SINGAPORE: PepsiCo on Thursday (Apr 27) opened a US$93 million (S$130 million) concentrate plant in Singapore, which will manufacture and supply beverage concentrates for more than 1 billion consumers in 20 Asia-Pacific markets.
The new 20,000-sqm facility, which is PepsiCo’s 12th concentrate plant worldwide, will be its first plant to serve a pan-Asia market. The company’s three other concentrate plants in Asia, located in Pakistan, India and China, manufacture solely for domestic markets.
It is also the beverage giant’s first concentrate plant in Singapore. Located at Sunview Way in Jurong, the new facility will produce hundreds of beverage concentrates for brands such as Pepsi, 7UP, Mountain Dew, as well as the company’s non-carbonated brands including Gatorade and Tropicana.
Prior to the setup of the Singapore plant, beverage concentrates used by PepsiCo’s bottling companies in Asia were imported from Ireland, according to the firm’s Asia-Pacific president Adel Garas. The new facility in Singapore, which took 18 months to construct, will be a boon for cost savings and logistics efficiencies.
An employee preparing beverage concentrates at the PepsiCo plant in Singapore. (Photo: PepsiCo)
“For our bottling partners, (the time between) the day they place their orders to the day they receive their orders has been shortened significantly … Singapore is a very strategic location,” Mr Garas told Channel NewsAsia.
Other factors for locating the plant in Singapore included the country’s pro-business environment and a skilled talent pool, an essential consideration for concentrate production, Mr Garas said.
The plant is now fully staffed by 90 employees, including scientists, engineers, supply chain specialists and flavour sensory technicians. PepsiCo also employs another 120 people in Singapore handling other aspects of the business, including sales and marketing.
On whether the company will ramp up hiring here, Mr Garas declined to reveal specific plans. “PepsiCo always looks at growing and strengthening our market position by investing in capability and infrastructure. We will grow this plant … And when you grow, you increase jobs but when and how many, I cannot speculate.”
With an impending hike in water prices come July in Singapore, Mr Garas said PepsiCo is unfazed by the possibility of higher production costs with the new plant incorporating several green design elements and certified as a Green Mark building by the Building and Construction Authority.
“One important point to make is this plant has all the technologies that will support environment sustainability so water and electricity utilisation is rationalised,” he told Channel NewsAsia. “It’s a very technologically efficient plant and (the water price hike) should not be of great concern.”
Minister for Trade and Industry (Industy) S Iswaran, who officiated the opening of the plant, said Singapore is well-positioned to capture opportunities in a fast-growing food manufacturing industry in Asia Pacific.
Minister for Trade and Industry (Industry) S Iswaran officiated the opening of the PepsiCo concentrate plant in Singapore. (Photo: Rachel Phua)
On the back of the launch of the food manufacturing sector’s Industry Tranformation Map (ITM) last year, the Government will continue to partner the industry to anchor high value-added manufacturing, adopt advanced manufacturing technologies and equip workers with necessary skill sets, Mr Iswaran said.
KEEPING THE FIZZ WITH HEALTHIER BRANDS
Mr Garas said PepsiCo’s products are doing well across Asia, with the Philippines, Thailand, Vietnam and Australia among its best-performing markets.
In a bid to cater to changing consumer demands in the region, the company has widened its portfolio to include non-carbonated and low-calorie beverages such as sports drinks and bottled water.
During its earnings announcement on Wednesday, PepsiCo said more than 45 per cent of its net revenue comes from sales of “guilt-free” products – beverages that have fewer than 70 calories per 12 ounces and snacks that have lower amounts of salt and saturated fat.
As consumers crave for healthier options, PepsiCo will continue its drive into diversification and Singapore’s plant will play a big role in this portfolio transformation, Mr Garas said.
PepsiCo’s president of Asia Pacific Adel Garas. (Photo: Tang See Kit)
“Eighteen years ago, there was not as much talk about calorie intake as we are seeing today,” he said, referring to the time he first joined PepsiCo as a sales director in Egypt.
“The company is evolving … PepsiCo’s goal is to have at least two-thirds of the company’s global beverage portfolio volume to be at a level of 100 calories or fewer from added sugars per 12-ounce serving by 2025. Products meeting these guidelines include low or no-sugar versions of the company’s existing beverages, and new innovations in hydration and teas, for example, that are coming in the future,” he added.
Additional reporting by Rachel Phua.
