Pepsi to invest $1 billion in China

04 November 2008

After Coke's  $2.4-billion acquisition of Beijing-based Chinese juice maker Huiyuan Juice in September (See: Coke pulls-off biggest ever acquisition of Chinese firm with $2.4-billion buy of Huiyuan Juice), the declining US sales has prompted rival PepesoCo  invest $1 billion in China over a period of four years to expand its manufacturing capability, research and development and sales force in the country.

With these two Chinese investments, the race for market share in the emerging markets has just got hotter.

PepsiCo, the maker of Pepsi, Frito-Lay snacks, Tropicana juices, Quaker Foods and Gatorade sports drinks said that this would be part of their global strategy to expand its operations in emerging markets.

The company said that the investment would be used to grow its business in interior and western areas of China.

PepsoCo chairman and CEO, Indra Nooyi, said in a statement, ''This is our largest investment in China in the nearly 30 years we have been doing business here, and it is consistent with our broader global strategy of investing in high-growth developing markets.''

Nooyi is on a four-day visit to China this week to meet with government officials and local business executives. She also will tour PepsiCo's operations in China.