TABLE OF CONTENTSPART I: INTRODUCTION...2 PART II: BODY...3 Question 1: Historical methods of PEPSICO since it penetrated into the Vietnamese market 3 1.1 Historical methods of internati
INTRODUCTION
Foreign direct investment (FDI) plays a vital role for both governments and businesses by fostering economic growth and expanding market opportunities Corporations leverage FDI to acquire new products and innovative technology, as well as to access international markets through the purchase of controlling interests in foreign assets Meanwhile, governments actively attract FDI to stimulate economic activity, create jobs, and build a more globally integrated economy.
Foreign direct investment (FDI) is crucial for international investors and has significantly contributed to the development of emerging markets Investing abroad enables businesses to achieve higher growth rates and diversify profits, offering substantial benefits to investors MNCs engage in FDI driven by revenue-related and cost-related motivations, which are essential to understanding their investment strategies While FDI offers numerous advantages, it also presents risks and disadvantages for both investors and host countries, impacting local labor markets and capital flows in the long term Careful consideration of these micro and macroeconomic implications is essential for sustainable international investment.
This report highlights PepsiCo, the world's largest American food and beverage company with products available in over 200 countries, as a prime example of successful foreign direct investment in Vietnam With nearly 20 years of presence in Vietnam, PepsiCo exemplifies how multinational corporations expand globally while contributing to local development The analysis explores the benefits and limitations of foreign direct investment for Vietnam, assessing whether the advantages outweigh the disadvantages for the host country.
BODY
Historical methods of PEPSICO since it penetrated into the Vietnamese market 3
1.1 Historical methods of international business of PepsiCo
In the early 1990s, PepsiCo ventured into the Vietnamese market, establishing itself as one of the first foreign-owned beverage companies in the country since 1991 The company entered Vietnam through a joint venture, culminating in the formation of the International Beverage Company (IBC) at the end of 1991 This joint venture was a collaboration between the Saigon Tourism and Trading Company (SPCo) and Marcondray of Singapore, each contributing 50% of the capital, marking a significant step in PepsiCo’s expansion into Southeast Asia.
PepsiCo officially entered the Vietnamese market in 1994 through a joint venture with IBC International Beverage Company, marking the company's first presence in Vietnam The initial products launched were Pepsi and 7 Up, coinciding with the lifting of the US embargo against Vietnam in 1994 Initially, the company's capital structure included SP Company with 40%, Macondray Company Inc with 30%, and Pepsi Cola International with 30% In 1998, to support capital investment and business expansion, the ownership shares were revised to Pepsi Cola International holding 97% and SP Company 3%, as per Decision No 291/GPDC7 dated December 28, 1998 The company's capital investment at that time amounted to 110 million USD.
On April 28, 2003, PepsiCo Global Investment acquired a 3% stake in Vietnam International Beverage Company, transitioning it into a fully foreign-owned enterprise and rebranding it as PEPSICO Vietnam International Beverage Company Today, PepsiCo’s products are widely available across Vietnam, featuring popular brands such as Pepsi, 7Up, Mirinda, Aquafina, Sting, Twister, Lipton Tea, Quaker Soya, and Poca, establishing its strong presence in the Vietnamese beverage market.
In April 2013, the strategic beverage alliance between Suntory Holdings Limited and PepsiCo, Inc was established in Vietnam, with Suntory holding a 51% stake and PepsiCo holding 49% This partnership led to the launch of new popular products such as Olong Tea + Plus and Mountain Dew, strengthening their presence in the Vietnamese beverage market.
Historical international business method since Suntory Pepsico entered the Vietnamese market from the initial joint venture method into the current 100% foreign owned enterprise.
1.2 Advantages of international business of Suntory Pepsico
- The Suntory-Pepsico joint venture in Vietnam is applied to both take advantage of experience, production technology and take advantage of sales experience and wide system in the market
The international joint venture enables Pepsico to enter the Vietnamese market swiftly and cost-effectively, facilitating rapid market penetration through established distribution channels Partnering with local entities increases the likelihood of success by leveraging existing relationships with key suppliers and customers Additionally, local partners bring valuable expertise in language, cultural nuances, and customs procedures, ensuring smoother operations and strategic advantages in the Vietnamese market.
