Pepsi pledges $1 bln for Russia, to open plant

MOSCOW, July 6 (Reuters) - PepsiCo Inc (PEP.N) pledged on Monday to invest $1 billion in Russia over three years and said it was confident in the Russian market, even as the country suffers its first recession in a decade.

"This investment reflects very clearly our great confidence in Russia and our long-term commitment to this very important market," PepsiCo Chairman and Chief Executive Officer Indra Nooyi said in a statement.

Russia, along with China and India, is critical for PepsiCo, which is looking to boost profits as recession and changing consumer habits limit sales growth in the United States.

Even as the crisis takes its toll on consumer spending in Russia, the market is still growing and has a potential to grow over years to come, industry players say.

"Today we are optimistic about the future of Russia, and we look forward to continuing to build our businesses here," Nooyi said.

Half a century after Soviet leader Nikita Khruschev first tried the iconic American brand during the American National Exhibition in Moscow, PepsiCo and its largest bottler, The Pepsi Bottling Group Inc (PBG.N), are opening their eighth Russian factory, which cost $180 million to build.

The new plant opening, scheduled for July 8, will coincide with a summit meeting between U.S. President Barack Obama and Russian President Dmitry Medvedev, aimed at restoring confidence between the two biggest nuclear powers, damaged under previous administrations.

With annual capacity reaching 2.1 billion litres per year by 2016, the plant will become PepsiCo's largest, yet another sign of the importance of the Russian market to the U.S. company.

PepsiCo, the world's No. 2 maker of soft drinks after Coca-Cola Co (KO.N), already operates seven plants in Russia and has invested roughly $3 billion in the market over the past decade, including a $1.4 billion acquisition of the country's leading juice producer, Lebedyansky, in 2008.

The company opened its first Pepsi-Cola bottling plant in Russia in 1974, making it the first Western-branded consumer product to be made here, 15 years after the historic American National Exhibition in Moscow introduced the carbonated drink to the Russian customer. (Reporting by Maria Kiselyova; editing by Simon Jessop)