Coca-Cola enters water fray [making 10,000 bottles of water every hour in Cambodia]

Thursday, 03 March 2011
By Ellie Dyer and Soeun Say

Phnom Penh Post

Photo by: Sovan Philong
Bottles of Dasani water are manufactured at the Cambodia Beverage Company Ltd factory, in Russey Keo district, Phnom Penh, today. Coca-Cola aims to make it the market leader in Cambodia.

Coca-Cola has waded into Cambodia’s bottled water market with international brand Dasani, aiming to become market leader in the crowded sector.

The global giant has launched a production line capable of making 10,000 bottles of water every hour at Cambodia Beverage Company’s factory in Russey Keo district in Phnom Penh, officials said today.

Country Commercial Manager Adrian Wenhlowskyj said the company was targeting the mid- to high-level consumer market, with an estimated 20,000 to 30,000 cases being distributed nationwide each month after a soft launch at the end of 2010.

“We are confident it will be [the market leader]. We will work very hard to achieve that,” he said.

That view was reiterated by General Manager of Coca-Cola Indochina Martin Gil, who said the retail price for a 500 millilitre bottle would be 1,000 riel (25 cents).

Speaking over the din of bottles being pressed and filled, following the treatment of municipal water with ozone, reverse osmosis and UV, he said: “Our vision is to be market leader in every category.”

The move to launch a water brand in Cambodia, which Coca-Cola entered in 1993, comes amid rising demand for products which include Fanta and Sprite.

Serving sales increased by 25 percent in 2010 over 2009, with revenues hitting about $40 million to $50 million and income rising about 30 percent last year, according to the firm’s Country Manager Paul Popelier.

The company paid about $4 million in tax last year, he added.

Popelier believes the company has room to grow nationally after benefiting from $27 million in company investment over the last few years, hinting that more de-carbonated products stand in the pipeline for Cambodia.

“In Cambodia, the firm provides around 15 serving per capita per year, compared to 80 and 90 servings in Thailand and Indonesia,” he said.

Today, Dasani’s potential competitors shrugged off concerns over the entrant to the water market.

Chea Mean, marketing manager of EUROTECH Import Export Company Limited, which sells 500ml bottles at the same price as Dasani, welcomed the launch.

“The more companies that come the better. I think that if we have a lot of popular brand names from foreign countries come in our country it will build confidence for foreign investors that Cambodia has stabilised,” Mean said.

Sang Sotheavy, vice director of Oral Quality Drinking Water, said that it hoped the new brand would be produced at a high quality, adding that its products were selling “very well” despite increased competition.

It has not always been smooth sailing for the Dasani brand, which also recently launched in Vietnam.

In 2004, it was embroiled in controversy when all Dasani bottles were pulled from UK shelves because they had been contaminated with bromate, a cancer-causing chemical.