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PepsiCo Returns To Indonesia, Breaks Ground For Snack Factory

By Donna Ahern
PepsiCo Returns To Indonesia, Breaks Ground For Snack Factory

PepsiCo began building a snack factory in Indonesia's West Java on Wednesday, marking its return to Southeast Asia's largest economy after splitting with a local partner two years ago.

The factory, part of PepsiCo's $200 million (€183.9 million) commitment to invest in Indonesia over a 10-year period, is expected to start producing snacks by 2025.

30-Year Joint Venture 

PepsiCo's affiliate Fritolay Netherlands Holding B.V. and Indofood, a unit of Indonesia's largest food company Indofood Group, ended a 30-year joint venture in 2021 without providing any reason, when Indofood bought PepsiCo's minority stake.

The JV at the time had manufactured a range of snacks under brands like Lay's, Cheetos and Doritos.


Building the new factory without a local partner, PepsiCo pledged to source most raw materials for its snacks, including corn and palm oil, from sustainable sources and to use renewable power sources.

Annual Revenue Raised 

In July, the US food and beverage maker raised its annual revenue and profit forecasts for the second time, banking on resilient demand for its snacks and beverages as well as price hikes.

On the 25 April, the company announced that it had raised its annual sales and profit forecasts after beating first-quarter revenue estimates on the back of steady demand for its products, as well as price hikes undertaken to offset rising costs.

Shares rose 2% in pre-market trading after the company also beat second-quarter results.


Packaged food companies, including PepsiCo, have hiked prices to counter a jump in costs of everything from commodities such as sugar to transportation costs caused by supply chain snags and the Russia-Ukraine war.

Read More: PepsiCo Returns To Indonesia, Breaks Ground For Snack Factory

News by Reuters, edited by Donna Ahern, Checkout. For more A-brand news, click here. Click subscribe to sign up for the Checkout print edition.

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