The Hindu Business Line : Coke India's operational structure still uncertain

EVEN as the uncertainty over the future operational structure of Coca-Cola in India continues, an independent investigation by Business Line reveals that corporate investors hold a major chunk of the 49 per cent share in Hindustan Coca-Cola Holdings Pvt Ltd (HCCHPL), the holding company controlling Coca-Cola's downstream operations in India.

While HCCHPL continues to hold a majority 51 per cent stake in the soft drink major, a Mumbai-based company called Western India Trustee and Executor Company holds the next single-largest chunk of equity in it, at 19.3 per cent, followed by IL&FS Trust Company Ltd, with 12.84 per cent. An individual called D.V. Lakhi holds 4.44 per cent stake in HCCHPL while 5 per cent each is held by Hindustan Coca-Cola Beverages Employee Welfare and Stock Options Trusts, respectively.

The remaining equity is scattered among individuals and bottlers such as Ludhiana Beverages, Enrich Agro Foods, Intercool Western Refrigeration and Supreme Industries.

As of March 31, 2003, Hindustan Coca-Cola Beverages (HCCB) posted a net profit of Rs 3.2 crore after having written back Rs 6.92 crore worth miscellaneous expenses during the year under review. Without the write-back, HCCB made an operating loss of Rs 3.22 crore during 2002-03, which was marginally lower than the net loss posted in the previous fiscal at Rs 4.85 crore.

But while the operating loss for the manufacturing company was reduced marginally, accumulated losses in the marketing company mounted during the year. HCCB subsidiary called Hindustan Coca-Cola Marketing Pvt Ltd posted a net aggregate loss of Rs 192.55 crore in 2002-03 against Rs 105.17 crore in the previous fiscal. Also, during the year under review, the share capital of the marketing subsidiary was raised to Rs 1.01 lakh from a mere Rs 1,000 in 2001-02.

Meanwhile, Coca-Cola Company's Chairman and Managing Director, Mr E. Neville Isdell, is believed to have lent a patient ear to the woes of franchisee bottlers of Coke India, sources said, adding that these were mainly centred around lowered price points hurting their operations financially.

And with Mr Isdell a firm believer of franchisee bottling operations, these woes are likely to be taken seriously by the Coke top brass, so that a clear division of the management of concentrate and company-owned bottling operations in India could well be on the cards. Sources also suggest that Mr Isdell may appoint his own choice of people at the helm, including former Coca-Cola India chief Mr Jay Raja.