PepsiCo’s Expansion of its Uruguay Production Plant

Dentons Jiménez de Aréchaga and Guyer & Regules advised on the transaction

PepsiCo successfully closed the deal to expand its concentrate plant in Uruguay and make it the main concentrate plant in America and one of the largest in the world. Its investment in Uruguay exceeds 65 million Dollars and will allow PepsiCo to have technology of the highest level of innovation. From its state-of-the-art Colonia plant, it produces concentrate of global beverage soft drinks brands which are exported to over 30 markets worldwide. The investment supposes an enlargement of the industrial plant by more than 6,000 m2 in order to incorporate further technology and make way for innovative means of production.

This operation represents an increase in added value, will employ a qualified workforce, and de-centralize economic activities away from the capital. Direct and indirect jobs creation will exceed 1,500. PepsiCo (present in the Uruguayan for over 60 years) represents 6 % of all Uruguayan exports.

On May 15, 2020, PepsiCo has closed an ambitious deal with the Free Zone’s Operator, which enables it to expand sizably, as well as obtained the renewal of its user license as Free Zone user for 20 more years.

Amid the COVID-19 pandemic, PepsiCo has honored Uruguay in choosing it as destination for this investment because of its well-known tradition of legal stability, respect of private property and high regard for the rule of law, within a continent that is frequently unfriendly to foreign businesses. In so doing, PepsiCo is not only generating opportunities for its beverage business, but will create important spill-over effects in Colonia in particular and Uruguay in general.

Corporate counsel provided by the Firm (through its Partner Virginia Brause and Of Counsel María Noel Saldías) allowed PepsiCo to expand, augment its capacity and become one of the top world concentrate plants worldwide.

Guyer & Regules advised Grupo Continental Zona Franca S.A. with Nicolás Juan (Picture), Mariana Santo and Cecilia Orlando.

Involved fees earner: Virginia Brause – Dentons – Jiménez de Aréchaga, Viana & Brause; María Noel Saldías – Dentons – Jiménez de Aréchaga, Viana & Brause; Nicolás Juan – Guyer & Regules; Cecilia Orlando – Guyer & Regules; Mariana Santo – Guyer & Regules;

Law Firms: Dentons – Jiménez de Aréchaga, Viana & Brause; Guyer & Regules;

Clients: Grupo Continental Zona Franca S.A.; PepsiCo Inc.;

Author: Ambrogio Visconti.