- A joint venture helps Pepsico to limit risks rather than owning the whole thing, because each partner only bears the risk for its own capital contribution.
- The joint venture between SP.Co and Marcondray-Singapore - Pepsi Cola International helps to improve the competitiveness of domestic enterprises in the beverage industry.
1.3 Disadvantages of international business of Suntory Pepsico
- There is a conflict, ownership dispute between the participating parties due to disagreement on investments or profit sharing
- There is a situation where large companies acquire small companies due to their inexperience and small scale.
- The possibility of great risk if the joint venture company has a deadlock.
- Language, thinking and cultural barriers between the parties' cooperation.
- Encountered many legal problems when joint ventures related to culture projects
- The firm Pepsico will not reap any rewards from the investment until the subsidiary is built and a customer base established.
The motives for initiating PEPSICO including revenue-related motives and cost-related motives
Attract new sources of demand:
When a company reaches its growth limit in its home country due to intense competition or near-perfection in the domestic market, it often looks to foreign markets for expansion Entering international markets allows businesses to leverage their full potential and identify new customer needs Countries with low barriers to entry, such as minimal economic and political obstacles, present ideal opportunities for multinational corporations to penetrate and expand their presence globally.
PepsiCo's products are enjoyed by consumers in over 200 countries and regions worldwide, with over a billion servings consumed daily Through targeted market expansion strategies across different regions and user segments, PepsiCo achieved $70 billion in net sales in 2020 Its diverse product portfolio includes popular convenience foods and beverages such as Lay’s, Doritos, Cheetos, Gatorade, Pepsi-Cola, Mountain Dew, Quaker, and SodaStream The company boasts a wide range of iconic brands that each generate estimated annual retail sales exceeding $1 billion, reinforcing its global market presence.
Many businesses seek growth by entering highly developed markets, but a common challenge is the implementation of defensive strategies Successful companies often establish policies to prevent new competitors from entering the market These firms may reduce product prices to create barriers for newcomers, aiming to maintain their market dominance and hinder competition.
Pepsi currently boasts a portfolio of over 22 brands, expanding beyond carbonated drinks to include healthy snacks and low-calorie beverages Unlike Coca-Cola, which emphasizes traditional advertising channels, Pepsi aims to target the younger generation full of energy and enthusiasm, positioning itself as a vibrant and energetic brand PEPSICO's strategic focus is on engaging young consumers who seek innovative and health-conscious drink options, strengthening its market presence and brand appeal.
Our brand caters to a diverse age group ranging from 13 to 35 years old, encompassing individuals from all walks of life, including middle to upper class backgrounds, modern urban dwellers, and minimalist lifestyle enthusiasts We offer a wide range of products at various price points, ensuring there is a suitable option for every budget and style preference.
Multinational corporations can leverage consistent net cash flows from cross-border sales, optimizing their global operations Spreading sales and manufacturing across countries helps reduce cash flow volatility and mitigates the risk of liquidity shortages Additionally, by demonstrating reduced risk to shareholders and creditors, multinational companies often benefit from a lower cost of capital due to more stable cash flows, enhancing overall financial stability.
The Covid-19 pandemic has temporarily disrupted PEPSICO's supply chain and caused shortages of goods in Vietnam However, this challenge highlights the urgent need for Vietnam to restructure its market strategy by opening up and diversifying export destinations Expanding into new markets such as Africa, the Netherlands, the United States, and Japan can reduce dependence on limited regions and mitigate risks associated with market volatility Diversifying market destinations is essential for ensuring sustainable growth and resilience in Vietnam's export sector amid global uncertainties.
