Coca-Cola Market Shrinks, Plans To Close Its Two Russian Juice Plants

Coca-Cola has four fruit juice plants in Russia out of which the company has decided to shut down two of the plants and have stated the reason behind this that its demand is continuously falling and due to such falling demand the company cannot put in risk hundreds of jobs. Coca-Cola had invested an amount of $276 billion in the fruit juice company four years back. The spokesman of Coca-Cola in Russia Vladimir Kravtsov has said in a statement that the company is going to close two of its fruit juice plants that is run by Nidan Unit of its, on 1^st June. He also stated that some of the capacity of that Unit which is going to be closed will be transferred to it’s another unit which know as Multon and this transfer will be done before the end of this year.

The spokesman Mr. Kravtsov further added that the plants, which are to be closed, are located in Moscow and Serbia region of Russia. He also told that about 1,000 staff workers of the units being closed would be offered jobs at the Multon unit. “The decision of closing the Nidan Unit was taken after the juice market fell by 5 percent the previous year but in case of Nidan it was going even more worse than the juice market. In the year 2010 Coca-Cola bought the Nidan company and then the also the fourth biggest juice making company of Russia.

In 2005 Coca-Cola bought Multon, it has two plants in Russia and both the plants are making combined production of more than 790 million liters of Juice every year. The Russian market researchers Neilson have stated that from January to September 2013 the Russian Juice market has fallen by 6 percent year-on-year in terms of volume. Due to the falling of Juice market in Russia, PepsiCo the rival of Coca-Cola and Coca-Cola itself has faced much competition from the local Russian brands.

According to Euro monitor data the stock shares of Coca-Cola was 23.5 percent in the Russian Juice market, which estimated $4.6 billion in 2013 while all the other local brands increased their market shares the previous year. One of the main reasons behind the shutdown of Juice plant is the slowing down of Russia’s economy as it has started to shrink because of the involvement of the country in Ukraine crisis.

Coca-Cola is however, still one of the world’s most leading companies whose stock price of today can be seen varying from $40.71 to $40.95. Besides Coca-Cola the company is also operating in many other drinks like non-alcoholic beverage concentrator and syrups but it is mostly known in the world by its flagship product Coca-Cola. It is a multinational American beverage corporation; manufacturer, retailer and marketer of the above mentioned drinks and is headquartered in Atlanta, Georgia. Stock symbol of Coca-Cola is KO and it trades under NYSE. The revenue generated by Coca-Cola last year was $46.854 billion. Its operating income, net income, total assets and total equity are $10.228 billion, $8.584 billion, $90.055 billion and $33.44 billion respectively.

If we go through the history of Coca-Cola we may come across that fact that it is among the oldest companies of the world as John Stith Pemberton who was a pharmacist invented it in 1886. The company was build up in Columbus, Georgia. The incorporator of Coca-Cola Company Asa Griggs Candler introduced the brand and formula of Coca-Cola. The company also owns an anchor bottler in North America. The current CEO and chairman of Coca-Cola is Muhtar Kent.