PepsiCo (PEP) Plans To Invest $5.5 Billion In India By 2020, Expansion in Rural Areas Seen As Key

PepsiCo, Inc. (NYSE:PEP) will spend about $5.5 billion between now and 2020 to expand its operations in India as part of a larger effort to bolster sales in emerging markets, the company announced.

The expansion coincides with an economic slowdown in India, where output growth has slowed to its lowest level in a decade, spooking some investors, the Wall Street Journal reports.

PepsiCo Chairman and Chief Executive Indra Nooyi on Monday called the investment a “vote of confidence in India’s future.”

The announcement follows a similar claim by The Coca-Cola Company (NYSE:KO), PepsiCo's top rival, which said last year that it would invest $5 billion in India by 2020.

PepsiCo will double its manufacturing capacity and improve its distribution network in rural areas while developing products geared toward Indian tastes. While the Purchase, N.Y.-based company doesn’t publicize sales and earnings by country, it said that eight of its big brands in India generate annual sales of more than $1.26 billion.

PepsiCo has been operating in India since 1989. Pepsi is currently beating Coke for market share in the emerging market, garnering 15 percent of the market to Coke’s 8.8 percent.