Snack giant PepsiCo has opened the doors of a new factory in southwest Poland. On an annual basis, 60.000 tons of potatoes will be processed there into crisps and other snacks. What is unique, according to the American food giant, is that production can take place in a CO2-neutral manner within ten years. The company chooses a difficult time to expand production.
None other than Prime Minister Mateusz Morawiecki, who is touring the city and country in the current Polish election year, opened the doors of a new factory on Thursday, June 1. It is located in the town of Święte, about half an hour's drive from the city of Wrocław. The production facility - intended for Lay's products, among others - involves an investment of 1 billion zloty, equivalent to more than €223 million.
Polish potatoes
PepsiCo processes 200.000 tons of potatoes in the country annually. An additional 60.000 tons will soon be added, spread over three years. In four years, another 30.000 tons of corn will be added. The factory is strategically located, close to the borders with Germany and the Czech Republic. Yet Silviu Popovici, European director at PepsiCo, says that the potato raw material is sourced from Polish farmers. A total of 7.700 hectares of chip potatoes will be needed in the coming years, for which it is looking for eighty new growers.
By 2035, the factory must produce with net zero emissions. This has been taken into account during construction. This is unique in Europe, the manufacturer says. Rainwater is used in the factory, the wastewater is recycled and solar energy is generated. In a biodigester, waste products, such as peels, are fermented to extract green gas. Potato growers can fertilize their crops again with the remaining digestate.
The products that will be produced from this year are not only intended for Poland. PepsiCo already has four factories in the country. Exports go to twenty European countries, including Germany, the Czech Republic, Slovakia and Hungary.
Growing in a difficult market
The American company chooses a challenging moment in the Polish potato sector to expand potato cultivation. For years shrinks cultivation due to disappointing yields, both in terms of tonnes and financially. A new decline was expected at the beginning of this year for 2023. The sector now sounds that the area may increase, to just over 200.000 hectares. That is a growth of a maximum of 5%.
Chips and fries manufacturers have pushed hard on cultivation, with significantly higher contract prices, just as is the case in Western Europe. At the beginning of this year, French fries producers on land offered €18 to €19 per 100 kilos. Chip manufacturers such as PepsiCo are considerably above that at €22. After all, PepsiCo needs potatoes to fill their lines. Insiders expect a decline in starch and table potato cultivation, making room for French fries and chips.
Faltering start
The winter in Poland was relatively dry, with little winter precipitation. Just like in Western Europe, the spring was soaking wet. Especially in central and southern Poland. As a result, the potatoes went into the ground late. It has now become quite dry again and the potato crops are starting to falter.