Coca-Cola Company’s chief executive said some Coke manufacturing plants in China were shuttered in the wake of the latest coronavirus, but the company is contemplating some re-openings to safely meet the population’s needs. In this 2010 photo, a woman walks past a Coke advertisement in central China’s Hubei Province. China is a major market for the Atlanta-based company.
Photo: Ren weihong
Photo: Ren weihong

Coke is reopening some China plants closed in wake of coronavirus

Many of Coca-Cola’s 45 plants in China have remained closed to help prevent the spread of the coronavirus, but the company said some are reopening with the backing of China’s government.

“The Chinese government wants to make sure the flow of food and beverages for its population doesn’t stop,” Coca-Cola Company chief executive James Quincey said in a call with analysts Thursday.

“So we, under the auspices of the Chinese government and their crisis management, are reopening some of our manufacturing facilities to make sure we can continue to produce our product for the population and get it distributed in a way that is not going to … be part of the spread,” he said.

He did not detail how that would be done. The company is not specifying how many closed or will reopen.

The government had asked businesses to remain shut through Feb. 9, but Coke said it continued some operations with the permission of local authorities.

Coke’s focus is on the safety of its employees and then on accommodating the needs of the government to help deal with the crisis, Quincey said.

Coke has about 47,000 company and bottler employees in China. It provided workers with face masks and hand sanitizer and installed temperature screening in offices and plants. Non-essential international business travel to and from China was also suspended through March, the company said.

China normally accounts for 10% of the drink volume Coke sells globally, though the China market generates a lower percent of company revenues and profits. Quincey said it is too soon to determine the outbreak’s short-term financial impact..

Coke released revenue growth figures Thursday for the fourth quarter of last year that exceeded analysts’ expectations, while profits fell in line with expectations.

With the SARS virus outbreak in China in 2003, Coke did not suffer a “particularly noticeable” long-term business impact, Quincey said. “It is worth noting China’s economy is much bigger, and it could become more connected to the rest of the world.”

— Michael E. Kanell contributed to this report

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