Indonesia water firm Danone AQUA aims to double production capacity

Indonesia's biggest bottled water producer Danone AQUA plans to double its annual production capacity to as much as 20 billion litres in the next 3-5 years to fend off rising competition and meet surging demand, its top executive said on Wednesday.

The move comes as global food and beverage companies including Japan's Asahi Group Holdings Ltd and Coca-Cola Co are increasingly jostling for market share in the world's fourth most populous nation with around 240 million people.

Danone AQUA, which controls around 40 percent of Indonesia's bottled water market and is run by France's Danone SA, also plans to launch new products and step up its marketing, President Director Charlie Cappetti told a media briefing.

Danone AQUA, which invests around $100 million a year in Indonesia, currently has 17 AQUA plants in the country and hopes to open 10 more in the next few years, Cappetti said.

"The Indonesian market is changing rapidly. The Japanese are coming and there's a lot of money available to enter the market," Cappetti said. "I think everyone is discovering the water business in Indonesia and wants to be part of the game."

In October last year, a unit of Asahi set up a joint venture with Indonesian instant noodle maker PT Indofood CBP Sukses Makmur to produce and distribute bottled water in Southeast Asia's biggest economy.

The venture is set to compete with established brands like Danone-run AQUA and Coca-Cola's AdeS. A 1.5 litre bottle of AQUA costs around 3,000 rupiah ($0.26), while premium brands like Evian, which is also owned by Danone, sell for at least double that price.

By 2018, the value of the Indonesian bottled water market is set to surge 66.1 percent to 44.9 trillion rupiah ($3.9 billion), according to market consultancy Euromonitor International, which took into account inflation rate estimates.

This outpaces the expected 34.5 percent increase in the value of the global bottled water market to $254.4 billion over the same period, Euromonitor added.

"The bottled water market in Indonesia has seen increasing competition due to exploding bottled water consumption," said Janice Wung, research analyst for energy and environment at consultancy Frost & Sullivan.

"The almost non-existent anti-bottled water campaign in this part of the world compared to the U.S. and Europe, together with the economic growth, has presented Indonesia as a lucrative market to global bottled water companies," Wung added in an email.

Source

Media

Taxonomy

• Consumer Products
• Food & Beverage