DAVOS Jan 24 Pepsico and Nestle
on Friday announced major investments worth a combined
$6 billion in Mexico, where the government has just pushed
through a series of economic reforms that aim to boost foreign
investment and growth.
Separately, Mexican state-run company Pemex will sign a
cooperation memorandum with Russia's No.2 oil producer Lukoil
on Friday, Pemex chief executive Emilio Lozoya told
Reuters as the country is opening up its energy sector in a move
to boost production.
Pepsico said it would spend $5 billion in Mexico over five
years to strengthen its food and beverage business, adding it
planned to expand its production capacity by adding new
manufacturing lines and expand delivery routes.
The company said the investment was expected to create 4,000
The Pepsico investment comes despite a new levy on soft
drinks and junk foods included in President Enrique Pena Nieto's
economic reform drive, which spans telecoms to energy and taxes.
Nestle said it planned to invest $1 billion in Mexico over
five years, building two new factories and expanding a third in
its sixth-biggest market.
The world's No. 1 food maker said it would build an infant
nutrition factory in Jalisco and a pet-food factory in
Guanajuato, as well as expanding an existing cereal factory.
The investment would create 700 direct jobs, Nestle said.
The Mexican factories will produce goods for the wider
region. For example, about 40 percent of the output from the
baby food factory will be exported to Latin America and the
Pena Nieto said at Davos on Thursday that foreign direct
investment (FDI) in Mexico totaled $28 billion during the first
9 months of last year.
FDI was boosted last year by the Belgian-based beer giant
Anheuser-Busch InBev's acquisition of Grupo Modelo
, which went through at the end of May and brought
in about $13 billion.
The planned cooperation between Lukoil and Pemex comes after
Pena Nieto last month signed a bill into law that ended the
country's 75-year-old oil and gas monopoly.
Under the legislation, which is still being mapped out,
foreign companies will be able to enter the sector as Pemex is
seeking to bring in expertise and boost efficiency.
"There are dozens of new players who now come and look at
the opportunities that are opening up in Mexico," Pemex CEO
As a private company, Lukoil is struggling to get large new
deposits in Russia, including offshore, and is actively pursuing
a foreign expansion to maintain its production levels.