INDONESIA AS NEW EMERGING MARKET

Tuesday, December 19, 2006

BOTTLED DRINKING WATER INDUSTRY

Bottled drinking water (AMDK) becoming attractive because requirement of drinking water public would be increasing along with growth of number of populations. Urban community now have been at level cannot get out of AMDK. This is influence the number and product from the industry growing more and more.

Now total consumption of drinking water reaches 26 liter billions per year. Instead of, water availability that is it is good to drinks with quality and well guaranted of its health and more difficult to be obtained.

From the angle of sale, this industry experiences growth from year to year. Data from Association of the Indonesian bottled drinking water manufacturers (ASPADIN) shows surprising number. If sale of AMDK by 2001 reaching 5.4 liter billions, one year then rising 31.5% becomes 7.1 liter billions. Then, by 2003 increasing 14.1% to reach 8.1 liter billions.

ASPADIN targets sale of AMDK this year grows 10% becomes 12 liter billions. Improvement of consumption is estimated happened at semester II 2006 with assumption of dry season takes its rise at spread at that time. According To Willy Sidharta, public chief ASPADIN, like quote by Bisnis Indonesia, compared to growth of 2005 reaching 11%, this year sales target tends to declines because condition of weather that is below par.

Even AMDK is wet business, does not mean no barrier. The weather that is below par and many drinking water depot store force AMDK industry to correct its strategy.

AMDK businesses play by tens of company, big, middle, and also small. According To ASPADIN, now there are 480 AMDK companies, but productive only 350 with 165 among others is merged into ASPADIN. Now there are approximately 600 AMDK brands which active in market.

This AMDK company excise starts 1973 with capacity produce of 6 million liters per year. Now they have capacity produce of approximately 12.6 liter billions per year (in 2005) with volume of trading 10.1 liter billions.

AMDK business also involves foreign company. Consumption level of AMDK in Indonesia 36 liters per capita per year. This number is still low compared to Thailand (70), USA (80), French (140), and Italy (165).

Local AMDK product has export to various country, like Singapore, Portugal, East Timor, Japan, Malaysia, and Hong Kong. Based on data, product export value AMDK by 1999 reaching US$3.9 million and downwards thus US$3.4 million at 2005.

On the other side, Indonesia also imports AMDK products from French, Malaysia, and Singapore. In 1999 import value this products reach US$0.39 million, in 2001 reducing to US$0.31 million. And in 2005 the imports increased again becomes US$0.99 million.

Among others, there are some AMDK industry player which still have not applied good productivity ways and correctness, many of them use of secondhand bottle, or other company brand gallon, and existence of usage forgery of sign of National Industry Standard (SNI).

Has not been known how much/many market share total AMDK in Indonesia. But, sale total of AMDK in Indonesia now is estimated more than IDR 3 trillion per year. From the number, simply brand Aqua and VIT lead the market share 45%, then equal to 30% by other brands, that is AdeS, Total, Club, 2-Tang, and Oasis. Meanwhile, other 25% fought over by hundreds of brand which spread over in all Indonesia.

Growing of AMDK industry, besides because of its practice to use , also because the taste is fitting in with tongue most Indonesia public. More than anything else, with consuming AMDK, likely there are guarantee for their hygienic and right processed. While for investor, the AMDK industry is one of primadona investment choice because, firstly, its processing process not too complicated and easy goes technology. Second, its investment not too big, more than anything else more and merely many local companies capable to make processing machines of AMDK with international quality. Third, its market prospect is hardly promises.

Hence, it is not strange if in story at retail AMDK product leader about 67% of beverage market share. Rest share for ready powder for drinking product (11.75%) and carbonate beverage (10.42%).


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