Arca Continental, the second-largest Coca-Cola bottler in Latin America, will temporarily cede part of the water it has under concession, meanwhile, ruling out risks to its operations in the face of the water crisis that has been going on for weeks in the city of Monterrey and other municipalities of Nuevo Leon.
Arturo Gutiérrez, general director of the Monterrey company, announced in a call with investors that the company joins forces with the government to face the lack of liquid, and as part of this, they have participated in the rehabilitation of 15 wells that supply the entity.
“We have been very articulated with the local industry and this is going to address part of the water deficiency. (…) We are convinced that these coordinated efforts between the government, the private sector and the community is the best way to get out of the crisis and, above all, avoid others in the future, working on a long-term solution Gutierrez said, during a call with analysts to discuss their second quarter results.
Regarding the use of water in its operations, the executive explained that the company deploys some water efficiency strategies, and as part of this, it now only uses around 1.5 liters of water for each liter of soft drink produced, “which is much better than the industry average,” he said.
The statements by the director of the Coca-Cola bottling company are presented after President López Obrador asked the beer and soft drink manufacturers to momentarily stop the production of their plants in the entity and transfer the water from their wells for domestic consumption.
Price hike in sight
During the second quarter of the year, the cost of sales increased 18.9%, mainly due to the increase in the prices of raw materials, such as PET, while administrative and selling expenses increased 13.4% to 15,696 million.
The pressure on operating costs caused by the rise in raw materials will remain a challenge towards the second half of the year to protect margins, for which price increases will be evaluated.
The bottler had a first price increase in March and another at the beginning of July, which has allowed it to keep its income safe. Between January and June, the company reported revenues of 99,428 million, 15.2% more compared to the first half of 2021.
“During the second half of the year we can evaluate additional price increases and also optimize our promotions in the market,” said the manager.
For now, in the midst of the rise in PET, the company advanced in its financial statement that it invested 3,470 million pesos during the second half of 2022 for the acquisition of coolers and returnable containers.
