PepsiCo opens new food manufacturing plant to fuel growth in China

PepsiCo, Inc. (NYSE: PEP) today announced the opening of a new food manufacturing facility in Wuhan, China. The plant, which is PepsiCo’s sixth food manufacturing site in its Greater China Region, is part of the company’s plans to drive the continued growth of its China business and expand further into central and western China.

The Wuhan plant is the first foods facility built by PepsiCo in China in line with the criteria established by Leadership in Energy and Environmental Design (LEED), the world’s leading green building standard. With state-of-the-art technologies and processes, the plant is expected to use 30 percent less water and 20 percent less energy compared to the 2006 baseline for PepsiCo China Foods manufacturing plants, reducing operating costs in the long term. Three existing plants in PepsiCo’s manufacturing network in China are LEED-certified: Pepsi bottling plants in Chongqing, Nanchang and Kunming.

The PepsiCo plant in Wuhan, which includes 25,000 square meters of production space, is equipped with one of the most advanced potato chip production lines in the world and has the capacity to produce approximately 15,000 tons of Lay’s potato chips annually. Lay’s is the world’s largest food brand and China’s top-selling chip brand.

PepsiCo Chairman and CEO Indra Nooyi officially opened the new Wuhan plant at a ceremony attended by Mr. Jia Yaobin, executive vice mayor of the Wuhan Municipal Government, and other leading Wuhan officials. Saad Abdul-Latif, CEO of PepsiCo Asia, Middle East, Africa; Tim Minges, chairman of PepsiCo Greater China Region; and Katty Lam, president of PepsiCo Greater China Region Foods also attended the event.

Mr. Jia Yaobin said: “PepsiCo is one of the most successful consumer goods companies in the world, and its products are well-known and popular in China. We thank PepsiCo for the contribution it has made to the development of Wuhan and the Dongxihu District. From the local government’s perspective, we recognize the significant role played by the business community in promoting local economic development, and we will continue to support PepsiCo in growing its business in Wuhan and the central and western regions. We wish PepsiCo even greater progress here in China.”

“PepsiCo has a strong and growing food and beverage business in China, and we’re making investments to drive sustainable long-term growth,” Nooyi said. “The Wuhan plant is a crucial piece of our growth strategy, as it opens new opportunities for PepsiCo in central and western China and will allow more Chinese consumers to enjoy Lay’s and other great PepsiCo brands. It also continues our commitment to sustainable development, which we believe is a key driver of both China’s and PepsiCo’s future success.”

Since entering the Chinese market in 1981, PepsiCo has established a leading position in China’s rapidly growing food and beverage industry.

Earlier this year, PepsiCo completed a strategic beverage alliance with Tingyi (Cayman Islands) Holding Corp. (Tingyi), one of the leading food and beverage companies in China. The PepsiCo-Tingyi beverage system is the No. 1 liquid refreshment beverage player in China and provides Chinese consumers with some of the country’s most popular beverage products, including: Pepsi, China’s top-selling cola; Mirinda, China’s top-selling flavored carbonated soft drink; Gatorade, one of China’s top-selling sports drinks; China’s top-selling tea and water brands, sold under Tingyi-Asahi Beverages Holding Corp. Ltd’s Master Kong brand name; and China’s second-largest juice portfolio. China is expected to become the world’s largest beverage market by 2015.

PepsiCo is also a major agricultural company in China, having opened eight sustainable demonstration potato farms and invested in agricultural farm development. Over the past 12 years, more than 10,000 Chinese rural households have benefited from PepsiCo’s agricultural projects in China. PepsiCo signed a Memorandum of Understanding with the Ministry of Agriculture of the People’s Republic of China in September 2011 to promote sustainable agriculture projects and accelerate the development of the Chinese countryside.