PETpla.net Insider 04 / 2017

EDITOUR PET planet Insider Vol. 18 No. 04/17 www.petpla.net 11 Indonesian rupees (IDR) – around 40 euro cents. Newcomers to the market should be stocked on supermarket shelves for less than 3,000 IDR and water should only cost 1,000 IDR (7 cents) for 240ml. Yet water is not sold in PET bottles, rather in deep-drawn polypropylene cups with a sealing lid. It is clear that the PET industry has to stretch itself so that there is still something left at the end of the day. The solution for almost all suppliers is to invest in the latest western technol- ogy, whether it be preforming equip- ment or cold aseptic. Additionally, reducing the number of formats used in production means products can be manufactured in very high quantities. We have visited all production stages in the PET industry, from recy- cling plants to bottling factories, but it was difficult to form a comprehensive picture of the size of the market, as whoever you asked, you got different, often contradictory answers in return. What we do know is that Indonesia has a population of more than 260 million, and more than half live in the cities. Yet only 25% have an internet connection. If you take this figure and use it as an indicator of income, 65 million people can be considered as middle class (fig. 1). Bottled water and other beverages This distinction is especially impor- tant with water. The Indonesian drink- ing water organisation Aspadin boasts bottled water production figures of 27.17 billion litres for 2016. 207 of the 700 concession bottled water com- panies in Indonesia are currently part of Aspadin. The largest global bottled water company Danone Aqua finds itself within this segment, producing 13 billion litres/a. That is almost 50% of the market. This share would have been even larger a few years ago, but regional brand names have grown faster than Aqua, particularly the Indo- nesian food corporation Mayora. They have penetrated the water market with their branded water Le Mineral, sup- ported by a large advertising budget. If we shared 27.17 billion litres among the 260 million inhabitants, it would work out at more than 100 litres per head. That looks good, but it is mis- leading. Even though 88% of the Indo- nesian population have access to com- munal drinking water, health-conscious Indonesians do not use this tap water for cooking, never mind drinking. The bulk goes into 5 gallon containers (19- litre) made from polycarbonate. Around 30 million are produced per year. During their 2-year lifespan, they recirculate around 40 times, meaning water bot- tling companies fill these containers an average of 20 times within one year. That alone equates to 20 x 19 litres x 60 million units = 22.8 billion litres, just for this segment (fig. 2). That is around 87 litres per head (260 million). Around 4.4 billion litres of remain- ing water is bottled in higher-priced packaging. There are now 65 million wealthy Indonesians, corresponding to a consumption of around 68l per head of water in small bottles. such as preforms and caps also work from multiple main factories, however they are not quite as dispersed. Another aspect which influences the drinks industry is that the Indo- nesian consumers are particularly conscious of their health and the environment, something which is not necessarily common in emerging nations. A product has to be healthy and environmentally-friendly in one way or another. Packaged spring water counts as healthy, tea and juice too, but sugary drinks like lemonade have a low approval rating in the eyes of the consumer. In Indonesia, PET bottles have a positive image, especially since a small yet distinguished recycling sector has established itself here. Large-scale companies like Danone Aqua use 10% rPET in their bottles, and this is welcomed by the consumer. The water market remains rela- tively stable throughout the year, suf- fering only minor fluctuations, while other kinds of beverages are subject to major variations according to the season. Sales figures take the big- gest hit during monsoon season and Ramadan, soaring once again in the subsequent festival period and summer time. High costs – low retail price The consumer is extremely price- sensitive, however they are up against high transport costs and high health and environmental standards. The threshold between defining a prod- uct as affordable or luxury is 6,000 Fig. 2 Share of water [mio l] in PET bottles and 5-gallons containers, total 27,200 mio liter Fig. 3 Beverages filled in PET [mio l], total 6,200 mio liter Fig. 4 PET bottles used for water, CSD and RTD aseptic beverages [mio], total 9,000 mio bottles 22,800 4,400 4,400 1,500 300 5,600 2,500 900