RAVI Jaipuria, one of India’s wealthiest individuals, said last week he fully understood the risks of the Zimbabwean landscape and would proceed with his US$30 million investment plan for a beverages business under the Pepsi brand.
In an interview with the Financial Gazette’s Companies & Markets (C&M) after Zimbabwe finally released a certificate of compliance giving him the green light to construct the plant, Jaipuria said while he was not blind to the risks, his US$2 billion empire would not be disturbed if something went bad in Zimbabwe.
An outlay of US$30 million was too small, said the soft spoken tycoon, whose investments cut across sectors worldwide.
The certificate of compliance only came eight months after the Pepsi project was announced in November last year.
Jaipuria said he was weighing the “positives” of investing in Zimbabwe against the “negatives” which gave him confidence in the deal, even after bureaucracy in the City of Harare had thrown the project behind schedule.
Jaipuria, whose net worth was estimated at US$1,67 billion by Forbes Magazine about a year ago, is said to generate a significant part of his wealth from Varun Beverages, which would be setting up a footprint in Zimbabwe through Pepsi.
Named after his son, Varun accounts for about 55 percent of his company, RJ Corp’s annual turnover.
It operates bottling plants in countries that include India, Sri Lanka, Nepal, Morocco and Zambia.
In the meantime, Jaipuria has been cementing his position as India’s bottling king with investments such as the Zimbabwean operation.
Varun announced in November last year that the Pepsi plant would kick off production by August this year, with capacity to provide 300 to 400 direct jobs, in addition to 1 500 indirect employment.
And to demonstrate his commitment, the tycoon included Zimbabwe on his African tour last week, to witness the issuance of the final document by the City of Harare, after which he told C&M that construction would start in two weeks.
“I cannot be deaf to what is happening in the world (including in Zimbabwe),” Jaipuria said.
“Zimbabwe will be a very small investment. It is not something that will kill the company if something goes wrong. There will be a risk factor but I am prepared to take the risk looking at the positives against the negatives. Zimbabwean people are hardworking and very intellectual. I think I must hire more Zimbabweans to work in other countries which are English speaking,” said Jaipuria, whose empire has established a footprint in seven African countries.
“We will be in production by early February,” he said.
“It will be the fastest plant (that we have built). We have not done this anywhere in the world but we will do it here,” he added.
It was the third time the tycoon arrived in Zimbabwe to deal with facilitating the development of the project.
Despite the country desperately needing foreign direct investment, its policies and administration of investment-related institutions and State organs have combined to deter foreign investment.
“A lot of countries have a single licencing authority for investors coming from outside. It makes life much easier. We (foreign investors) don’t have contacts in Zimbabwe so we keep running from pillar to poster,” said Jaipuria.
“All the equipment is already planned; it can be shipped anytime. We are looking at more products such as dairy; we will start making juices here and ice cream. We are the largest producer of ice cream in India and we are looking to expand outside India. The President (Robert Mugabe) was keen to see me bring health care here. There is a change in the way Indian investors look at outside investment. We are a US$2 billion group, we can afford to go into many countries but it is going to be step by step,” he added.
The Indian tycoon had last year visited the country before meeting President Mugabe during the Africa India summit in November, where he laid out a vision that was far beyond beverages production.
On completion, the Pepsi plant is projected to become the single largest competitor to beverages conglomerate, Delta Corporation Limited, whose fortunes have recently been affected by a liquidity crunch that has combined with increasing joblessness to erode disposable incomes and consequently sales.
At present, Pepsi products are already available in Zimbabwe, where they are shipped from the company’s Zambian plant.
Jaipuria, who remains modest, travelled to Zimbabwe by his private jet, which he said was not for luxury but for business.
“God has been kind,” he told C&M.
“He has given me enough money to invest, we have a good business. We give free education in India. We employ 25 000 people.
“Yes I have a private jet. The connections are not good so if you want to connect in Africa you need a private jet. We do seven countries in Africa so it is mostly necessity than luxury. It took me one hour to fly from Maputo to Harare but (one of my executives) took eight hours to get here (by commercial flights,” he said.-Fingaz