Bottled mineral water 'Shanti', produced and marketed by the Dhaka Water Supply and Sewerage Authority, (DWASA) is failing to attract consumers in the absence of a proper marketing policy.
The authority has, however, said it is not planning to make profit from this project.
The bottled brand of the Dhaka WASA has been introduced to intervene so that the private brands cannot control the market entirely.
The bottled water production plant of the Dhaka WASA has a capacity to produce 'mineral water' of around 60,000 litres per day. But it is utilising less than half of its capacity due to lack of demand of its product in the market or it does not want to make profit.
If they do not want to make profit, why did they launch a brand spending at around Tk 169.35 million?
"Look, the Dhaka Wasa's current revenue earning is Tk 8 billion yearly. The total turnover of the bottled plant is only 0.25 per cent of total WASA revenue. So it does not mean anything to us whether the plant makes profit or not," WASA managing director Taqsim A Khan told the FE.
About the allegation that the WASA is keeping bottle plant at low profile to let private sector producers get upper hand in the market, Mr Khan said it is not true at all.
"In this open market system, the government can neither make profit nor control market".
He said Shanti is not able to control market with this capacity. Yet it always keeps price Tk 1 less at least from the other brands in the market.
According to Pran-RFL Group marketing director Kamruzzaman Kamal, the mineral drinking water market size is around Tk 2.5 billion.
The WASA's bottled brand Shanti shares less than 1 per cent of the total market.
According to a research firm, the market leader of drinking water is Fresh, which is owned by the Meghna Group. Fresh holds almost 32 per cent of the total Bangladeshi market.
Mum, owned by the Partex Group, holds the second position in the drinking water market by covering 20 per cent. The third is Acme which holds 5 per cent, Pran water 4 per cent and SPA, owned by Akij Group, has around 4 per cent share.
There are around 20 players in the organised market who produce and market drinking water on a large scale. More 30 companies have area-based market in the capital and elsewhere in the country.
Industry insiders said the bottled water market is growing at a rapid rate of around 20 per cent. At this growth rate, the 2.5 billion market is estimated to overtake the soft drinks market soon.
The WASA bottled plant has very modern facilities.
A former official of the WASA, who is now retired, told the FE that Shanti with the current facilities can share 10 per cent bottled drinking water market.
The WASA bottled plant produces bottles and caps, and purifies water by employing ultraviolet treatment in four steps.
The purifying process includes filtration with carbon filter, 0.5, 1.0 and 0.2 micron-filters, reverse osmosis system, mineral dosing in two steps and ozonation. The procedure is rare in this country.
The source of water of the plant is deep aquifer (1,000 feet underneath). The plant has treatment capacity of 10,000 litres of water per hour, and it is producing 20,000 bottles of water per day. The plant also has a laboratory, where it tests the water bottles on random basis.
Though the quality of our product is far better than other existing companies in the country and the price of Shanti is also lower, the demand is poor as people do not know about it due to the absence of sufficient campaign.
Tasqim A Khan said they do not have any plan to introduce new marketing strategy to penetrate the market.
"The project started with a view to ensuring quality mineral water and controlling the monopoly of private mineral water business in the market", he said adding that the WASA would not compete with private players in the market.
The Dhaka WASA Bottled Water Production Plant project began in July, 2004, and was completed in December, 2007. The project cost was Tk 169.35 million. Severn Trent Services, a US company, installed the plant.
The plant produces six types of Shanti water bottles. Their prices are 500 ml Tk 12, one- litre Tk 16, one-and-half-litre Tk 19, two- litre Tk 24, five-litre Tk 45 and 20-litre Tk 35 (excluding jar price).
The authorities introduced the water-containing jars in May this year, the demand for which is increasing at the corporate houses, sources said.
WASA sources said a high-powered committee has been formed to look after the project. The committee is headed by the chairman of the Dhaka WASA. But it has not done anything significant for the project.
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