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Coca-Cola to sell nine production units in US

Published 25 September 2015

Coca-Cola is offloading nine production facilities, valued at $380m, and creating a National Product Supply System (NPSS) with independent bottlers in the US.

Coca-Cola bottling

The production facilities will be sold to Coca-Cola Bottling Co. Consolidated, Coca-Cola Bottling Company United, and Swire Coca-Cola USA, all of which will be part of the National Product Supply Group (NPSG).

The company-owned Coca-Cola Refreshments (CCR) and Coca-Cola North America will also be a part of the group, which will support national product supply activities for the NPSS bottlers.

These bottlers represent approximately 95% of the volume produced by the company in the US.

Coca-Cola North America executive vice-president and president Sandy Douglas said: "The National Product Supply System will benefit all of our US bottling partners by driving our production system to manufacture products at the lowest optimal cost.

"The board of the NPSG will focus on infrastructure planning, innovation planning, and optimal sourcing."

Under the initial terms of the letters of intent signed with the bottlers, NPSS bottlers will purchase certain production facilities from CCR within their distribution territories.

CCR will initially sell nine facilities between 2016 and 2018. A decision on the remaining plants will be taken in the due course, the company said

Coca-Cola Bottling will acquire units in Sandston in Virginia, Baltimore and Silver Spring in Maryland, Indianapolis and Portland, Indiana and Cincinnati in Ohio.

United will handle the production facility in New Orleans, Louisiana. Swire will take over the production facilities in Phoenix in Arizona and Denver in Colorado.

In August, three major European bottlers, Coca-Cola Enterprises, Coca-Cola Iberian Partners and Coca-Cola Erfrischungsgetränke (an arm of Coca-Cola) merged to form Coca-Cola European Partners.

The net revenues of the consolidated European entity are expected to be around $12.6bn.

Image: Coca-Cola has created a National Product Supply Group. Photo: courtesy of The Coca-Cola Company.