Frito-Lay to Invest $40 Million in Russia

October 15, 2001

Frito-Lay to Invest $40 Million in Russia

MOSCOW - Frito-Lay, the world's leading snack company, announced today it will invest $40 million to build a state-of-the-art manufacturing facility in Kashira, Russia and to support related agricultural development programs.

The announcement was made in Moscow in conjunction with the Business Development Mission to Russia, led by United States Commerce Secretary Donald L. Evans. John F. Stevenson, President, Central/Eastern Europe Business, Frito-Lay International, is a member of the delegation.

Flanked by Secretary Evans, United States Ambassador Alexander Vershbow, Mr. Boris Gromov, Governor of the Moscow Region and Deputy of the Duma, and Mr. Evgenii Pouziakov, Head of the Kashira Region Administration, Mr. Stevenson stated, "The decision to build our manufacturing facility in Kashira was prompted by Frito-Lay's long-term commitment to being a market leader in Russia."

"On behalf of Frito-Lay, I would like to commend Secretary Evans for his initiative in bringing the mission to Russia at this critical time, and to thank the Governor of the Moscow Region and the Head of the Kashira Region Administration in helping to make this investment possible," Stevenson said.

Secretary Evans responded: "Today's announcement is further evidence that Russia's economic reforms continue to build a more transparent and open economic system that rewards entrepreneurship and innovation and welcomes American investment."

Frito-Lay already has already invested $20 million to build a distribution system that reaches over 70% of Russia. "With consumer demand for our products growing and the economic climate in Russia improving, we are moving forward with the construction of a plant that will produce potato chips and extruded snacks," Mr. Stevenson said. The project will create 350 new jobs in the Kashira region and bring Frito-Lay's total investment in Russia to $60 million.

Key to the success of Frito-Lay in Russia will be the ability to obtain high quality ingredients, especially potatoes, to produce Lay's, the world's leading potato chip. To ensure supplies, Frito-Lay agricultural experts are working with Russian farmers, using the company's proprietary agro-technology. This integrated food system, which has been used successfully with farmers around the world, is expected to improve the yields of Russian potato crops significantly. More than 20,000 tons of potatoes will be grown under the program in 2002. That is expected to double to 40,000 in 2003.

To prepare its 350 new employees in Russia, Frito-Lay will offer comprehensive training programs in the latest manufacturing, quality systems and management practices - both locally and at its facilities in Europe. "We expect to operate the plant at 100% capacity with a highly skilled workforce once the doors open in 2002," Mr. Stevenson said.

Frito-Lay, headquartered in Plano, Texas, is the $11 billion snack food division of PepsiCo, Inc., which is based in Purchase, NY. Frito-Lay is the leader in half of the world's top 10 snack chips markets, with operations in 40 countries. Its family of global brands includes Lay's Potato Chips, Doritos Tortilla Chips, Ruffles Potato Chips, Tostitos Tortilla Chips and Cheetos Cheese-Flavored Snacks. Frito-Lay has four brands that each generate annual retail sales of $1 billion or more.

In addition to Frito-Lay, PepsiCo includes: Pepsi-Cola Company, the world's second largest beverage company; Tropicana Products, Inc., the world's largest marketer and producer of branded juices; and The Quaker Oats Company, the producer of Gatorade, the leading sports drink, and other food brands.