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September 16, 2020

PepsiCo starts snacks plant build in Russia

The US food and drinks group has embarked on the building of its latest factory in Russia, the company's third-largest market by sales.

By Dean Best

PepsiCo has embarked on the construction of a new snacks factory in Russia.

The US giant said the facility, located in the eastern city of Novosibirsk, would be its third dedicated snacks plant in the country. The factory will have a capacity of more than 60 thousand tons.

PepsiCo said the first two lines at the plant will start operating at the end of next year, manufacturing Lay’s crisps and HrusTeam crisp breads. “We plan to have a two-stage launch of four production lines in total to manufacture Lay’s chips and HrusTeam crisp breads. The first two lines will be launched in 2021. We plan to launch the other two in 2022-2023,” a spokesperson for PepsiCo’s Russian arm said.

Products from the new plant will be sold across Siberia, the Urals and Russia’s Far East, as well as some CIS countries, with the spokesperson pointing to Kazakhstan as an example. PepsiCo’s two other plants are in Russia’s Moscow and Rostov regions.

Alongside the construction of the new factory, PepsiCo said it would invest in the local agriculture sector to build a supply of local potatoes for the facility.

The new plant is expected to create 900 jobs, PepsiCo said. It is already present in Novosibirsk with a dairy manufacturing facility.

“The construction of the new facility in Novosibirsk will increase the efficiency of the company’s logistics through localisation of production,” the spokesperson said.

Russia is PepsiCo’s third-largest market by net revenue. According to PepsiCo’s 2019 annual report, the company’s net revenues in Russia were US$3.26bn, up from $3.19bn a year earlier. The group said its snacks volumes grew at a “low-single-digit” rate. Drinks volumes were down at a “mid-single-digit” rate.

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