Russian Economy in Billion Dollar Boost
Posted by Neil Payne on July 6th, 2009MOSCOW, July 6 (Reuters) – PepsiCo Inc pledged on Monday to invest $1 billion in Russia over three years and said it was confident in the Russian market, even as the country suffers its first recession in a decade.
“This investment reflects very clearly our great confidence in Russia and our long-term commitment to this very important market,” PepsiCo Chairman and Chief Executive Officer Indra Nooyi said in a statement.
Russia, along with China and India, is critical for PepsiCo, which is looking to boost profits as recession and changing consumer habits limit sales growth in the United States.
Even as the crisis takes its toll on consumer spending in Russia, the market is still growing and has a potential to grow over years to come, industry players say.
“Today we are optimistic about the future of Russia, and we look forward to continuing to build our businesses here,” Nooyi said.
Half a century after Soviet leader Nikita Khruschev first tried the iconic American brand during the American National Exhibition in Moscow, PepsiCo and its largest bottler, The Pepsi Bottling Group Inc, are opening their eighth Russian factory, which cost $180 million to build.
The new plant opening, scheduled for July 8, will coincide with a summit meeting between U.S. President Barack Obama and Russian President Dmitry Medvedev, aimed at restoring confidence between the two biggest nuclear powers, damaged under previous administrations.
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