PepsiCo signs pact with PAJL

New Delhi: Eyeing rapid growth in the juice segment, PepsiCo India is focussing on strengthening domestic supply of fruit concentrates to cut down imports and eventually become export-competitive.

For the purpose, the company signed an MoU with Punjab Agro Juices (PAJL) last year and has recently started processing kinnows - a variety of citrus fruit resembling oranges, at a 400-mt per day capacity plant set up by the state government in Hoshiarpur. The processed juice is used for the company's Tropicana brand.

'As the market for juices and juice-based drinks is growing over 25 per cent rate, there is a need to build domestic capability. In the first phase, the idea is to become import competitive,' PepsiCo India Export, Agriculture and External Affairs Executive Director Abhiram Seth told PTI.

He said the company currently imports majority of juice concentrates, other than some fruits like Mango and Guava. Procuring and processing fruits and vegetables like oranges, tomatoes, melons and carrots would help in cutting down imports and also make India a sourcing hub for other international markets such as the Middle East and Asia.

'We expect to meet all our domestic requirements of juice concentrates within one year and start exporting not only to PepsiCo but also other players,' Seth said.

Currently, carbonated drinks contribute around 65 per cent to the company's total sales in India, while juices and juice-based drinks along with mineral water account for the rest.

However, Pepsi's non-carbonated portfolio of drinks is growing. For the plant in Hoshiarpur, the company has tied up with local farmers for supplying kinnows and intends to purchase around 8,000 mt of the fruit.

'The project in Hoshiapur is the first initiative and as we become more competitive, more such facilities will come in,' he said.

In 2002, the company had signed a project with Punjab Agri Export Corporation, or PAGREXCO, to initiate a citrus development programme as a part of its efforts to create a local supply base for citrus juice.