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Mulshi Springs nears deals with UB, ITC

Natural spring water firm eyes Rs 125 cr turnover in five years

MUMBAI: Mulshi Springs, the Pune-based natural spring water company, is planning to make a huge splash in the premium bottled water segment.

The company is on the verge of signing deals with aviation baron Vijay Mallya’s UB group, hotel majors ITC and the Oberoi group. It is in talks with fast moving consumer goods major Hindustan Unilever Ltd (HUL) too.

Naveen Luthra, managing director, Mulshi Springs, said that the company is in discussions with at least one ‘very large’ hotel chain and one airline major. He, however, refused to name the companies.

But a source close to the development said a deal with the Oberoi group for its East India Hotels is already through. The deal size is reported to be Rs 35 crore.
“Production has already begun and this water will be available in the hotels from November this year. It has been branded as Oberoi Spring Water and approvals from US Food and Drug Association and Water Quality Association are in place,” added the source.

The source said that the ITC deal has also been ‘almost signed’ and production for that would begin in December. “The water will be available in ITC hotels from February next year,” the source said.

The UB group is expected to start offering bottled natural spring water in Kingfisher’s international flights in the next six months. The bottles, in 200 ml and 500 ml sizes, will be made available to first-class fliers.

Rival Jet Airways is also likely to offer Oberoi Spring Water as the Oberoi group manages its in-flight catering services. In addition, the bottles will be sold in airport lounges.

Priced between Rs 50 and Rs 200, Oberoi Spring Water will be available in four sizes – 200 ml, 500 ml, 1 litre and 1.5 litre.

When contacted, officials from both the Oberoi group and ITC declined comment.
Meanwhile, the HUL deal is expected to go through in the next one month. The FMCG giant will source water from Mulshi Springs and do the packaging and bottling itself. HUL will sell this water in plastic bottles and not glass ones and retail them in shopping marts.

Once the deals are in place, Mulshi Springs will produce an estimated 30,000 bottles per day — 10,000 will be for Oberoi group, 5,000 for ITC and 10,000-12,000 for the UB group. The company already retails water under its own brand in high-end hotels in Mumbai. Its water utilisation capacity is 4 million litre per day.

Under its overseas expansion plans, Mulshi Springs will sell its product in Dubai and seven other Middle Eastern countries from early next year. Also on the radar is the United States, where the premium water brand will be available from the first quarter of the next fiscal. In the next five years, the company hopes to scale up its turnover to Rs 125 crore from Rs 10 crore now.

The packaged water industry is pegged at Rs 1,800-2,000 crore. Of this, the premium segment accounts for Rs 100 crore.

SOURCE:  DNA MONEY – POOJA SARKAR | Tue, 16 Sep 2008

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