INDONESIA – US food and beverage giant PepsiCo has announced a substantial investment of US$200 million to build a new snack factory in Indonesia, a move that marks the company’s return to the country after a two-year absence.
The factory, located in the West Java town of Cikarang West Java, is currently under construction and is expected to become operational by 2025.
Just Food reports that the snack major’s decision to return was also smoothed by investment incentives provided by the Indonesian government.
Speaking during the groundbreaking ceremony, PepsiCo Indonesia CEO Asif Mobin said that the factory is set to generate a significant number of employment opportunities for Indonesians adding that the factory encompasses an area of 60,000 square meters.
He revealed that the primary focus of the new facility will be the production of snacks to meet the demands in halal-food markets in Indonesia and beyond.
This venture marks just the beginning of our direct investment in Indonesia. We anticipate the manufacturing of other products on this site in the future,” Asif said.
The US company said its new facility “underscores a broader vision: prioritizing local talent, harnessing local raw materials, and strengthening the domestic value chain”.
It added: “With its rapidly expanding economy, dynamic demographic profile, and evolving consumer needs, Indonesia presents unparalleled opportunities, particularly in the F&B sector.
Building the new factory without a local partner, PepsiCo has pledged to source most raw materials for its snacks, including corn and palm oil, from sustainable sources and to use renewable power sources.
The snack giant quit its snacks joint venture in Indonesia in early 2021, selling the minority stake to local partner PT Indofood CBP Sukses Makmur. PepsiCo did not provide a reason for its exit from the venture.
The partnership had produced the snack brands Lay’s, Cheetos, and Doritos for the local market but under the terms of the sale agreement with its JV partner, PepsiCo and its affiliates agreed not to manufacture, package, sell, market, or distribute any competing snack food products in Indonesia for three years
PepsiCo CEO Asif Mobin said: “In Indonesia, our expansion signifies more than growth – it represents our commitment to the country, its sustainability objectives, and the communities we serve.”