Arca Continental to invest $681m during 2019 to boost production

Mexican soft drinks bottler Arca Continental has announced plans to invest close to MXN 13 billion ($681.1 million) during 2019.

The company, which is the second-largest Coca-Cola bottler in Latin America, said 35% of the amount will be allocated to Mexico; 39% to operations in the US, including MXN 3 billion ($157.2 million) to a new production facility in Houston; and 26% to South America.

The resources will be used to strengthening operations and market execution in the firm’s beverages business, as well as in its food and snacks division.

Speaking before the annual shareholders meeting, Arca Continental chairman Manuel Barragan Morales said: “Consistent with Arca Continental’s long-term vision, in 2019 we will continue to reinforce and expand our production, distribution, and customer service capabilities in the markets we serve in order to strengthen our position and capture new opportunities for organic and inorganic growth.”

In 2018, Arca Continental’s net sales were up 14% year-on-year to $8.33 billion, while EBITDA rose 5.7% to $1.44 billion.

“In 2019, we will focus our efforts on innovation and on fine-tuning our diverse commercial initiatives,” said CEO Arturo Gutierrez Hernandez. “We will also reinforce operations in the US and in all our territories through greater digitisation projects and a more profound analysis of the information we collect from the market.”

Last September, Arca Continental subsidiary Coca-Cola Southwest Beverages (CCSWB) started work on the $250 million distribution and production facility in Houston. The site, which is expected to open in the first quarter of 2020, will be the first dedicated Coca-Cola bottling plant constructed in the US in a decade.

The plant will feature five production lines, in-line blow moulding, distribution facilities, a warehouse and a sales department.

Arca said the facility will allow CCSWB to effectively serve its client base in southeast Texas, and will provide $30 million in cost savings due to the facility’s efficient new equipment.