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PepsiCo Returns To Indonesia, Breaks Ground For Snack Factory

By Reuters
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PepsiCo Returns To Indonesia, Breaks Ground For Snack Factory

PepsiCo has commenced construction of a snack factory in Indonesia's West Java, 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 (€183.9 million) commitment to invest in Indonesia over a 10-year period, is expected to start producing snacks by 2025.

End Of Joint Venture

PepsiCo's affiliate Fritolay Netherlands Holding B.V. and Indofood, 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 joint venture 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.

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Second-Quarter Performance

In July, PepsiCo raised its full-year guidance on the back of 'strong' business momentum in the second quarter of its financial year.

The company expects its full-year organic revenue to increase 10% (previously 8%) and its core constant currency EPS to increase 12% (previously 9%), it said in a statement.

“Our strong performance and the progress we are making on our strategic priorities give us confidence that the investments we are making to become an even Faster, even Stronger, and even Better organisation by Winning with pep+ are working," chief executive Ramon Laguarta commented at the time.

"Moving forward, we will look to elevate our focus on productivity initiatives to further support investments in innovation, brand building, digitalisation, and sustainability to win in the marketplace and fortify our businesses for the long-term.”

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