PepsiCo investing in India

by Eric Schroeder
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NEW DELHI — PepsiCo, Inc. is ramping up its presence in India with the announcement it will invest 33,000 crore rupees ($5.5 billion) in the country by 2020. The company plans to use the funds to support its efforts in innovation, manufacturing, infrastructure and agriculture.

“India is a country with huge potential, and it remains an attractive, high-priority market for PepsiCo,” said Indra Nooyi, chairman and chief executive officer. “We’ve built a highly successful business in India over the course of many years, and we believe we’ve only scratched the surface of the long-term growth opportunities that exist for PepsiCo and our partners. This investment is PepsiCo’s vote of confidence in India’s future and it represents our deep commitment to this great country.”

PepsiCo India already has built eight brands that generate 1,000 crore rupees or more in estimated annual retail sales (Pepsi, Lay’s, Kurkure, 7UP, Slice, Mirinda, Mountain Dew and Aquafina).

On the manufacturing front, PepsiCo said it plans to significantly increase capacity to meet the growing demand for its foods and beverages. PepsiCo and its partners plan to expand their production capacity in India to more than double current levels by 2020.

PepsiCo and its partners plan to ramp up selling and delivery infrastructure throughout the country, with a particular focus on rural market expansion. As part of this strategic initiative, PepsiCo said it will work with its partners to deploy new technologies designed to enhance service to retail customers and increase efficiency across go-to-market systems.

Finally, PepsiCo said it will allocate resources to expand its collaborative farming program, which provides farmers with access to quality seeds, technical agronomic expertise, bank loans and crop insurance. The program currently reaches 24,000 farmers.

“Most importantly, our investments will be aligned with India’s interests,” Ms. Nooyi said. “We will be guided by Performance with Purpose, PepsiCo’s vision for building a profitable and sustainable 21st century corporation that is a good investment for our shareholders, a good environment for our employees, a good citizen in our communities and a good steward of our planet’s resources. We believe Performance with Purpose will drive sustained value for PepsiCo and positively contribute to India’s development well into the future.”

Since opening its first operations in India in 1990, PepsiCo is estimated to have created opportunities for more than 200,000 people in the country through direct or indirect employment and agricultural collaborations.  It is estimated that the strategic initiative will add more than 100,000 new employment opportunities.

The announcement comes a little more than a year after Atlanta-based The Coca-Cola Co. unveiled its own plans to invest $5 billion in India by 2020 for the continued development of the non-alcoholic ready-to-drink beverage market. Coca-Cola has invested more than $2 billion in India since it re-entered the country in 1993.

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