Frito-Lay Consolidates Manufacturing Network

October 20, 2006

PLANO, Texas – Frito-Lay today announced the consolidation of its manufacturing network from 34 to 32 sites to increase productivity and optimize its supply chain. Production will move to larger, state-of-the-art facilities in Arizona, California, Colorado, Kansas, Texas, Utah and Washington.

Frito-Lay will close the 41-year old Lubbock, Texas facility, one of the company’s oldest, and the facility in Honolulu, Hawaii, a landlocked site that cannot be expanded. A total of 387 employees will be affected by these actions, which is less than 1% of Frito-Lay’s North America’s employee population. The Honolulu facility will continue to serve as a temporary distribution center until a new location is identified on the island. Lubbock, which employs 279 people, and Honolulu, which employs 108 people, will cease manufacturing operations by end of year. Despite the manufacturing consolidation, Frito-Lay still retains 113 employees in Lubbock and 123 employees in Honolulu in warehouse and sales operations.

“While the consolidation is strategic for our business, we recognize the personal impact business decisions such as this one have. This is not an easy decision to make,” said Al Carey, President and CEO, Frito-Lay North America. “We are committed to working with and supporting our displaced associates to ensure as smooth a transition as possible.”

Frito-Lay will assist the 387 displaced associates by providing severance pay based on years of service, enhanced retirement benefits, financial counseling and professional outplacement services.

“While productivity is one of the hallmarks of Frito-Lay’s success, these decisions are never easy,” said Rich Beck, Frito-Lay Senior Vice President, Operations. “The company came to this decision based on a thorough analysis of our manufacturing network. Consolidating production into more efficient, geographically-viable plants optimizes Frito-Lay’s supply chain to ensure continued growth.”

Frito-Lay North America is the $10 billion branded snacks division of PepsiCo, which is headquartered in Purchase, NY. In addition to Frito-Lay, PepsiCo divisions include PepsiCo Beverages North America, Quaker Foods North America and PepsiCo International.