The water resources of Afghanistan are huge.
But decades of war, mismanagement and neglect
have left the country without the infrastructure necessary
to harness those resources.
AFGHAN WAR WATER-PROFITEERS
The bottled-water industry's emergence exemplifies
the unexpected opportunities the war has created
for foreign and domestic entrepreneurs.
Bottled water a $100-million market in Afghanistan
by Andrew Mayeda & Mike Blanchfield
CanWest News Service, Nov 23, 2007
KANDAHAR AIRFIELD, Afghanistan - Each time a Canadian soldier brushes his teeth, he is under strict orders: Don't use the tap water. Instead, soldiers tramp outside in their flip-flops to a pallet stacked with bottles of water, which they use to wet their toothbrushes and rinse their mouths. NATO authorities are so worried about contamination from the local water supply that the food-services contractor must ensure it can provide roughly six one-litre bottles a day to every person on base. With more than 10,000 soldiers and support staff at Kandahar Airfield, the multinational base that serves as home to most of Canada's 2,500 troops in Afghanistan, that works out to nearly 22 million bottles of water a year.
It offers entrepreneurs a profitable opportunity and is a niche that several Afghan companies have exploited. The trend is not confined to military bases. Elsewhere in Afghanistan, foreign government officials and aid workers also tend to drink nothing but bottled water, resulting in a business modestly worth more than $100-million.
It is no wonder that, in the six years since the fall of the Taliban, the bottled-water market has grown from virtually nothing into a thriving business, making plastic water bottles a nearly ubiquitous sight in the more developed parts of the country. The industry's emergence exemplifies the unexpected opportunities the war has created for foreign and domestic entrepreneurs, while underscoring the inability of the Afghan government to build the infrastructure to provide even the most basic public services.
While Afghanistan actually has more than enough water resources to supply its people, the United Nations Development Program indicates less than one in four Afghans has access to safe drinking water. The situation is particularly dire in rural areas, where access drops to 18% of the population.
Water deposits are especially rich around the country's central Hindu Kush mountain range and river systems to the north, said David Banks, a British hydrogeology consultant who has studied Afghanistan's water supply. "The water resources, particularly the groundwater resources, of Afghanistan are huge," Mr. Banks said. But decades of war, mismanagement and neglect have left the country without the infrastructure necessary to harness those resources.
Industry insiders say the flood of bottled water into the country began in 2001, after the defeat of the Taliban by U.S.-led forces. "The locals drink the local water. They're not the bottled-water drinkers," said Cecil Galloway, operations director of Afghan Beverage Industries (ABI), an Afghan-owned company that opened a bottling plant in Kabul last year. The company produces a water brand called Cristal.
At first, foreign suppliers, mostly from neighbouring Pakistan and the United Arab Emirates, dominated the market. The biggest player initially was Nestle Pakistan, a subsidiary of the Swiss food and beverage giant Nestle. The company did not reply to an interview request. But this year, the government imposed a hefty 40% tariff on bottled-water importers in an effort to encourage domestic producers. Development agencies believe nurturing local industry is crucial to breaking the country's dependency on foreign aid. The strategy has had some success in the bottled-water industry. Last year, ABI became the first Afghan company to win a contract to supply bottled water with the U.S. military.
Still, domestic bottlers face a host of obstacles. Just maintaining the sanitary environment needed to produce high-quality bottled water is an enormous challenge, said James Frasche, chief operating officer of Afghan Natural Beverages, which says it is the only company in Afghanistan that bottles spring water. Afghanistan groundwater is contaminated with high levels of E. coli and other bacteria, as well as industrial and military chemicals. Meanwhile, its air has one of the highest concentrations of fecal matter anywhere on Earth. On top of that, companies have to deal with an unstable electricity supply, tortuous supply chains, a shortage of qualified personnel, and the always-looming security threat.
Penetrating the military procurement market can also be a time-consuming, tricky affair. At Kandahar Airfield, for example, Supreme Foodservice, the Swiss firm hired by NATO as its prime food-services contractor, handles procurement of bottled water. To become NATO suppliers, bottled-water companies must ensure their products meet U.S. and European food-safety standards. The Afghan Ministry of Health, meanwhile, simply doesn't have the expertise or resources to test products against international quality standards, say industry insiders.
CANADA SELLING AFGHAN'S WATER and TROOPS BREATHING FECAL MATTER
Afghan $100-million bottled water market ("unexpected opportunities of war"). Financial Post, Nov 23, 2007
THE WATER BARONS and KYOTO'S WATER WIZARDS and DEAD IN THE WATER
AFGHANISTAN REMEMBERED and NATO KILLING FOR DRUG TRADE and AFGHAN NARCO-STATE NOW
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