PepsiCo Indonesia will commence the production of snacks at its new factory in Cikarang, West Java, in the 1st quarter of 2025.
This was part of its earlier investment commitment of US$200 million over a 10-year period in the country and the new factory will manufacture its flagship snacks like Lays, Cheetos and Doritos for the domestic market, with eventual plans to export to neighbouring ASEAN countries.
The new factory also marks its re-entry into Indonesian snack market after it ceased its operation in 2021 following the end of a 30-year joint venture between PepsiCo and domestic food giant PT Indofood CBP Sukses Makmur.
The firm also discontinued its carbonated drinks after its contract expiry with PT Anugerah Indofood Barokah Makmur (AIBM), the entity holding the license for Pepsi’s production, sale and distribution in Indonesia.
PepsiCo sold its minority stake in the venture to Indofood, and the venture stopped local production of Lays, Cheetos and Doritos. The snacks, however continue to be available via parallel importers but at a steep price exceeding Rp 100,000 (US$6.30) per pack, far beyond the affordability of average Indonesian consumer.
According to Gabrielle Angriani Johny, Director of Government Affairs and Corporate Communications at PepsiCo Indonesia, “The new factory is expected to reduce prices and meet local demand.” PepsiCo also plans to localise its supply chain in the future although currently it will rely on imported potatoes and corn sourced from neighbouring Australia.
PepsiCo strategy in Indonesia aligns well with Indonesian government goal to strengthen downstream activities in the food and beverage industry, thereby creating a multiplier effect for economic growth.
