To increase Coca-Cola's capacity in the country investments worth Rs 700 crore (Rs 7 billion) are being planned.

While Coca-Cola India will invest Rs 500 crore (Rs 5 billion), its bottlers plan to pour in Rs 200 crore (Rs 2 billion) in their bottling operations during the current year.

The company has its own bottling operations as well as a string of franchisee bottlers in the country.

It's worth noting that Coca-Cola recently kicked off a price war, cutting  prices by 15-20 per cent (it ranged from Rs 10 to Rs 8 for a 300 ml returnable glass bottle and from Rs 7 to Rs 5 for a 200 ml bottle). This, it hopes, will drive demand in the months to come.

The company is also banking on its 200 ml packs to achieve large sales volumes. It was the introduction of these 200 ml packs which led to a growth of 15-20 per cent in the carbonated soft drinks market in 2002 after the market grew by less than one per cent in 2001.

Coca-Cola officials disclosed the bottlers would invest the money in glass bottles, distribution and transportation of soft drinks.

While the company plans to invest about 45 per cent of the proposed money in the south considering the potential in the region, the bottlers are in the process of identifying the destination of their investments.

Though the company officials have refused to comment on projections for volume growth this year, industry sources said soft drink companies, including Coca-Cola and Pepsi, are in fact revising their volume targets for the current year after the recent price cuts.