PepsiCo’s expansion plan faces Singur-like snag

PepsiCo’s expansion plan faces Singur-like snag
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First Published: Thu, Jan 15 2009. 10 38 PM IST

 Facing opposition: PepsiCo India’s foods division Frito-Lay’s factory in Sankrail near Kolkata is caught in a stand-off over land possession. Indranil Bhoumik / Mint
Facing opposition: PepsiCo India’s foods division Frito-Lay’s factory in Sankrail near Kolkata is caught in a stand-off over land possession. Indranil Bhoumik / Mint
Updated: Thu, Jan 15 2009. 10 38 PM IST
Kolkata: The snack-food division of PepsiCo Inc.’s Indian unit finds itself caught in a miniature version of the stand-off in Singur that led to Tata Motors Ltd driving its dream small car project out of West Bengal to Gujarat. And like Tata Motors, it says it may have to reconsider the project.
Facing opposition: PepsiCo India’s foods division Frito-Lay’s factory in Sankrail near Kolkata is caught in a stand-off over land possession. Indranil Bhoumik / Mint
Frito-Lay India, which makes Uncle Chipps, Lay’s potato chips, Kurkure and Quaker Oats, was allotted a four acre plot in Sankrail—an hour’s drive from Kolkata—by the West Bengal government three-and-a-half months ago to expand its existing unit in the area.
The firm had planned to invest Rs100 crore on expanding the unit, which has been in operation since 2006. But even after having paid for the plot and completing the legal formalities, Frito-Lay has not been able to take possession of the land because two small factories, backed by Mamata Banerjee’s opposition Trinamool Congress, have refused to move out.
And though they have no legitimate right to occupy the plot, West Bengal’s Marxist-led government is willing to rehabilitate these factories because it doesn’t want to pick a fight with the opposition.
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Though on a much smaller scale, it is a repeat of the stand-off in Singur, where farmers protesting land acquisition for Tata Motors’ small car factory attacked contract workers and employees. That campaign, led by the Trinamool Congress, forced the firm to move the project to make the Rs1 lakh Nano car, billed as the world’s cheapest, to Gujarat in October.
Frito-Lay, whose officials in the Sankrail factory have been subjected to occasional intimidation by locals in the recent past, wrote to West Bengal chief minister Buddhadeb Bhattacharjee on 22 December, seeking “immediate intervention” to ensure the situation didn’t go out of hand.
In that letter, seen by Mint, Frito-Lay said it would have to “rethink the justification of our investment in this project” if the administration couldn’t ensure the safety of its employees and properties.
The Trinamool Congress is opposing the expansion of Frito-Lay’s factory because it would oust two small industrial units, said Sital Shankar Sardar, the party’s Sankrail legislator. “When two landowners had opposed, the fencing shouldn’t have happened.”
Surprisingly, the state government is trying to buy peace with the encroachers.
“One of the units has claimed to be a manufacturer of telecom tower components though the DM (district magistrate) doesn’t think so. Yet, we are willing to give them land in an industrial estate if they can produce a detailed project report.” Subrata Gupta, managing director of West Bengal Industrial Development Corporation (WBIDC), said.
An official of the state’s commerce and industries department said these two units had not been able to produce any documents to show they manufactured anything at all. Even the ownership of one is questionable, according to this official, who didn’t want to be named because he isn’t authorized to speak to the press.
“Between them they occupy about 2.5 acres of the 4-acre plot allotted to Frito-Lay. WBIDC is hopeful of striking a deal with these people by rehabilitating them elsewhere or by offering a cash compensation of around Rs40 lakh per acre,” said the official.
Asked about the stand-off, Frito-Lay’s spokesperson Mrinal De issued a statement saying: “In line with our growth plan and further investments in West Bengal, we had requested for additional four acres of land adjacent to our existing manufacturing plant in the food park. The land was allocated to us by WBIDC towards the end of last year. Since then, we have completed payments and following which we expect a smooth handover of land.”
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First Published: Thu, Jan 15 2009. 10 38 PM IST