PepsiCo Opens Green Beverage Plant in China as Part of $1 Billion Investment

June 30, 2009
Purchase, N.Y.-based PepsiCo Inc. has opened what the company says is the first green beverage plant in China to comply with Leadership in Energy and Environmental Design (LEED) standards.

The plant, which is PepsiCo's first overseas green facility, is part of a $1 billion investment that the company is making in China, according to PepsiCo.

The beverage facility, located in the western city of Chongqing, "is important to the company's ongoing strategy to expand in emerging markets and broaden its portfolio of locally relevant products," the company said.

"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."

PepsiCo noted that it 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.

The company 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.

China is PepsiCo's fastest-growing foods market and its largest beverage market outside the United States.

Chongqing Plant Achieves Several Firsts

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 LEED sustainable engineering standards set by the Green Building Council, according to PepsiCo. The plant uses more than 35 water- and energy-saving designs and includes 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," Nooyi said. "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% less water and 23% less energy than the average PepsiCo plant in China, according to the company. 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% 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, according to the company.

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 4 million kilowatt hours compared with the former Chongqing plant, according to the company. 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 was there to learn more about the country by meeting with consumers, employees, customers, business partners and government officials, the company said.

PepsiCo, which employs approximately 198,000 people worldwide, sells its products in approximately 200 countries. Its principal businesses include Frito-Lay snacks, Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices and Quaker foods.

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