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Eureka Forbes to enter packaged drinking water market

Press Trust of India  |  Mumbai 

Water purification appliances-maker Eureka Forbes is making a foray into the packaged water segment and will roll out the bottled water product on a pan-India basis by next year, a top company official said.

"We are foraying into the extremely competitive packaged drinking water market through the 'franchise' route. In our business model, each franchisee will invest Rs 1.5-2 crore in a state-of-the-art purification and bottling set-up," Eureka Forbes CEO - Direct Sales and Senior Vice President Marketing, Marzin Shroff, told PTI.

The company will sell the product under the brand name 'AquaSure', in 20-litre and one-litre bottles, but has not divulged the prices.

Eureka Forbes, which started the direct selling concept in India, has a 52% market share in the 1,500 crore water purifier segment, with its Aquaguard and AquaSure brands.

When asked why it is entering the highly competitive market, where there are many players including multinationals, Shroff said, "Our core expertise of direct selling is our differentiator. We believe, this shall help us establish in the 20 litres 'bubble' segment that currently is dominated by local players. The existing customer base of over 10 million users of Aquaguard and AquaSure are a captive audience for bottled water launch."
At present, the bottled water segment is estimated to be worth Rs 3,000 crore, growing at an annual rate of 25%, and is dominated by Parle group's Bisleri, Manickchand group's Oxyrich, Tata Group's Himalayan, UB Group's Kingfisher, Pepsico's Aquafina and Coca-Cola's Kinley.

Eureka Forbes has already set up franchised operations for packaged drinking water in Andhra Pradesh and plans to enter Andhra Pradesh, Maharashtra, Tamil Nadu and Gujarat in a phased manner in the next four to six months.

"Our focus will be South India, Maharashtra and Gujarat... Markets that constitute almost 65-70% of the bottled water market, to begin with," he said.
The company is eyeing 14% growth in revenue in the current fiscal from Rs 1,450 crore last year on the back of its planned expansion in the air purification segment.
"The air purifier market is a nascent market. It is a category of the future and we intend to build in a big way. It is a category with tremendous potential. Right now, its contribution to the company's revenue may look minuscule, but we hope to treble the turnover every year. This is the future category for us so we will not keep any stone unturned to make it big," Shroff said.
"Last year, we did a turnover of Rs 3 crore and this year, we should be between Rs 10 crore for the segment," he said, adding that the company expected the segment to register a five-fold turnover going forward.
The air purifier market is estimated to be around worth Rs 4 crore and the firm currently enjoys a market share of 70-80% and plans to sell 15,000 units, compared to 5,000 units sold last year.
Shroff further said the company is trying to expand its global footprint to 14 new countries and will be helped by Swiss firm Lux International AG, in which it acquired a 25% minority stake last year.
"We are in a partnership with them (Forbes - Lux Group AG) in 36 countries, we want to move that to 50 countries. We are expanding into Eastern Europe now. We are also looking at Southern Africa and South America," he said.

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First Published: Sun, July 10 2011. 12:15 IST