PepsiCo to shut Kerala plant , sets up its largest greenfield food plant in UP

PepsiCo India has chosen Uttar Pradesh to set up its largest greenfield foods plant to manufacture potato chips. UP CM Yogi Adityanath on Wednesday (September 15) inaugurated the leading global food and beverage company’s largest greenfield foods plant worth Rs 814 crore in Kosi Kalan in Mathura. It may be noted that the company had taken an exit route from Kerala due to labour issues with its in Kanjikode Palakkad in March last year. It was a carbonated soft drinks and packaged drinking water bottling plant operated by franchisee Varun Beverages.

• What's the story?

The PepsiCo unit in Palakkad, operated by franchisee Varun Beverages Ltd, served a mandatory closure notice to the state labour department on Tuesday after being in lockout since March. The employees at the unit — affiliated to CITU (of CPI-M), INTUC (of Congress) and BMS (of RSS) have been protesting since December, demanding wage hike and better service conditions for contract labourers — demands that were pending for a year then.

As the protest by 280-odd contract workers was joined by 110 regular employees, production at the unit was affected. Subsequently, the management declared a lockdown from March 22. The unit, established in 2001 at the industrial belt Kanjikode, has been engaged in packaged drinking water and soft drinks under Pepsi brand. In March 2019, PepsiCo had handed over the plant to its bottling partner Varun Beverages due to labour strike demanding benefits and hike in wages of contract labourers. Before being assigned to the franchise, the plant had been closed for a while. Production resumed after an agreement was arrived at with workers. Sources in the management said they had to go for lockdown because of the loss caused by the strike in February this year. Even though police protection was provided, employees on duty were assaulted, they said.

The Mathura plant, according to the firm, will produce Lay’s potato chips and will be the company’s first ‘Make and Move’ factory. “The state-of-the-art plant aligns with the UP government’s industrialisation-led growth agenda,” the company’s press communiqué said. ‘Make and move’ factory means the products manufactured in the plant are sold directly to distributors from the plant, instead of dispatching them to a mother warehouse managed by a third party.

According to reports, the PepsiCo factory at Kosi Kalan, Mathura, spanning over 29 acres of land, would acquire 150,000 tonnes of locally grown potatoes for a total investment of Rs 814 crore, benefiting over 5,000 farmers and providing 1,500 direct and indirect job opportunities. The company stated that at least 30 per cent of their employees at the plant will be women.

• What's Next?

In 2004 Cocacola also winded up their plant from Kerala due to protests regarding the exploitation of groundwater. After the covid outbreak, many states reformed their labour laws to encourage and attract investment and UP has certainly made most of it. While many states are still struggling to attract any major investment UP has been a regular achiever in this case of economic growth.