Coca-Cola to build first Gaza factory

"The only enemy of extremism is good jobs," said Palestinian entrepreneur Zahi Khouri, the man behind the decision to build in Gaza.

By NIV ELIS
coca-cola (coke) (photo credit: REUTERS)
coca-cola (coke)
(photo credit: REUTERS)
Coca-Cola plans to build its first factory in Gaza within the next year and already has secured Israeli permits for necessary materials and supplies to enter the Strip.
The man behind the sodapop venture in Gaza, Palestinian entrepreneur Zahi Khouri, a founder and the chairman of the Ramallah-based National Beverage Company solely licensed for Coca-Cola in the West Bank, spoke exclusively to The Jerusalem Post on Tuesday.
His company already operates Coca-Cola factories in Ramallah, Jericho and Tulkarm.
“We’ve been shipping to Gaza on a regular basis with the approval of the Palestinian Authority and the Israeli authorities,” Khouri said. “It made commercial sense to have a plant [in Gaza] so we could sell the product at a much a lower cost.”
It’s more financially efficient and environmentally sound, he said, because bottles can be recycled and reused.
Currently, there is only one soda factory in Gaza, according to the spokeswoman for the Coordinator of Government Activities in the Territories who said it produces 7-Up.
Bringing Coca-Cola to Gaza will occur in two-phases, Khouri said.
The first phase, which will become operational in the third quarter of 2015, will focus on carbonated beverages, while the second, pegged for late 2016 or early 2017, will expand to juices, water and other non-carbonated products.
Each phase will comprise a $10 million investment, and the factory is expected to create 120 direct and 10 times as many indirect jobs, though Khouri believes direct jobs could number closer to 200.
The factory will be located in an industrial area on the Gaza side of the former Karni crossing, which was closed in 2011 for security reasons. All the building material for the factory and Coca-Cola ingredients will enter Gaza through Kerem Shalom.
The company, (whose shareholders include other Palestinian companies such as the Yosur Co., The Vegetable Oil Industries Co. and Coca-Cola Co. itself), made the decision to build in Gaza two years ago, Khouri said, but had to overcome numerous hurdles.
“It had to get the approval of the Palestinian Authority, which through their official channels coordinated with the Israel Defense Forces,” he said.
Despite the fact that it will operate a plant in Hamas-controlled Gaza, he continued, the Ramallah-based company will pay taxes only to the PA , thereby avoiding problems with terror- finance laws.
In deciding to invest in Gaza, the company brushed aside the commercial risk of building in the small strip that has seen three devastating wars in the past six years.
“Definitely the risk is there, but we are a bunch of optimistic investors, and I think Israel and the Palestinians have both learned their lesson that weapons do not solve anything,” Khouri said.
With frequent checkpoint closures, however, bringing in necessary equipment and experts for the plant and then getting regular shipments of components such as concentrate and bottles will be an ongoing challenge.
For Khouri, however, the Gaza plant will be more than a commercial venture.
“This is something that’s extremely important if we want to talk about peace and coexistence. It’s about where business can contribute to peace – don’t talk to me about the word process, I mean actual peace – by creating jobs and facilitating the life of the private sector,” he said, adding, “The only enemy of extremism is good jobs.”
For its part, Coca-Cola Co.
invested $25m. into its Palestinian business in the past five years, according to the National Beverage Company. It also has sponsored a clean water project in Gaza with Mercy Corp.
and featured soccer fans from Palestine in a viral World Cup promotion over the summer.
Representatives from Coca-Cola Co. in Israel did not return requests for comment from the Post.