FUNDING OUR GROWTH THROUGH ENVIROMENTAL SUSTAINABILITY

Pepsi-Cola Products Philippines, Inc.

A Green, Sustainable and Ethical Business Model

FUNDING OUR GROWTH THROUGH ENVIROMENTAL SUSTAINABILITY

Concepts
Clean energy has no additional cost.

If it is not broken, then get someone to fix it.

Triple bottom line of People, Planet and Profit
A Green, Sustainable and Ethical Business Model

FUNDING OUR GROWTH THROUGH ENVIROMENTAL SUSTAINABILITY

The Pepsi-Cola Vision

To be the leader in the Philippines in the development of a sustainable supply chain platform that will address the challenges brought about by climate change and resource shortage, and do it within a profitable framework.

A Green, Sustainable and Ethical Business Model

FUNDING OUR GROWTH THROUGH ENVIROMENTAL SUSTAINABILITY

About Pepsi in the Philippines

Most profitable beverage company 11 manufacturing plants nationwide, using more than 10 million liters of fuel oil and 60 million kwhs of power

A Green, Sustainable and Ethical Business Model

FUNDING OUR GROWTH THROUGH ENVIROMENTAL SUSTAINABILITY

About Pepsi in the Philippines

Cost of power is the highest in Asia and beset with power shortage Faced with challenges on price and supply of fuel and CO2

A Green, Sustainable and Ethical Business Model

FUNDING OUR GROWTH THROUGH ENVIROMENTAL SUSTAINABILITY

Project Power Play

Set up renewable energy facilities within the premises of the Pepsi bottling plants, which are capable of producing power, steam, CO2 and other saleable by-products AT NO COST TO PEPSI.

A Green, Sustainable and Ethical Business Model

FUNDING OUR GROWTH THROUGH ENVIROMENTAL SUSTAINABILITY

Business Model
No capital investment (BOT or BOS)
Use of Energy Service Companies (ESCO) or project developers, which bear the construction, installation, operation and maintenance costs Outsourcing of risks (financing, FX, raw material sourcing)

A Green, Sustainable and Ethical Business Model

FUNDING OUR GROWTH THROUGH ENVIROMENTAL SUSTAINABILITY

Business Model
Pay based on outputs at reduced prices with minimum off take Sharing on external revenues (e.g. sale of power to the grid, carbon credits, CO2 sale)
Assess impact of feed in tariff on power pricing

A Green, Sustainable and Ethical Business Model

FUNDING OUR GROWTH THROUGH ENVIROMENTAL SUSTAINABILITY

Business Model
Transfer of ownership to Pepsi after a certain period with an option to do O&M after the BOT period
Exit plan (pre-termination due to nonperformance, buy-out)

A Green, Sustainable and Ethical Business Model

FUNDING OUR GROWTH THROUGH ENVIROMENTAL SUSTAINABILITY

Rationale
Not our core business or competence and thus, direct investment can be risky
Difficult to get Board approval for new or untried technology and not a priority if it does not involve a new product line or process

A Green, Sustainable and Ethical Business Model

FUNDING OUR GROWTH THROUGH ENVIROMENTAL SUSTAINABILITY

Rationale
Discounted cost with additional revenues Opportunity to upgrade assets without CAPEX
Competitive advantage through innovation

A Green, Sustainable and Ethical Business Model

FUNDING OUR GROWTH THROUGH ENVIROMENTAL SUSTAINABILITY

Rationale
Improved public image through corporate environmental leadership Leads to the creation of new industries (e.g. niche on renewable energy captive market, environmental entrepreneurship

A Green, Sustainable and Ethical Business Model

FUNDING OUR GROWTH THROUGH ENVIROMENTAL SUSTAINABILITY

Lessons Learned So Far

Long and winding road
Choice of project developer Choice of technology Government

Show me the money obtaining funding for the projects, loan or equity

A Green, Sustainable and Ethical Business Model

FUNDING OUR GROWTH THROUGH ENVIROMENTAL SUSTAINABILITY

Lessons Learned So Far

The biomass supply chain
Vertical integration Reforestation Support to coconut farmers

Spread the gospel of clean energy Empower customers and suppliers to use clean energy in their operations

A Green, Sustainable and Ethical Business Model

FUNDING OUR GROWTH THROUGH ENVIROMENTAL SUSTAINABILITY

What We Have Done So Far

Metro Manila Plant Project Developer Restored Energy Development Corp., new entrant, formerly a laundry company and into the hotel business Steam generation facility serving the largest plant of Pepsi in the Philippines, uses rice hull
A Green, Sustainable and Ethical Business Model

FUNDING OUR GROWTH THROUGH ENVIROMENTAL SUSTAINABILITY

What We Have Done So Far

Metro Manila Plant Uses two multi-fuel Thermax boilers capable of displacing four million liters of fuel oil 25% cost reduction Operational since April 2010, final phase completed in November 2010 Funded by a local bank with a guarantee from IFC
A Green, Sustainable and Ethical Business Model

FUNDING OUR GROWTH THROUGH ENVIROMENTAL SUSTAINABILITY

What We Have Done So Far

North Luzon Plant Under construction and to be commissioned in September 2011 Solutions Using Renewable Energy, Inc. project developer Cogeneration facility to produce power and steam and will use rice hull and wood chips
A Green, Sustainable and Ethical Business Model

FUNDING OUR GROWTH THROUGH ENVIROMENTAL SUSTAINABILITY

What We Have Done So Far

Cagayan de Oro Plant Under construction and to be commissioned early 2012 Power Source project developer Cogeneration facility to produce power and steam and will use coconut wastes

A Green, Sustainable and Ethical Business Model

FUNDING OUR GROWTH THROUGH ENVIROMENTAL SUSTAINABILITY

What We Have Done So Far

Other Plants For contract review and signing Can be tri-generation and polygeneration To use solar, wind and biomass gasification technologies

A Green, Sustainable and Ethical Business Model

FUNDING OUR GROWTH THROUGH ENVIROMENTAL SUSTAINABILITY

Our Other Projects

Project Damascus (Big Change)
Implementation of energy efficiency solutions meant to reduce the manufacturing plants electrical energy consumption by at least 15%

A Green, Sustainable and Ethical Business Model

FUNDING OUR GROWTH THROUGH ENVIROMENTAL SUSTAINABILITY

Our Other Projects

Project Heaven Sent
Water conservation through the recycling of treated waste water, and the harvesting of rain water

A Green, Sustainable and Ethical Business Model

THANK YOU

A Green, Sustainable and Ethical Business Model