Establishing a subsidiary in new markets allows businesses to fully leverage economies of scale and utilize foreign factors of production This strategy enables cost-effective production where goods can be manufactured inexpensively and either sold domestically or exported By operating in regions with lower costs of labor, land, capital, or technology, companies can enhance efficiency and reduce overall production expenses, maximizing profits and competitive advantage in international markets.
Use foreign raw: Establish a subsidiary in a market where raw materials are cheap and accessible Sell the products in that market and elsewhere.
Use foreign technology: Participate in a joint venture or acquire an existing overseas plant to learn about foreign production processes, so as to improve its own operations.
React to exchange rate movements: Establish a subsidiary in a new market where the local currency is weak but is expected to strengthen overtime.
In 1994, PepsiCo entered the Vietnamese market through a joint venture with IBC International Beverage Company, launching its first products, Pepsi and 7Up, coinciding with the lifting of the US embargo against Vietnam The company was renamed PepsiCo Vietnam International Beverage Company in 2003, expanding its product lineup to include beverages like Sting, Twister, Lipton Ice Tea, and Aquawna Over the years, through strategic mergers and acquisitions, PepsiCo significantly expanded its production, raw material sourcing, and market presence, becoming one of Vietnam's largest beverage companies Vietnam's economy has experienced remarkable growth over the past 30 years, with an average GDP growth rate of approximately 7% annually from 2009 to 2019, establishing it as one of the world's fastest-growing economies Its attractive investment environment is driven by factors such as cheap labor, a stable exchange rate, and low inflation, making Vietnam increasingly appealing to global businesses.
In 2010, PepsiCo recognized Vietnam as a key market for its expansion strategy, announcing a $250 million investment over three years and opening a new factory in Can Tho Two years later, the company further strengthened its presence by acquiring, selling, and importing the San Miguel factory in Dong Nai The same year, PepsiCo inaugurated its largest Southeast Asian facility in Bac Ninh, cementing Vietnam's significance in its regional operations.
Analyze the impact of Covid 19 pandemic on this MNC’s value based on
3.1 Impact of Covid 19 on the economy of Viet Nam
COVID-19 has had widespread economic impacts, disrupting global supply chains, travel, tourism, and causing increased stock market and oil price volatility The beverage industry has faced significant challenges in importing and exporting goods, while consumer and corporate panic has distorted consumption patterns and led to market anomalies Multinational corporations like PEPSICO have encountered unprecedented challenges as the rapid spread of the virus has contributed to a global economic slowdown.
As the COVID-19 pandemic continues to unfold, currency markets may take weeks or months to realign with efforts to control the virus’s spread, potentially causing some countries to lose ground economically While the pandemic remains a dominant factor, other elements such as policy changes also play a crucial role in influencing currency movements These policy shifts carry political risks for nations and multinational corporations alike during the 2020 crisis, making it essential to monitor the pandemic’s progression to better understand and anticipate currency fluctuations.
Despite the global disruptions caused by the Covid-19 pandemic, Vietnam's economy achieved remarkable resilience through effective strategies focused on both disease prevention and socio-economic development In 2020, although GDP growth was the lowest in the 2011-2020 decade, Vietnam was among the few countries in Asia to register positive economic growth, surpassing neighboring nations like Singapore and Malaysia in economic scale The country's economy exceeded 343 billion USD, making it the leading economy in Southeast Asia and the 4th largest in the region after Indonesia, Thailand, and the Philippines Vietnam's swift response to natural disasters and epidemics helped mitigate the impacts of high unemployment and underemployment, securing significant progress amid global uncertainties.
Vietnam in 2019 before the Covid epidemic occurred:
In Q2 2019, the foreign exchange market experienced significant fluctuations, with the USD/VND exchange rate rising by 0.84% over five weeks from April's end, peaking at 23,360 VND/USD (bank rate) However, in June, the VND strongly recovered as the USD/VND rate steadily declined, resulting in a total decrease of 0.43% for the month Consequently, the bank rate was reduced by 100 VND/USD, adjusting to 23,260 VND/USD for buying and 23,380 VND/USD for selling, reflecting a notable stabilization in the currency's value.
