The investment will directly create almost 3,000 new jobs, the soda-to-snacks manufacturer said.
The plant in Guanajuato, north-east of Mexico City, will be PepsiCo’s first new facility construction in 20 years. When running at full capacity, which the company hopes to achieve by 2025, it will create an additional 1,000 jobs.
Roberto Martinez, president of PepsiCo Alimentos Mexico, said: "Mexico's competitiveness is key to the success of PepsiCo, and our goal is to make sure that our success is also that of Mexico."
PepsiCo Mexico employs nearly 80,000 people and its portfolio includes brands such as Sabritas, Gamesa, Quaker, Pepsi, Gatorade and Sonric's.
In 2017, Latin America represented 11% of PepsiCo's total global US$63.5bn net revenues, with Mexico and Brazil generating a significant portion of these earnings. Mexico net revenues for 2017 were $3.6bn while Brazil net revenues represented US$1.4bn.
Four strategic areas
The $4bn cash injection will be rolled out over 2019 and 2020 through PepsiCo Alimentos Mexico and its strategic partner Grupo Gepp. It will focus on four strategic areas: agricultural model, infrastructure, sustainability agenda, and community development programs.
Over one billion dollars will be directed to strengthening the company’s sourcing and agricultural model for key commodities grown locally such as potatoes, corn, and sugar, purchased from small, medium and large producers, it said.
PepsiCo will also renovate its Agricultural Development Center (CDAS) to ensure the supply of high-quality potato seeds, it added.
A portion of the investment will go to improving the nutrient profile of PepsiCo products, with $13m devoted to reducing saturated fats.
It will also aim to reduce CO2 emissions and increase the amount of renewable energy used in its Mexican operations, while more than $7m will be invested in development programs that focus on water, recycling, nutrition and the empowerment of women, it said.
110-year history in Mexico
PepsiCo has been present in Mexico for over 110 years and Ramón Laguarta, CEO and chair of the board, said the company was “excited for the next 100”.
"Mexico is our largest operation in Latin America and the second worldwide. It is an honor for us to have a positive impact at all levels of the country's economy, from the countryside to the corner stores in each location."
The $4bn planned investment follows a US$5bn cash injection in Mexico in 2014 directed towards product innovation, brand consolidation, infrastructure, sourcing, and community outreach.
Grupo Gepp is PepsiCo Mexico's exclusive bottler. It manufactures and distributes international brands such as Gatorade, Lipton, Pepsi, and 7up, as well as partner products including Jumex Fresh and Jarritos.