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PepsiCo to set up 4 plants

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Having identified India as a rapidly-growing market, US food and beverages giant PepsiCo plans to pump an estimated Rs 700 crore into the country to set up four new plants here by 2012. It is yet to finalise the locations.

“Going forward, over the next three years, we will certainly be putting up new plants,” PepsiCo India Chairman Sanjeev Chadha said.

Chadha, who took charge as the PepsiCo India head three years ago, said there would be three new plants on the beverages side and one on the foods side. But he did not specify the quantum of investment involved. He said, on an average, it costs $30 million (around Rs 135 crore) to set up a beverages plant and $50-60 million (Rs 225-270 crore) to set up a foods plant.

Going by these estimates, industry analysts say that PepsiCo, whose global operations are headed by Indra Nooyi, may have to shell out $150 million (about Rs 700 crore) to set up these plants. The company is “in the process of searching and identifying, through a network analysis, the location of these plants”. PepsiCo currently has 43 bottling plants in India, of which 15 are company-owned and 28 are franchisee-owned. In addition to this, PepsiCo’s FritoLay foods division has three state-of-the-art plants.

Since its entry in India 19 years ago, the company has invested over $1 billion in the country. When asked about the delay in getting the Foreign Investment Promotion Board approval for an additional $200-million investment, Chadha said: “It’s only a procedural point. It should be cleared soon.”

Source: Business Standard

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