The USD/VND exchange rate closed at 23,300/23,320 VND/USD, with a slight increase of only 1 VND/USD from the end of May, reflecting minimal fluctuation Over the first six months, the exchange rate rose by 0.41%, while the central rate increased by 1.06% since the end of 2018, indicating Vietnam's relatively stable currency in the region Despite alternating adjustments, the Vietnamese dong remains among the most stable regional currencies compared to countries like the Philippines, Malaysia, and Singapore.
According to BIDV's research, several favorable factors support a stable trend in the third quarter of 2019 The interbank VND/USD interest rate differential is projected to remain stable at a positive level, with the 1-week term fluctuating around 0.7% to 1.2% Market sentiment is expected to stay steady, alleviating concerns as international pressures are anticipated to ease.
Vietnam's macroeconomic stability remains strong with consistent economic growth, low inflation rates, and sustained foreign currency inflows, supporting a resilient domestic foreign exchange market In the third quarter of 2019, these favorable economic factors contributed to the continuation of a stable foreign exchange trend from the beginning of the period.
Since 2019, Vietnam's exchange rate has been lower compared to 2018, with a 1.8% increase in the fourth quarter of 2018, a 1% rise in the first quarter of 2019, and only a 0.3% increase in the second quarter of 2019 The USD/VND exchange rate remained stable, increasing by just 2.5-3%, which supported interest rates, credit growth, and inflation control efforts The State Bank of Vietnam manages interest rates and exchange rates in line with macroeconomic stability, market trends, and monetary policy goals, employing a combination of monetary tools and interventions in the foreign exchange market when needed A key focus of monetary policy from now until the end of 2019 is to maintain exchange rate stability by controlling VND liquidity.
The USD/VND exchange rate experienced a sharp rise in early 2020 but has since declined significantly The US dollar weakened due to dual shocks from easing monetary policies by global central banks and concerns over a negative US economic growth outlook in 2020.
The first four months of 2020 saw a significant appreciation of the USD/VND exchange rate, with the central rate reaching 23,245 VND/USD on February 25, marking a 0.4% increase and a new three-year high This peak was quickly surpassed two months later, as the central rate rose to 23,272 VND/USD on April 24 During this period, bank buying prices of USD ranged from 23,075 to 23,300 VND/USD, while selling prices varied between 23,230 and 23,510 VND/USD In the free market, USD buying prices fluctuated between 23,170 and 23,450 VND/USD, with selling prices ranging from 23,180 to 23,500 VND/USD, reflecting heightened exchange rate volatility during this period.
Historically, the free market USD selling price was consistently lower than the bank rate; however, recent trends show a significant reversal with the free market rate now exceeding the official bank rate To stabilize the exchange rate amidst this volatility, authorities initiated measures on March 24 to control currency fluctuations and restore market stability.
In 2020, the State Bank of Vietnam adjusted the USD selling rate at its official exchange, setting the buying rate at 23,175 VND and the selling rate at 23,650 VND The central bank maintained the buying price while reducing the selling price by 257 VND, or over 1%, compared to the rate announced on March 23 As a result, the State Bank’s selling price was approximately 100 VND lower than commercial banks during that period.
Since early 2020, analysis shows that USD purchase prices on the free market experienced an upward trend, which was subsequently curbed following intervention by the State Bank After the intervention, the free market USD selling price fell below the official bank rates The State Bank maintained the USD selling rate at a fixed 23,650 VND/USD for three months, stabilizing the exchange rate However, on July 16, the State Bank raised the official USD selling price to VND 23,873/USD, adjusting the exchange rate management in line with fluctuations in the central exchange rate.
Following the sublimation period, the USD/VND exchange rate's upward momentum slowed, entering a steady decline from May 19, 2020, onwards By December 29, 2020, the central rate of USD/VND had reverted to its early 2020 level of approximately 23,150 VND/USD Both bank rates and the free market exchange rate experienced a decline and stabilization after the State Bank's intervention beginning March 24, 2020.
