PepsiCo banks on sustainable development

By Ding Qingfen (China Daily)
Updated: 2010-04-19 13:09
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BEIJING: Even before calls for energy saving turn a notch louder in China, global food and beverage producer PepsiCo is already leading the way with a green, socially responsible approach in its business operation.

PepsiCo banks on sustainable development

Ken Newell, president of PepsiCo China Beverages, said the Chongqing green plant is a good example of its clean production practices. [Provided To China Daily]

From its Mother Water Cellar project (an initiative to provide access to water to residents in dry areas of rural China) to Baotou potato plantation (where farmers are taught how to grow high-value crop), PepsiCo has undoubtedly set an example on how a multinational commits itself to the Chinese market by improving the lives of the local communities.

Last year when the Chinese government pledged to reduce the intensity of carbon dioxide emissions per unit of GDP in 2020 by 40 to 45 percent from the 2005 level, PepsiCo also crafted an innovative plan to keep in line with the nation's blueprint.

As part of the plan, PepsiCo established a green bottling plant in Chongqing municipality, its first such endeavor outside the United States.

The iconic Chongqing bottling plant will be used as a green model for new plants planned by PepsiCo in China, said Ken Newell, president of PepsiCo China Beverages, during a recent visit to the southwestern city.

More plants

PepsiCo has 22 plants in China. In November 2008, Chairman and CEO of PepsiCo Indra Nooyi announced a further investment of $1 billion in the Chinese market, which will be used to add "another 14 plants" in the future.

Two green plants located in western China - Kunming of Yunnan province and Lanzhou of Gansu province - will become operational around the end of year.

Coming on-stream in June 2009, the Chongqing green plant is equipped with sustainable technologies to conserve and save a large volume of water and power.

It features 35 sustainable designs and more than 200 real-time water and energy usage tracking and control points, which "use 22 percent less water and 23 percent less energy than the average PepsiCo plant in China, and reduces 3,100 tons carbon emission and conserves 100 million liters of water each year," said Newell.

"It is worth mentioning that our Chongqing green plant is a good example of our clean production practices," he added.

PepsiCo has been applying measures to save energy in its bottling plants for years. In the past five years, its 22 bottling plants have collectively saved water and energy by 40 percent, Newell said. That amounts to 15.6 million tons of water, equivalent to 1.5 times of the water in Hangzhou's West Lake, and 604.97 million kilowatt hours (kwh) of energy, which could supply 162,425 households for one year on the basis of 4,000 kwh per household a year.


Apart from the beverage bottling plants, PepsiCo has also invested in sustainable technology in agriculture.

"We replaced traditional flood irrigation with drip irrigation on the farms and saved water by 50 percent. The replacement of diesel with electricity cut CO2 emission by 4,165 tons. Coupled with wind turbines, it helped save 10,035 kwh of electricity," Newell said.

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A farm in Baotou, Inner Mongolia uses such innovations that have turned the desert area into a high-yielding potato farm.

Through such green innovations, PepsiCo hopes to enhance its brand image among the public and improve its business performance in the long-term, added Newell.

Despite some international corporations' doubts on the business environment in China due to Google's recent decision to withdraw from China, Newell insisted that the Google incident is "an exception" and China will continue to be a hot investment destination for foreign businesses given the attractive economic indicators.

"China is one of the top three priorities for PepsiCo, if not the top priority. There is no question that China is critical for global economic growth," he said.

"We plan to go further into the west and the north, in line with the nation's 'go west' strategy," he said.