Corporate News

By Claire-Ann M. C. Feliciano, Reporter

Pepsi to spend less this year

Posted on January 22, 2014

BEVERAGE MAKER Pepsi-Cola Products Philippines, Inc. (PCPPI) plans to invest about P3.5 billion this year mainly to expand its distribution network and manufacturing capacity, the firm’s top official told reporters over lunch in Makati City yesterday.

PEPSI-COLA Products Philippines, Inc. President Partho Chakrabarti gets a drink from a kiosk in Makati City in this photo yesterday. -- Jonathan L. Cellona
“Every year, we spend P3-4 billion; and for this year, around P3.5 billion,” PCPPI President Partho Chakrabarti said when asked on the company’s investment plan this year.

This year’s investment -- which will be less than last year -- will be used to “grow the manufacturing capacity and expand distribution network.”

Mr. Chakrabarti said the company approved about P4 billion for its investments last year which was used mainly for expansion.

“More than 60% of the P4 billion was for expansion and the remaining was regular distribution and other things,” the official said.

“We also invested in our 12th manufacturing site in Sto. Tomas [in Batangas]. We also expanded our facilities in Muntinlupa, Cebu and Davao -- so that was where we largely spent the money.”

The company’s 11 manufacturing facilities are located in Bacolod City, Cagayan de Oro City, Cebu, Davao City, Iloilo, La Union, Leyte, Muntinlupa City, Naga City, Pampanga and Zamboanga City.

Mr. Chakrabarti said PCPPI -- which saw its net income jump 12.04% to P780.747 million in the nine months ending September last year versus P696.836 million in the same period in 2012 -- expects profit growth to have been sustained till end-2013.

“Generally, we had done very well last year,” Mr. Chakrabarti said.

“But I believe 2014 will also be a good year. We will have good economic growth and the beverage industry is expected to grow in line with the economy and we hope to do better than 2013.”

PCPPI yesterday also announced that it has teamed up with electric tricycle (e-trike) manufacturer EMotors, Inc. to make its distribution business more efficient. Specifically, EMotor swill supply e-trikes which PCPPI will used for distribution of beverage products.

Elizabeth H. Lee, EMotors president and chief executive officer, said that with the partnership PCPPI “will be expanding its distribution coverage to more clients at a faster turnover rate.”

“Costs are also going to be significantly reduced and we will bring clean, green and zero-emission vehicles through PCPPI’s extensive network nationwide,” Ms. Lee said.

PCPPI plans to kick-start this project with a pilot test using three e-trikes in Metro Manila, according to another official.

“We got three units. We’re piloting that in the southern part of Metro Manila. By next week, we are going to test their efficiency and reliability,” said Alvin Augusto M. Valencia, PCPPI assistant vice-president and general manager for Metro Sales Operations.

“We’re trying out the three units and we’ll see what will happen from there.”

PCPPI, incorporated in 1989, and is engaged in the manufacture, sale and distribution of carbonated soft drinks and non-carbonated beverage to retail and wholesale businesses, including restaurants and bars.

It is co-owned by United States-based beverage giant PepsiCo, Inc. via Quaker Global Investments B.V. and Lotte Chilsung Beverage Co. Ltd., one of South Korea’s biggest beverage firms.

PepsiCo established presence in the country via businessman John Clarkin, who founded Pepsi-Cola Bottling Co. of the Philippine Islands Ltd. in 1946, importing beverages from the US for a year before the opening of the first Pepsi bottling plant in Quezon City, according to PCPPI’s Web site.

PCPPI’s product line includes carbonated beverages such as its flagship cola, Pepsi, and its diet version, Pepsi Max; citrus-flavored Mountain Dew; lemon-lime 7-Up; and orange-flavored Mirinda.

The company also produces non-carbonated beverages such as Tropicana Coco Quench coconut water, Tropicana Twister orange juice, Gatorade sports drink, Gatorade Propel vitamin water, Sting energy drink, Mug root beer, Lipton iced tea, and Premier pure distilled water.

PCPPI had also forayed into the powdered juice segment with Mirinda Powder Fun Mix, an orange-flavored powdered juice mix drink.

Shares of PCPPI gained three centavos or 0.67% to close at P4.52 apiece on yesterday from P4.49 each on Monday.