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Thursday, Apr 22, 2004

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`Tired' Coke mulls pulling out of Kerala

Boby Kurian

Bangalore , April 21

COCA Cola India (CCI) has indicated that it may consider closing down or relocating its troubled plant at Plachimada near Palakkad in Kerala.

The operations of the plant, at the centre of a controversy for alleged misuse of groundwater, have been temporarily suspended till the monsoon sets in following a direction from the State Government.

A top company official said on condition of anonymity that a decision on the future of the plant will be taken shortly, and the company was not ruling out the possibility of shutting down.

Blaming the State Government for indecisiveness, the official said: "The State thinks the project is a goldmine for us and we won't leave. It is not. We have lost a lot of money in the last one-and-a-half years, and frankly, we are tired. Kerala accounts for less than one per cent of our national sales."The company said that it has received an invitation from Tamil Nadu to relocate the plant.The plant grabbed media attention across the world last summer when local pressure groups turned the heat on the MNC accusing it of depleting water resources in the drought-prone areas of the district.

Since then the controversy has gained political colour and Coke has said that the State has been wavering in its support to protect a significant foreign investment from a "needless agitation".

It said that any decision by the company to pull out could hit Kerala's plans in attracting foreign investment.

"We are expected to resume operations in June and will look for an agreement with the State before doing that," the official said while explaining that State was yet to honour commitments on water and power connections made at the time of inviting investment.

Coke has invested Rs 80 crore - including the initial Rs 24 crore - in the four-year-old plant. The company also said that there was no proof that its plant was the cause for farmlands drying up in the Plachimada area.

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