In 2020, the USD exchange rate at banks ranged from 23,010 to 23,220 VND/USD for buying and selling, while the free market saw rates between 23,290 and 23,320 VND/USD During this period, the USD buying price at banks decreased by 0.3% compared to the start of the year, whereas the selling price experienced a minimal decrease of only 0.04%, reflecting stable currency exchange trends in the Vietnamese market.
In your opinion, is this firm a good or bad FDI? Give explanations and reasons
Foreign direct investment (FDI) plays a vital role in the economic growth of developing and emerging market countries It provides crucial multinational funding and expertise that enable local companies to expand their international sales Additionally, FDI attracts private investment in essential infrastructure, energy, and water sectors, leading to the creation of jobs and higher wages, thereby boosting overall economic development.
Pros of Foreign Direct Investment:
- Provides technology to developing countries
- Provides financing to developing countries
- Promotes stable, long-term lending
Cons of Foreign Direct Investment:
- Not suitable for strategically important industries
- Investors have less moral attachment
- Unethical access to local markets
Vietnam has established itself as an emerging hub with a rapidly improving business environment, attracting increasing foreign investment Today, it is considered a highly attractive destination for international companies seeking growth opportunities Notably, global corporations like PepsiCo recognize Vietnam’s potential, making it a promising land for foreign investment and business expansion.
Vietnam's transparent and objective legal environment positively influences Pepsi's business operations, ensuring smooth and efficient processes The company benefits from various incentives, including corporate income tax advantages and clearly defined import and export tax policies These favorable regulations streamline customs clearance procedures, facilitating seamless movement of goods and supporting Pepsi's overall business growth in Vietnam.
Vietnam's stable government and social structure make it an ideal destination for foreign direct investment Positioned in a region prone to political and economic instability, Vietnam offers a secure environment that attracts international companies This stability enhances Vietnam's appeal as a reliable hub for business operations and foreign capital inflows.
Vietnam has significantly advanced its commitment to regional and international economic integration, demonstrating its openness to global markets Its accession and commitments within the World Trade Organization (WTO) have enhanced market access for both goods and services, creating favorable conditions for international investors This progressive integration not only benefits Vietnam’s economy but also makes it an attractive destination for multinational companies like Pepsi to invest directly in the country.
4.3 Pepsi's challenges when investing directly in Vietnam
Besides the above advantages, direct investment in Vietnam also has some disadvantages as follows:
Limited infrastructure, particularly weak transportation networks, significantly hampers investment projects in Vietnam This inefficient infrastructure concerns companies like Pepsi, as it creates substantial operational challenges and threatens to diminish their expected returns on investment Improving transportation infrastructure is crucial to fostering a more business-friendly environment and attracting sustained foreign investment.
- Vietnam's waste and emission treatment support industry has not been developed yet and cannot meet the production needs of Pepsi.
The roles of direct foreign investment in Vietnam’s economic development over
In the past 20 years of economic rejuvenation in Vietnam, FDI has played the most visible and significant role in boosting investment capital for growth From USD 2.451 billion in
Foreign Direct Investment (FDI) experienced significant growth from 2001 to 2007, increasing from USD 2001 billion to USD 8,100 billion, with disbursed FDI rising by approximately USD 40 billion since 1988 Its contribution to total social investment capital fluctuated notably, rising from 13.1% in 1990 to 32.3% in 1995, but declining to around 20% by 2000 due to regional financial crises Between 2001 and 2005, FDI accounted for roughly 16% of total social investment, maintaining this share through 2006-2007 Compared to other investment sources, FDI offers unique advantages such as technology transfer, export promotion, and the development of managerial expertise, making it a crucial driver of economic growth.
