Pepsi begins work on $30m plant

HARARE - Pepsi has begun construction work at its first Zimbabwean $30 million plant despite the worsening economic situation in the country.

The bottling plant, which is one of the biggest investments in Zimbabwe’s manufacturing sector in recent years, is set to occupy a total land space of 7,3 hectares, including an 8 125- square metre manufacturing facility and a 1 330-square metre utility area.

Varun Beverages, which has partnered with businessman Adam Molai for the Pepsi venture that will employ at least 400 people, said machines and equipment had already been ordered with resources required for completion of the project in place.

“The construction of the plant is in full swing from mid-September. The bottling equipment has been ordered and all required resources are in place for timely completion of the project,” Varun chief executive Shankar Krishnan said.

“Based on our current networks, the plant is poised to be up and running by second quarter 2017,” he added.

In the launch phase, the plant will have a high speed 600-bottles-per-minute production line and an ultra-modern 400-cans-per-minute filling line.

Krishnan  noted that while the priority was launching Pepsi brands by June next year, Varun was also looking at launching juice-based beverages from PepsiCo’s portfolio to augment market share presently dominated by Zimbabwe Stock Exchange-listed beverages manufacturer Delta Corporation.

“We would possibly look at juice-based beverages in future. The decision to look at other sectors would be a factor of what our board decides as we move forward,” he said.

Krishnan also said the group was bullish about the Zimbabwe market —presently plagued by low capacity utilisation, little Foreign Direct Investment and shrinking disposable incomes —and felt its investment was perfectly timed.

“Zimbabwe has huge potential for the beverages market and that is the reason we have decided to invest in this country. Yes there are challenges to date but we are confident these are short term.

“To give you a different perspective, when we entered the Zambian market, it had been stagnant for years. After our entry in late 2010, the industry started to grow and today it has doubled in volumes,” he said, adding Varun anticipated similar results in Zimbabwe.

Krishnan said the entry of a new player in the sector was going to lead to price stability.

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