PepsiCo to Partner with China's Ministry of Agriculture to Promote Sustainable Farming

PepsiCo, Inc. (NYSE: PEP) today announced that it has signed a Memorandum of Understanding with the Ministry of Agriculture of the People's Republic of China to promote sustainable agriculture projects and accelerate the development of the Chinese countryside.

As part of the joint initiative, PepsiCo and the Ministry of Agriculture will build and operate demonstration farms that leverage the most advanced irrigation, fertilization and crop management techniques. They also will collaborate to promote best practices across China's farming system to improve yields, increase income levels and raise living standards for farmers throughout the country.

The partnership continues PepsiCo's focus on investing in sustainable agriculture development projects in China and it demonstrates the company's continued support for China's 12th Five-Year Plan.

PepsiCo is one of the largest agricultural enterprises in the world, growing and using more than four million tons of potatoes for its Frito-Lay snacks, 600,000 tons of oats for its Quaker food products, and three million tons of oranges and other fruits and vegetables for its Tropicana and other juice brands every year.

Tim Minges, Chairman of PepsiCo's Greater China Region, said, "PepsiCo takes great pride in creating tailored approaches to business investment that achieve both commercial and social objectives. Our success in promoting sustainable agriculture programs in China and around the world is a great example of our ability to drive PepsiCo's performance while also improving the communities in which we do business. Our experience and expertise in modern farming enables PepsiCo to get more 'crop per drop' and we are excited to work with the Chinese Ministry of Agriculture to introduce many of these best practices to benefit China's local farmers and the environment."
 

Tim Minges, Chairman of PepsiCo's Greater China Region speaking at the signing ceremony

Wang Ying, Director-General of the Department of International Cooperation of the Ministry of Agriculture, commended PepsiCo's efforts with the following remarks at the signing ceremony: "The advancement of sustainable agriculture is an important component of China's agriculture policy. The 12th Five-Year Plan adopted last year set out clear objectives for the development of sustainable agriculture in the new era, especially the need for speeding up agricultural modernization. By partnering with PepsiCo, we will be able to enlist advanced foreign technologies for the building of modern farms and promote best practices across the country. This is a substantive step in our efforts to carry out the policies and guidelines introduced in the Five-Year Plan."
 

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The signing ceremony

Director-General Wang Ying also pointed out that "PepsiCo has engaged with many countries in promoting modern agricultural production and operation, and we are excited at the opportunity to learn from these valuable experiences. We hope there will be more multinational corporations and international agencies ready to enter into win-win partnerships with the Ministry of Agriculture to promote sustainable agriculture in China."

In May 2010, PepsiCo announced that it is investing $2.5 billion in its China business over the next few years, on top of $1 billion investment announced in 2008. The investments are broad-based and include plans for expanded agricultural development.

PepsiCo is one of the largest agriculture-related enterprises in China, having invested more than RMB 200 million (equivalent to more than USD 31 million) in local agricultural development. These investments, supported by PepsiCo's proven expertise in crop plantation and irrigation, have benefited more than 10,000 rural Chinese households and created a win-win solution for local farmers and the company. Examples include:

• A PepsiCo pilot farm in Inner Mongolia has used advanced irrigation technologies to transform desert into fertile potato farmland.


• The average yield of PepsiCo's potato farms in China has increased to 45 tons per hectare, meeting the global standard.


• PepsiCo has achieved up to 50% reduction in water consumption in potato cultivation by implementing advanced irrigation techniques.

PepsiCo is also investing in rural communities in China. For example, the PepsiCo Foundation announced a $5 million grant in June to support the All-China Women's Federation in its efforts to provide access to clean water in rural areas of China, benefiting 500,000 people by 2015. The company's 10-year cooperation with Water Cellars for Mothers has brought clean drinking water access to more than 50,000 people in water-stressed regions across China.

PepsiCo investments in China's agricultural sector are part of a global strategy to make the company a leader in sustainable agricultural around the world.

Detailed overview of PepsiCo's investments in sustainable business practices throughout China

Source: Pepsico News