December 20, 2018 / 1:36 PM / a month ago

UPDATE 1-Pepsico's SodaStream to open factory in impoverished Gaza

(Adds details, background)

JERUSALEM, Dec 20 (Reuters) - Israel-based SodaStream, a carbonated drink-machine maker bought this year by Pepsico for $3.2 billion, is establishing a factory in the Gaza Strip, its chief executive said on Thursday.

Most Palestinians in Gaza, a territory controlled by the Islamist militant group Hamas, live in poverty. The economy there is stifled by an Israeli-Egyptian blockade on the territory as well as by disputes with the Palestinians' limited self-rule authority based in the Israeli-occupied West Bank.

SodaStream CEO Daniel Birnbaum told the Globes business conference that the company's manufacturing plant in Israel had succeeded with a mixed workforce of Jews and Arabs, and that it was looking to expand that approach.

The new project, Birnbaum said, sitting on a stage next to Pepsico CEO Ramon Laguarta, was to establish a manufacturing facility in Gaza. "We want the people of Gaza to have jobs, real jobs, because where there is prosperity, there can be peace."

He did not discuss other details of the planned facility.

Earlier this month, PepsiCo completed its purchase of SodaStream as it battles Coca-Cola for an edge in the health-conscious beverage market.

Founded in Britain in 1903, SodaStream was a coveted device in British kitchens in the 1970s and 80s, allowing people to create fizzy drinks by adding flavoured syrups to carbonated tap water. But its popularity faded as bottled sodas became cheaper.

More recently, the company reinvented itself as a fizzy water company popular with younger and more health- and environmentally-conscious consumers, who want to drink less soda and use fewer plastic bottles.

SodaStream was in the spotlight a few years ago when critics called for a boycott over a factory it was running in the West Bank. The company has since closed that factory, relocating to a new, much larger facility in southern Israel, although it still employs many Palestinians. (Reporting by Ari Rabinovitch and Steven Scheer Editing by Tova Cohen and Mark Heinrich)

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