Mineral water industry

OBJECTIVES 1) To know the present, past and future of mineral water industry.

2) To know the opportunities in this sector. 3) To know how demand for mineral water bottles went up.

4) To know the future growth in this sector. 5) To know the obstacles in the success of this sector. 6) To know how the person can survive in this sector as a top leader. 7) To know how actually it works. 8) To know the advantages and disadvantages of this sector. 9) To know the top leaders of this sector. 10) To see the SWOT.

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INTRODUCTION India is the tenth largest bottled water consumer in the world. In 2002, the industry had an estimated turnover of Rs.10 billion (Rs.1,000 crores). Today it is one of India's fastest growing industrial sectors. Between 1999 and 2004, the Indian bottled water market grew at a compound annual growth rate (CAGR) of 25 per cent - the highest in the world.

With over a thousand bottled water producers, the Indian bottled water industry is big by even international standards. There are more than 200 brands, nearly 80 per cent of which are local. Most of the small-scale producers sell non-branded products and serve small markets.

In fact, making bottled water is today a cottage industry in the country. Leave alone the metros, where a bottled-water manufacturer can be found even in a one-room shop, in every medium and small city and even some prosperous rural areas there are bottled water manufacturers.

Despite the large number of small producers, this industry is dominated by the following players: Parle Bisleri, Coca-Cola, PepsiCo, Parle Agro, Mohan Meakins, SKN Breweries and so on. Parle was the first major Indian company to enter the bottled water market in the country.

The total annual bottled water consumption in India had tripled to 5 billion liters in 2004 from 1.5 billion litres in 1999. Global consumption of bottled water was nearing 200 billion liters in 2006.

AUGMENTING DEMAND 2

Millions of people, both in rural and urban India, suffer from inadequate or no tap water supply. Even some parts of Mumbai, the country's financial capital, get a mere two hours of daily water supply. The city's Virar suburb gets 45 minutes. So bottled water is much in demand by residents - even though the businesses profiting from the sales are thriving from access to public water sources. The shortage of water in various areas resulted in more demand for packaged water which shows the success and opportunities in this sector.

OBSTACLES OF BOTTLE INDUSTRY

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1) Duplicate brands: - There are various small scale units who deal with illegal and

unregistered packaged industries and supply unpurified water to the public which is unhealthy/unsafe. 2) Government policies: - There are lengthy processes of the government for the

registration of any firm. This results in illegal business.

3) Only source ground water: - The major source available in India for water is non

other than ground water. This is one of the major obstacles for the bottle industry. 4) Shortage of water: - As there are only few sources of water so this becomes major

obstacle for the bottle industries to arrange water or either they have to purchase. 5) Conflicts with community: - The bottle industrialist take the major under ground

water for business purpose which results in shortage of water and that creates a conflicts with community.

6) Problems of finance: - The investment required for a registered business is high as it

requires finance for machineries, land and for many more. This is one of the major problems for bottle industry.

Equipments for water processing

➢ Sand Filters & Carbon Filters 4

The carbon filters and sand filters we manufacture are widely used to remove suspended particles, turbidity, odor, color and iron present in the raw water. These filters provide fresh water and are easy to operate. These filters are available in three series, FR, SS and MS activated carbon filter is widely used in various industries. The entire gamut is appreciated for its durability, simple installation and reliable performance. The FR series of activated carbon filters comes with fiber glass reinforced plastic (FGRP) composite vessels that are 1/3rd of the weight of carbon steel. These filters are well recognized and are certified by NSF & PED. Our range of activated carbon filter are as strong as steel and are reckoned for their excellent appearance. The filters are appreciated for the following features: •

High performance Composite material

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Thermoplastic liner of polyester

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Wall thickness 3.8 mm to 7.6 mm as per vessel diameter

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100 % corrosion resistant

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Excellent bonding between inlet & PE liner

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Better curing at high temperature 200 mm to 1,000 mm diameter

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All are top opening & dia 450 mm onwards top & bottom opening 450 mm onward flange fitting

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Operating Pressure: - 10.5 kgf/cm2

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Operating temperature: - 490 C

