The Hindu Business Line : PepsiCo plans to pump in $500 m to triple India business

PepsiCo will also look to bring in the “good for you” products and ideas that have helped its portfolio elsewhere to shift away from a predominantly “treat for you” or comfort food bias.

Our Bureau

New Delhi, Sept. 21 A visit of PepsiCo Chairman and CEO, Ms Indra Nooyi, and all its top executives, merits a announcement such as a $500-million investment over the next three years to triple business in the next five years in India.

“Looking forward, as a tangible sign of our continued confidence in India, I am delighted to announce that we expect to invest $500 million over the three years, with a goal to triple our business here. This represents a substantial acceleration of our business here,” said Ms Nooyi addressing a press conference in Gurgaon on Sunday.

The money would be spent on expanding manufacturing capacity and adding new facilities and further building marketing infrastructure, as well as for sustainable initiatives and R&D, said PepsiCo India’s CEO, Mr Sanjeev Chada.

Consumers can look forward to new fortified and flavoured water over the next 12 months and more offerings from its Quaker portfolio. PepsiCo will also look to bring in the “good for you” products and ideas that have helped its portfolio elsewhere to shift away from a predominantly “treat for you” or comfort food bias. India ranks among the company’s top ten markets overall in dollar terms. In purchasing power parity terms it would be counted among the top 5-6 markets, and is a very substantial one whose prospects the company was bullish about, said Ms Nooyi.

She was accompanied by Pepsico’s senior leadership team that included Vice-Chairman and Pepsico International CEO, Mr Michael D. White, and Mr Saad Abdul-Latif, President South Asia, Middle East and Africa (SAMEA) Region.

The Pepsico Executive Committee (PEC) is to meet here on Monday.

The three-day India visit is to give the 26 business leaders a first hand insight into “what makes India tick, its history, politics culture and most importantly cuisine.”

Financial crisis

Commenting on the Wall Street financial crisis, Ms Nooyi said, “The problem of Wall Street has not trickled over to the Main street, where we are. Our business continues to be quite robust. We generate a lot of cash…. I don’t believe the problems of Wall Street will trickle over to companies like ours.”

High commodity prices and global inflation, however, were issues of concern and would affect margins in the short term.

“But when you have 10, 11, 12 per cent inflation it is hard to cover that with pricing changes in the short term. The challenge would be to manage the long term and try and ride out the short term,” she added.

PepsiCo’s five-year, $500 million investment announced earlier in 2001, had already been exceeded.

“As a result we have attained double digit growth in both volume and revenue and become the fourth largest consumer company in India in 19 years,” said Ms Nooyi.

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