Bottled water a lucrative business

Bottled water a lucrative business

By Soeryo Winoto

JAKARTA (JP): Before the 1970s, no one had ever thought that
selling drinking water would become a lucrative business in this
archipelagic country.

In those days, for people living in urban areas, drinking
water meant the clean and consumable water supplied by the city
company for drinking water (PDAM).

People in rural areas then had little knowledge about health
or hygiene and were not particular about the water they drank.
They drank well water albeit many of the wells were located close
to rivers.

No one anticipated too that rapid population growth would
threaten the purity and abundance of our water sources.

Few were aware that industries can consume more water than
agriculture. And even fewer had thought that the country's
economy would one day depend not only on agriculture, but
industries too. The public had also never thought that they would
one day have to pay for drinking water, which is more expensive
than gasoline.

Those living in densely populated villages had difficulties
seeking proper spots for digging wells, what with the many septic
tanks here and there. Those living in urban areas started to
complain about the muddy and smelly tap water supplied by PDAM.

People in rural areas, who use water from rivers or waterways
for their daily needs, were being "poisoned" by industrial
effluent discharged indiscriminately into these water sources.The
fact that the government had not effectively used water from
rain, rivers and the ground, also contributed to the scarcity of
consumable water.

This was when Tirto Utomo came up with the idea of bottling
drinking water.

Tirto Utomo established his first such factory in Bekasi, West
Java, in 1973. The bottled water was called Aqua, a name that
could be easily remembered. Today drinking water is generally
referred to as air aqua (aqua water). "Aqua" means water in
Latin.

Since then many other brands of bottled water have entered the
market.

After almost 30 years, Aqua is still the leading player in the
business. PT Aqua Golden Mississippi, the producer of Aqua, now
has 12 factories.

According to recent records at the Ministry of Trade and
Industry, the Directorate General of Food and Medicine Control
at the Ministry of Health and the Statistics Bureau, Aqua holds
36 percent of the market, followed by Ades with 19 percent, VIT 8
percent and 2 Tang 6 percent.

"With more players in the business, the market will be almost
equally shared among them," Willy, deputy chairman of the
Association of Indonesian Producers of Packaged Drinking Water
(Aspadin), said, adding that the association did not promote or
market any of the products.

Records also indicate that last year Aqua consumed about 2.5
billion liters of water, out of the five billion liters used by
producers of bottled water.

In 1999, out of the more than 4 billion liters of water used
by bottled water producers, 1.75 billion liters was used by Aqua.
(See Tabel)

In an interview with a Jakarta-based magazine last year,
Willy, who is also director for industrial affairs of PT Aqua
Golden Mississippi, said the company expected Rp 700 billion in
revenue in 2000.

The actual revenue of the company in 2000 was not available.

The lucrative bottled water business here has lured foreign
producers.

"The entry of imported products cannot be avoided in such an
open era. But local products are keeping steady as domestic and
imported products have their own market segments," Willy said.

Imported bottled water is more expensive than those locally
produced, thus the imported products is not more than 0.1 percent
of the total bottled water consumption in the country.

"There are less than 10 imported products," he said, citing
Evian, Volvic, Perrier, Canadian Clear as examples.

270 companies

There are now about 270 companies registered as bottled water
producers at the Ministry of Trade and Industry.

"About 150 of them are actively producing bottled water,"
Willy Sidharta, said.

The many players in the market have given rise to stiff
competition and unhealthy rivalry. For example, many brand names
of bottled water producers resemble that of Aqua, such as Club
Aqua, Aquaria and Quaqua.

Aqua is PT Golden Mississippi's trademark, but the company had
failed to obtain a patent for its product.

"Some producers reuse the plastic bottles, which are supposed
to be disposed for hygienic reasons," said Willy. "Such
transgressions are mostly perpetrated by unregistered companies."

According to the association, five-gallon containers have also
been misused. "Unscrupulous producers refill containers bearing
names of other brands," Willy added.

"This is a trade and business transgression which can damage
the reputation of legitimate producers," Willy said.

An illegal producer, who operates in Ciputat, at the border of
South Jakarta and Tangerang, Banten, told The Jakarta Post that
consumers could hardly tell the difference between the legally
and illegally produced bottled water.

"The (illegally produced) water is as clear as those legally
produced. The taste is also almost the same," he said, declining
to explain how he and his men processed the water.

But a buyer called the public to be more vigilant when
purchasing the five-gallon bottled water. "The illegal products
have the plastic seals around the containers' neck sloppily
pressed. The seals are usually loose as the producers use hot
water to tighten the seals."

Many people have complained about substances floating in
bottled water or the water tasting sour.

The association, which has only 70 of the 270 producers
registered at the Ministry of Trade and Industry as members, is
unable to stop the illegal practices.

"We don't have the authority or legal power to take action
against illegal or dishonest producers. We only cooperate with
the Ministry of Trade and Industry and the Ministry of Health
regarding any irregularities," said Willy.

"Dealing with such a problem is time consuming. The key is to
reinforce laws that regulate the production of bottled water," he
said.

"Therefore, we call on all producers to become members of the
association. In this way the association can guide them to
produce better quality drinking water. Members must abide by the
association's code of ethics as the objective of the association
is to maintain the quality of bottled water and seek ways to
develop the industry in a healthy manner."