PepsiCo and Theo Mullers facility will produce a range of new yoghurt products

PepsiCo and Theo Muller's facility will produce a range of new yoghurt products

PepsiCo has teamed up with German privately-owned dairy firm Unternehmensgruppe Theo Müller to open a US$206m yoghurt facility in New York, US.

The plant, to be located at Genesee Valley Agri-Business Park in Batvia, will be established through a joint venture between the two firms called Wave Holdings. The facility will produce a range of new yoghurt products, however, the companies are yet to decide on specific brands.

The plant is expected to be built over a two-year period with the expectation of creating around 186 jobs. No date has been give for the ground-breaking of the facility. New York state and Genesee County have agreed to offer around $26m in tax credits for the deal.

Müller is Germany's largest privately-owned dairy business employing around 4,700 throughout Europe and Israel with sales of around EUR2.2bn (US$2.96bn). The company produces a line of six different premium yoghurts, including its leading brand in the UK, Müller Corner.

"This project demonstrates that leading international companies like PepsiCo and Muller see New York as a premier place to invest and the natural choice for their first venture into the yogurt business," Governor Andrew Cuomo said in a statement.

The announcement ends months of speculation about a potential deal between PepsiCo and Muller. PepsiCo has made a series of moves in the dairy sector since it formed a global nutrition unit last year to look at ways to expand into the industry, including its purchase of Russia's largest dairy processor Wimm-Bill-Dann. But the company had, until now, made no inroads into its domestic dairy industry.

According to data from Euromonitor in October last year, US yoghurt sales are estimated to have increased by 7% to 9% in 2010 to around $6.57bn.

The investment will continue a strong recent trend of major yoghurt producers opening manufacturing facilities in New York. In 2011, major investments were made by two of the nation's largest yoghurt producers - Chobani and Fage.