Multinationals cast votes of confidence via big investments
Multinationals have cast votes of confidence in China's booming consumption market with new investment expected to strengthen supply chain and production capacities.
The Suzhou Distribution Center for sports giant Adidas was unveiled on Wednesday, with a maximum capacity of handling one million products on an average day for warehousing and sorting.
With nearly 1 billion yuan (US$139 million) of investment, the largest amount for the company in China over the past five years, it allows the company to respond quicker to sales and distribution demands.
It also signals the latest logistics capabilities as well as advancements in digitalization and smart operation models. Through the 139,000 square meter facility, it will serve the brands flagship stores as well as online storefronts so that merchandise is sorted and shipped more efficiently.
Chief Financial Officer Harm Ohlmeyer who visited China for the first time since 2019 said he's delighted to see the rebound trajectory of China's business as sports activities continued to gain momentum.
Its revenue in China grew 16 percent from a year ago to 766 million euro (US$821 million) in the second quarter, reflecting double-digit growth at offline retail channels.
"China keeps its position as the most vibrant consumption market with great potential, and we remain dedicated to understanding the local market and culture, to provide relevant products to shoppers," he added.
Managing Director of Adidas China Adrian Siu stated that the new facility has laid the foundation for its future development and shift toward consumption end-based production, and it seeks to strike a balance between sports performance and fashion lifestyle elements.
Elsewhere, the demand for beverages, carbonated drinks and sports drinks have pushed local production from market leading players.
Swire Coca-Cola's latest 2 billion yuan investment in neighboring Kunshan, in Jiangsu Province, started construction earlier this week.
The new site which marks Swire Coca-Cola's largest investment in China to date, will be operational by 2025 and covers manufacturing, distribution and regional sales in eastern China.
Covering an area of 116,000 square meters, it aims to cash in on the rapid growth of beverage and bottled tea drinks, with 13 production lines planned.
It will have a maximum annual beverage filling capacity of over 1.6 million tons and an estimated annual sales of 1.2 billion yuan.
This also belongs to a broader investment initiative for the bottling company over the next decade, including new bottling plants planned in Zhengzhou in Henan Province and in Guangdong, to expand production capacity.
The new site will also be responsible for new products and new packaging. The company said it intends to leverage the Yangtze River Delta region's geographical location to further elevate economic development.