The mark of “The Coca-Cola Company authorized Shanghai Shenmei Beverage and Food Co., Ltd for production” can be seen on the packaging of Coca-Cola, Sprite and Fanta sold in cities including Shanghai, Suzhou, Jiaxing, Wuxi, Nantong and Changshu.

Shanghai Shenmei Beverage and Food Co., Ltd (hereinafter referred to as “Shanghai Shenmei”) is Coca-Cola’s largest and the most modern bottling plant in Asia. Coca-Cola was a shareholder of Shanghai Shenmei when the latter was established in 1988. As Coca-Cola reformed its bottling plants system in China and the Chinese market grew rapidly, Swire Group -- Coca-Cola's important bottling partner, took over the shares of Coca-Cola, becoming the holding company of Shanghai Shenmei.

In the 1920s, Coca-Cola opened bottling plants in Shanghai and Qingdao. During World War II, Coca-Cola suspended its business in China. At the end of the 1970s, it came back to China as a symbol of America.

In April 1981, Coca-Cola returned to the Chinese mainland and established the first bottling plant in the roast duck factory of COFCO Group's Beijing Branch. In 1983, the company established a second bottling plant in Guangzhou.

However, Coca-Cola cannot tear itself from Shanghai.

In 1986, Coca-Cola put forward an idea of building a beverage concentrate plant in Shanghai.

What is a beverage concentrate plant? A senior employee of Shanghai Shenmei said, “The global business model of Coca-Cola is that other countries buy the beverage concentrate to produce concentrated sugar syrup which will be manufactured into finished product in bottling plants. The Coca-Cola Company in China will produce concentrated sugar syrup according to the recipe and then ship the syrup to the bottling plants around China.”

The recipe should be kept in confidential. Initially Coca-Cola required a sole proprietor to run the concentrate plant in Shanghai. However, at that time, a foreign sole-capital enterprise was not allowed.

What is the solution? Just like the process of the establishment of diplomatic ties between China and the U.S., China played an important role in giving a solution.

China proposed a solution: Coca-Cola builds two plants in Shanghai — a beverage concentrate plant and a bottling plant, and then hands over the bottling plant to China. The two plants will be combined to a joint board with each side taking half shares.

Coca-Cola approved the plan. As a result, the first cooperative venture of China and the United States—Shanghai Shenmei was born.

Public data show that Shanghai Shenmei is co-managed by Shanghai Food Development Co., LTD, Shanghai Shantou Industrial Co., LTD, COFCO, and the Coca-Cola Company. Shanghai Shenmei has a registered capital of US$97.98 million with an investment of US$139.28 million. Personnel from both sides formed the management committee of the company. There are both beverage concentrate department and Coca-Cola battling department in the company.

Since Shanghai Shenmei was founded, Coca-Cola has started producing concentrate in the Chinese mainland.

In the beginning, the application should be submitted half a year in advance with 48 stamps of approvals to transport the concentrate to the bottling line in the plant of Shanghai Shenmei. But as the Chinese mainland was getting more open, the number of the required approvals decreased. Since China joined the World Trade Organization in 2001, approval was no longer needed. The process and time were shortened greatly, and product scale increased.

With the reform and opening up in the Chinese mainland proceeding, Shanghai Shenmei has expanded its business. It has built two large plants in Minhang Economic and Technological Development Zone and Jinqiao Development Zone with 12 production lines, including the advanced 1,500 cans/minute bottling line, 500 cans/minute PET bottling line, 540 cans/minute PET bottle blowing line, 300 cans/minute water and tea beverage bottling line, as well as water processing system, carbon dioxide purification system and syrup continuous manufacturing system.

Patrick Healy, CEO of Swire Beverage, said on a public occasion, “We are glad to improve our cooperation with Coca-Cola Company. We are positive about the Chinese market because it serves as the third largest market in terms of sales volume. We believe that the world-class bottling plants system built by Swire Beverage in the Chinese mainland over the past 27 years would work to its advantage in the expanding franchised areas. In general, the reforming plan could improve our beverage business in the Chinese mainland and help us seize opportunities brought by the dynamic market, leading us to more achievements.

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