Andrew Reid, general manager of Pepsi Cola Jamaica, gestures during an interview with Wednesday Business at his offices on Spanish Town Road, Kingston. Pepsi will double its Jamaican investments to US$5 million this year. - Junior Dowie / Staff Photographer

Susan Gordon, Business Reporter

In a year it believes it is poised to make a profit, Pepsi Cola Jamaica Bottling Company Limited is doubling its annual investment to pump US$5 million (J$337.5 million) into its operation to upgrade its second bottling line at the Spanish Town Road plant in St. Andrew.

The expansion will seethis bottling line, commissioned two to three years ago, increasing its throughput by 50 per cent at the end of July.

The company said it was expanding to meet growing market demand for all Pepsi products, and more so, its non-carbonated drinks.

The latest sizeable investment in the business was the J$200 million or US$3 million at the time, spent on the second bottling line in year 2004.

Lowered operational costs

The beverage company is also expecting the expansion to bring down its operational costs even as its creditor and parent company Pepsi Americas looks towards a profitable year for the subsidiary.

"We've been under pressure to keep up with the market," said general manager for Pepsi Cola Jamaica, Andrew Reid.

"The 50 per cent increase in capability has put us ahead of the game," he told Wednesday Business from his Spanish Town Road offices.

The upgraded machine will be able to move faster and push out more bottles per hour, but Reid would not disclose numbers saying the information was proprietary. The effect of this is that, even with the usual one to one and a half hour down time incurred to shift the production of soda to non-carbonated beverage - a process known as cleaning in place (CIP) where the carbon dioxide is flushed out - the company can still benefit from a larger throughput, Reid said.

The machine which is the smaller of the two owned by Pepsi already bottles both carbonated and non-carbonated two litres and 20 ounces drinks.

"This year, our capital investment is higher than normal," he said.

"We started with an initial investment of close to US$60 million when we bought the land, equipment, trucks."

The company normally averages US$2 to US$2.5 million of capital investment per year, he said.

Boasting steady double digit growth in business for the past three years between 11 and 21 per cent, the Pepsi Jamaica boss said the company's flagship product Pepsi now enjoys 86 per cent market share in the local cola market, based on an independent market research out of Dominica Republic done in retail outlets.

Non-carbonated brands

But, it is the growth of the non-carbonated brands that has further boosted the company's revenues.

"The growth of these brands has aided us tremendously because they are more expensive and the revenues and the margins are much more attractive. This is where the market is shifting," he said.

"The research company we utilise shows that over the next three to five years there will be tremendous growth in the non-carbonated sector and much more so than in the carbonated sector, so we are equipping ourselves for this trend shift."

The numbers, he said, were indicating 10 to 15 per cent annual growth for the non-carbonated segment and about 2-5 per cent for carbonated growth per annum in the Caribbean.

Its non-carbonated brands include the Tropicana line, Gatorade, Essential water, Aquafina, and Toma its newest non-carbonated beverage.

Its sodas also include 7Up, Mountain Dew and Ting.

Tropicana, he said, experienced 100 per cent growth for the first four months this year, while Gatorade had 50 per cent more sales.

susan.gordon@gleanerjm.com