at the company’s head office in Istanbul. “We could
think of adding a new country or countries to our geography.”
The company is in regular contact with Atlanta-based Coca-Cola, which owns 20% of
the firm, as it would need permission to make fresh investments, he said. The drive
into new markets by Coca-Cola Icecek, also known as CCI, comes as beverage
producers globally seek other avenues of growth following the coronavirus pandemic
and amid a broader shift by consumers into healthier drinks.
Any investment would most likely be through an acquisition of an existing bottler,
“There is a Coca-Cola bottler or operation in almost every country in the world,” the
CEO said. “So you need to have either a partnership with that bottler in that country,
or take over its business if they are quitting, with the permission of The Coca-Cola Co.”
Shares in Coca Cola Icecek rose as much as 2.1% to 57.1 liras in Istanbul, the highest
since June 2014.
CCI has more room on its balance sheet to fund an expansion after cutting its ratio of
net debt to earnings before interest, tax, depreciation and amortization to a record low
of 0.54, compared with a limit of 3.25 set by investors.
The company, which is 50% owned by Turkey’s biggest brewer Anadolu Efes Biracilik
ve Malt Sanayii AS, is among the top eight Coca-Cola bottlers globally. CCI earns
nearly half of its revenue and two-thirds of its profit in Turkey, and has operations in
Azerbaijan, Iraq, Jordan, Kazakhstan, Kyrgyzstan, Pakistan, Syria, Tajikistan and
Other highlights from the interview:
• The company returned to net volume growth of 1.8% in the third quarter
following a contraction in the previous three months
• CCI can finance its organic growth and capital expenditure with free cash flow
generated from its operations.
• “During the pandemic we didn’t have a major supply chain problem in any
operations in the 10 countries. Supply chain is one of our strongest muscles
within our operations that cover 26 plants. None of them halted operations
because of the pandemic.”
• CCI withdrew its 2020 guidance on the back of a lack of visibility in the pandemic
o “Based on our first nine-month results, although we are lagging behind
2019’s volumes, in all other metrics we are delivering ahead of 2019. For
2021, we are still working on the budget. We will first want to see this
year’s 12-month performance.”
• Apart from Pakistan, Iraq and Jordan, CCI has a leading market share.
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