US embassy cable - 04KATHMANDU498

C O N F I D E N T I A L KATHMANDU 000498 
 
SIPDIS 
 
STATE FOR SA/INS 
STATE ALSO FOR DS/IP/SA AND DS/DSS/OSAC 
LONDON FOR POL/GUERNEY 
NSC FOR MILLARD 
 
E.O. 12958: DECL: 03/18/2014 
TAGS: CASC, BEXP, ECON, PTER, NP, Maoist Insurgency 
SUBJECT: NEPAL: COCA-COLA FEELS THE PINCH OF THE 
MAOIST-IMPOSED EMBARGO 
 
REF: A. A) KATHMANDU 489 
     B. B) KATHMANDU 437 
 
Classified By: Deputy Chief of Mission Robert K. Boggs for reasons 1.5 
(B,D) 
 
1.  (C) On March 18, NN Singh, Managing Director of Coca-Cola 
Nepal reported to Econoff that the Coca-Cola's bottling plant 
located in Bharatpur (130 kms southeast of Kathmandu outside 
of Chitwan) ceased operations temporarily as a result of the 
Maoist-imposed economic blockade (reftels).  He said that 
this was done as a precautionary measure; the company did not 
receive a specific threat.  The factory will likely re-open 
on March 26. 
 
2.  (C) Resorting to bicycle rickshaw delivery to the smaller 
shops, the distribution network of most commercial goods, 
including Coca-Cola beverages, has been hit hard by the 
economic blockade.  Singh indicated that Coke's local 
management decided to close the facility when it realized 
that the Maoists were serious about their embargo, which 
began on March 8.  He said that Coke employees, recognizing 
that the company would lose money if production was not 
complete through to the bottling stage, decided to open the 
factory themselves and finish the pending work.  The 
employees were able to complete the production run in the 
course of one evening.  Singh indicated that there will 
likely be a supply gap once the Maoist imposed embargo is 
lifted on March 25, but that Coca-Cola India would send an 
initial shipment to supplement Nepal's Coca-Cola needs. 
(Note: Coca-Cola is one of the largest U.S. investors and the 
only large U.S. distributor in Nepal.  End Note.) 
 
3.  (C)  Ironically, the President of Coca-Cola India was in 
Kathmandu this week to consult with local managers on the 
advisability of opening two new bottling plants in Nepal. 
MALINOWSKI