INDIA – Varun Beverages, a leading bottler of PepsiCo beverages, has announced the commencement of commercial production of soft drinks and energy drinks at its Gorakhpur facility in Uttar Pradesh.  

Additionally, the Jaipuria family-promoted firm intends to venture into the production of juices and value-added dairy products at the same location. 

The Gorakhpur facility’s expansion into various beverage segments aligns with Varun Beverages Ltd’s strategy to diversify its product portfolio and meet evolving consumer preferences.  

In its latest annual report statement, VBL revealed plans to enhance production capacities in the juices and value-added dairy products segments in 2024. 

With operations spanning across six countries, Varun Beverages derives a significant portion of its net revenues from the Indian Subcontinent and African markets.  

The company’s operations in India, Sri Lanka, and Nepal accounted for 83 percent of its net revenues in 2023, with the remaining 17 percent contributed by Morocco, Zambia, and Zimbabwe. 

Varun Beverages holds a dominant position in the Indian beverage market, accounting for over 90 percent of PepsiCo’s beverage sales volume in the country. It manufactures, markets, and distributes a wide range of PepsiCo-owned products, including carbonated soft drinks, juice-based beverages, energy drinks, and packaged drinking water. 

Recently, Varun Beverages completed the acquisition of South Africa-based Beverage Company BevCo and its subsidiaries.

The acquisition, valued at approximately Rs 1,320 crore (US$158.28M), has officially made BevCo a subsidiary of VBL as of March 26, 2024. 

As part of the acquisition, Varun Beverages issued a corporate guarantee of ZAR 1,500 million (US$78.88M) to secure credit facilities extended to BevCo by the FirstRand Bank.  

However, the company clarified that this guarantee would have no impact on its operations. 

During the fourth quarter ending December 31, Varun Beverages reported a consolidated net profit of US$15.9 million, reflecting a significant increase from US$9 million in the same period the previous year.  

This robust performance was attributed to double-digit volume growth in both domestic and international markets. 

Furthermore, Varun Beverages’ Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin expanded to 15.7 percent, benefiting from softer packaging costs amid rising sugar prices.  

The company’s strong financial performance underscores its position as a key player in the global beverage industry and its commitment to continued growth and expansion. 

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