The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

BAHAMAS-based bottled water companies are facing stiff foreign competition, the head of one leading producer telling Tribune Business yesterday that high electricity costs, 15 per cent up over last year, was another major challenge.

Geoffrey Knowles, Aquapure's operations manager, told Tribune Business that while the company was still holding its own and providing employment for its 125 staff, it was facing ever-increasing competition from foreign rivals.

Mr Knowles told Tribune Business: "We are holding our own, but there is still severe competition from offshore. I don't think any of us are really making any money.

"You have, for instance, companies like Nestle and, I think, Niagara, which sell the 32-pack, 16.9 ounce bottles. We can't really compete with them on price. The duty is too low. I think the duty is 70 per cent and they are able to produce millions of bottles a day. People buy them and bring them in on containers. A lot of the hotels buy the foreign water, so it's tough."

Mr Knowles said electricity costs were a major challenge for his operation. He added: "We are about close to 15 per cent higher in electricity costs over last year. We have a big bill, and that 15 per cent translates into a lot of dollars. You are looking at around $6-$7,000 a month more."

"Cost is a big factor. Electricity costs, material costs, everything is going up except the price of our water. We have had increases in the cost of plastic, electricity, labels as well as boxes, and in order to compete we have to hold our price, so it's very tough."

Continuing on the electricity theme, Mr Knowles said power outages also had a significant affect on the company's operations. He explained: "When we have our equipment running and we have a power cut, it takes us a while to get our generator going, so then we have to restart all the machines and, when the power comes back on, it takes our generator off-line, so it's another power cut of sorts .We lose a tremendous amount of manpower with these cuts.

"We are pretty much even with last year, and that's sort of a good thing given the recessionary period we're in. We were hoping for some growth, forecasting maybe a 5 or 10 per cent growth, but I don't think that's going to happen. We are managing to keep afloat, so to speak; we are still paying our bills."

The head of Source River (SRL), which produces the high-end Echo water brand, told Tribune Business that the company was holding its own. "We are trying to put in different equipment to expand into different things. We are trying to get our own equipment in to make our own bottles and change the dynamics of our operations. Sales are still moving ahead as far as I know. That particular water is in very high demand, so we are putting in additional capital to be able to compete," they said.