PepsiCo to increase investment in Chinese farms: Media

BEIJING: PepsiCo Inc, the world's second-largest food and beverage company, is set to expand its farming operations in China, Chief Executive Indra Nooyi said in comments published on Friday.

The news follows Nooyi's announcement last year that PepsiCo would invest $2.5 billion in China over three years, the China Daily newspaper reported.

Nooyi was in Beijing on Thursday to meet with Chinese vice Premier Wang Qishan, who expressed appreciation for the company's increasing investment in China, the state-run news service Xinhua reported.

Nooyi left for India on Friday, according to a public relations representative for PepsiCo who had not been briefed on details of Nooyi's visit.

PepsiCo already has seven farms in China, near the company's factories in Inner Mongolia, Hebei, Hubei, Guangdong and Guangxi, according to the China Daily.

The farms are maintained on a contract basis with independent farmers, with PepsiCo providing the funding and equipment, the paper said.

In addition to drink brands, PepsiCo's portfolio includes Quaker Oats, Lay's and other labels.

PepsiCo's archrival, Coca-Cola Co, is also planning expansion in China to the tune of $2 billion, and last October opened three new plants in Inner Mongolia, Henan and Guangdong.

China's soft drinks industry is expanding at a compounded annual growth rate of 12.8 percent, according to 2010 data from Euromonitor International.

Copyright Reuters, 2011