PepsiCo, Nestle and Cisco have announced plans to spend a total of $7.35 billion in the nation over the coming years. The former is making the investment despite reforms by the Mexican government which place a higher tax on sugary drinks, calorie-filled snacks and pet food. PepsiCo makes products such as Pepsi and Mountain Dew soft drinks as well as Lay's crisps while Nestle makes Purina pet food.
The Financial Times reported that the move by these multinational corporations has been met positively by Mexico's president Enrique Pena Nieto. The move is expected to generate a host of new jobs as Pepsi looks to invest $5 billion into Mexico over the next five years. This will include plans to expand its range of products and increase manufacturing and delivery capacity, creating 4,000 jobs.
Mr Pena Nieto was quoted by the news provider as saying: "The enthusiasm that our country has awakened through the structural reforms it is making and the platform it is building to boost economic growth and social development."
Paul Bulcke, chief executive of Nestle, explained that the company is ready to spend $1 billion to build new baby food and pet food plants as well as expanding its cereals facility. Mr Bulcke said that the work is expected to create around 700 new direct jobs while a further 3,500 indirect jobs will also be made available.
Nestle will be wary of not making the same mistakes in Mexico as it has done in India. Earlier in the month, the company admitted that it had made a strategic error by ignoring more affluent consumers in the nations and instead pursued the cheaper market by pushing sweets and low cost noodles. The company stated it did not take advantage of the "emerging affluent segment".
Posted by Kate Griffin
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