barter deal between US soft drinks giant PepsiCo and the Ukraine.

PepsiCo expects to invest almost $150 million to treble its soft drinks production in the Ukraine and to open up to 100 Pizza Hut restaurants there.

The expansion is being financed out of hard currency proceeds from ship exports, with the Ukrainian treasury sharing in the profits from the exports.

A joint venture, Ukrainian Development Corporation, has been formed to market internationally all the commercial vessels built by the Zaliv Shipyard, near the Black Sea.

The joint venture is committed to taking delivery of the shipyard's output for the next eight years.

These vessels are being sold by Fram Shipping, a Bermuda company which is a partner in the joint venture with PepsiCo, Zaliv and Ukrpivo, the Ukrainian state beverage organisation.

The Eletson Corporation, of Greece, has taken over ownership of three double-hulled 68,000 tonne products carriers which are currently under construction at the Zaliv Shipyard.

This is the first success of the partnership between PepsiCo and the Ukraine, with the assistance of Fram Shipping.

Fram Shipping's spokesman Mr. Ben Olson said yesterday he was not in a position to comment.

PepsiCo has said it is confident Fram could sell or lease all of the vessels, saying that Fram had found customers for Ukrainian-made ships worth $300 million in the past two years.

Part of the modernisation of the Zaliv Shipyard will include converting part of it to new manufacturing ventures, including the planned production of prefabricated Pizza Hut restaurant units.

Ships are one of the few products which the Ukraine can hope to sell internationally.

PepsiCo has relied heavily on barter deals to expand its operations in the former Soviet Union, where it began doing business in 1974.

PepsiCo has 20 bottling plants in the region and operates two Pizza Hut restaurants in Moscow.