➢

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➢ UV Sterilization System

Our Standard features of UV sterilization system includes individual lamp indicator, ballast, drain, test port etc. while Optional features include wiper system either manual or programmable automatic, UV monitoring, intensity meter. Our modular design allows for a wide range of flow rate ranging from 200 LPH to 50000 LPH and larger flows can be handled by manifolding units together. UV Sterilization system are also available with Pre Micron Filtration units to avail the best results by avoiding shadow effect. All of our systems are designed using the state-of-the-art Quartz Technology which gives the best penetration of UV rays through Silica Quartz Jacket and the lamp used is also of hard glass for obtaining more UV output of > 50000 micro watts sec/cm2.

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➢ Jar And Bottle Filling Machines

Our compact design automatic and bottle filling machines are capable to fill 60/120 machines per minutes. The pump speed of these machines is 60/120 strokes/min while filling speed depends upon filled volume/bulk density of material.

➢ Bottle Filling Machines

We are a prominent manufacturer treatment

of

machines

water and

respective spare parts. In our assortment, we provide semi automatic bottle filling machines that are available with different capacities. These bottle filling machines are mainly used in drinking water industries for packaging of bottles. Our machine is highly durable and gives longer serviceability.

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➢ Packaged Drinking Water Storage Tank

Packaged drinking water storage tank are used to supply liquefied oxygen, nitrogen, argon and other liquefied gases. The tanks have the advantage of low area requirement, safety, simple operating convenience and are widely used in the field of gas , chemical , machinery medical treatment, electronic, mining and metallurgy. The tanks can supply cryogenic liquid from the bottom by connecting it to an outer vaporizer and cryogenic pump. We can supply the whole system along with the valve system and piping based on the customer requirement. The drawing should be on the right side of the picture. We can use the photo on the top or the one at the bottom. * Simple tube structure. * No need to replace the insulation material regularly. * Excellent insulation and low static evaporation. * Tank inter layer passes strict leakage test by helium gas spectrometer with a leak rate of less than 1 x 10 ?¹º pa-l/s. * Convenient system operation and small area requirement.

➢ Micron Filters

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Micron Filters Housing are available in different modes of constructions, viz., Poly Propylene, HDPE, SS 304 and SS 316. PP housings are available in ½“ to 1½“ BSP Female Threading sizes. Mounting brackets in SS 304 and fittings specially made for easy maintenance and handling. SS 304 / 316 Filter Housings are available with Threading or Dairy End Fittings or TC Fittings. These Housings are available with Leg Supports. Filters are either used alone or installed in series to obtain better results and optimum life. We also provide SS housing for some special applications like Pharmaceutical and Food & Beverage use (Code & Cartridge and Housings).

➢ Filter Membran

Applied membranes is a major supplier of membranes which are sold under the AMI brand, and private label. These elements are sold in 1.8" to 4" diameters and in many configurations. All 9

sizes and private labels are available. For the past 20 years Applied Membranes has manufactured hundred of thousands of

elements under the Applied Membranes label and

private label. These elements have earned the reputation of consistent quality, reliability and performance

➢ Pressure Pumps We provide a gamut of pressure pumps which is procured from most trustable vendor. Made from premium quality raw material, our precise range is catered to various clients based in different parts of the

country.

Following

are

the

attributes of High Pressure Pump:

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Low power consumption

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Easy to installs

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Corrosion resistance

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Trouble free performance

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Durable

➢ Ozonators

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unique

Likewise membranes, we also manufacture and supply our special range of ozonators. These are used for water treatment applications in various industries. It is considered as a disinfectant system that used ozone gas as the prominent component. Ozone is a powerful oxidant and a good disinfectant. It reacts more than 3200 times of any known oxidation system or disinfection system.

