US$30million Pepsi Plant opens in Harare



Reported by Peter Banda in Harare

22 May 2018 – Harare, Zimbabwe – Project Management Zimbabwe (PMZ) has announced the completion of a major international project in Zimbabwe. International beverage manufacturing giant Pepsi Corporation is set to give stiff competition to rival market leader Cocacola in Southern Africa after opening a new US$30milion bottling plant in Harare.

Pepsi brands landed on the local market at 30% to 50% cheaper than Cocacola brands, a development that will certainly see competition in the sparkling beverages segment  growing.  Cocacola beverages are manufactured and sold in Zimbabwe by a local bottling company, Delta Beverages. Varun Beverages, an Indian soft drinks manufacturer controls the new Pepsi operations franchise in Zimbabwe and is expected to create over 2000 jobs directly and indirectly locally.

Pepsi is selling its two-litre, 500ml and 330ml beverages for $1,65, 65c and 50c respectively; while Delta is trading similar beverages at $2,15, 95c and 50c respectively, and the 330ml price is promotional at the moment.

Zimbabwe has a population of close to 14 million people and Delta Beverages has a market share of about 70%. Demand for Delta’s products is, however, expected to remain firm supported by a favourable outturn in the mining and agricultural sectors. Given a stable political and economic environment Pepsi is expected to grab and control 20% share by the end of the year.

Zimbabwe is expected to hold general elections this year in July to choose new political leadership. A one-off surge in demand may arise from election spending through various political party campaigns. An improvement in tourism arising from significant infrastructure upgrades in airports coupled with the opening up of the skies to new airlines is expected to improve beverage spending in city and resort hotels where beverage companies will benefit.

Delta is Zimbabwe’s largest manufacturer and distributor of lager beer, traditional sorghum beer and soft drinks. Pepsi has other bottling plants in neighbouring countries Zambia and Botswana which have been feeding the Zimbabwe market in recent years.

Delta is still trading under a cautionary with regard to The Coca Cola Company and potential termination of the bottler agreement with the company. Management indicated that negotiations are still in progress and finer details are too sensitive to disclose at this point in time. They did indicate that The Coca Cola Company is unlikely to terminate the agreement and if it does, a favourable franchise agreement would be brokered. Ironically Cocacola announced in a statement in mid May 2018 that they will be investing US$65million into Zimbabwe operations this year only.

Project Management Zimbabwe (PMZ – Project Management Institute of Zimbabwe) is Zimbabwe’s largest Association of Project Managers, with a membership base of over 1000. The institute has a mandate of policing the elevation of project management standards nationally through mentorship and membership services programmes.  For information, visit www.pmiz.org.zw or email: [email protected].

Source:  Project Management Zimbabwe