Please copy and visit
"https://integrated2021.cci.com.tr"
address in one of the following
browsers.

OUR OPERATING
ENVIRONMENT

FUTURE OUTLOOK
Our Operating Environment

Economic And Political Environment

CCI is a regional beverage company operating in developing countries that are subject to political instability, macroeconomic challenges and security issues from time to time. Furthermore, the Covid-19 pandemic in 2020 has brought a significant impact on CCI’s operating region, slowing down the economic flow as a result of the extended shutdowns, just like the rest of the world. After a period of economic constriction, uncertainty, and a decreasing trend in consumer confidence and purchasing power, a gradual normalization and economic recovery phase has begun as a result of supportive monetary policies implemented by central banks, prevalent Covid-19 vaccination programs and resumption of social mobility despite the fluctuating nature of the pandemic due to new variants.
We have seen a variation in recovery rate across our countries of operation, directly proportional with financial support policies by governments and vaccination rate. On the other hand, the rapid economic recovery and broad elimination of shutdowns around the world in 2021 along with a shortage in supply due to the rapid rise in demand and deterioration of the supply-demand balance have caused a significant increase in raw material and energy prices, leading to a high rate of inflation.
While Iraq and Central Asian countries have seen positive outcomes from rising oil and gas prices since their economies highly rely on natural resources, the regime shift in Afghanistan have increased political and economic uncertainty in the Middle East and Central Asia. On the other hand, while issues with currency exchange still remains in Turkmenistan, developing country currencies have continued their erosive trend against the US dollar. Despite these challenging conditions and uncertainties, CCI has significantly increased its sales volume both inTurkey and international markets thanks to the company’s skilled workforce, rapid adaptation and excellent execution capability, cautious expense management and strong structure of partnerships, and maintained its quality growth algorithm with a high rate of profitability. As a result, the company has achieved a strong balance sheet and high liquidity, and continued to create a healthy free cash flow.

International Developments In 2021

COP26: During the 26th UN Climate Change Conference (COP26) organized in Glasgow on 31 October - 12 November 2021, participating countries discussed the progress achieved towards the commitments undertaken with the Paris Agreement and the United Nations Framework Convention on Climate Change. The four key focus areas of the summit were combating climate change/greenhouse gas reduction, adaptation, financial matters and collaborations.The participants agreed on international carbon trade, methane emission and fossil fuel breakthrough issues, as well as achieving a 45% drop in emissions by 2030.
Furthermore, Glasgow Breakthrough Agenda was introduced as an international plan. More than 40 countries, including Turkey, pledged to work together to position clean energy technologies and sustainable solutions as the most affordable, accessible and attractive option in all carbon-intensive industries (5 industries producing more than 50% of the global emissions: energy, transportation, steel, hydrogen and agriculture) before 2030.

Turkey had ratified the Paris Agreement prior to COP26 and announced its goal of achieving a net-zero status by 2053. Other CCI countries are also expected to prepare their road maps in accordance with the international declarations signed at COP26.
Swipe left to view the chart.

Regulatory Environment

As CCI, we operate in a volatile environment in terms of the regulations imposed on us. The regulatory authorities have made some changes during the reporting period.

GEKAP: Recycling Participation Share (GEKAP)is published on Official Gazette in 2019 and became effective as of 2020. GEKAP requires the legal entities to declare the recycling contribution fee for the primary and secondary packaging of the products they have imported or the products they supply to the market. Our company is liable to GEKAP.
Deposit Return Scheme For One-Way Packaging(DRS)
DRS is expected to be implemented for one-way beverage packaging in 2022 as a part of circular economy transformation. The material types to be involved in the system are expected to be specified in the second half of 2022. We work in collaboration with all relevant stakeholders in order to implement the deposit system.

Our goal is to increase consumer awareness about packaging waste pollution and to reduce our environmental impact, and we continuously work on increasing our recycling rates as we transition into a circular economy. With the introduction of DRS, GEKAP liabilities are expected to be exempted for those products covered by DRS.
Turkish Environment Agency
The Law on “Establishment of Turkish Environment Agency and Amendments to Various Laws ”was passed in the Turkish Parliament and published in the Official Gazette on 30.12.2020. With the establishment of Turkish Environment Agency under the Ministry of Environment, Urbanization and Climate Change, some responsibilities related to environmental protection were transferred by the Ministry to the Agency, such as the Deposit Management System.

International Regulations

Excise Taxes and Sales Taxes
In our operation geography, in addition to regular taxation, our products might be subject to taxes like an excise tax in each jurisdiction. Indirect taxes for specific beverages can be seen in different countries under the name of excise tax or other terms. As a result of excise and other indirect taxes, the price of soft drinks charged to customers may increase. In Turkey, an excise tax applies to all carbonated and non-carbonated soft drinks and Coca-Cola drinks are differentiated from other sparkling beverages in this framework. In Pakistan, an excise tax applies to the sales of sparkling beverages in addition to Value-Added Tax (VAT). In Jordan, an excise tax applies to carbonated products only. In Tajikistan, the excise tax applies to carbonated drinks, carbonated soft drink (CSD) and teas.
Traceability Labelling
Track and Trace (T&T) labeling is an initiative approved on the level of Eurasia Economic Union and water and beverages were included into the mandatory list of products subject to T&T. Every country member may implement this regulation, but not earlier than March 2022. Main objective of the initiative is to control and monitor illicit trade and counterfeited products. However, the inclusion of the non-alcoholic beverages in the mandatory label tracking system (or traceability labeling) would bring the unnecessary extra cost to the producers since the risk of forgery and smuggling is almost non-existent for the non-alcoholic beverages, unlike the tobacco, alcohol, and pharmaceutical industries.

Technological Environment

In order to achieve better optimization and efficiency, we continue to form key building-block solutions such as Enterprise Resource Planning, Customer Relations Management, Contract Management, Purchasing Management, Warehouse Management and Transportation Management, as well as increasing our momentum in automation. We create a digital twin of our organization, production lines and customer experience by combining our capabilities in API and microservices-based technologies, cloud, artificial intelligence/machine learning (such as dialog-based artificial intelligence, image processing, deep neural networks),industrial IoT, edge computing and robotic process automation. As a result, we can use agile business models and consistently adapt to changing market conditions.
We aim to play a pioneering role in change and continue to create value by staying in constant interaction with our stakeholders. To further develop our innovative work and to create a culture of innovation, we strive to position our BÜDOTEK Teknopark office as our innovation and incubation center. In order to create value for our customers, environment and employees; we design, develop, test and productize advanced technologies as well as industry solutions based on data and artificial intelligence. Our Teknopark office allows us to collaborate with start-up communities, universities and ecosystem partners to showcase solutions, co-innovate and co-develop.
We invest in technology to drive change in the “Digital Age” and achieve our vision as a company. We use technology for:
Customer Experience: Improving customer experience through use of data and digital competencies.
Asset Optimization: Improving our use of assets and achieving higher levels of eff iciency, quality and environmental sustainability.
Human Experience: Allowing the required time for our employees to regain or improve their skills and make life easier.
Innovation: Innovating continuously and creating new business opportunities