The Coca-Cola Company earned $439 million from refranchising its bottling operations in Vietnam in 2023, the beverage giant said in a performance review.
In January 2023, Swire Pacific Ltd. completed its purchase of the entire Coca-Cola bottling subsidiary in Vietnam, marking the Hong Kong conglomerate’s expansion into the Southeast Asian beverages market.
Swire Coca-Cola Limited of Hong Kong-based Swire Pacific is now the owner of Coca-Cola Beverages Vietnam Ltd., which has three operational bottling facilities in the country.
Within the deal, the company earned $3 million from the refranchising of its bottling operations in Cambodia.
Coca-Cola said the refranchising was part of its strategy to ensure sustainable growth. The franchise business model has enabled the company to develop a strong global footprint with a local touch in markets around the world, it said.
In line with the strategy, the beverage giant completed the sale of its stake in bottlers in Pakistan and Indonesia to Coca-Cola İçecek and Coca-Cola Europacific Partners (CCEP), respectively.
It also completed the refranchising of a portion of its bottling operations in India, received regulatory approval to sell its bottling operations in the Philippines, and completed the sale of its stake in the largest bottler in Thailand to Swire Pacific Limited.
Swire Coca-Cola posted revenues of HKD1,856 million ($237.4 million) from its Vietnam operations in the first half of 2023. In that period, its earnings before interest, taxes, depreciation, and amortization (EBITDA) in Vietnam reached HKD263 million ($33.65 million).
However, its Cambodia business, which was acquired in the same deal as the Vietnam operation, recorded losses as a result of “challenging conditions.”
Mainland China and the U.S. were its two biggest markets, with revenues of HKD13,202 million ($1.69 billion) and HKD12,686 million ($1.62 billion), respectively.