COCA-COLA TO INVEST ADDITIONAL USD 100 MILLION IN

UNCLAS SECTION 01 OF 02 MAPUTO 000607

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON EINV ETRD PREL PGOV MZ
SUBJECT: COCA-COLA TO INVEST ADDITIONAL USD 100 MILLION IN
MOZAMBIQUE


1. (U) SUMMARY: The Charge recently met with Coca-Cola's
country director, who discussed plans for significant
additional investment in Mozambique. The director also
described the company's humanitarian programs, including a
planned multi-million dollar partnership with USAID to supply
clean water, and prevent the spread of HIV/AIDS and malaria.
Coca-Cola entered the Mozambican market in 1993, currently
employs over 700 local staff, and has developed a strong
reputation for corporate excellence in the country. Post
hopes to capitalize on Coca-Cola's experience by inviting the
company to our July 15 and 16 Trade and Investment Conference
in Maputo, to be opened by President Guebuza, where
prospective U.S. investors can learn from the business
community and have access to senior decision-makers. END
SUMMARY.


2. (SBU) The Charge met recently with the Country Director
of Coca-Cola's operations in Mozambique, Saider Sibanda, to
take a tour of Coca Cola facilities in Maputo. In
Mozambique, the Coca-Cola operation is 70 percent owned by
the South African firm SABCO and 30 percent owned by the U.S.
Coca-Cola Corporation. Sibanda informed the Charge that
Coca-Cola plans to invest an additional USD 100 million in
Mozambique to increase production in the region. Sibanda
outlined Coca-Cola's extensive humanitarian projects in the
country and its plans to partner with USAID in a Global
Development Alliance (GDA) to provide millions with clean
water and prevent the spread of HIV/AIDS and malaria. In
tough economic times, Coca-Cola's commitment to excellence
has not waned, instead it is investing more with little doubt
that Coca-Cola will achieve strong financial gains in the
future.

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HISTORY
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3. (U) Early in 1993, Coca-Cola secured the rights for a
plant in Maputo. After Mozambique's sixteen-year long civil
war that destroyed much of the country's infrastructure,
Coca-Cola was one of the first foreign companies to invest.
With an initial investment of USD 11 million, the company
established a factory producing and selling 1.13 million
cases of Coca-Cola and employing a workforce of 80. Today,
the Mozambican operation boasts three plants in Machava,
Chimoio, and Nampula, greatly expanded production, and
employs a current workforce of 700.

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COCA-COLA'S COMMITMENT TO COMMUNITY
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4. (U) In Mozambique, Coca-Cola maintains numerous
humanitarian projects. Most noteworthy is a Global
Development Alliance between Coca-Cola and USAID. Coca-Cola
and USAID formed the Water and Development Alliance (WADA) to
provide access to clean water and to protect the Mozambican
environment. In Chimoio, the WADA project combines the
resources of local and international public and private
entities to address the city's urgent water needs. The
combined funding commitment from all partners exceeds USD
1.79 million including USD 500,000 from USAID. To date,
impacts of expanding the water supply include a consistent
supply of clean, running water for 25,000 people, 12 schools,
one provincial hospital, one secondary health facility, and
local industrial and commercial users, including the local
Coca-Cola plant. Due to the success of the alliance, USAID
and Coca-Cola extended their partnership and will enter a
three-year, multi-million dollar alliance to bring clean
water to the northern provinces of Zambezia and Nampula that
will benefit hundreds of thousands of Mozambicans.
Coca-Cola's commitment to the Mozambican people extends to
providing valuable information on preventing the spread of
HIV/AIDS to its employees, funding a project with the World
Health Organization along the Zambezi River that supplied
34,000 people with mosquito nets, treated over 20,000 people
for malaria, and provided assistance for small business
development.

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COMMENT
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5. As in many countries, Coca-Cola is an excellent corporate
citizen, partnering with USG assistance projects and
assisting other U.S. companies enter and expand their
operations in the Mozambican market. Although the current
economic climate is difficult, the Coca-Cola story in
Mozambique demonstrates that rich opportunities for U.S.
investment and trade are possible, with great potential in

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the areas of agriculture, energy, mineral extraction, and
tourism. To assist prospective U.S. investors access
Mozambican markets, the U.S. Embassy in Maputo will hold the
U.S. Trade and Investment Conference in Maputo, Mozambique on
July 15-16, where companies like Coca-Cola can share best
practices. The President of Mozambique will address the
conference and a number of Mozambican ministers will provide
detailed sector-specific briefings for U.S. investors.
Chapman