Monterrey Mexico.- Faced with growing demand in the south of the country, Coca-Cola Femsa (KOF) plans to install a new plant, reported its executive director Ian Craig García.
In a conference call with financial analysts, company executives acknowledged that demand has exceeded capacity in some territories in Mexico and Brazil.
For this reason, in 2023, they began installing new production lines where they already operate, which will increase their capacity by 15 percent by 2025.
“To drive growth, we are increasing our manufacturing and distribution capacity. To do so, we are implementing new modeling capabilities that optimize our footprint and capacity allocation,” said Jorge Collazo, Director of Investor Relations.
“In 2024, we are adding seven new bottling lines, two in Mexico, two in Guatemala, two in Brazil and one in Colombia. Of these lines, one in Mexico and one in Brazil, we will begin operations during the second half of the year. The rest are already online.”
Overcoming capacity constraints is something the team is definitely working on, Collazo added.
Craig Garcia said that due to these efforts to add capacity and generate productivity, in May they broke their own record for historical monthly production that they had previously established in March, by producing 198 million unit cases.
And yet, despite these efforts, demand continued to exceed capacity in the south of the country, creating shortages.
“Just in terms of launching new plants, what we are trying to do is saturate our current facilities,” the KOF CEO described.
“But eventually we will need a new plant to serve the southeastern territory of Mexico. As long as we can continue to add lines to our facilities, that will be the way to go. But at some point we will start a new, greenfield plant for Mexico and, at some point, for Brazil as well.”
They are also focusing efforts on their distribution capabilities, where Craig Garcia explained that when they are overwhelmed, they hire third-party assets, both delivery trucks and warehouses.
They are therefore looking to increase their distribution capacity by 30 percent by the end of 2025.
During the second quarter of the year, the largest bottler of the Coca-Cola system in the world in terms of volume, had a 7.5 percent increase in unit cases, compared to the same period in 2023, driven by Mexico, Guatemala and Brazil.
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