Page 66 - IACC Newsletter January 2013 Issue no. 8 HD

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PepsiCo consolidates all its company-owned bottling plants under two market
units
Beverage and snacks maker PepsiCo has consolidated all its company-owned bottling plants under two market units to
eliminate layers in organizational hierarchy and enable quick decision making to push growth in a tepid economic
environment.
PepsiCo beverages CEO Gautham Mukkavilli told ET the consolidation, effective from this month, is being done to
improve operating efficiencies. "We expect the restructuring to help in faster alignment of resources in terms of sales
and distribution, quicker decision making, and better geographic alignment of commercial strategies," he said.
The maker of Pepsi cola, Nimbooz lemon drink and Tropicana juices has also reconfigured its market units-as the bottling
arms are called internally-from three to two now.
The north and east units have been clubbed together under what is now called the himalayan market unit, while the
west and south divisions have been brought together under the peninsular market unit.
Satyavrat Pendharkar, a PepsiCo veteran, will head the Himalayan unit, while Samudra Bhattacharya, another old hand
at the company's bottling business, will take care of the peninsular unit, the company said.
Sanjay Mishra, who was heading the western division, has moved to a sales role within the firm's Asia, Middle East and
Africa sector. Arghya Chakravarty, who was heading the southern division, has now become sales director for beverages.
A person familiar with the development said the company has empowered the two market unit heads to make
independent calls to respond fast to market dynamics and consumer demand. "For example, assuming that rival Coca-
Cola decides to flood a particular market with specific promotions or discounting, then the PepsiCo market unit head will
have the authority to make independent calls on how best to counter the competitor," the person said.
PepsiCo has so far invested more than $1 billion (approx 5,500 crore) in India and in all, has 38 beverage bottling plants
besides three plants for making snacks. Of these, close to 24 beverage plants are franchisee-owned, and the remaining
14 are company-owned. Independent bottling entrepreneur Ravi Jaipuria and his brothers CK and SK Jaipuria control half
of PepsiCo's bottling business in terms of volumes, and have a significantly higher number of plants compared to the
company.
India is perhaps the only country where PepsiCo's bottling and franchise operations are split almost evenly. In rapidly
growing markets like China, for example, PepsiCo's bottling is entirely held by franchise bottlers.
There has been speculation that PepsiCo may hand over an increasing number of bottling operations to the Jaipurias,
but Mukkavilli denied it. "As of now, there is no such move being considered to review our franchisee and company-
owned bottling arrangements," he said. Ravi Jaipuria's RJ Corp acquired PepsiCo's West Bengal operations three years
back-the first time a company plant had been acquired by a bottler. And the previous year, it had taken a controlling
stake in PepsiCo's Guwahati-based franchisee bottler North East Pure Drinks.
Ranbaxy Launches Absorica Capsules in US Market
Ranbaxy Laboratories Ltd. said its wholly-owned subsidiary Ranbaxy Laboratories, Inc. announced the sales and
promotion launch of Absorica (Isotretinoin) capsules, a product that is licensed from Mississauga, Ontario-based Cipher
Pharmaceuticals Inc.
Absorica is indicated for the treatment of severe recalcitrant nodular acne in patients 12 years of age and older. Due to
its high lipophilicity, oral absorption of isotretinoin is enhanced when given with a high-fat meal. However, Absorica,
which is formulated using patented Lidose technology, can be given without regards to meals. The fasted AUCo-t of
Absorica is around 83 percent greater than that of Accutane, while both products are bio-equivalent under fed