Coca-Cola India may disinvest plants of its asset-heavy bottling partner Hindustan Coca-Cola Beverages, as per a report by The Economic Times. The move is part of a bid to re-franchise its global bottling business.
"The objective is to move away from the capital intensive, low margin business of bottling over a period of time, (and) to accelerate focus on its concentrate business," a source told the paper.
The beverage maker began talks with existing independent franchise bottlers for the divestment, as per ET. Moneycontrol could not independently verify the report.
HCCB has 18 plants and accounts for two-thirds of Coca-Cola India’s volumes. It is the US beverage major's largest plant in India and reported revenue of Rs 9,082 crore in FY18, as per a filing with the Registrar of Companies.
The company announced it aims for $2.5 billion in revenue by 2020. To meet the goal, the operating structure would have to be modified and sales of a wider range of beverages would have to increase. The company said it would also focus on increasing outlet strength by 1 million and operate under seven zones, instead of the current five.
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