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. Last Updated: 07/27/2016

Coca-Cola to Build in Russia

ST. PETERSBURG -- Coca-Cola International has reached preliminary agreements with the city of St. Petersburg for construction of a plant that will produce the company's world-famous soft drink for distribution throughout northwest Russia.

Government officials said the project is scheduled to go before the City Council this month for approval.

"A preliminary agreement has been made, and we've already made a land deal", says Alexander Hodtchik, head of the department of New Forms of Property in the Petersburg City Council. "They've leased a large piece of property in the South end of the city, and will begin construction as soon as the agreement goes through the legislature here. That will be in February sometime".

Polly Howes, a spokeswoman at Coca-Cola headquarters in Atlanta, says that no definite agreement has been reached and that Coke is "still in the negotiation phase" with the Petersburg government.

The company has, however, already taken concrete steps towards the building of the plant. Business Link, the employment agency that handles hiring for Coca-Cola in Russia, confirmed that the company has already hired construction engineers for the building of the factory. and officials in the Moscow Region of St. Petersburg confirm that Coke has already pledged $1. 5 million dollars towards the lease of land near Pulkovo airport.

The new factory will make its own Coke syrup, and will produce bottled Coca-Cola to be sold for rubles throughout the Russian northwest. Coke officials won't say how many workers the plant will employ, but officials said privately that the eventual payroll will be made up of about 300 to 400 people.

If the factory deal goes through as scheduled, it will be a major boost to St. Petersburg's ailing economy. Under communism, St. Petersburg relied heavily on the military-industrial complex. In recent years, the city has seen many major industries shrink or disappear entirely as Russia has cut back on defense spending. The city's largest factory, the Kirov military/agricultural machinery plant, which employed 30, 000 workers, shut down entirely last November.

New construction by firms like Coca-Cola will not immediately replace the jobs lost by the collapse of the military industry, but they are a sign that the city is making some progress towards the reshaping its economy.

"It's very reassuring to the foreign business climate to have companies like Coca-Cola here", says Hodatchik.

In the past several months, Phillip Morris and Gillette have announced plans to build plants in St. Petersburg.