PepsiCo Inc. (NYSE:PEP) chairman and CEO Indra Nooyi is in Russia this week with U.S. President Obama -- and other corporate execs -- to
increase business ties between the nations. The relationship could be significantly increased if companies feel there is stability in Russia, which has a rep for heavy bureaucracy and corruption. Russian trade with the U.S. was just $36 billion in 2008, the same amount as with Poland, Reuters
notes.
Pepsi first entered the Russian market 50 years ago and opened a bottling plant there in 1974. As part of this week's visit, Nooyi is opening a bottling plant outside Moscow and says Purchase, N.Y.-based Pepsi plans to open a snacks manufacturing plant later this year in the southern city of Azov and will invest $1 billion in Russia over the next three years. PepsiCo made the announcement with Pepsi Bottling Group Inc. (NYSE:PBG), which it tried to acquire earlier the year. The latest
investment announcement will bring PepsiCo's and PBG's cumulative investment in Russia to over $4 billion.
In addition to building a warehousing and distribution infrastructure for the Lebedyansky juice business -- which PepsiCo and PBG spent about $2 billion to acquire last year -- Pepsi happens to be the largest private user of potatoes (used for chips) grown in Russia and plans to continue investment in local agriculture.
Other strategics planning investments that sent execs with Obama include agricultural and construction equipment manufacturer Deere & Co. (NYSE:DE) and aircraft maker Boeing Co. (NYSE:BA). -
Baz HiralalSee Pepsi's announcement
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