Pepsi: The 150m-dollar factory targets only the Romanian market

With the inauguration of the Pepsi factory in Dragomiresti commune (Ilfov county) on Tuesday, American Mike Holmes, 55, a veteran within Pepsi, has completed the most important project in his 30-year career with the American giant.

Holmes persuaded Pepsi shareholders last autumn to go ahead with the 150 million-dollar investment in the Romanian factory, which will become the group’s largest factory in Europe in 2011, and, more importantly, the largest greenfield project on the Romanian consumer goods market.

Moreover, the Pepsi factory has been designed only to cover local demand and not for export, as is the case of the latest greenfield projects carried out in Romania.

“A challenging time for the project was in September last year, when the first signs of the crisis showed in consumption. Then I called Jacek Petryka (vice-president for Central and Eastern European operations of Pepsi Americas) and we both spoke in favour of going ahead with the project before the American managing board. It took us five minutes to secure their approval,” says Mike Holmes, president of Pepsi Americas Romania.

The first construction stage of the Pepsi factory in Dragomiresti was completed on Tuesday, following 85 million euros in investments. This is one of the few projects of the past year to go ahead as initially planned, despite the crisis.

Another American company, Procter & Gamble, is building a similarly-sized greenfield – the shampoo factory in Urlati (Prahova county), but it targets the entire Central and Eastern European area, with the production facility to be 80% dedicated to external markets, when completed.

The soft drinks market has proven to be one of the growth drivers of the FMCG sector over the last 4-5 years, recording a 20-30% growth rate, higher than that of personal care products, estimated at 10-15%. However, 2009 put an end to the series of fast-paced consumption rises, which prompted companies to revise their investment strategies.