Pepsi’s biggest bottling partner outside the United States, Varun Beverages, is preparing to deepen its African footprint with a large-scale production plant in Kenya.
In its audited results for the quarter and full year ending 31 December 2025, the company listed the establishment of a wholly owned Kenyan subsidiary as a major milestone.
The firm confirmed it has registered Varun Beverages Limited in Kenya to undertake the manufacturing, distribution and sale of beverages.
Construction of the new plant is scheduled to begin in the first quarter of 2026, with commissioning targeted for the final quarter of 2027. The facility is projected to produce between 12 and 15 million cases annually once operational.
Key Developments
Varun Beverages also announced the full acquisition of Twizza (Pty) Limited in South Africa for an enterprise value of about ZAR 2,095 million. The deal, pending regulatory clearance, is expected to close by 30 June 2026.
The company further entered into an exclusive distribution agreement with Carlsberg Breweries A/S to pilot the distribution of Carlsberg beer across its African subsidiaries.
In response to rising demand, the group has expanded its business scope to include alcoholic beverages, covering ready-to-drink products, beer, wine and spirits, both in India and in overseas markets. This move was formalised through an amendment to its Memorandum of Association.
From 1 February 2025, Varun Zimbabwe and Varun Zambia began distributing PepsiCo snack brands in their respective markets.
On the capacity front, four new greenfield plants in India commenced commercial operations in 2025, alongside backward integration facilities at Prayagraj and in the Democratic Republic of Congo.
Production of PepsiCo snack products, including Cheetos, also started in Morocco and Zimbabwe through the company’s subsidiaries.
In Sri Lanka, VBL acquired a 50 percent stake in Everest Industrial Lanka (Pvt) Limited, strengthening its backward integration strategy, along with acquiring the business of Sri Sri Lanka (Private) Limited.
Also Read: CBK Survey: CEOs Flag US Tariff Risks as Kenyan Firms Stay Upbeat on Growth
The board, during a meeting held on 3 February 2026, approved a final dividend of Rs. 0.50 per equity share for the 2025 financial year, subject to shareholder approval at the upcoming AGM. Credit rating agency CRISIL, an S&P Global company, upgraded the firm’s long-term bank loan rating to CRISIL AAA/Stable from CRISIL AA+/Stable.
Financial Performance
Profit after tax climbed 16.2 percent to Rs. 30,620.4 million in calendar year 2025, up from Rs. 26,342.8 million in 2024.
The increase was attributed to higher sales volumes, reduced finance costs and stronger other income streams, including interest earned on deposits in India and favourable currency movements in international markets.
Depreciation rose 28.4 percent, reflecting the commissioning of new plants in India and brownfield expansions abroad.
Following debt repayment using proceeds from its qualified institutional placement, finance costs in India have become negligible. International finance costs are largely linked to operations in South Africa, including lease-related fair value adjustments under Ind AS 116.Pepsi Bottler Varun Beverages to Build Mega Production Plant in Kenya
