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PepsiCo to double investment in Indian snacks

Post a commentBy RJ Whitehead , 27-Aug-2014

PepsiCo chairman Indra Nooyi has pledged to double the company’s investment in its Indian food processing operation to add to the sizeable sums it has already spent in the country.

Nooyi, who is currently on a visit to India, had met with food processing industries minister, Harsimrat Kaur Badal, who announced the move.

A lot of investment is coming, which is substantial. In coming years, it will surely double. So, a good amount of investment will continue to come in different parts in India,” Badal said after the meeting.

Healthier snacks

Nooyi also assured the minister that PepsiCo would look into the manufacture of healthier and more nutritious snacks after Badal urged her to “partner with India for further research and development in developing such processed food products that can be supplied as part of the mid-day meals in rural India,” according to a statement issued by the Indian government. 

"They are researching to launch many new products in India. Especially, products with health benefits by balancing nutrition and taste. They are also looking on how to decrease sugar content in drinks,” said the minister.

"Oats are also being promoted by them, which are very healthy. So lots of research is done and productions are made which are good for farmers as well as for people.”

Nooyi earlier this week met with India’s trade minister Nirmala Sitharaman on a tour that is also expected to see the PepsiCo head entertained by finance minister Arun Jaitley and Narendra Modhi, the prime minister. 

Modhi courting investment

That Nooyi’s schedule is packed with such high-level meetings is significant. Having already invested US$2bn in India since it entered the market in 1989, last year PepsiCo committed a further Rs33,000cr (US$5.5bn) by 2020 to increase production. Doubling this amount will provide a much needed capital injection to India’s food industry.

It also shows the new government’s apparent support for overseas investors, even though the BJP-led administration’s election manifesto was opposed to foreign direct investment in retail. 

That attitude thawed during the campaign and now in government to the point that a number of international senior corporate executives, including Mitsubishi Corp's president, Ken Kobayashi, Facebook COO Sheryl Sandberg and Japanese retail giant Uniglo’s chief executive Tadashi Yanai, have enjoyed personal receptions with Modhi.

India is among PepsiCo’s top five markets, with eight brands on the market that make an annual turnover of over Rs1,000 crore (US$165m)

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