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Illicit Mineral Water Companies Thriving

The water crisis in the state has become a boon for mineral water companies whose sales are zooming up.

Published: 22nd April 2016 03:48 AM  |   Last Updated: 22nd April 2016 03:48 AM   |  A+A-

HYDERABAD: The water crisis in the state has become a boon for mineral water companies whose sales are zooming up. Most of the illicit mineral water companies have seen a three-fold increase in their production and with no major reservoir having enough water, the demand is only going to rise further.

According to sources, more than 70 per cent of people in the state are depending on private mineral water sources to quench their thirst as the water being supplied by civic bodies are, in most cases, found to be unfit for consumption.

"Of late, our production has increased by leaps and bounds. There is a huge demand for water as most of the borewells have dried up. Earlier I used to supply 2,000 litres a day and am supplying more than 6,000 litres now," said S.Kiran, who owns an illegal (no BIS mark) mineral water plant in Rangareddy district.

Corroborating his claim, C Krishna, a shopkeeper at Chandanagar, said, "In our colony, I used to sell hardly 30 cans a day in the past but have been selling more than 100 cans a day for the the past one month and I am unable to meet the demand. Now, I have employed a man only to deliver water cans so as not to lose customers."

While illicit mineral water companies are making a fortune, the ones certified by the Bureau of Indian Standards (BIS) have seen no rise in production whatsoever.

"The only thing that people are bothered about is the cost of a can. While we are selling a 20-litre can for Rs  40, illicit companies are selling it at Rs  20 and attracting more buyers," YV Narayana, director of Aqua Maestro Pvt Ltd, Jubilee Hills, said.

In Telangana there are at least 7,000 mineral water plants, of which only 113 are BIS-certified. One needs an investment of about Rs  20 25 lakh to set up a mineral water plant and goes for ISI certification and other permits.

However, most of the firms do not go for these certifications. Without the required permits, an investment of about Rs  4 lakh will be enough to set up a plant. 

"Every ISI-certified company is now facing huge competition from non-certified ones. They are more in number and can afford to sell water cans at a low cost as their overheads and production costs are low. We, on the other hand, follow all the rules, maintain a chemist, a microbiologist and get our samples checked at regular intervals," TS Phanish, manager of Telangana and Andhra Pradesh Packaged Drinking Water Manufacturers Association, said.

When asked whether there had been an increase in the number of illicit companies this year, he said, "There is a huge increase in the number. Now, there is at least one water plant in every street and it has become a family business.

While we are striving hard to survive, people are establishing a plant in a single room and are making a fortune. We even made representations to the government and requested them to take action against these people. We don't want them to close their plants as people would face problems. The only thing we are asking for is to ask all these non-ISI plants to get certified so that there will be level playing."

Most of the illicit mineral water plants are set up in small houses or on agriculture lands. In illicit mineral water business, production of 20 litres of water will cost Rs  4 and it is sold for Rs  25 to Rs  30. But those with ISI mark are sold at Rs  45 to 50 and the branded ones at Rs  65 to 80.

Cost Advantage

An investment of Rs  25 lakh is needed to set up a standard plant with all permits and certification but only Rs  4 lakh for an illicit plant.

Illicit plants bottle a 20-litre can of water at Rs  4 and sell it at Rs  25 whereas the cost of production is about Rs  30 lakh and sale price between Rs  45 and Rs  80 in the case of standard companies.

More from Hyderabad.

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