Foreign Direct Investment (FDI) projects are a key driver of Vietnam's technological advancement, facilitating technology transfer along with comprehensive training in operations and management This approach fosters the development of a skilled team of technical staff and workers with high levels of expertise Surveys indicate that 44% of FDI companies regularly retrain their personnel, covering approximately 30% of new recruits, ensuring continuous skill development Additionally, many employees are sent abroad for advanced training directly from parent companies, enhancing their technical capabilities To date, most of Vietnam's innovative and high-tech talent has been concentrated within the FDI sector, underscoring its vital role in technological progress.
The FDI sector plays a vital role in job creation, employing over 1.2 million direct workers as of 2007 These workers often receive extensive training both domestically and internationally, enhancing the sector's workforce quality While the number of jobs created by FDI is modest compared to small and medium enterprises, the sector offers significantly higher-quality employment opportunities Many FDI officials and workers are skilled, experienced, and continue to contribute to its growth and development.
"nuclei" for developing Vietnam's highly qualified and competent workforce Furthermore, the amount of jobs created by the FDI sector's spillover effect can be a considerable figure 2.
Over the past 20 years, Foreign Direct Investment (FDI) has played a crucial role in boosting State budget revenue Between 1996 and 2000, FDI businesses contributed $1.49 billion to the budget, excluding crude oil earnings, which was 4.5 times higher than five years earlier During 2001-2005, FDI-related budget revenue surged to over $3.6 billion, with an average annual growth rate of 24% Additionally, the FDI-invested economic sector contributed more than $3 billion to the state budget in 2006 and 2007, more than doubling the contribution during 1996-2000 and accounting for 83% of the revenue generated in 2001-2005.
Vietnam has consistently made significant progress over the past years, establishing itself as one of the fastest-growing countries globally This rapid development has enhanced the nation's international standing, improved the living standards of its people, and strengthened its competitiveness on the global stage.
In recent years, the Foreign Direct Investment (FDI) sector in Vietnam has consistently outpaced the country's overall GDP growth, highlighting its strong and continuous expansion From 2011 to 2015, Vietnam's GDP grew at an average of 5.9% annually, increasing to approximately 6.75% during 2016-2019, while FDI growth rates soared, reaching around 8.4% in 2010 and approximately 10.6% in 2019 Despite this robust FDI growth, Vietnam's GDP per capita remains lower than that of other ASEAN nations, with a 2019 figure of around $2,750 USD—about 4% higher than Singapore’s, 22.5% higher than Malaysia’s, and 35.3% higher than Thailand’s—indicating significant potential for economic advancement through increased investment.
Vietnam has attracted over $7 billion in foreign direct investment annually for more than 30 years, averaging approximately $2.2 million per person Between 1988 and 2019, nearly 47% of registered FDI was realized, with the majority originating from countries with medium-level technology, highlighting the need for Vietnam to attract FDI from wealthier nations possessing advanced technology, financial strength, and larger markets From 2011 to 2019, the FDI sector contributed around 25.7% to Vietnam's economic growth, increasing Vietnam’s GDP contribution from 13% in 2010 to 19.6% in 2019, demonstrating its significant impact on the country's economic development.
PepsiCo began its strategic entry into the Vietnamese market in the early 1990s, quickly gaining dominance through competitive pricing and a strong global reputation for quality In just three years (2001-2004), PepsiCo Vietnam experienced an average annual volume growth of 21.5% and increased its market share by nearly 6%, establishing itself as the leading beverage company in Vietnam From 1998 to 1999, following restructuring and full ownership by PepsiCo, the company’s profits surged from USD 110 million, and it subsequently expanded its infrastructure by investing over USD 500 million in building multiple factories across Can Tho, Bac Ninh, and Quang Nam These investments and strategic moves solidified PepsiCo’s position as a dominant player in Vietnam’s beverage industry.
