Newsmaker: Atul Singh

Cool Cola hot seat ready for new warrior

It maybe an uneasy homecoming for Atul Singh, who takes charge, on the first of next month, as president of Coca-Cola India. He had joined the company in 1997 as vice-president, marketing, and headed its franchisee bottling operations during 1999-2002.

Singh, who is now the company's president for the east, central and south China division, steps into the shoes of Sanjiv Gupta, who is largely understood to be leaving under not very agreeable circumstances. Secondly, Gupta is not vacating the seat warm. Right now, it is quite the proverbial hot seat.

The pesticide controversy is refusing to fade away - Coke has just taken a united stand with arch rival Pepsi to move the Supreme Court against the Rajasthan High Court's order telling the two companies to declare the pesticide status on the bottles.

The issue of drawing water in a remote Kerala pocket refuses to leave centrestage. The Panchayat does not appear to be in a mood to relent.

As if that was not enough, the India performance has been a dampener for the MNC's second quarter results announced in Atlanta on June 21. Unit case volumes in the country decreased 14 per cent in the quarter.

That is quite a comedown from three years ago, when the Indian outfit had been declared Coke's best performing subsidiary in the world. The worse news was in the outlook. The company admitted that it did not see much light at the end of the tunnel this year in spite of a reorganisation of its Indian operation.

"Price increases to cover rising raw material and distribution costs, the lingering effects of the false pesticide allegations and the de-emphasis of the powder business drove the declines," the company said in a statement, adding, "...results are expected to remain weak throughout 2005."

And then there are all the theories about Gupta's decision to quit, all of which say the same thing, that Gupta is leaving in a huff because his position has been undermined in a recent business reorganisation.

Gupta's resignation came early last month, around the time that the company restructured its India operations appointing John Ustas, who was heading Coca-Cola's bottling operations in Norway, as the CEO of the company-owned bottlers in India.

Gupta used to head all of Coke's operations in India, including company-owned bottling. Ustas reports directly to Steve Buffington, the regional director of Latin America and Asia for bottling investments, leaving Gupta looking after the concentrate business, franchise bottlers and marketing operations.

In an executive office memorandum issued to all its employees announcing Singh's appointment, Coca-Cola said it was a 'challenging' and 'strategically important' opportunity for him. Understatement, we say.

Coca Cola India division consists of India, Sri Lanka, Bhutan and franchisees as well as bottling operations in India. In India, the company has 24 Cobos and 26 franchisee-owned bottling plants. These come under its subsidiary, Hindustan Coca-Cola Beverages.

In an executive office memorandum issued to all its employees announcing Singh's appointment, Coca-Cola said it was a 'challenging' and 'strategically important' opportunity for him. Understatement, we say.