PepsiCo to invest US$2.5 billion in China

Posted by Nicole Eckersley on 24th May 2010

US soft drink and snacks maker PepsiCo is to invest US$2.5 billion (A$3 billion) in its food and beverage businesses in China over the next three years.

The investment, announced on Friday, is in addition to a US$1 billion ($A 1.2 billion) investment pledged in 2008, which will be completed this year.

The money will be spent on new manufacturing facilities, the company’s research and development operations, expanded agricultural development and brand building.

“This investment reflects very clearly our great confidence in China and our long-term commitment to this very important, growing market,” said PepsiCo chairman and CEO Indra Nooyi. “We look forward to continuing to evolve our business in China and offer Chinese consumers a full portfolio of foods and beverages ranging from soft drinks and juices to oatmeal and savory snacks.”

PepsiCo plans to open 10-12 plants in China to manufacture soft drinks, non-carbonated beverages and snacks and will install additional production lines in existing facilities.

Among the new plants will be facilities in the interior and western Chinese provinces of Fujian, Gansu, Henan and Yunnan in the next two years. The company will also open five new farms for potatoes and oats.

PepsiCo also plans to broaden its portfolio of Chinese-designed and developed products with the construction of an R&D centre to develop food and beverage choices made with “wholesome ingredients that contribute to healthier eating and drinking” for Asia.

PepsiCo currently operates 27 beverage and food plants and five farms throughout China and employs around 20,000 people in the country.

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