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Pepsi to Invest $500 mn in India
Rediff.com
March 29, 2005
Enthused by four-fold growth in business in the last five years, US
cola giant PepsiCo on Tuesday announced up to Rs 2,200 crore ($500
million) investment to consolidate its beverages and snacks business
in India.
"We have invested over Rs 3,000 crore (Rs 30 billion) directly and
Rs 900 crore (Rs 9 billion) through our partners so far and we are
going to invest $300-500 million more over the next three to five
years," Indra Nooyi, President and Chief Financial Officer, PepsiCo,
told reporters in New Delhi.
Ranking India at number five worldwide in terms of revenues, Nooyi
said PepsiCo's business has grown four fold in the last five years
and the company has put in place a strategy to expand further.
PepsiCo, which pioneered the concept of contract farming in the country,
has recently entered into a partnership with the Punjab government
for cultivation of citrus fruits to expand juices business here.
Asked about the company's financial performance in India, Nooyi said:
"We are making cash profits from our Indian business. I am bullish
on India and looking at the market as a long term bet."
Of the announced investment of up to $500 million, Nooyi said about
60 per cent is targeted for the beverages segment while the rest would
be for snacks.
Terming India as one of the most important global markets for PepsiCo,
Nooyi claimed over the last five months Pepsi has emerged as number
one in the marketshare in beverages segment and said: "It is the second
biggest consumer brand in the country."
PepsiCo, which employs about 60,000 people directly or indirectly,
has three snacks manufacturing plants with 50 lakh (5 million) outlets,
up from 50,000 five years ago.
With the huge success of Kurkure brand, the company is likely to take
it to other markets like the United States, the United Kingdom, South
Africa, Middle East and Australia.
Asked whether PepsiCo would manufacture Kurkure here and then export,
Nooyi said: "The product would be manufactured in the local markets
to avoid transportation cost and make it a local product."
In the juices segment, the company is likely to launch new products
in the near future.
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