PepsiCo plans major investment

Banking on the Indian middle-class’s fetish for colas and chips, the $65-billion American food and beverage multinational PepsiCo has earmarked an investment of Rs.33,000 crore ( $5.5 billion) for India till 2020. This will not only help the Purchase-based company double its production capacity and strengthen distribution, but also create more than one lakh jobs.
PepsiCo chairman and CEO Indra Nooyi remained upbeat about India’s chances of bouncing back from the current tough economic scenario. “PepsiCo’s faith in the India growth story remains unscathed,” she said. “This is a temporary slowdown and it comes after years of double digit growth. India will eventually power its way up.”
PepsiCo’s investment comes a year after its rival Coca-Cola announced plans to devote $5 billion to build capacity here. A substantial chunk of PepsiCo’s investment will go towards increasing its manufacturing capacity. Resources will also be allocated to boost innovation in foods and beverages and expand its collaborative farming programme.
Nooyi’s faith in the Indian market comes at a time when the country has been derided both globally and domestically for being slow on reforms and clearances. Besides, many investors have been lately talking about first seeing the verdict of the forthcoming general elections and then investing. Nooyi, however, is unabashed about her support and is willing to go ahead. “It’s difficult to time the market,” she said when asked if this was the right time to invest. “We are waiting for India to come back,” she said highlighting the long-term growth potential of the market as well as its demographic dividend. “Investors who stay longer also stand to gain enormous value.”
While charting out its strategy for nutritious products, she feels that a significant part of the nutrients would come from India over time. “It’s among our top 10 markets now,” she said and added that it would move up a few notches in the global pecking order. She also emphasized its importance as a talent hub.