Nairobi Governor Evans Kidero and Patrick Pech, NBL managing director (right), unveil the Sh1.2 billion plant July 16, 2013. Photo/Salaton Njau
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The factory has a production capacity of 900,000 PET bottles per day, and will help cut Coca-Cola’s packaging costs —which accounts for about a quarter of its expenses — by 10 per cent.
The firm said the plant will supply the bottles to the other six bottling franchises under Coca-Cola brand and will also be exported to Uganda, Tanzania, Ethiopia and Mozambique.
Nairobi Bottlers has started manufacturing its own plastic bottles in a Sh1.2 billion investment that will lower its costs and prepare it for a price war against rival PepsiCo.
The factory has a production capacity of 900,000 PET bottles per day, and will help cut Coca-Cola’s packaging costs —which accounts for about a quarter of its expenses — by 10 per cent.
NBL managing director Patrick Pech said the firm is reacting to the growing demand for plastic bottled soda compared to glass which currently makes up 75 per cent of sales volumes.
“We have been spending huge sums of money sourcing for the plastic bottles and this plant will help us save on costs,” said Mr Pech at the commission of the factory in Nairobi Tuesday.
“This will help meet the increased demand for our PET bottled beverages.”
PepsiCo in February started local production in Kenya, increasing competition in the soft drinks segment which sparked off price wars with Coca-Cola.
PepsiCo is selling six flavours of its 350ml drinks at Sh23, translating to more volume for consumers at the same price as Coca-Cola’s Sh300ml glass bottles.
Coca-Cola made a similar move for its 300ml bottles in response to the rival’s return to Kenyan market, cutting price to Sh23 but increasing the price of the 500ml bottle to Sh37.
The franchisee plans to leverage on the plant to grow the share of plastic bottled soda to 35 per cent as it eyes consumers seeking to enjoy a soft drink on the go or in outdoor gatherings such as picnics.
“It’s about the convenience offered by PET bottles,” said Mr Pech.
Nairobi Bottlers is Coca Cola’s largest bottler in Kenya, producing more than half of the firm’s volumes of soda, mineral water and fruit juices.
The firm said the plant will supply the bottles to the other six bottling franchises under Coca-Cola brand and will also be exported to Uganda, Tanzania, Ethiopia and Mozambique.
The plastic bottle factory comes barely a year after the giant beverage maker unveiled a Sh1.3 billion plastic bottling line in July last year with a capacity of filling 28,000 bottles per hour, doubling its production volumes.
Rising demand and the opening of PepsiCo plant has reversed the drop in soda production recorded last year to grow 5.8 per cent to 109,707 metric tonnes in the three months to March.
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