Fizz goes out of Turkmenistan for Coca-Cola as ‘currency woes halt production’

Fizz goes out of Turkmenistan for Coca-Cola as ‘currency woes halt production’
By bne IntelliNews November 21, 2017

Soft drinks producer and distributor Turkmenistan Coca-Cola Bottlers has halted production and is on the verge of shutting down its operations altogether, opposition-run news website reported on November 21.

The company has reportedly recently faced currency conversion difficulties. The black market rate of Turkmenistan's national currency, the manat, hit a new low on October 23. Turkmenistan's unofficial dealers were selling the dollar for TMT9 compared to the TMT7.5 demanded for the greenback seen in the previous month. The official rate of the manat has been fixed at TMT3.5 to the dollar since 2015.

The growth of the black market rate has largely been driven by the ongoing economic troubles natural gas-dependent Turkmen economy has experienced given low world hydrocarbon prices. Failed energy deals have also been a problem in recent years.

Turkmenistan Coca-Cola Bottlers also faces problems when it comes to importing ingredients needed for soft drinks production as well as pressure from local businesses, the news report said.

The only Coca-Cola soft drinks remaining on sale in Turkmenistan are those that were produced prior to the stopping of production. Due to the limited supply, the price for a bottle of Coca-Cola has risen from TMT4-TMT5 to TMT8-TMT9.

Coca-Cola Turkmenistan has been operating in the country since 1998. As of February 2009, Turkmenistan Coca-Cola Bottlers became an operating subsidiary of Coca-Cola Icecek A.S. The company has been annually producing approximately 88mn bottles.

The extent of tightly-controlled Turkmenistan’s economic crisis was underlined on November 6 when officials announced another squeezed limit on cash withdrawals Turkmen citizens are allowed to make from ATMs abroad. The State Bank of Foreign Economic Activity (TDDYIB) said clients traveling or residing abroad would not be able to withdraw more than $50 or its equivalent on any given day from ATMs in other countries. It marked the third time this year the authorities had adopted the measure in an attempt at keeping money circulating within the Central Asian country. In March, the TDDYIB set the daily limit at $250, down from $1,000, and cut the limit further to $100 per day in October.

Turkmen President Gurbanguly Berdymukhammedov raised some eyebrows on October 17 when, despite his country’s economic difficulties, he unveiled Turkmenistan's first golf course, a designer 18-hole course in a country where golf is virtually unheard of. The championship-calibre 18-hole Ashgabat Golf Club was designed by American golf great Jack Nicklaus’s global design firm.

The Turkmen president similarly spent around $8bn-$10bn on the 5th Asian Indoor and Martial Arts Games (AIMAG), which the country hosted for 10 days in September.