Beverage Industry

PepsiCo to invest $2.5 billion in China over next three years

May 25, 2010

PepsiCo, Purchase, N.Y., plans to invest an additional $2.5 billion in China during the next three years. The newly announced investment is in addition to the $1 billion investment the company announced in 2008, which will be completed this year. The new investment will be allocated to a variety of projects, including new manufacturing facilities, a significant increase of the company's research and development operations, expanded agricultural development and brand-building initiatives, the company says.

"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," said PepsiCo Chairwoman and Chief Executive Officer Indra Nooyi, 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, PepsiCo says. The plant is the first LEED certified beverage plant built in China and uses 22 percent less water and 23 percent less energy than the average PepsiCo plant in China.

PepsiCo also plans to broaden its portfolio of Chinese-designed and developed products. Current beverage offerings include Tropicana Guo Bin Fen juices and Cao Ben Le drinks, which are inspired by traditional Chinese medicine. To accelerate expansion of its product portfolio, PepsiCo will build a research and development center in China to develop products for all of Asia.

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