ESTIMATED COSTING

Cap cost

Rs.0.25

Bottle cost

Rs.1.50-2.50

Treatment cost

Rs.0.10-0.25

Label cost

Rs 0.15-0.25

Cartoon cost

Rs.0.50

Transportation cost

Rs.0.10 -0.75 11

Others

Rs.0.25

Total cost

Rs.2.85 -4.85

(excluding labour, marketing & tax) Selling cost

Rs.12.0 -15.0

Premium natural mineral water includes brands such as Evian, San Pelligrino and Perrier, which are imported and priced between Rs.80 and Rs.110 a litre. Natural mineral water, with brands such as Himalayan and Catch, is priced around Rs.20 a litre. Packaged drinking water, which is nothing but treated water, is the biggest segment and includes brands such as Parle Bisleri, Coca-Cola's Kinley and PepsiCo's Aquafina. They are priced in the range of Rs.10-12 a litre.

PACKAGING OF MINERAL WATER

It is well known that drinking water should be packed in clean, colourless, odourless, Clear, tamperproof containers, which are hygienically safe. Much of the water is packaged in similar bottles as carbonated soft drinks, and would, therefore, carry many of the same Requirements. Strength Unlike carbonated drinks, the bottles filled with still water need only enough strength to hold Water and to survive impact. REQUIREMENTS FOR PACKAGING ➢ Colour and Clarity :-

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Clarity is one of the most important requirements and is the main reason why clear bottles of plastics are used. A resin with higher levels of co-polymer adds to the clarity. As regards the light blue colour in the bottles, this is permissible for one time use bottles. However in India, the BIS (Bureau of India Standards) have prescribed colourless bottles for multi trip/reusable containers. Since currently almost all the bottlers use blue coloured containers, studies have commenced at IIP to establish whether blue colour helps to reduce the UV effect and the percentage of blue colour that could be considered to be added without affecting the clarity of the bottle. ➢ Purity:Because water is a flavourless product, using a plastic that remains tasteless and odourless is Imperati.

➢ Mandatory Certification:To prevent adulteration, the quality of the bottle and its sealing drew great attention and concern. The standardisation of the quality of the water and the bottles was not thought of earlier. There was a concern whether mushrooming brands in packaged drinking water would really ensure quality and safety. The provisions of mandatory BIS certification and that of Prevention of Food Adulteration Act (PFA) have brought in assurance to the consumers that packaged drinking water is trustworthy. The Indian Standard IS: 14543 – 1998 prescribes the quality and safety requirements of packaged drinking water.

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PLASTIC PACKAGE TYPES As the market has evolved, so too has its packaging mix .Bottles may be the favourite container for packaging water , but glass rarely features as the first choice today. Glass together with cans and cartons have a diminished share .Glass retains a high profile in outlets where the water is for consumption on the premises (hotels ,restaurants, cafes)remaining particularly strong in Central and South America and Europe ,especially Germany. Plastics are versatile materials and are in many cases capable of matching or surpassing the characteristics of other types of packages. They do not corrode, are hygienic, lightweight and often provide opportunities for reducing the weight of the packages used. A variety of polymers are available which can be used for packaging of drinking water. ➢ Polyethylene :-

Low-density polyethylene film is the most important group of plastics used in packaging drinking water. Polyolefins also have the highest calorific value of all constituents in the packaging waste stream and are, therefore, prime candidates for disposal through incineration with energy recovery. 14

➢ Polyethylene Terephthalate (PET) PET is the most extensively recycled plastic of the present time. It is easier to collect than other plastics. It has a high intrinsic value, is economic to recycle even with existing collection systems and there are well-developed markets for its recycling, such as carpet fibres and fibre film. The important feature of used PET is its ability to be converted chemically to the monomer from which it was produced using hydrolysis or methonolysis. The US Food &Drug Administration for food-packaging applications have approved PET produced by chemical recovery of this sort. For packaged drinking water PET bottles are used in 50ml to 20 litres capacity. Perrier has developed a new container that incorporates a layer of nylon sandwiched between layers of PET to comply with the requirement for a standard 12 months shelf-life mineral water.

