Pepsi to set up $8m chips business in 2019

Pepsi to set up $8m chips business in 2019
Published: 22 June 2018
PEPSICO'S largest franchise bottler, Varun Beverages, says it is moving to set up an $8 million potato chips business in Zimbabwe next year, as the group expands its local footprint.

RJ Corporation chairman, Ravi Jaipuria, last week said the business - which was going to see the firm invest in grassroots agriculture for good potatao varieties - was going to see the beverages manufacturer sell frozen fresh chip potatoes to hotels, restaurants and supermarkets locally.

RJ Corporation (RJ Corp) owns Varun Beverages.

"It will be about $7 to $8 million… We are looking to start with one tonne per hour, that is one tonne of French fries, and it will be basically for restaurants and supermarkets for people to come and buy. Lots will be for restaurants and fast foods," Jaipuria told The Financial Gazette last week after commissioning of the group's local PepsiCo plant in the capital..

Highlighting that the group was going to spend this year expanding its $40 million Pepsi Bottling Plant, the RJ Corp boss said the fries project was going to commence next year.

"Definitely not this year, we have the Pepsi plant expansion to look into. We are targeting next year if we can. We are working on the logistics and costs at the moment. Maybe by end of this year we will finally put it to start.

"This year is for expansion of the plant and other developments to the plant. This phase of the investment will only start next year," the Indian billionaire said.

Varun Beverages is also eyeing regional soft drink exports following commissioning of the Pepsi Bottling Plant.

The plant - equipped with a 400-bottle-per-minute production line - is anticipated to spur Varun Beverages into the regional market.

"We will soon start exports to Zambia, Botswana and other neighbouring countries… Ultimately, we will also start on an agricultural programme which will see us exporting potato fries into the region," Jaipuria said.

The plant, which had initial budget of $30 million, ended up gobbling $40 million on the back of Zimbabwe's foreign exchange shortages.

PepsiCo started operations early this year after completing the first phase with three more phases to follow.

Phase two is expected to be completed by September this year.

On completion, the PepsiCo plant is projected to create at least 400 jobs and another 2 600 downstream.

Meanwhile, Jaipuria said Zimbabwe needed to fix its foreign exchange shortage if it is to attract more investment.

"The forex availability issue remains an issue. Investors can't set up without certainty they will be able to repatriate.

"Of course, we are very confident in the country and will continue investing, but the forex issue needs to be addressed," he said.

This comes as Varun Beverages corporate affairs manager, Fungai Murahwa, recently said the group's plant ended up costing $40 million to setup instead of a planned $30 million on the back of forex shortages.

Zimbabwe has been battling a foreign exchange shortage which has escalated into a debilitating cash shortage for locals and companies now sourcing for cash on the parallel market at huge premiums.
- fingaz
Tags: PepsiCo,

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