Pepsi Starts Building $170 Mln Frito Lay Plant in Rostov Region

MOSCOW. Oct 15 (Interfax) – Pepsi International has announced that construction of a Frito Lay production plant in Azov, in the Rostov region, is now underway.

The new plant will be constructed over a period of six months on a total territory of 150,000 square meters for a total cost of just over $170 million. The plant will start production of snack items under the Lay’s and Cheetos brands in 2009. The plant will have a range of more than 80 products. The plant will provide 350 new jobs upon opening and expand its workforce three-fold by 2011.

This will be PepsiCo’s second plant for snack production in Russia. The first plant was built in 2002 in Kashira in the Moscow region for production of potato and corn chips under the Frito Lay brand. Investment in the plant came to $52 million.

The Russian snack market came to 353,300 tonnes in 2007, of which potato chips accounted for 127,700 tonnes, the Euromonitor research agency said. The market is expected to grow to 3,400 tonnes in 2007, with potato chip production to rise to 135,500 tonnes. In terms of sales, the snacks market will grow 15.6% in 2007 to $2.138 billion from $1.849 billion in 2006, while the potato chip market will increase 16% to $865.6 million from $746.6 million.

The construction of a plant in the Rostov region would be the company’s second project in Russia this year. PepsiCo launched construction in the spring on a water bottling factory in Domodedovo in the Moscow region with an annual productive capacity of 2 billion liters.

PepsiCo is one of the world’s leading food and beverage companies. The company’s sales revenue for 2006 came to more than $35 billion.

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