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Shortage of water could halt the production lines at Coca-Cola's Urumqi plant. Soft drinks major Coca-Cola expands search for water sources to feed its thirsty plant. Lack of access to fresh water may prove to be a stumbling block for Coca-Cola Co, the world's biggest soft drinks maker, as it seeks to further expand its presence in China. Zhan Zaizhong, general manager of Cofco Coca-Cola Beverages Xinjiang Co Ltd, a joint venture between the US company and the State-owned trading conglomerate Cofco Group, says that despite the strong demand, the company is being forced to re-look at its investment plans in Xinjiang Uygur autonomous region due to lack of water resources. Set up in with an investment of more than million yuan, the Urumqi plant is Coca-Cola's 38th factory in China. It already has two production lines for juices and soda in Urumqi. The Urumqi plant has already attracted much attention, considering that it is located in an area that is surrounded by deserts. Melted ice from the Tianshan Mountain is the only major source of water, while the average annual precipitation for the region is just millimeters. However, Coca-Cola has made handsome gains from the plant, with annual growth rates in excess of 30 percent, compared with just 10 percent in mature markets like Guangdong province. Zhan says that though it normally takes five years for a Coca-Cola facility to break even, the Urumqi facility has achieved this in just three years. At the same time Zhan also admits that based on Coca-Cola's site standards, Xinjiang is not the optimal location to house a manufacturing facility. Though the region gained only million yuan revenue in , we decided to build a factory,' Zhan says. Wang Ping, a food and drinks industry analyst at Shenzhen-based brokerage Great Wall Securities Co Ltd, says having an ideal location is an important factor for beverage companies, failing which it may lose ground to other brands. The decision to set up a unit in Xinjiang was prompted due to these factors,' she says. Unlike the eastern coastal regions, where the drinks market is saturated with several beverage brands, there are not too many firms in Xinjiang. The people in Xinjiang are mostly fond of lamb and beef, and soda is often perceived as the ideal accompaniment for a meal, Zhan says. If the transportation distance is beyond this radius, the profit will be reduced greatly,' Wang says. According to Zhan, a box of Coca-Cola containing 24 tins costs 5 yuan to transport from Xi'an to Xinjiang. The logistics cost can add up to between 50 and 60 million yuan every year. However, not all the materials can be produced in local factories. The local factories are unable to produce plastic bottles that meet Coca-Cola's requirement, or CO2 used for soda. But in the past few months, it is water that is proving to be a major issue for the company. Though the company made water storage provisions when it set up the facility, it did not anticipate the problem would become as bad as it is now. Coca-Cola had set up a water tank in Urumqi to supply water continuously to the plant for 24 hours. But, in April, a stoppage in water supply shuttered output for a whole week in Xinjiang. This has led to huge losses, Zhan admits. People will come again if the furniture shop is closed, but they will not make a repeat visit to buy a Coca-Cola beverage, if they do not find it on the shelves. Zhan says that among his tasks now is to ensure that there is constant water supply to the facility. If we can't find underground water, we hope the government will help us out in some way. Finding water in Urumqi may not prove to be that easy, as the region is far from the sea and has very few rivers running through it. No such techniques are available in Urumqi. With this year's precipitation already at a considerably lower level than last year, Urumqi is having a tough time coping with the water requirements of its citizens and industries. Yang Ming, a director from the Urumqi water supply group, says the city will irrigate the green belts only between 11 pm and 2 am, and if the temperature touches 34 C, there will be no water for green belts. To cope with the water crisis, the city is also planning a major water purification project, which when completed will boost daily production capacity to , cubic meters. It will also be the biggest water-purifying company in Urumqi, says the water supply group. Wang says promotion and logistics are the two biggest costs for beverage companies. More World News Venezuela's new cabinet sworn in Obama celebrates young inventors at science fair 'Al-Qaida supported' train plot thwarted Earth Day marked around the world Cyprus 'will survive' financial crisis US reports on human rights criticized. 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Here Are the Fortune 500 Companies Doing Business in Xinjiang

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How do American businesses fit into this picture? The companies listed below comprise those Fortune companies the highest-revenue U. Researchers Shawn Zhang and Benjamin Han, working with ChinaFile editors, identified dozens of such companies by mining publicly available information in Chinese and English, including press releases, SEC filings, company websites, and news reports. Fortune firms with attenuated connections to Xinjiang—such as expired partnerships in the region or the mere presence of products in Xinjiang, with nothing more—were eliminated. Several responded with information that is reflected here. Only Citigroup took the opportunity given to make an additional statement. It is included in the table below. While the list is unlikely to be complete, it represents the most careful and comprehensive such accounting to date. Readers with corrections or additional information are invited to submit the reporting form below the table. Skip to main content. October 2,

Urumqi buy coke