VARUN TO TRIPLE INVESTMENT:
I NDIAN beverages maker Varun plans to triple its investment in Zimbabwe to US$ 150 million in the next three years to meet growing demand for its products and diversify its product range.
The beverages company, already now Zimbabwe’s second biggest beverages maker, has a plant in Harare that produces popular soft drink brands Pepsi, Mirinda, Mountain Dew and 7Up.
Indian ambassador to Zimbabwe Rungsung Masakui told Herald Business early this week that the country was now well primed to receive significant investment from his country due to an improved investment climate.
The Indian diplomat said doing business in Zimbabwe had been difficult over the last few years, but ongoing reforms by President Mnangagwa’s Government, including putting in place US$ 1 billion investment protection fund, will make it easier for foreign investors to invest in this economy.
As such, further investment is expected from Varun, which intends to increase its investment from US$ 50 million to US$ 150 million to meet growing demand for its beverages.
The top Indian diplomat said the beverages manufacturing company was failing to meet demand at the moment, as other major manufacturers are constrained by foreign currency.
However, Ambassador Masakui said Varun had plans to diversify into manufacture of new products lines such as potato chips and dairies over the next two to three years.
“Surprisingly, many people have come in despite very negative perception about this market; one example is Pepsi ( Varun Beverages). They have invested already US$ 50 million and they are tr ying to i ncrease the lines.
“They cannot really meet demand for their products from the market, and are also trying to diversify into other products like potato chips, dairy and several other things; that is a long term plan. In the coming two to three years, they are planning to boost their investment in Zimbabwe to US$ 150 million, that’s what it is” Ambassador Masakui said.
The Indian beverages manufacturer was last month declared a special economic zone ( SEZ), as Government seeks to incentivise the company, which is reportedly already working to put up a new US$ 23 million plant.
Varun Beverages’ soft drinks are currently dominating the market given Zimbabwe’s largest beverages maker Delta Corporation’s products such as Coke and Fanta have limited market presence.
The Indian diplomat said due to a difficult operating environment, trade and investment cooperation between Zimbabwe and India had remained constant, averaging US$ 166 million between 2015 and 2016.
India exports mainly medical drugs, medicines and related equipment to Zimbabwe while the southern African country exports mostly precious mineral products such as jewellery to the Asian economic giant.
Ambassador Masakui said he had seen a number of investments into Zimbabwe’s mining industry by Indian investors, demonstrating confidence in the country’s new investment environment in the last year or so.
Indian firms have made investments mainly in the food and beverages, pharmaceuticals and agro- processing industries. There are over 25 major firms owned by Indians or Zimbabweans of Indian origin in Zimbabwe.