Pioneer Food trading update - The South African business increased turnover by 7.6%, whilst International turnover declined by 10.3%. Picture : Simphiwe Mbokazi 453
Global food and beverage group PepsiCo is confident the multi-billion rands of commitments it made to the Competition Commission through its acquisition of Pioneer Foods, is on track.
This was according to PepsiCo Executive vice-president Chief of Corporate Affairs Roberto Azevedo, who was interviewed yesterday during his visit from the US to the group’s South African operations.
He said PepsiCo Sub-Saharan Africa was now among the top 10 biggest contributors to group revenue, and the intention was to grow this, both in South Africa where the bulk of this revenue derives from, and other African countries, which, he said, for the group, were still relatively “unexplored”.
Globally Pepsico operates in more than 200 countries and territories.
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As part of the public interest commitments made to the government in terms of the acquisition in 2020, PepsiCo would invest at least R5.5bn in addition to the $1.7 billion (R28.9bn) purchase price, to achieve a sustainable business locally and an export centre to the rest of Africa.
These investments include modernising and increasing production capabilities, adding routes and distribution capabilities, as well as investments in social initiatives.
The R600 million Kgodiso Development Fund would support broader socio-economic imperatives of education, SMMEs, emerging farmers and enterprise development over five years
Pioneer Foods operates 42 food and beverage plants in South Africa, 70 distribution centres and employs some 12 500 people. Key South African brands include Sasko, Weet-Bix, White Star and LiquiFruit.
Part of the programme also consists of a R1.66bn PepsiCo employee share ownership scheme, which launched in November 2021.
PepsiCo first entered South Africa in 1997 with an investment into Simba. The Pioneer Foods acquisition is one of the largest deals made by PepsiCo outside of the US, and its local food operations represent one of the most diverse in the group.
He said globally, PepsiCo was performing well and growing or at least maintaining market shares, while continuing to improve efficiencies, as simply passing on cost input increases to consumers was unsustainable over the long term.
He said he was impressed with the technology at the plants he had visited, particularly some of the renewable energy initiatives such as using feedstock to produce energy and then reusing it as fertiliser.
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