1. What does Coca-Cola represent in terms of relevance, jobs created, facilities and perspectives in Romania?
We are part of Coca-Cola HBC, a leading bottler in the Coca-Cola System, with a 60 year history and the world’s best-selling non-alcoholic beverage brands portfolio – a very diverse one. Coca-Cola HBC has the most diverse footprint among the bottlers, covering 28 countries.
Coca-Cola HBC Romania is the largest beverage company in the local market and we employ over 1,500 people. We have three bottling plants in Romania, located in Ploiesti, Timisoara and Poiana Negri – the latter being our mineral water bottling plant.
The plant in Ploiesti is the largest within the Coca-Cola HBC Group, for the East-European region. It is here that we inaugurated, back in 2013, the first aseptic production line in the country – with investments of over 22 million Euro. Following this investment, we are exporting Cappy Pulpy to ten other European countries. Our commitment here in Romania is a strong one and we are constantly looking to further investment opportunities on the local market. It is in Ploiesti that we also have, since 2009, the intelligent, completely automated warehouse, High-Bay, the first of its kind in Romania. Through its automated systems, High Bay reduces the vehicles movements necessity, thus contributing to reducing our carbon footprint. In fact, our Ploiesti plant is energetically independent and has a reduced carbon footprint due to the Combined Heat and Power plant, the first of a series of 15 such heating plants throughout Coca-Cola HBC Group.
We are also very proud that all our 3 bottling facilities have the Gold Medal from the European Water Stewardship, an important recognition for their minimum impact on the environment.
2. What is Coca-Cola HBC’s contribution to the Romanian economic growth?
As the largest beverage company in Romania, we have a significant contribution to the local economy, through the taxes we pay here, through the jobs and opportunities we create for Romania.
Just as an example, for 2015, the taxes paid by Coca-Cola HBC in Romania reached EURO 38.6 million and we estimate that our tax contribution in 2016 will also be of significant value.
Moreover, every job at Coca-Cola supports more than 10 in the broader economy. We are proud to say that 2015 was the best year Coca-Cola HBC had in its 25 years of history in Romania: we increased our turnover to EURO 475.8 million and our net profit reached EURO 54.7 million.
3. How would you characterize the business environment in Romania in 2016?
I would say that Romania has good opportunities to stand as a regional leader, however it needs to transfer the economic performance of recent years to the population’s well-being and to accompany the economic growth with measures to increase competitiveness.
While the business environment in Romania is highly competitive, it is also challenged by a consistent dose of ambiguity. From an economic perspective, I consider necessary a medium term development, to strengthen Romania’s main segments of economic growth, of sectors with high competitive potential.
I am confident that, through a more intense dialogue between the private and public sectors, the Romanian economy can grow sustainably and, as active member in several business and industry associations, Coca-Cola HBC Romania contributes to this cooperation between the business community and the public institutions.
4. The Romanian economy has been the subject of a major tax cut in 2015. How has this tax cut helped your sector? Has this tax cut come at the right moment?
The VAT decrease from 24% to 9% for food and non-alcoholic drinks led to retail prices dropping and therefore contributed to the consumption stimulus. According to the data we have from GfK, over 75% of the savings went back in FMCG shopping, with a slice more than 50% in food and non-alcoholic beverages.
What we saw in 2015 and 2016 as well is the fact that the economic growth also supports traditional trade, which is an important segment of the overall trade. Also for us, at Coca-Cola CHBC, traditional trade has always been a focus, since both modern and tradition trade have important roles to play in the Romanian economy.
5. Within your company, for the first three quarters of 2016, what were the highest performing segments and why? What segments have decreased and why?
We continued to grow our business in 2016, supported by good macroeconomic environment but also by our diverse portfolio, the love of our consumers and innovation. The 330 ml non-returnable glass bottle, the new Fanta bottle and the recently launched Coca-Cola Lime, currently available in Romania only, are three innovations introduced in 2016, of which we are very proud.
Coca-Cola HBC Romania started to cycle the VAT reduction on our products in June 2015, which supported volume growth for several quarters. Romania has maintained a positive momentum in the third quarter of 2016, with strong growth in all categories, while performance in Water was flat versus last year. We are very proud of our strong results and achievements. Everyone at Coca-Cola HBC Romania has contributed to refreshing the business and bringing the Company back to growth. As mentioned before, our volumes continue to grow very well, due to the relatively stable economic environment and to the VAT reduction which increased consumption and brought the consumers’ confidence back. We saw a comeback in the buying power, most probably due to reduced inflation and an overall positive macro-economic environment. Volume in Romania increased by low teens – the second quarter of 2016 was the sixth consecutive quarter of growth. Sparkling performance in the second quarter of the current year was supported by our 1.25L pack for the organized trade, as well as single-serve package performance. Cappy Pulpy continued to drive robust results in Juice. Package mix continued to improve driven by good growth in the Sparkling single-serve packages.
6. What makes Coca-Cola HBC Romania the most responsible company here in terms of CSR?
We recognize the critical importance of creating shared value for employees, consumers, customers, suppliers and communities. We were honored to have been awarded as the most responsible company in Romania, at the beginning of 2016, due to our integrated efforts and focus on sustainable development. Romania CSR Index 2015, the analysis which placed us on the first place in terms of corporate responsibility, has taken into consideration the most complex reporting tools for CSR at a global level. This recognition adds to the amazing performance of Coca-Cola HBC Group, which is the world sustainability leader in the beverage industry, topping the Dow Jones World and Europe Sustainability Indexes for beverage companies for three years in a row – 2014, 2015 and 2016.
For us, social responsibility starts from building and maintaining a sustainable business, treating employees with fairness and care and it continues with the various environmental and community programs that we support and invest in. The progresses we have made in some key areas prove that we are always on the lookout for ways to improve our business performance and maintain our stakeholder trust in our company and products. In 2015, Coca-Cola HBC Romania became a founding member of the UN Global Compact Network Romania, to represent locally the UN Global Compact – the largest sustainability platform worldwide – and promote the 10 principles related to human rights, labor, environment and anti-corruption. We continued to reduce water used for beverage production, to decrease our energy consumption and our carbon emissions. Moreover, we started including environmental and social clauses in all our supplier contracts and we increased the average training hours per employee by 17%. Detailed information on our achievements are included in our 2015 Sustainability Report which we plan to launch soon.
We strongly believe that we are what we leave behind, which is why Coca-Cola HBC Romania has integrated all its sustainability initiatives, as well as the projects born within communities, in the After Us – www.afterus.ro – platform, launched in mid 2016. We aim to inspire as many people as possible to be aware of the importance of what they leave after themselves, to adopt a responsible lifestyle and to pass it on to future generations.
Sustainability is integrated across every aspect of our business, as we look to create and share value for all our stakeholders. We have a strong commitment to be at the forefront of sustainable practice and performance in the beverage industry.