ECONOMY

Coca-Cola HBC planning Polish water acquisition

Soft drinks bottler Coca-Cola HBC is poised to make its third mineral water acquisition in two years in line with its strategy of diversifying into the non-carbonated soft drinks market. Coca-Cola HBC, with operations in 26 countries serving a population of more than 500 million, yesterday said it was planning, together with The Coca-Cola Company of the US, to acquire Polish mineral water company Maspex. The Polish firm has a production facility at Tylicz and sells bottled mineral water under the brand name Multivita. Coca-Cola HBC did not provide details of when the purchase would be finalized nor the price to be paid. The acquisition is subject to regulatory approval from the Polish government. Coca-Cola HBC underscored its interest in the non-carbonated soft drinks market last year with its takeover of Romanian mineral water company Dorna Apemin and Swiss mineral water operation Valser Mineralquellen. Both transactions were joint acquisitions with The Coca-Cola Company. It also opened a mineral water bottling plant in Hungary. Earlier this year, Irial Finan, Coca-Cola HBC managing director, said the company plans a series of acquisitions to strengthen its non-carbonated soft drinks portfolio, which accounted for 15 percent of business last year. The company plans to increase the share to 20 percent in 2004, a goal well within reach in view of the massive demand expected during the Olympic Games. Coca-Cola HBC is estimated to have a 53 percent share of the non-carbonated soft drinks market against a 37 percent share in carbonated soft drinks. Its share of the water market amounts to about 74 percent of the total non-carbonated market. New products aside, the company has resorted to new packaging to increase market share. The company is targeting total volume growth of 7-9 percent this year and EBITDA increase of 11-13 percent. Operating profit is projected to rise 25-30 percent and net profit to almost double from 2002. Net capital expenditure is set at between 335-350 million euros. Shares of Coca-Cola HBC rose 0.76 percent yesterday to close at 13.20 euros. It is also listed in London, Sydney and New York.