Pepsi invests in snack line

Pepsi-Cola Products Philippines Inc. (PCPPI), the exclusive bottler of PepsiCo Inc. beverages in the Philippines, will start manufacturing snack foods in the country within the year.

Furqan Ahmed Syed, president of Pepsi Philippines, said the manufacturing facility will be located in Cabuyao, Laguna.

He declined to give added details, noting that the facility will mainly manufacture PepsiCo’s popular snack lines for the Philippine market, where it will compete with Filipino players like the Gokongwei Group’s Universal Robina Corp.

“It has been our vision to become a food and beverage company for some time,” Syed told reporters on the sidelines of the company’s annual meeting. He said the timing was right, given the country’s positive economic prospects and its large population.

Under the terms of the agreement, Pepsi Philippines, known for its flagship cola brands Pepsi Cola and 7-Up as well as non-carbonated drinks like Gatorade and Tropicana, will make and distribute a range of PepsiCo’s popular snack products to the Philippines’ 100 million consumers.

This will include snack food brands like Cheetos.

“This development presents an exciting opportunity for [Pepsi Philippines] to further its vision of becoming a premier food and beverage company in the Philippines,” Syed said in a separate statement.

The agreement between PepsiCo and Pepsi Philippines marks the creation of only the second PepsiCo snacks franchise operation in the world, with the first commencing manufacturing in Bangladesh earlier this year.

The agreement also marks another milestone in PepsiCo’s longstanding business relationship with the Lotte group, a multinational food and retail conglomerate based in South Korea. Lotte owns over 38.88 percent of Pepsi Philippines, its single-largest shareholder. PepsiCo has worked closely with Lotte in Korea since 1976 and in the Philippines since 2010. The Lotte group is also PepsiCo’s beverage partner in Myanmar.

Pepsi Philippines recently announced that its first quarter 2015 net income hit P192 million, up 41 percent. Pepsi Philippines has 12 manufacturing sites in the Philippines.