Sheikh Shahariar Zaman

The government is positively considering a $51 million Coca Cola investment plan to set up the global brand's own manufacturing unit in Bangladesh.

"We are positive about the investment proposal and it is likely that the issue will be settled by this year," Prime Minister's Economic Affairs Adviser Dr Mashiur Rahman told the FE.

Dr Rahman is the head of the committee that is examining the investment proposal of the multinational company (MNC), which has three very popular brands - Coke, Sprite and Fanta.

Coke scrapped franchise agreement with Tabani Beverage in 2008 but it has another agreement with Abdul Monem Group, which is still valid.

"Coke wants to make the investment to set up its plants and if possible it wants to buy the assets of Tabani Beverage, which can be used for production and marketing purpose," Dr Rahman said.

The committee sat for two meetings and analysed the investment prospects and it will prepare its final report soon, said a Board of Investment official.

Tabani has significant asset and Coke can use it for future production, he said.

Coke started business in Bangladesh with an agreement with Tabani, owned by a Pakistani national, in 1965.

After the liberation, Tabani was put under the Freedom Fighters' Welfare Trust and it continued its business up to 2008.

"The MNC used to sell to us the liquid concentrate of its brands and here we produced cold drinks and marketed them," said a Tabani official.

Coke asked Tabani to increase its capacity in 1978 but it failed to do so and later the MNC signed another agreement with Abdul Monem Group to produce the popular cold drink brands.

"Tabani had the right to distribute its products in greater Dhaka and Rajshahi divisions while Monem entered into a contract to distribute them in Chittagong and Khulna divisions," he added.

The companies at that time only produced regular glass bottle (RGB) drinks and it continued production until 2001, when Monem introduced PET bottles in the market.

The MNC in 2003 asked Tabani to improve its quality including setting up an effluent treatment plant on the factory premises but it failed to comply with the conditions, the official said.

Eventually, Coca Cola scrapped the contract with the Tabani in 2008 and now it has come with the investment proposal with an ambition to tap the emerging economy by itself.

"Tabani has over seven acres of land in Mirpur, a manufacturing plant and other assets which are now out of use," he said.

"Every month the company has to spend Tk 2.0 million to pay the salary of about 250 officials and workers," he added.

The official said Coke can use the skilled human resources of Tabani, who have wide knowledge about the Bangladesh market, if it wants to distribute its products by itself.


-The Financial Express