PEPSICO ANNOUNCES PLANS TO INVEST $1 BILLION IN SPAIN DURING NEXT 5 YEARS
PEPSICO ANNOUNCES PLANS TO INVEST $1 BILLION
IN SPAIN DURING NEXT 5 YEARS
MADRID, Nov. 6 /PRNewswire/ -- PepsiCo, Inc. (NYSE: PEP) today said it will invest $1 billion over the next five years to rapidly expand its food and beverage operations and aggressively market its products in Spain. The announcement was made here by Wayne Calloway, PepsiCo's chairman and chief executive officer.
Calloway said Spain represents a focal point in the company's push to accelerate its growth in international markets. "We view Spain as one of our most significant investment opportunities in the world," Calloway said. "Given Spain's very solid consumer base and the country's ongoing economic progress, we're making a long-term commitment to this market."
Spain already ranks as PepsiCo's sixth largest market outside the United States -- with 1990 systemwide revenues of more than $500 million -- and Calloway said the company expects systemwide sales here to double over the next five years. In addition to systemwide marketplace spending, Calloway announced a five-year capital investment program that includes: advanced information technology for the company's snack food operations, new state-of-the-art production facilities for its soft drink business and a rapid expansion of its restaurant operations.
Advanced Communications Technology
Calloway said the company's Spanish snack food business, which manufactures and distributes a range of market-leading products under the Matutano and Sonrics brand names, will receive the largest infusion of computer technology in the history of the country's food distribution industry.
The new technology centers on highly sophisticated hand-held computers and an advanced communications network which will feed daily sales data to 60 regional offices, the company's headquarters in Barcelona, its central production facility in Burgos and then to PepsiCo mainframes in Dallas, Texas. The automated system will allow the division and its 1,300-strong sales force -- the largest in Spain -- to almost instantly monitor sales activity at over 200,000 retail accounts throughout the country.
The technology package, which will be designed and implemented by an international team of PepsiCo, Telefonica and IBM experts, includes the use of land-based digital circuits and new two-way satellite links. It is unparalleled in Spain and could have widespread industrial applications within the country and internationally.
The primary benefit of the new system is the speed with which highly detailed sales and marketing information is gathered and analyzed. The data will be applied to the company's planning, purchasing, manufacturing and logistics functions under the project name "IBS" (Integrated Business System).
The new system will combine hardware and technical knowledge supplied by IBM Espaa and Fujitsu Espaa. The advanced communications network will be supplied by Telefonica.
New Bottling Plants
On the soft drink front, Calloway said PepsiCo and its joint venture bottling partners, KAS and Banco Bilbao Vizcaya, recently inaugurated a new and advanced production facility, in the southern city of Seville. He said a similar facility, at Echevarri, Vitoria in the north, will become fully operational next spring.
The two plants, among the most modern and efficient in Europe, will result in a net increase of 50 percent in the joint venture's production capacity, to more than 400 million liters of soft drinks per year.
Each facility incorporates in-plant manufacturing of plastic (PET) bottles and corresponding filling lines. The Seville plant also includes two new production lines which can fill a combined 2,000 glass bottles per minute, and the Vitoria facility will include a new line which can fill 2,000 cans per minute.
Ultimately, 75 percent of the joint venture's annual volume, which is driven by flagship brands Pepsi-Cola, Seven-Up and KAS soft drinks and fruit juices, will be supplied by these two sites. The new facilities are expected to provide both production and distribution efficiencies for the company's bottling operations.
Expansion of Restaurants
Calloway also announced today that Kentucky Fried Chicken Espaa plans to increase its number of restaurants in Spain from the current 20 to over 100 by the year 1996. He said KFC's expansion plans will target high-traffic, high-visibility, urban locations throughout the country.
KFC has already used this strategy to develop 14 units in Madrid and Barcelona combined, including several "flagship" restaurants each with average annual sales over $2 million.
Calloway said Spain is a particularly attractive opportunity for KFC given chicken's enormous popularity with Spanish consumers. According to independent research, chicken constitutes nearly 30 percent of total meat consumption in Spain, the highest share among all European countries.
Calloway also said the company's future plans call for expanding its Pizza Hut operations, now totalling 19 units in Spain.
/CONTACT: Kenneth Ross of PepsiCo, 914-253-2725/
(PEP) CO: PepsiCo Inc. ST: New York IN: FOD SU: JT -- NY002 -- 1518 11/06/91 08:01 EST