PepsiCo is making significant moves to expand its production and increase market share in multiple regions. In South Africa, PepsiCo has opened a new Futurelife factory at Dube TradePort, doubling its local production. The new facility, which is twice the size of the previous one, has led to a doubling in production. Futurelife, a subsidiary of PepsiCo's Pioneer Foods, sources 87% of its raw materials locally. South Africa is one of PepsiCo's largest operational areas outside the United States, and the company is committed to serving the people of South Africa and driving inclusive growth. The new facility is expected to play a major role in sustainable economic development in the province. Futurelife also has plans to expand its business into export markets in Asia, the Middle East, Europe, North America, and the rest of Africa [67b33911].
In Jamaica, Pepsi-Cola Jamaica Bottling Company has invested $30 million in a new production line to increase its market share in Jamaica and export markets. The company aims to act as a regional hub, marketing brands like Pepsi, Gatorade, and Ocean Spray to a wider regional market. The new production line is expected to boost production by at least 60% initially, with the company producing 600,000 cases per month. The workforce has also been increased by 25% to manage the new operation. Prime Minister Andrew Holness highlighted the importance of the manufacturing sector, which accounts for 9% of the total goods and services produced in the economy and contributed to GDP growth in 2022 [8b290edc].
In the United States, PepsiCo has secured an exclusive 10-year agreement with Subway sandwich shops to become their sole drink supplier, replacing rival Coca-Cola. Starting in January 2025, Coca-Cola brands like Sprite, Fanta, and Diet Coke will gradually disappear from Subway restaurants, making way for PepsiCo products such as Mountain Dew sodas, Tropicana juices, and Gatorade sports drinks. Subway operates about 20,000 restaurants in the US and nearly 37,000 worldwide. The company is also extending its agreement with Frito-Lay, PepsiCo's snack-food unit, to provide chips and snacks at its restaurants through 2030. This deal comes after Subway announced a deal in 2023 to be acquired by Roark Capital Group for nearly $10 billion, pending a Federal Trade Commission investigation [68d5f1e0].
In China, Swire Coca-Cola Ltd, a bottler of Coca-Cola, has started the construction of a new factory in Guangdong. The factory, with an investment of 1.25 billion yuan ($175.89 million), will cover an area of 128,000 square meters and will have 11 new beverage production lines, multi-tier warehouses, and supporting facilities. The new facility is expected to increase the annual production capacity by approximately 66 percent compared to the current level of the company's Guangdong branch. Swire Coca-Cola plans to increase its investment in China, with an expected investment of over 12 billion yuan from 2023 to 2032. As Coca-Cola's fifth largest bottler in the world, Swire Coca-Cola operates five bottling plants in Guangdong and serves more than 90 million consumers [a5533532].
PepsiCo is also expanding its presence in Central Asia, with a focus on Kazakhstan. David Manzini, the president of PepsiCo for Central Asia, Russia, Belarus, and the Caucasus, stated that Central Asia holds significant economic potential and Kazakhstan provides the necessary economic and geopolitical stability for projects to thrive. PepsiCo received substantial support from the local government in securing land for their investment. The new plant in the Almaty Region will initially produce up to 16,000 tons of finished products annually, with plans to increase capacity to 21,000 tons by 2027. The project will create 350 direct jobs and boost agricultural development in Kazakhstan by sourcing local raw materials and partnering with Kazakh farmers. The investment is substantial, totaling more than $160 million for the first stage, and there are indications of a potential second stage. The plant's launch represents effective collaboration between the government and private sector in advancing Kazakhstan's economic diversification and prosperity goals. The U.S. Ambassador to Kazakhstan, Daniel Rosenblum, highlighted the attractiveness of investing in Kazakhstan and the deepening economic relationship between the U.S. and Kazakhstan [a74ed775].
In Zimbabwe, Delta Corporation, a subsidiary of AB InBev, has invested US$71 million in capital expenditure in 2023 to expand its production capacity and improve efficiency. The company expects volume growth as a result of this investment. Despite the challenging economic environment in Zimbabwe, Delta Corporation remains optimistic about the future and plans to introduce new products and expand its market share in the alcoholic and non-alcoholic beverage sectors [c06a5877].
In related news, Jamaican Teas Limited (JTL) has reported a net profit of $45 million in the fourth quarter of 2023, a significant improvement from the previous year. The CEO, John Mahfood, attributed the improvement to efforts in improving productivity and reducing stockouts. JTL implemented a second shift, increasing production by 40% in the last few months. The company also appointed new distributors in Jamaica and Trinidad, expecting increased revenue in the coming year. Mahfood expressed the expectation of a significant improvement in the manufacturing side of the operation in 2024. JTL's total revenue for the quarter was $652 million, with a marginal decline from the previous year. The company aims to continue improving its gross profit margin in the next year. Mahfood also discussed the company's performance in different markets, noting that the majority of JTL's customers are international. He expressed a desire for stronger growth in exports and hopes that positive trends in Caribbean economies and the US economy will benefit the company's exports [cbe4f518].
Beverage company Coca-Cola has pledged to collaborate with the government and the private sector in ongoing efforts to boost economic development within the East African region. Coca-Cola Africa President Luisa Ortega expressed the company's commitment to reinforce strong trade relations with Kenya, which serves as their regional hub. The collaboration aims to benefit businesses in the United States and the region, with a focus on job creation, local economic development, and strengthening trade relations. The announcement was made during the 4th American Chamber of Commerce (AMCHAM) business summit, which covered topics such as economic development, U.S.-East Africa trade and investment relations, digital transformation, and climate action [4cca99c7].