New Delhi: Buoyed by record growth, PepsiCo India is more than doubling its investments in its Indian beverage business in 2009.
In the current year PepsiCo's total system investment in its Indian beverage business will now exceed $220 million. While PepsiCo India said it would invest over $170 million, its bottling partners would invest the remaining $50 million, making the combined invstment its largest in its beverage business since 1989 when it entered India.
This is over and above the capacity additions that the beverage giant made last year.
PepsiCo says its beverage business momentum has steadily accelerated over the last nine quarters, and that it is now the fastest growing beverage business in India and it wants its new investments to be ready to leverage the higher growth that it expects from its Indian operations in the coming years.
''We are extremely pleased with our performance in 2009. Our beverage volume is growing around 30 per cent in the current year,'' said Sanjeev Chadha, chairman and CEO, PepsiCo, India Region.
Chadha said, ''To sustain this growth, I am happy to report that we have decided to revise our earlier investment plans upwards, and are now more than doubling our investments over last year.''
These new investments will be spread across manufacturing capacity, market infrastructure, supply chain, fruit processing, agriculture, and R&D.
Over the next three years, PepsiCo plans to augment capacities in other locations, including the setting up of new greenfield plants, for which it has been scouting for suitable locations, and will focus on states that offer the best investment environment.
PepsiCo's said its growth has been spread across the company's diverse portfolio, with all categories - carbonated drinks, juices, juice-based drinks, sports drinks, as well as packaged water - showing strong momentum.
"The growth has been driven by investments in market infrastructure, innovative marketing campaigns, a stronger distribution network, the launch of new products like the extremely popular Nimbooz, and new packages like the stylish Pepsi My Can," the company said in a press statement.
The excise reduction by the Indian government as part of its fiscal stimulus package, has played a critical role in enabling PepsoCo, as indeed, other soft drinks makers, to withstand cost pressures and maintain price stability of their products.