21 August 2006
International beverage giant Coca-Cola is relocating its Africa group head office from Windsor in the UK to Johannesburg, a move seen as a clear signal of the company’s commitment to the African market, and South Africa in particular.
“The commercial aviation infrastructure, the telecoms infrastructure, the whole commercial environment is improving across Africa, and now is the right time for us to move our base to Africa, and Johannesburg is the location of choice,” Alex Cummings, president of Coca-Cola South Africa, said on the Moneyweb Power Hour.
South Africa is by far Coca-Cola’s largest market in Africa, two-and-a-half times that of the second biggest, Nigeria. It makes up 40% of the company’s African revenue.
In 2005, Coca-Cola’s South African turnover grew by 8% to 10% – a higher rate than GDP, which stood at 4.9%.
“South Africa … has the most developed infrastructure,” Cummings said. “South Africa is our biggest business and, frankly, Johannesburg is the business capital of South Africa. And so if we’re going to move to South Africa, Johannesburg was the logical place to base our offices.”
The move to Johannesburg will integrate the group’s leadership with the 60 000 associates who make up the Coca-Cola System in Africa, and bring its leadership closer to customers, suppliers and business partners.
The Coca-Cola Company first entered Africa in 1928 with a beverage manufacturing plant based in South Africa. Since 2000 the company and its bottling partners have invested more than U$600-million in plants, manufacturing and distribution across the continent.
Painting Africa red
According to company statistics, Coca-Cola sells an average of 235 beverages, of all products, to each man, woman and child in South Africa every year – a rough total of over 10-billion units. The world per capita average is 77 units.
In an article on brandchannel.com titled Painting South Africa R, Ron Irwin argues that Coke’s success in Africa “has been due to its savvy advertising as well as its ubiquitous involvement in local community life.
“City dwellers in South Africa cannot fail to notice the Coke signs installed in every shop and roadside stand, but Coke has taken the initiative to reach poorer South Africans in rural areas as well. To this end it has initiated sports sponsorships, sports development, entrepreneurial development, scholarships and education projects.
“It has also relentlessly found ways to get its products trucked into even the most remote corners of Africa, and has cultivated a reputation for corporate honesty and openness that has won the respect of African businesspeople from Cape Town to Madagascar.”
Coca-Cola Africa’s group office relocation will begin in January 2007 and should be complete by June of that year.