➢ Polypropylene (PP) Polypropylene (random clarified co-polymer)is widely used for food contact applications throughout the world and enjoys favourable status with food and regulatory agencies PP containers/cups with peelable lids are used for packaging of drinking water 100,200ml.capacities with suitable lids for closures. 20-litre Polycarbonate containers. ➢ Poly Vinyl Chloride (PVC) Earlier, the most commonly used package for mineral water was stretch blow moulded bottle of PVC, as PVC is rigid, clear and has adequate impact strength. Compared to other polymers,PVC requires lower amount of energy to produce. If collected separately, it can be readily recycled. The recycled PVC is sandwiched between inner &outer layers of virgin polymer in co-extruded PVC pipes. The major concern for safe use of PVC for non-toxic and food contact applications is the residual monomer level in the resin. The FDA in USA and regulatory agencies have specified the monomer levels at 5ppm in PVC resin. PVC containers in capacities of 100,200,250 and 1000ml are used for packaged drinking water. ➢ Polycarbonate (PC) 15

Polycarbonate can be processed into useful end products by any of the usual processing Techniques like extrusion, blow moulding, injection moulding etc. Polycarbonate containers are popularly used for muti-trip application for mineral water containers of 15-20 litres. ➢ Polyethylene Naphlthate (PEN) This is a high performance resin and the containers made out of this resin are used for Refillable, returnable mineral water. ➢ High Impact Polystyrene (HIPS) HIPS (High Impact Polystyrene) containers cater to the 200ml mineral water market. These Containers are provided with heat sealable peelable lids. 20-litre Polycarbonate Container

ADVANTAGES FOR BOTTLE INDUSTRY PLANTS IN INDIA Based on our above detailed discussion of several key themes, India has developed in the following factors which are a major advantages for any of the sectors. India worked on following strategies to accelerate its growth trend. 1. Develop Human Capital 2. Augment Savings Rate Through Fiscal Reforms 3. Increase in Capital Accumulation (Through FDI and Privatization) 4. Kick-start Investments in Infrastructure 5. Reform Tax Structure 6. Improve Labour Flexibility 7. Decentralize 1. Develop Human Capital:-

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While India has been successful in creating an educated work force for the tertiary sector, primary level education still needs to be improved. The government has already taken a number of measures in this area recently. While enrolment for primary education has improved significantly, there is still a high incidence of dropouts. In 2000-01 about 53% of primary school students dropped out of school. Apart from increasing the focus on primary education, we think the government needs to complement this with programs that help train the work force.

2. Augment Savings Rate Through:Fiscal Reforms India’s savings rate was lower than for most other Asian economies. One of the key reasons for the high growth in Asia (excl. Japan and India) has been the average savings rate of around 35% of GDP in the 1990s. In India, the savings rate has averaged at 24% of GDP for the past 10 years, restricting total capital formation. Even if India’s average incremental capital output ratio (ICOR) improves to about 4% from 4.4currently, it is difficult to see sustained GDP growth of above 6.5% unless the savings rate increases. But slowly and gradually India achieved the target. 3. Increase in Capital Accumulation:Through FDI and Privatization As efforts to improve the domestic savings rate are critical, attracting foreign direct investment and privatization by way of selling stakes in SOEs to foreign investors can also augment fixed investment. Total FDI as a proportion of GDP was significantly lower in India than in China, averaging less than 1% of GDP over the past three years compared with 3.9% in China. India’s average share of global FDI inflows over the past three years was mere 0.9%, compared with 10.2% for China. Although the government has opened many sectors to FDI, we were supposed to improve the overall business environment. Then India adopted new policies and now is also one of the major exporters. 4. Kick-start Investments in Infrastructure:Since the liberalization effort was started in 1991, the government has pulled back from investing in infrastructure, assuming that the private sector will participate. However, it is unlikely to happen in the medium term. In addition, rebuilding infrastructure on a nationwide basis may take longer. Therefore, in the near term, the government could partially address this issue by developing special economic zones at strategic locations with world-class 17

infrastructure. Investment in infrastructure sectors needs to be increased to at least 9% of GDP (about US$65 billion) from about 6% currently to sustain GDP growth of 7%. 5. Reform Tax Structure:Indian tax rates were the highest in those economies. In today’s fast-globalizing world, where all countries were having reduced import tariff barriers, India still was having inter-state trade taxes. At that time India moved to a consolidated value-added tax, instead of multiple point and multiple rate production and sales taxes. Moreover, indirect taxes were inherently regressive and affecting productivity adversely. Hence, there was a need to improve the compliance of direct taxes to reduce the pressure on collecting higher indirect taxes through high rates. Regarding VAT already the steps are taken.

