Pepsi To Invest $1 Billion in China
PepsiCo plans to invest $1 billion in China over the next four years, one of its fastest growing international markets. The funding marks the largest investment in the country in close to 30 years and is likely to create thousands of new jobs.
A large part of the investment will be used to fund major capital programs to expand manufacturing capacity mostly in interior and western areas. Local research and development facilities will be expanded, as will the local sales forces to broaden product distribution.
New products will be developed along with brand building initiatives. Many of the company’s most prominent brands are produced and sold in China, including Pepsi, Frito-Lay snacks, Tropicana juices, Quaker foods and Gatorade sports drinks.
The company’s third quarter revenue in the Middle East, Africa and Asia segment, which includes China, grew 22% over one year ago and 25% year-to-date. Snack volume growth of 9% in the quarter was led by double-digit growth in the Middle East, China and India. Beverage volume jumped 10% driven by mid-teens growth in China and the Middle East, and high-single-digit growth in India.
To protect its market share during this past summer’s Olympics in China where Coke was an official sponsor, Pepsi changed its packing and launched a red can commemorating China’s Olympic team.
“We are enormously confident in the continued prosperity of China,” said PepsiCo Chairman and Chief Executive Officer Indra Nooyi, who is in China this week.
In continuing its work on a program called “Performance with Purpose,” the company will also expand its efforts in China to promote environmental sustainability. The program is designed to achieve business and financial success while leaving a positive imprint on society, the company said.
