Coke puts $29m into quake-hit Christchurch

Coca-Cola Amatil managing director Terry Davis says leaving Christchurch could have haunted the company. Photo / Simon Baker

Coca-Cola Amatil took a hard look at its options when it was considering re-investing in Christchurch following the February 22 earthquake, which took a heavy toll on its manufacturing facility in the city, says the beverage giant's group managing director, Terry Davis.

The plant, located in the industrial area of Woolston, at the base of the Port Hills, was knocked out of action for four months following the disaster.

Davis said the Sydney-based, ASX-listed company's board of directors considered rebuilding the plant, which supplied the South Island, in Wellington or Nelson.

"I took the view that if companies like us made those sorts of decisions, it would come back to haunt us in the future - that we'd deserted the community when it needed us most," he said.

Yesterday, the beverage company - best known for drinks such as Coke, Sprite and Fanta - officially opened a new, $15 million high-tech bottling line at the Woolston plant.

The firm said it had invested an additional $9 million into infrastructure repair and the re-establishment of operations following the February 22 and September 2010 quakes.

It would also spend $5 million on a new distribution centre in Christchurch - bringing its total investment in the city to $29 million.

However, Coca-Cola Amatil, which employs around 140 staff in Christchurch, is not the only firm to have invested a large amount of capital in the earthquake-struck region.

Canterbury Employers' Chamber of Commerce chief executive Peter Townsend said stationery supplier OfficeMax had made a "significant" investment in the city since the quakes, and state-owned power firm Meridian Energy had expanded its call centre.

"It's really important that the big companies are overtly committed to the future of Christchurch and [the Coca-Cola Amatil investment] is a good example," Townsend said.

The company's new manufacturing equipment in Christchurch features "blow-fill technology", which enables bottles to be manufactured on the same production line in which they are then filled with product, capped, labelled and packaged for distribution.

Davis said the company would achieve cost savings of A$90 million ($116 million) annually by the time blow-fill technology was fully introduced across its operations in Australasia, Indonesia, Papua New Guinea and Fiji.

The roll-out, the company's biggest infrastructure investment in a decade, at a total cost of A$450 million, is expected to be completed within the next four years.

Coca-Cola Amatil's Auckland plant, in Mt Wellington, has also had the technology installed.

Davis, who was in Christchurch for the opening of the new bottling line yesterday, said the company's biggest challenge at present was falling levels of consumer confidence.

It was combating this threat through helping its customers - such as retailers - grow their businesses, he said.

"It's to find ways for our customers to sell more hamburgers or more pies. Obviously, if you sell a hamburger or fish and chips you then sell a Coke with it."

The firm posted a A$4.5 billion revenue in 2010 and continued to consistently grow annual profits following the onset of the global financial crisis.

Davis would not go as far as saying the business was recession-proof.

"We say we're recession-resistant," he said.

The Atlanta-based, New York listed Coca-Cola Company owns a minority stake in Coca-Cola Amatil.

* Coca-Cola assisted the Business Herald with travel to the new plant.