Pepsi-Cola unit earmarks $100M for expansion

Beverage maker Pepsi-Cola Products Philippines Inc. will spend $100 million to expand its Philippine operations this year, which involves the widening of its distribution network and increase in its manufacturing capacity.

Pepsi-Cola on Friday said it would hire over 1,000 more employees as it would add four new manufacturing lines at its various facilities across the country.

Half of this year’s capital expenditure budget would be spent for the widening of its distribution network, while the other half would be for the expansion of manufacturing operations.

“There are over a million sari-sari stores in the country today, and we are just in half of them. Our objective is to get to as much of them as possible,” Pepsi-Cola president Partho Chakrabati told reporters.

Speaking at the sidelines of the company’s shareholders meeting, Chakrabati said that while the company’s products were already in all major areas of the country, its reach in inner cities was still lacking.

In the first quarter of the year, Pepsi-Cola said gross revenues reached a record P6 billion, higher by 4 percent than the level in the same period in 2012. This helped the company grow profit by 20 percent to P270 million.

Chakrabati said the company expected sales to continue increasing this year given the country’s healthy economic growth, citing the 7.8-percent expansion in domestic output in the first quarter as reported by the government earlier.

The Philippines was Asia’s fastest-growing economy in January to March.

“That aspect of the economy relates to consumption. The Philippines has a very strong consumption story, and our business is dependent on that,” he said.

However, Chakrabati said election spending did not contribute much to the growth in the company’s sales. “We didn’t feel anything until April, and even then, it was not that significant,” he said.

Apart from higher consumer demand, Chakrabati said the company’s main source of growth would come from the expansion of its distribution network and the introduction of new product lines.

To serve the prospective rise in demand, Chakrabati said the company would ramp up its production. The company plans to add four new manufacturing lines in four different plants in the Philippines. The company will also open its 12th manufacturing facility in the country this year, located in Santo Tomas, Batangas.