Pepsi allots P350 million for Cagayan De Oro plant expansion

MANILA, Philippines - Pepsi-Cola Products Philippines Inc. is putting up a new production line at its Cagayan De Oro plant, estimated to cost P350 million.

In a disclosure to the Philippine Stock Exchange yesterday, Pepsi said the new line is intended to boost capacity and further bolster its position in the local beverage market.

Pepsi earlier said it was ready to spend up to P2 billion for its capital expenditures for its fiscal year ending June 2010, mainly for the expansion of existing lines and launch of new products to keep up with the increasing consumer preference for beverages associated with health and wellness.

The expansion would provide an additional six million cases of non-carbonated and carbonated drinks to Pepsi’s existing 170 million cases a year, which is expected to ensure sufficient growth for the company over the next five years.

Pepsi also plans to further grow its non-carbonated beverage (NCB) line through acquisitions.

The company expanded its NCB product offerings in line with its strategy to make their products available at affordable packaging across the nation.

Pepsi currently holds 18 percent and 25 percent of the carbonated and non-carbonated beverage markets, respectively.

Majority owned by the Guoco Group and US-based PepsiCo. Inc., Pepsi posted a net profit of P799.69 million last year or an increase of five percent from P760.7 million in 2007. Net sales rose 9.6 percent while operating income grew 19 percent to P1.1 billion.