Pressure mounts on Coca-Cola over RI operations<\/p>\n
Dow Jones, Sydney<\/p>\n
Coca-Cola Amatil is battling pressure to exit its Indonesian
\nbusiness as some blue chip investment banks, including Merrill
\nLynch, continue to question the company's strategy in that
\nmarket.<\/p>\n
Indonesia accounts for around 11 percent of Coca-Cola Amatil's
\nsales, 5 percent of earnings before interest and tax, and 9
\npercent of net assets, ranking it fourth in size behind the
\ncompany's operations in Australia, Oceania and South Korea.<\/p>\n
Coca-Cola Amatil has been in Indonesia since 1992.<\/p>\n
In a report released Wednesday, Merrill Lynch analysts voiced
\ntheir concerns about Coca-Cola Amatil's Indonesian strategy which
\nthey say has become all about \"price recovery and margin
\nprotection\" where previously it was focused on \"product
\naffordability combined with a rapid increase in availability.\"<\/p>\n
\"The Indonesian business continues to struggle. In our view
\nthe changed strategy for Indonesia raises the question of why
\nCoca-Cola Amatil would\/should be in this market at all,\" analysts
\nsaid in the report to clients.<\/p>\n
Merrill Lynch, which is recommending clients buy the stock,
\nsaid there is a question mark over whether the long term growth
\npotential of the Indonesian operations \"will ever be realized.\"<\/p>\n
Similarly, rival investment bank Credit Suisse First Boston
\ntold clients Wednesday that Coca-Cola Amatil's Indonesian unit
\nwas marked by volatility.<\/p>\n
Credit Suisse First Boston expects the stock to underperform
\nthe broader market.<\/p>\n
\"Earnings news about Indonesia is likely to affect Coca-Cola
\nAmatil's share price,\" analysts said.<\/p>\n
The soft drinks maker is due to report its full year 2002
\nresults on Feb. 13.<\/p>\n
However, Coca-Cola Amatil maintains that it's going be a long
\nterm player in Indonesia.<\/p>\n
\"We believe it has long-term potential,\" a spokesman told Dow
\nJones Newswires in reference to Indonesia.<\/p>\n
Late last year, Coca-Cola Amatil said that trading in
\nIndonesia in October and November had been \"above expectations,\"
\nwith volume growth achieved in each of those months compared with
\nthe same months a year earlier.<\/p>\n
Coca-Cola Amatil's share price were under pressure in 2002
\nreflecting concerns about its operations outside of Australia.<\/p>\n
Its shares closed down six cents at A$5.70 on Wednesday.<\/p>\n
Coca-Cola Amatil is about 35 percent-owned by the Coca-Cola
\nCo. of the U.S.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pressure-mounts-on-coca-cola-over-ri-operations-1447893297",
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"sponsor": "Okusi Associates",
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