Zacks Investment Research | Jan 30, 2019 11:35PM ET
The Coca-Cola Company (NYSE:KO) has acquired full stake in Nigeria’s leading producer and distributor of value-added dairy, iced tea and juices — Chi Ltd. In 2016, Coca-Cola had acquired 40% equity stake in Chi. As previously planned, the company increased its stake in Chi to 100% after three years.
Notably, Chi’s diversified beverages fully complement Coca-Cola’s existing portfolio and provides it solid opportunities to expand in new categories and strengthen its business in Africa. This is in sync with Coca-Cola’s mantra of evolving as a total beverage company. In fact, the latest acquisition perfectly fits in with the company’s long-term investment and growth plans for Africa as juices and value-added dairy categories are among the fastest-growing beverage segments in Nigeria and Africa. Investment in leading value-added dairy and juice brands like Hollandia and Chivita, should bolster Coca-Cola’s beverage portfolio in Africa, where the company has operations for more than 90 years.
The company has been eyeing strong consumer opportunity in Africa as clear from its plans to invest around $17 billion in the continent between 2010 and 2020.
Overall, Coca-Cola commands a strong presence in the developing and emerging markets of Latin America, India, Russia and China encouraged by growth opportunities that these countries. Among these, China represents a significant long-term growth opportunity for Coca-Cola, where it is presently investing $4 billion. Markedly, this is an addition to the $9 billion of investments already made in China since 1979.
Additionally, Coca-Cola plans to explore opportunities in the $500-billion coffee market, particularly the on-the-go-coffee business with its recent buyout of Costa. It is also looking to enter into the fast-growing cannabis market like many of its beverage peers.
These apart, the company has been gaining from the ongoing productivity efforts and disciplined growth strategies. Coca-Cola’s strategy of introducing new products alongside focusing on lifting and shifting successful brands globally is aiding its performance.
In past six months, this Zacks Rank #3 (Hold) stock has gained 3.2% against the Zacks Investment Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.