BY ADITI SHAH
REUTERS - PepsiCo Inc(PEP.N), the maker of
Pepsi-Cola, Frito-Lay snacks and Tropicana juice, plans to invest $5.5 billion
in India by 2020 to expand its presence in the country, it said on Monday.
PepsiCo's plans come after rival Coca-Cola Co
(KO.N), the world's largest drinks maker, said in June last year it would
invest a total of USD 5 billion between 2012 and 2020 to grow its business in
Asia's third-largest economy.
PepsiCo and Coca-Cola's investments, driven by a
growing middle class with higher disposable incomes, are likely to be welcomed
by Indian officials who are trying to restore foreign investor confidence after
growth has fallen to a decade-low.
"India is a country with huge potential and it
remains an attractive, high-priority market for PepsiCo," Chief Executive
Officer Indra Nooyi said in a statement.
"We've built a highly successful business in
India over the course of many years and we believe we've only scratched the surface
of the long-term growth opportunities that exist for PepsiCo and our
partners," said Indian-born Nooyi on a visit to the country.
PepsiCo and its partners plan to invest in expanding
their product range, doubling production capacity and improving their sales and
distribution network, especially in rural markets, the company said.
The company has 38 bottling plants and three food
plants in India, according to its website, and generates more than 10 billion
rupees in annual sales from eight products including Pepsi and Frito-Lay potato
chips, it said.
PepsiCo saw volumes in its snack business in Asia,
the Middle East and Europe rise 4 percent in the July-September quarter, led by
double-digit growth in China, Pakistan and Turkey. On the drinks side, volume
rose 7 percent.
India is trying to attract more foreign investments
by opening up various sectors including retail and telecoms in a bid to narrow
its current account deficit.
Separately Britain's biggest clothing retailer Marks
& Spencer (MKS.L) on Monday opened its largest store in India in Mumbai,
while Unilever (ULVR.L) (UNc.AS) said in April said it would raise its stake in
Hindustan Unilever (HLL.NS) to as much as 75 percent from 52 percent.
However, India has also had some high-profile
departures as the government has been seeing as struggling to pass reforms.
India's economy also slowed to a decade low of 5 percent in the fiscal year
through March, while inflation has been accelerating.
In October BHP Billiton Ltd (BLT.L)(BHP.AX)
surrendered almost all its oil and gas blocks in the country, citing an
inability to carry out exploration operations.
Ends.
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