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Pepsi brings chips plant

Calcutta, July 9: Frito-Lay India, PepsiCo India’s profit-making snack foods arm, is set to enter West Bengal.

Managing-director Manu Anand came to Calcutta on Tuesday to identify a place where his company can set up a manufacturing unit which will cost Rs 80 crore.

Sources said officials of the West Bengal Industrial Development Corporation (WBIDC) had shown him a site at Dankuni, about 18 km from the heart of Calcutta, near Coca-Cola’s bottling plant. Anand had stressed that the place should have a good supply of water, which is needed in huge quantities in manufacturing of potato chips.

Later he held discussions about the project with WBIDC managing-director Gopal Krishna and other officials of the corporation.

The state government had been negotiating with PepsiCo India for quite some time now for this project, which is expected to receive clearances in a month and a half.

The sources said easy availability of potato in Bengal has attracted Frito-Lay to invest in the state. The state produces about 65 lakh tonnes of quality potato.

At present, the major chunk of Frito-Lay’s snacks is manufactured in its factories at Channo in Punjab and Ranjangaon in Pune with a combined annual capacity of 17,000 tonnes. About 10 per cent of its products are outsourced from the Rs 50-crore Bikanervala Foods.

The company has also talked about contract farming for potato. PepsiCo India had pioneered contract farming in Punjab, under which it provides nurseries of appropriate varieties and farming technology to the farmers with a commitment to buy back specified quantities at specified prices.

The state government has been able to woo Frito-Lay because of McKinsey’s presentation. The state government had given a mandate to the global consultant to bring in potential investors to the state — mainly in the agro-processing and information technology sectors.

Frito-Lay India, which has been consistently making profits in the snack foods business for PepsiCo India, manufactures leading snack brands like Lays Potato chips, Lehar Namkeen, Nutyumz, Kurkure and Cheetos fun snacks in India. Though Frito-Lay India does not give out turnover figures, industry sources peg it at Rs 250 crore.

Its parent company, the $14-billion Frito-Lay International, is the world’s largest snack food company and is part of the $27-billion PepsiCo Group.

Frito-Lay India is the largest player in the Indian salty snack market with a share (value) of above 40 per cent.

Lays potato chips are the flagship brand of Frito-Lay India. Introduced 10 years ago as Ruffles Lays, the brand has had consistent growth thereafter. Last year it has grown by 48 per cent.

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