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Nov, 19 2014

RJ Corp to look after PepsiCo's bottling business in North

RJ Corp, PepsiCo\'s largest bottler in South Asia, will look to accelerate its growth in the country and bridge the gap with Coca-Cola and holds 56 per cent market share in India.

PepsiCo has divested its entire company-owned bottling operations in North India to its franchisee bottling partner Varun Beverages, a part of RJ Corp, according to a report published by Economic Times.

The brand is doing this in a bid to compete with its rival Coca-Cola in the North Indian market.

"We are expanding our partnership with a strategic partner who understands the local market and has continually demonstrated the ability to drive synergies and deliver strong market execution," D Shivakumar, Chairman and CEO at PepsiCo India told ET.

The deal comprises transfer of four plants and two co-packing units spread across Uttar Pradesh, Haryana, Chandigarh, Uttaranchal, Himachal Pradesh and Punjab with over 900 direct employees.

With this deal, PepsiCo's entire north and east India bottling operations, except Bihar will come under Varun Beverages, owned by Ravi Jaipuria's RJ Corp, making it one of the US major's top franchisee bottlers globally.

"There are huge operational efficiencies, cost savings and supply chain advantages of consolidating operations across the region," Ravi Jaipuria told ET.

RJ Corp, PepsiCo's largest bottler in South Asia, will look to accelerate its growth in the country and bridge the gap with Coca-Cola and holds 56 per cent market share in India.

With this acquisition, Varun Beverages will own 13 PepsiCo bottling plants including those in Delhi-NCR which it acquired last year, UP, Rajasthan, the northeast and Goa. Overall, Varun Beverages owns 19 plants including in overseas markets like Sri Lanka, Mozambique, Zambia and Morocco.

RJ Corp also runs business across restaurant, ice cream, hotels, real estate and education.

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