6. Improve Labour Flexibility:India’s labour laws were restrictive. These laws were effectively working only for the protection of the labour employed in the organized sector, which accounts for only 10% of the total work force. In fact, to avoid these restrictive laws, a large majority of factories use ‘casual’ labour. Factories prefer to employ people on contract instead of taking them directly onto their payroll. There was an urgent need to relax labour laws to enable flexibility of labour. As India is now one of the flexible country in terms of labour.

7. Decentralize:China may have traditionally been a centralized economy; it is currently operating in a completely decentralized structure. State governments actively compete with each other in wooing foreign direct and domestic private investment, ensuring a progressive business environment. In India decentralization of authority and responsibility was very crucial to encourage reform. We had enjoyed global leadership in the past. We led the world in thought, word and deed. We had the world’s first university at Takshashila in 700 BC. We had a global university in Nalanda in the 4th century. We were far ahead of other civilizations in medicine and surgery 2,500 years ago. We led the world in astronomy and mathematics. We showed the world how to navigate. We created footprints across the world through 18

merchandise and trade. Our textile industry was a world leader in the 17th and 18th centuries. Above all, we were a global economic power at the turn of the eighteenth century, contributing to a quarter of the global output. We must seek inspiration from our past, stride opportunities of the present and secure a glorious future-as a superpower in the global economic order. Twenty years from now we will be more disappointed by the things that we did not do than that ones we did do. Let us forge a partnership of men and women who govern, who think, who produce wealth and those who labour. Such a creative partnership will unleash the vast latent energies of our 1 billion people. It will enable them scale the highest peak to make India an economic superpower. We were sure we will succeed and will do India proud and results are out after a period of time.

DISADVANTAGES There are certain disadvantages which still exists in our country due to which many obstacles come in the success of the country .following are the few disadvantages

1. Unfavourable Tax Structure:No, doubt the tax rates are being improved but still there are still many things which need to be improved. The government should always see the tax structure of other developed countries so that the tax rate should be made in much more batter way.

2. Poor Infrastructure:Indian tax rates are currently among the highest in emerging economies. In today’s fast-globalizing world, where all countries reduce import tariff Barriers, India still has inter-state trade taxes. This is high time India needs to move to a consolidated value-added tax, instead of multiple points and multiple rate production and sales taxes. Moreover, indirect taxes are inherently regressive and affect productivity

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adversely. Hence, there is a need to improve the compliance of direct taxes to reduce the pressure on collecting higher indirect taxes through high rates. Regarding VAT already the steps are taken. 3. Interfering Administrative Environment:-

Still there is a lot of interferences of government which results in illegal business and many other illegal practices. so, the government should take the favourable steps to reduce all this illegal practices. 4. Unfavourable laws:Still there are many laws which create many problems for the country which are unfavourable for the growth of different sectors. The government should look after these issues so that there should no obstacles in the way of success. 5. Poor Demand Due To lower Employment Growth:-

As there are poor labours flexibility still there are many more remote areas where today also parents do not permit their children’s to go for studies which result in low employment growth and if there will low employment there will be no more demand or poor demand.

TOP PLAYERS

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Top multinational players such as Coca-Cola and PepsiCo have been trying for the past decade to capture the Indian bottled water market. Today they have captured a significant portion of it. However, Parle Bisleri continues to hold 40 per cent of the market share. Kinley and Aquafina are fast catching up, with Kinley holding 20-25 per cent of the market and Aquafina approximately 10 per cent. The rest, including the smaller players, have 20-25 per cent of the market share.

The western region accounts for 40 per cent of the market and the eastern region just 10. However, the bottling plants are concentrated in the southern region - of the approximately 1,200 bottling water plants in India, 600 are in Tamil Nadu. This is a major problem because southern India, especially Tamil Nadu, is water starved.

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