Mike Holmes, who took charge of Pepsi Americas Romania operations after the deal by which the world's second leading Pepsi product bottler entirely took over the domestic bottler was finalised, says the Romanian market could be a lesson for the other branches of the US company.
Pepsi Americas, which last year entirely took over QAB, PepsiCo product bottler in Romania and Moldova, has already made its first strategic move to develop its Romanian operations, namely it acquired the plot of land for the new plant in Bucharest.
The construction of the new plant will entail the relocation of production facilities inside the city to the outskirts of Bucharest. Its rival, Coca-Cola HBC Romania, has recently announced the relocation of its production facility in Militari to the plant it owns in Ploiesti.
Holmes explains the company's decision to build a plant in the capital city primarily because it wanted to locate production in the heart of an important retail market, such as the area of Bucharest.
Pepsi Americas plant in Bucharest, to produce carbonated, non-carbonated soft drinks and natural juice, will entail investments the company's chairman puts at $34m. The company has recently bought an 80,000 square metre plot of land for $4m, on which it will start building the plant in mid next year.
Holmes expects Bucharest production capacity to rise by 15-20% after the new plant has opened, with the company to be able to cover demand in the area and close the facility located in Viilor area as a result.
Pepsi Americas currently owns 3 logistic and production facilities in Bucharest, with bottling lines being located in Viilor area, while other two locations are used for warehousing.
"The construction of the plant may last between 12 and 18 months," considers Holmes. He was officially appointed as chairman of Pepsi Americas Romania early this year, but he has been in Romania for almost a year, as a representative of the US company. He is a veteran of PepsiCo system, for which he has worked for over 32 years. Holmes says he has noticed in Romania many similarities with the Polish market, not only in terms of market size, but also with regard to the structure of retail.
"I believe, though, we have many lessons to learn from our experience on the Romanian market (...)," he says.
Upgrading Pepsi production is currently the biggest project of Pepsi Americas domestically. The company's plans for the following period include bringing new packaging for certain product categories or portfolio diversification.
Holmes was the first expat Pepsi Americas brought to Romania, with the CFO of QAB being replaced later on, by the Irishman Eamonn Murphy this March.
"We're not planning to change the team in Romania and this is why I do not believe other expat managers will be brought here," states Holmes.
Pepsi Americas in Romania
Has made its first move to develop its operations in Romania, namely it acquired the plot of land for the new plant of Bucharest
Production facilities located in the centre of the city will be moved to the outskirts of Bucharest
The new plant will produce carbonated and non-carbonated soft drinks, and natural juices and will take investments put at $34m
Production capacity of Bucharest will rise by 15-20% after the new plant is opened
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