Pepsi’s largest bottler outside the US, Varun Beverages Limited (VBL), is set to expand its footprint in Africa by launching a mega‑production facility in Kenya.
The company confirmed the move in its audited financial results for the year ended December 31, 2025, identifying the incorporation of a wholly owned Kenyan subsidiary as a milestone.
“We have incorporated a wholly owned subsidiary in Kenya under Varun Beverages Limited to carry on the business of manufacturing, distribution, and selling of beverages,” the report stated.
Construction is scheduled to begin in the first quarter of 2026, with commissioning targeted for Q4 2027. The facility is expected to deliver a capacity of 12–15 million cases annually.
Key Developments Across Africa
VBL’s expansion in Kenya is part of a broader growth strategy:
- South Africa: Acquired 100% stake in Twizza (Pty) Limited for ZAR 2,095 million, pending regulatory approval by June 2026.
- Carlsberg Partnership: Signed an exclusive distribution agreement to test‑market Carlsberg beer across African subsidiaries.
- Zimbabwe & Zambia: Began distributing PepsiCo snack products from February 2025.
- Morocco & Zimbabwe: Launched commercial production of PepsiCo snacks, including Cheetos.
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Diversification Into Alcoholic Beverages
Responding to rising demand, VBL expanded its scope to include alcoholic beverages — ready‑to‑drink products, beer, wine, and spirits — in India and international markets. This addition was formally integrated into the company’s Memorandum of Association.
Strengthening Backward Integration
To support production, VBL invested in backward integration facilities:
- Four greenfield plants commenced operations in India during 2025.
- Facilities at Prayagraj (India) and the Democratic Republic of Congo enhanced supply chain resilience.
- Acquired a 50% stake in Everest Industrial Lanka (Pvt) Limited to strengthen operations in Sri Lanka.
Financial Performance: Strong Growth Momentum
Varun Beverages reported a 16.2% rise in profit after tax (PAT), reaching Rs. 30,620.4 million in 2025, up from Rs. 26,342.8 million in 2024.
Growth drivers included:
- Higher sales volumes
- Lower finance costs (post debt repayment through QIP proceeds)
- Increased other income, including interest on deposits and favorable currency movements
Depreciation rose by 28.4%, reflecting new plant commissioning and international expansions. Finance costs remain negligible in India, with international costs largely tied to South Africa.
Dividend & Credit Rating Upgrade
The Board approved a final dividend of Rs. 0.50 per equity share for FY2025, subject to shareholder approval. Meanwhile, CRISIL (an S&P Global company) upgraded VBL’s long‑term rating to AAA/Stable from AA+/Stable, underscoring its financial strength.
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