PepsiCo Vietnam's strategic focus is on strengthening its most successful products rather than future offerings Between 2009 and 2011, the company's growth rate exceeded 20%, tripling the national beverage industry's average growth Thanks to improved production and management processes, Pepsi Vietnam reduced costs per tank by nearly 45% In 2011, PepsiCo announced a $250 million investment plan to expand manufacturing capacity, upgrade facilities, and diversify its product portfolio across Vietnam Key projects included building new factories in Binh Duong and Can Tho, along with constructing its fifth and largest factory in Bac Ninh, Vietnam Singapore's urban-industrial area, which is among the largest in Southeast Asia This investment plan underscores PepsiCo’s commitment to Vietnam, with a total capital infusion of $500 million since their market entry in 1994.
Suntory PepsiCo’s Can Tho branch has received a certificate of merit for four consecutive years from 2013 to the present, recognizing its compliance with tax policies and laws Nationwide, Suntory PepsiCo’s branches and factories have been repeatedly honored for their responsible tax payment, as acknowledged by the Prime Minister, the General Department of Taxation, and local authorities Since its establishment in 2004, the Quang Nam branch has received 13 merit awards from the Prime Minister, the Ministry of Finance, and Quang Nam Province’s People’s Committee In 2016, the company’s branches in Quang Nam and Bac Ninh continued to be recognized with certificates of merit for exemplary adherence to tax regulations Additionally, in late 2014, Suntory PepsiCo was among the top 20 companies in Ho Chi Minh City to receive a certificate of merit for outstanding tax compliance.
Committee of Ho Chi Minh City for the achievement of tax payment exceeding the target estimate.
In 2016, Suntory PepsiCo significantly increased its contribution to Can Tho's tax revenue by over 30% compared to 2015, earning recognition as one of the two exemplary companies honored by the Can Tho Tax Department in August 2017 The company ranked among Vietnam's Top 100 largest corporate income taxpayers in 2016, 2017, and 2018, and was recognized as one of the Top 5 multinational FMCG companies with the best working environment in Vietnam in both 2017 and 2018 Additionally, Suntory PepsiCo was listed among the Top 3 reputable enterprises in the beverage industry in Vietnam for three consecutive years from 2017 to 2019 Since its market entry in 1994 with just two products, SPVB now boasts 13 popular brands including Pepsi, Oolong Tea TEA+ Plus, Aquafina, Sting, and Lipton Iced Tea, with a growing operational scale comprising five factories, five representative offices, 2,800 full-time employees, and thousands of indirect employees nationwide.
CONCLUSION
Pepsico’s investment abroad is driven by the desire to access new markets, boost demand, and capitalize on high profitability opportunities By engaging in foreign direct investment (FDI), Pepsico can also benefit from cheaper raw materials and abundant labor pools in host countries Investment decisions by multinational corporations (MNCs) like Pepsico depend on various factors, including revenue and cost considerations, which influence the choice of investment methods tailored to specific markets Such investments have significant implications for developing and emerging economies by providing essential funding and expertise, fostering infrastructure development, and stimulating economic growth through increased income and employment From 2016 to 2019, Suntory PepsiCo Vietnam consistently ranked among the top 100 enterprises paying corporate income tax, with its tax contributions doubling by 2019 compared to 2016, underscoring its impactful role in the local economy.
In 2019 and 2020, Vietnam faced significant losses and challenges due to epidemics and floods, severely impacting communities nationwide In response to the Government’s call to "leave no one behind," Suntory and PepsiCo have made meaningful contributions by supporting long-term social initiatives During the fight against COVID-19, these companies actively empowered vulnerable populations through the "Million Meals" program, providing essential food aid Additionally, they donated medical equipment and supplies to frontline hospitals across the country, demonstrating their commitment to community resilience and health.
The "Million Meals" program has provided nearly 540,000 meals worth 8 billion VND to over 37,000 vulnerable individuals, including homeless people, unemployed workers, poor patients, and students in dormitories This initiative highlights PEPSICO's commitment to supporting pandemic-affected communities in Vietnam To further boost economic recovery, the Party and State of Vietnam should expand international economic activities and foster global exchanges, creating opportunities for foreign investors to enhance production and business resilience post-COVID-19 Strengthening international collaborations can also raise awareness of Vietnam's market potential, attracting more investment and driving sustainable growth.
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