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PepsiCo, Germany Company To Open Yogurt Factory In Batavia

10:01 AM, Feb 25, 2012   |    comments
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By JOSEPH SPECTOR
Albany Bureau Chief

ALBANY -- PepsiCo and a leading German dairy company are announcing a deal today to build their first U.S. yogurt-producing facility at a business park in Batavia.

The Purchase, Westchester County, based PepsiCo and Theo Muller Gmbh, Germany's largest privately owned dairy business, will invest $206 million and create 186 new jobs at the new facility at the Genesee Valley Agri-Business Park. The joint venture is called Wave LLC.

"This project demonstrates that leading international companies like PepsiCo and Muller see New York as a premier place to invest and the natural choice for their first venture into the yogurt business," Cuomo said in a statement.

The state is providing about $13 million in tax breaks through state agencies for the deal, as well as a $1 million grant from the state's Homes & Community Renewal program. Genesee County will provide $12 million in tax breaks.

Cuomo's office said that the project would be developed over two years, but the company may begin importing Muller products quickly to capitalize on the rapidly growing yogurt market.

The announcement ends months of speculation about a potential deal by Pepsi and Muller to collaborate and gain in foothold in the burgeoning U.S. yogurt market.

And as rumors swirled about the companies' partnership, so too did speculation on where the factory might be built. The ongoing development of the Genesee County business park led to talk of a potential blockbuster deal. Neighboring counties, including Livingston County, were also vying for the rumored project.

Cuomo's news release states that because of the access to dairy farms, water supply and distribution routes to key markets, the company chose the Genesee Valley Agri-Business Park.

Alpina Yogurt, based in Miami, has a plant under construction at the business park.

"New York is working hard to be a global leader in the kind of high-growth manufacturing that has critical economic development and job creating potential," said Kenneth Adams, the head of the state's Empire State Development Corp. in a statement.

New York has quickly become a yogurt-making capital, particularly Greek yogurt. The state has 29 yogurt plants, which employ more than 2,000 people and produced 530 million pounds of yogurt in 2011, Cuomo said. That's a 43 percent increase from 2010 and more than double 2008 levels.

Because producing Greek yogurt requires three times as much milk as traditional yogurt, farmers are seeing a boom. Last year, more than 1.166 billion pounds of milk was used for yogurt production - enough to support 500 dairy farms, Cuomo said.

Late last year, Cuomo brokered a deal over what was dubbed the "yogurt wars" when local leaders in Johnstown, near Albany, were battling over a sewer line for a new FAGE Inc., plant.

The 15-county area of western New York accounts for about 40 percent of the state's milk production, Cuomo said. The largest producer is Wyoming County.

By JOSEPH SPECTOR

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