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PepsiCo to invest $2.5 billion in China

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Purchase, N.Y. — Beverage and food giant PepsiCo has unveiled plans to invest an additional $2.5 billion in China over the next three years.

Beverage and food giant PepsiCo has unveiled plans to invest an additional $2.5 billion in China over the next three years.

The company said Friday that the investment will be allocated to a variety of projects, including new manufacturing facilities, a significant scaling up of the company’s research and development operations, expanded agricultural development and brand-building initiatives.

PepsiCo noted that the plans comes in the wake of a $1 billion investment that it announced in 2008 and expects to complete this year.

"I am delighted to announce that over the next three years we expect to invest $2.5 billion in our food and beverage businesses in China," PepsiCo chairman and chief executive officer Indra Nooyi said in a statement. "This investment reflects very clearly our great confidence in China and our long-term commitment to this very important, growing market. 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 to 12 new plants in China to manufacture soft drinks, non-carbonated beverages and snacks and will install additional production lines in existing facilities.

Consistent with the company’s strategy to expand in interior and western China, PepsiCo will open plants in the provinces of Fujian, Gansu, Henan and Yunnan in the next two years. All new plants will meet LEED standards for environmental design, following the model of the company’s Chongqing beverage plant, which opened last year. That plant, which PepsiCo reported is the first "green" beverage plant ever built in China and the first of its kind to receive LEED certification, uses 22% less water and 23% less energy than the average PepsiCo plant in China.

PepsiCo also plans to broaden its portfolio of Chinese-designed and developed products as it works to provide more food and beverage choices made with wholesome ingredients that contribute to healthier eating and drinking.

Current beverage offerings include Tropicana Guo Bin Fen juices and Cao Ben Le drinks, which are inspired by traditional Chinese medicine. On the food side, the company offers Quaker oat cereal in local flavors and Lay’s potato chips in flavors designed specifically for the Chinese market, such as cool cucumber and crispy prawn. To accelerate expansion of its product portfolio, PepsiCo said it will build a world-class research and development center in China to develop products for all of Asia.

As one of the largest growers of potatoes in China, PepsiCo also plans to invest in agricultural development. It will open five new farms for potatoes and oats, bringing advanced irrigation technology to each. PepsiCo said it has already established a number of successful farms in China, including its pilot farm in Baotou, Inner Mongolia, where the company introduced advanced irrigation technologies to transform desert into fertile potato farmland.

"We are building expertise and infrastructure now so that we can have a strong, sustainable manufacturing and agricultural base to serve the diverse and growing needs of consumers across China," Nooyi said.

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


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