PepsiCo returns to Indonesia, breaks ground for snack factory

Sep 02, 2023

A view shows a plant of PepsiCo company in Azov in the Rostov region, Russia March 9, 2022. REUTERS/Sergey Pivovarov/File Photo Acquire Licensing Rights

CIKARANG, Indonesia, Aug 30 (Reuters) - U.S. food and beverage maker PepsiCo (PEP.O) began building a snack factory in Indonesia's West Java on Wednesday, marking its return to Southeast Asia's largest economy after splitting with a local partner two years ago.

The factory, part of PepsiCo's $200 million commitment to invest in Indonesia over a 10-year period, is expected to start producing snacks by 2025.

PepsiCo's affiliate Fritolay Netherlands Holding B.V. and Indofood CBP (ICBP.JK), a unit of Indonesia's largest food company Indofood Group, ended a 30-year joint venture in 2021 without providing any reason, when Indofood bought PepsiCo's minority stake.

The JV at the time had manufactured a range of snacks under brands like Lay's, Cheetos and Doritos.

Building the new factory without a local partner, PepsiCo pledged to source most raw materials for its snacks, including corn and palm oil, from sustainable sources and to use renewable power sources.

($1 = 15,255.0000 rupiah)

Reporting by Stefanno Sulaiman; Editing by Gayatri Suroyo and Simon Cameron-Moore

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