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Livingstone Marufu, Harare Bureau
INDIAN soft drinks manufacturer, Varun Beverages, has started manufacturing operations in the country, but says the cost of setting up its plant might spiral from the initial budget of $30 million to about $40 million due to foreign currency shortages.

Most companies in Zimbabwe are struggling to procure to foreign currency to import equipment and critical raw materials.

This has seen some firms increasing prices of the products due to cost from premiums on foreign currency bought on the parallel market. Companies that cannot secure foreign currency under the central banks priority framework of allocation resort to the black market.

PepsiCo has already seen spent $22 million on phase one of the plant, with more capital expected to be invested as the project progresses.

The plant will be built in phases, totalling four on completion. This will see an increase of Pepsi branded soft drinks and other brands.

PepsiCo started operations last month and its products are already making a mark on the local market driven by their affordability. Varun Beverages corporate affairs manager, Fungai Murahwa, said cost cutting measures and affordability will give his company an
edge.

“We expect the project to cost around $40 million from the initial budget of $30 million due to an increase in the prices of raw materials triggered by foreign currency shortages.

“As we speak phase 1 has been completed and it cost the company around $22 million and there are three phases to follow. Phase two is expected to be completed by September this year,” he said. He said the beverages manufacturer had so far employed 150 people.

On completion, the PepsiCo plant is projected to create at least 400 jobs and another 2 600 downstream.