Coca-Cola, the world's leading beverage supplier, formed a manufacturing network in Northeast China, with a bottling plant that started operation yesterday in Jilin Province.

The newly established plant, located in Changchun, capital city of Jilin, is Coca-Cola's fourth plant in Northeast China, with others in Harbin, capital city of Heilongjiang Province, as well as Shenyang and Dalian of Liaoning Province.

Involving an investment of US$20 million, the Jilin-based plant covers 50,000 square metres, with a building area of 15,490 square metres.

It has two internationally advanced production lines and is capable of an annual production output of 43 million standard boxes of carbonated beverages, including Coca Cola, Sprite and Fanta.

The new bottling plant, operated by Jilin COFCO (China National Cereals, Oils and Foodstuffs Corporation) Coca-Cola Beverages Co Ltd - a joint venture of two world top 500s - is expected to satisfy the surging market demand in Jilin Province.

Paul Etchells, president of Coca-Cola (China) Beverages Co Ltd said Northeast China is a market with huge potential for Coca-Cola's long term business expansion in China.

"The Chinese Government's policy to invigorate Northeast China, a national industrial base, will spur the rapid economic development of the region, which offers vast market margins for us," said Etchells.

Based on the manufacturing capacity of the new bottling plant, Coca-Cola will enlarge its distribution system and sales networks in the region to meet increasing demands.

According to Luan Xiuju, president of Jilin COFCO Coca-Cola Beverages Co Ltd, the new plant will make contributions to the local economy.

"In addition to creating new job opportunities for Jilin, the bottling plant may attract some upstream and downstream enterprises of Coca-Cola, engaged in beverage raw materials, packaging and logistics, to set up their branches here," said Luan.

Re-entered into China since 1979, Coca-Cola has joined hands with COFCO, Hong Kong Swire and Malaysia-based Kerry to pool over US$1.1 billion into the Chinese mainland and boasts 28 bottling plants, including three under construction in Lanzhou, capital city of Northwest China's Gansu Province, Zhanjiang of South China's Guangdong Province and Southwest China's Chongqing Municipality.

Etchells pointed out that Coca-Cola currently still has market gaps in the Chinese mainland and the company is making efforts to "fill up the gaps."

Experts and insiders say Coca-Cola's northeast expansion strategy reflects its attempt to win over a larger market share compared with Pepsi - its global rival - in the region.

A recent survey conducted by AC Nilson, one of the world's top market consulting companies revealed that Pepsi took 52 per cent of the cola market share in Jilin last year.

The establishment of the Coca-Cola Jilin bottling plant also indicates that competition among the world's top beverage suppliers has intensified and extended to the second-tier cities of China.