Pepsico to invest in SodaStream plant expansion

Sodastream factory

Pepsico stands to receive an NIS 80 million grant plus tax benefits for the NIS 320 million investment in the plant in southern Israel.

Pepsico, which acquired Israeli company SodaStream over a year ago, is planning expansion of SodaStream's plant in the Idan Hanegev Industrial Park near Rahat at an investment of NIS 320 million. SodaStream currently has 1,500 employees at the plant, and will hire 1,000 more for the expanded plant.

SodaStream has applied for aid for its investment under the Law for the Encouragement of Capital Investment, as an exporting company with activity in outlying areas. SodaStream could receive an NIS 80 million grant, 20% of the investment, plus tax benefits in the form of reduced corporate taxes, as US chip giant Intel, which has a fab in Kiryat Gat, is already receiving. Under the Law for Encouragement of Capital Investments, the corporate tax rate for exporting companies operating in outlying areas is 7.5%, but SodaStream will probably pay less than that.

The tax benefit requires approval from the Ministry of Economy and Industry, the Ministry of Finance, and the Israel Tax Authority. The Ministry of Economy and Industry Investment Center is scheduled to hold a meeting next month to discuss the company's request for a grant for its investment. The Investment Center is expected to approve the request.

Government sources said that the process of granting approval for the planned expansion of the SodaStream plant would be completed by the end of the year. In any case, there is a budget source for the government's support.

In the summer of 2018, Pepsico acquired all of the shares in SodaStream for $3.2 billion. A senior government source familiar with SodaStream's plans said, "Pepsico, an international company, has less sentiment toward Israel than SodaStream's previous ownership had, and Pepsico initially seriously considered locating its expansion in Mexico. Even though they had alternatives, they decided to expand the company's business in Israel."

Published by Globes, Israel business news - en.globes.co.il - on November 24, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Sodastream factory
Sodastream factory
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