RUSSIA: PepsiCo, Pepsi Bottling Group to spend $1bn

By | 6 July 2009

PepsiCo and its bottling affiliate, Pepsi Bottling Group (PBG), is to invest US$1bn in Russia over the next three years.

The move will bring the two companies' total investment in Russia to $4bn, PepsiCo and PBG said today (6 July).

News of the fresh investment plan came as PepsiCo CEO Indra Nooyi embarked on a visit of Russia, during which she will open a new bottling plant on the outskirts of Moscow.

"This investment reflects very clearly our great confidence in Russia and our long-term commitment to this very important market," said Nooyi, who will also join a meeting of business leaders convened by Russia and US presidents Medvedev and Obama, as part of her visit.

PepsiCo and PBG also are planning "significant investments" to build a state-of-the-art warehousing and distribution infrastructure for domestic subsidiary Lebedyansky juice business, the firms said.

In 2008, PepsiCo and PBG invested approximately $2bn to acquire Lebedyansky, which is Russia's leading branded juice company.

The new bottling plant in Domodedovo, near Moscow, will be the largest in PepsiCo's current global system. It will produce a range of beverage brands, including Pepsi-Cola, Aqua Minerale water and RTD Lipton Iced Teas (through PepsiCo's joint venture with Unilever) for sale by retailers across Russia, as well as in neighbouring CIS countries.

It is also the first PBG plant in Russia equipped to produce ultra-light PET plastic bottles on all bottling lines, with labelling technology that uses no glue, less plastic and less energy than traditional labels, according to the firms.

In the US, PepsiCo and PBG remain in deadlock over a PepsiCo's attempt to fully acquire the bottler.

It is 50 years since Pepsi-Cola was first launched in Russia.

Sectors: Soft drinks, Water

Companies: PepsiCo, PBG, Lebedyansky, Aqua

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