"Over the next 10 years we see this market as reaching the size of a market that would be in our top 25 in the world level in terms of its total potential," he told Reuters in an interview.

The world's biggest soft drinks maker would consider acquisition opportunities if they arise, but was concentrating on organic growth for now in Vietnam, he said.

Like many other U.S. companies, Coca-Cola left Vietnam after the Communist takeover in 1975, but returned in 1994 when a U.S. trade embargo was lifted.

The new investment would be spent on creating production capacity, marketing and equipment, and Kent said Coke would "ramp it up even further over the following three-year period between 2012 and 2015."

"We will always seek what we call around the world bolt-on acquisitions," he said. "So far we have had very good results in terms of organic growth in Vietnam, so if there are any opportunities in the future we will look at them, right now we are focused on organic growth."

Coke's broad geographic footprint, especially in developing markets like China and India, has helped it weather the global slowdown.

Even though economists say there are signs economies are turning the corner, Kent said he was less concerned about the specter of inflation than economic growth getting back on track.

"We certainly can manage through inflation very well with our industry and products," he said. "I think for us the main concern would be a return to macroeconomic growth, and not inflation."

But he noted that "this business was built for times like these," with a wide reach and relatively low price.

"We are investing across the whole world... We believe this is a tremendous opportunity for us, this recession."

No changing U.S. model

After PepsiCo Inc reached an agreement to acquire its large U.S. bottlers last month, some analysts have questioned the future of Coke's North American business model, through which it sells drink concentrate to a network of independent bottlers that in turn bottle and distribute the drinks.

But Kent said he was "a firm, firm believer in retaining, in strengthening the franchise system."

"If your question is: 'Do you believe that you have to go ahead and fully integrate your business in the model that your principle competitor has announced?' my answer would be: 'No'," Kent said.

"My answer would be that we will evolve it to make sure that it is ahead of the curve to satisfy consumer and customer needs, but we will not radically change the concept and the philosophy behind it... I think there's not one road that leads to Rome."

Kent did not believe a report by the American Heart Association last month recommending that Americans cut back dramatically on sugar consumption would have an impact on the soft drink market in the United States.

The AHA research report took particular aim at the $115 billion U.S. market for soft drinks, the no.1 source of added sugars in the American diet.

"Obesity is about lifestyle. It is not about a single product, it is not about a single drink, it is not about a single food," Kent said, sipping a sugar-free Coke Light.

Coke was playing a role in promoting a healthy lifestyle in America, he added. "It's a culture that needs to be broadened and it's all about the choice of the consumer."

By John Ruwitch - Reuters - September 4, 2009

PM encourages Coca-Cola’s investment in Vietnam

Vietnam will continue to create favourable conditions for US businesses, including Coca-Cola, to operate efficiently in the country, says Prime Minister Nguyen Tan Dung.

While receiving Coca-Cola International Chairman of the Board and CEO Muhtar Kent in HCM City on September 4, Mr Dung welcomed the company’s decision to double its investment in Vietnam to US$400 million in the next three years.

He praised Coca-Cola’s business operations, its social welfare and environmental protection programmes in Vietnam in recent times and wished the company would expand operations in the country in the future.

Mr Dung noted that trade ties between Vietnam and the US have grown and flourished and hoped that the US would soon grant the Generalised System of Preferences (GSP) to Vietnam.

The CEO congratulated Vietnam on its socio-economic achievements despite the ongoing global economic crisis. He said that Vietnam, with its great potential, is expected to be one of Coca-Cola’s large markets in future.

According to him, over the past 15 years, his company has invested a total of US$200 million in building three factories in Vietnam, generating jobs for 1,500 local labourers. He said the US company will pour US$200 million into Vietnam in the next three years.

Radio Voice of Vietnam - September 4, 2009