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May 8, 2019

PepsiCo to build new snacks plant in Mexico under $4bn investment project with local partner

US food and drinks giant PepsiCo plans to build a new facility in Mexico for the manufacture of snacks. 

By Dean Best

US food and drinks giant PepsiCo plans to build a new facility in Mexico for the manufacture of snacks as part of a US$4bn investment project over the next two years with a local partner.

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The plant will be located in the city of Guanajuato in Leon province and will make PepsiCo’s snack brands Doritos, Sabritas and Cheetos, a spokesperson confirmed to just-food, adding that the factory will employ 1,000 people when fully operational in 2025.

PepsiCo’s Mexican division – PepsiCo Alimentos México – is teaming up with its strategic partner in the country, Grupo Gepp, to invest in bolstering infrastructure, its agricultural footprint, sustainability initiatives, and community development programmes, according to a statement. The partnership between the two firms is commonly known as The PepsiCo Mexico System. 

Nasdaq-listed PepsiCo said it expects to create a total of 3,000 jobs from the $4bn investment project, in addition to anticipated new positions from Grupo Gepp, which is engaged in the production, bottling, distribution and sale of soft drinks, including the brands Pepsi, 7Up and Canada Dry.

Ramón Laguarta, PepsiCo’s chairman and chief executive, said: “Mexico is our largest operation in Latin America and the second worldwide. It is an honour for us to have a positive impact at all levels of the country’s economy, from the countryside to the corner stores in each location.” 

Of the total funds, $109m will be funnelled into the new plant at Guanajuato to strengthen the company’s infrastructure and boost production capacity. Another $1bn will be channelled into sourcing raw materials such as potatoes, corn and sugar from local small, medium and large producers and to renovate its Agricultural Development Center. 

Investment will also be put toward cutting CO2 emissions and increasing the use of renewable energy under a sustainability agenda. PepsiCo said it also plans to invest $13m to further reduce saturated fats in its products. Another $7m will go toward development programmes focused on water, recycling, nutrition and the empowerment of women. 

Miguel Antor, the CEO of Grupo Gepp, said the investment exemplifies the company’s commitment to continued reinvestment in Mexico.

Roberto Martinez, the president of PepsiCo Alimentos Mexico, said: “Mexico’s competitiveness is key to the success of PepsiCo, and our goal is to make sure that our success is also that of Mexico.” 

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VC funding trends to watch out for in Consumer

Consumer industry investors across the world are betting big on the ESG trend to pick up in the future and are focusing on backing the start-ups and emerging companies working in the meat-alternative products category.   The top two deals in this category were the $500 million investment raised by Impossible Foods and the $347 million investment deal for Future Meat Technologies.  GlobalData’s Venture Capital Investments – Consumer 2021 will help you dive into the capital raising landscape across regions and themes.  Use the report to identify emerging signals and trends across Consumer, formulating winning strategies for the road ahead.   
by GlobalData
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