PepsiCo Announces Myanmar Distribution Agreement with Diamond Star
PepsiCo to explore opportunities for agricultural investment
PepsiCo and UNESCO form partnership to promote vocational training in Myanmar
PURCHASE, N.Y., Aug. 9, 2012 /PRNewswire/ -- PepsiCo, Inc. (NYSE: PEP), one of the world's largest food and beverage companies, announced that it has signed an agreement with Diamond Star Co., Ltd., a unit of the Capital Diamond Star Group, to distribute PepsiCo beverage brands in Myanmar.
As part of the agreement, Diamond Star, which is one of the largest consumer packaged goods distributors in Myanmar, now has exclusive rights to import, sell and distribute Pepsi-Cola, 7-Up and Mirinda, three of the 22 brands in PepsiCo's portfolio that generate more than $1 billion each in annual retail sales.
PepsiCo also plans to explore opportunities to invest in agricultural development projects in Myanmar. One of the world's largest agricultural enterprises, PepsiCo sources more than four million tons of potatoes annually and works with thousands of local farmers around the globe to make its products.
The distribution agreement with Diamond Star follows several years of strong growth for PepsiCo in developing and emerging markets. PepsiCo nearly tripled its business in developing and emerging markets from $8 billion in annual revenue in 2006 to $22 billion in 2011.
In addition, PepsiCo also announced that it has signed a Memorandum of Understanding with the United Nations Educational, Scientific and Cultural Organization (UNESCO) to partner on vocational training initiatives in Myanmar. PepsiCo and UNESCO plan to work together to provide programs that focus on managerial skills training to support the country's development, empower its people and strengthen the workforce as PepsiCo looks to expand its business in the future.
"PepsiCo has a strong and growing business that spans more than 200 countries and territories around the world, and we are constantly looking for new growth opportunities that will put our food and beverage brands in the hands of more consumers," said PepsiCo Chairman and CEO Indra Nooyi. "Myanmar is a market with great potential, and our agreements with Diamond Star and UNESCO are important first steps towards expanding our presence in the country. Over time, we believe we can build a strong business in Myanmar and play a positive role in the country's continued development."
"Diamond Star is extremely proud to be associated with PepsiCo," said Diamond Star Managing Director Ko Ko Gyi. "PepsiCo is a world-class company that emphasizes an exemplary code of conduct and a sustainable approach to business with a focus on people at its center."
"Giving youth the skills they need to secure decent jobs, improve their livelihoods and shape their future is a key to successful national transformation. Private corporate partners have a determining role to play in this ambition, and UNESCO warmly welcomes this new partnership with PepsiCo to show how we can work together for the benefit of Myanmar's youth -- its most valuable resource," said Irina Bokova, Director-General of UNESCO.
Diamond Star has been doing business in Myanmar for nearly 50 years. During that time, the company has built strong distribution capabilities and relationships throughout Myanmar's retail sector. PepsiCo beverages are now available to consumers in parts of the country and product availability will increase in the coming weeks. Under the recently signed agreement, Diamond Star purchases and imports the products from PepsiCo's Vietnam operations. It plans to promote PepsiCo's brands in Myanmar with a sampling campaign and outdoor advertising.
PepsiCo last did business in Myanmar in 1997. The United States Department of State earlier this year encouraged companies to explore opportunities in the country. PepsiCo plans to evaluate other opportunities in the Myanmar market, including the potential for local manufacturing operations.
PepsiCo is a global food and beverage leader with net revenues of more than $65 billion and a product portfolio that includes 22 brands that generate more than $1 billion each in annual retail sales. Our main businesses – Quaker, Tropicana, Gatorade, Frito-Lay and Pepsi-Cola – make hundreds of enjoyable foods and beverages that are loved throughout the world. PepsiCo's people are united by our unique commitment to sustainable growth by investing in a healthier future for people and our planet, which we believe also means a more successful future for PepsiCo. We call this commitment Performance with Purpose: PepsiCo's promise to provide a wide range of foods and beverages for local tastes; to find innovative ways to minimize our impact on the environment by conserving energy and water and reducing packaging volume; to provide a great workplace for our associates; and to respect, support and invest in the local communities where we operate. For more information, please visit www.pepsico.com.
About Diamond Star
Founded in the early 1960's, the company was registered as Diamond Star Co., Ltd. in 1990 when Myanmar business law was set up. The company's core businesses in the 1980's were soft commodity trading and flour milling. Since then, the company has grown into a conglomerate with six divisions comprised of 12 companies. The company's lines of business include Trading, Flour Milling, Distribution, Retail, Real Estate Development and Construction. The company's turnover in FY 2010/2011 was US$305 million, making it one of the leading companies spearheading Myanmar's development and modernization. In addition to the head office in Yangon, the company has offices and distribution centers situated strategically across the country enabling it to cover most of the country. To date the company has more than 4,000 people under its employment. Its business partners include multinational companies from Australia, China, India, Japan, South Korea and the ASEAN countries. For more information, please visit www.cdsg.com.mm.
The United Nations Educational, Scientific and Cultural Organization (UNESCO) works to create the conditions for dialogue among civilizations, cultures and peoples, based upon respect for commonly shared values. It is through this dialogue that the world can achieve global visions of sustainable development encompassing observance of human rights, mutual respect and the alleviation of poverty, all of which are at the heart of UNESCO'S mission and activities. The broad goals and concrete objectives of the international community – as set out in the internationally agreed development goals, including the Millennium Development Goals (MDGs) – underpin all UNESCO's strategies and activities. Thus UNESCO's unique competencies in education, the sciences, culture, communication and information contribute towards the realization of those goals. UNESCO's mission is to contribute to the building of a culture of peace, the eradication of poverty, sustainable development and intercultural dialogue through education, the sciences, culture, communication and information.
PepsiCo Cautionary Statement
Statements in this communication by PepsiCo that are "forward-looking statements" are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause PepsiCo's actual results to differ materially from those predicted in such forward-looking statements. Such risks and uncertainties include, but are not limited to: changes in demand for PepsiCo's products, as a result of changes in consumer preferences and tastes or otherwise; damage to PepsiCo's reputation; PepsiCo's ability to grow its business in developing and emerging markets or unstable political conditions, civil unrest or other developments and risks in the countries where PepsiCo operates; trade consolidation or the loss of any key customer; changes in the legal and regulatory environment; PepsiCo's ability to build and sustain proper information technology infrastructure, successfully implement its ongoing business transformation initiative or outsource certain functions effectively; unfavorable economic conditions in the countries in which PepsiCo operates; fluctuations in foreign exchange rates; PepsiCo's ability to compete effectively; increased costs, disruption of supply or shortages of raw materials and other supplies; disruption of PepsiCo's supply chain; climate change, or legal, regulatory or market measures to address climate change; PepsiCo's ability to hire or retain key employees or a highly skilled and diverse workforce; failure to successfully renew collective bargaining agreements or strikes or work stoppages; and failure to successfully complete or integrate acquisitions and joint ventures into PepsiCo's existing operations.
For additional information on these and other factors that could cause PepsiCo's actual results to materially differ from those set forth herein, please see PepsiCo's filings with the SEC, including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. PepsiCo undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE PepsiCo, Inc.