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PepsiCo, one of the world's largest food and beverage companies, opened its first overseas "green" plant in China June 26 in the western city of Chongqing as it reiterated plans to invest $1 billion in the country. The state-of-the-art beverage facility is important to the company's ongoing strategy to expand in emerging markets and broaden its portfolio of locally relevant products.
PepsiCo plans to fund a variety of major capital programs to grow its manufacturing capacity in China, particularly in interior and western areas. Over the next two years, the company expects to open five new beverage manufacturing plants – in Kunming, Zhengzhou, Quanzhou, Lanzhou and Nanchang. It also plans to invest to strengthen its local research and development capabilities and broaden its portfolio of Chinese-designed and developed products such as Tropicana Guo Bin Fen juices, Lay's Lychee potato chips and Cao Ben Le drinks, which are inspired by traditional Chinese medicine.
"Despite the current uncertainty in many parts of the world, we have no doubt that China will remain a powerful engine of global economic expansion," said Indra Nooyi, PepsiCo chairman and chief executive officer. "This is the largest, most ambitious development effort we've undertaken in our more than 25 years of doing business here."
The Chongqing plant is the first "green" beverage plant ever built in China – and the first plant of any kind in the industrial center of Chongqing – to comply with the rigorous sustainable engineering standards known as Leadership in Energy and Environmental Design (LEED), set by the Green Building Council. The plant uses over 35 water and energy saving designs and utilizes the world's most advanced technology, including an environmental management system that monitors water and energy use on every production line and every piece of individual equipment in real time.
"This plant reflects our deep and long-term commitment to China," said Nooyi. "It is also an important milestone in our green journey, on which we are partnering with the Chinese government, industry and others to continue to promote the health and longevity of our planet."
The facility is designed to use 22 percent less water and 23 percent less energy than the average PepsiCo plant in China. To save water, the plant utilizes a high-pressure cleaning system, water-free conveyor belt lubricant and water-saving fixtures. Plant associates re-use water for landscaping and general cleaning instead of using potable water. To save energy, 75 percent of the plant's indoor areas feature natural lighting, including a skylight in the packing area and warehouse. A roof garden insulates the office building and saves energy for cooling and heating.
The new plant is expected to help PepsiCo annually reduce greenhouse gas emissions by 3,100 tons; water usage by 100,000 tons; and overall energy use by four million kilowatt hours compared to the former Chongqing plant. It also will serve as an educational center to raise awareness of good environmental practices among students in the local community.
The announcement was made during a 10-day visit to China by Nooyi, who is investing the time to learn more about the country by meeting with consumers, employees, customers, business partners and government officials. China is PepsiCo's fastest-growing foods market and its largest beverage market outside the U.S.