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  • Novalis_97 Novalis_97 Sep 7, 1998 8:43 PM Flag

    Coke owns 30% of China's carbonated drin

    U.S. giants riding out overseas storms -
    multinationals mostly immune to economic crises, so

    WASHINGTON (CBS.MW, 9/4/98) -- While many U.S.-based
    multinational companies have seen their business in Asia and
    Latin America catch a chill from the economic viruses
    in those regions, few seem concerned about the
    potential for full-blown
    companies have lots of experience with overseas turmoil and
    know how to adjust. Take Coca-Cola (KO), the world's
    largest maker of soft drinks. Even though sales fizzled
    in Japan, Indonesia and Thailand in the second
    quarter, the company's saw overall volume jump a healthy
    10 percent. And the Japanese slump can be traced to
    the first price increase in that country in years,
    said Bill Hensel, a company spokesman.

    said the economic troubles in Asia, which accounts for
    23 percent of Coca-Cola's sales, and Latin America,
    which accounts for 11 percent, have their benefits,
    too. Since Coke tries to buy most raw materials in the
    countries in which it operates, it pays less for
    sweeteners, packaging, advertising and the like when local
    currencies decline against the dollar.

    Coke has also
    taken advantage of the decline in currencies to step up
    investment in many of the more than 200 countries in which
    it hasoperations.

    "We've had a lot of
    experience," Hensel said. "We've got a pretty good handle on
    how to do this."

    Indeed, after the peso crisis
    in 1994-95, which led to a sharp devaluation, Coke
    took a series of steps aimed at reducing the cost of
    its drinks with the goal of retaining the loyalty of
    Mexican consumers whose incomes had fallen. Since then,
    the company has boosted its share of the Mexican
    market to 68 percent from 57 percent.

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