July 6 (Bloomberg) -- PepsiCo Inc., the world’s second- largest soft-drink maker, and Pepsi Bottling Group Inc. plan to invest $1 billion in Russia over three years in anticipation that growth in the country’s retail sales will resume.

The investment will bring the companies’ total outlay in Russia to more than $4 billion, according to a statement released today. PepsiCo and Pepsi Bottling this week will open a new bottling plant outside Moscow. PepsiCo also plans to start up a new snacks plant in Azov in southern Russia this year.

“This investment reflects very clearly our great confidence in Russia and our long-term commitment to this very important market,” PepsiCo’s Chief Executive Officer Indra Nooyi said in the statement. “We are optimistic about the future of Russia, and we look forward to continuing to build our business here.”

Purchase, New York-based PepsiCo introduced its Pepsi drink to Russians 50 years ago. The company is counting on a resumption of growth in consumer demand after Russian retail sales declined the most in almost a decade in May. Retail sales, fed by rising consumer borrowing, have increased at an average annual rate of about 13 percent since 1998.

“The Russian market has potential for growth, that is obvious,” said Natalia Smirnova, an analyst at Uralsib Financial Corp. in Moscow. “PepsiCo is not afraid of a temporary slowdown.”

Lebedyansky Acquisition

Renaissance Capital in February forecast food retail sales growth of 16 percent in ruble terms this year, though the gain will be 2 percent adjusted for inflation. Food will become shoppers’ “main priority” as falling incomes squeeze out other spending, Renaissance analysts said in a Feb. 25 report.

Last year, PepsiCo and Pepsi Bottling agreed to pay $1.4 billion for a 75.5 percent stake in Russia’s biggest juice manufacturer, OAO Lebedyansky, making it the company’s largest international purchase.

PepsiCo and Pepsi Bottling on July 8 will open a beverage bottling plant in Domodedovo in the south of Moscow, the largest Pepsi bottling facility in Europe, according to the two companies. PepsiCo is also investing more than $100 million in the Azov snacks plant, which will make products such as Lay’s potato chips and Cheetos snacks.

To contact the reporter on this story: Maria Ermakova in Moscow at mermakova@bloomberg.net.

Last Updated: July 6, 2009 04:18 EDT