Twenty-litre water containers are the best selling but smaller, 600mL and 1L containers are becoming more popular with consumers.

WATER manufacturers have admitted purified water should be cheaper but blamed high overheads for recent price increases.

U Aung Thant Zin, director of PGS drinking water, said increased costs for diesel and plastic containers have caused bottled water prices to rise since PGS began manufacturing four years ago. But he also said the company could reduce prices further to develop a higher market share.

“We established our drinking water factory in 2004 but it took about a year to develop a kind of brand awareness,” he said. “The current selling price is K110 for 0.6 litres, K140 for one litre and K400 for 20 litres. Actually, we should sell 0.6 and one litre bottles for less than K100 and 20-litre containers for between K200 and K300,” said U Aung Thant Zin.

“To reduce the wholesale price of drinking water, we need to get regular electricity supply to help save expenses. Another high expense is plastic bottles, which we buy from our suppliers,” he said.

“Four years ago the price for fifty gallons of diesel was about K100,000 but now it is about K300,000 for the same amount. Also the price of plastic bottles has doubled, up from K52 to K105 for a one-litre container.”

He added that because of the company’s higher prices, he did not expect PGS to get a significant share of the market. Instead, the company targeted high-end consumers – offices, schools and factories.

Not surprisingly, the peak period for his company is hot season and sales decrease by half in rainy season.

“The best selling size is 20 litres, which is most in demand by schools, factories and offices. The peak sales time is from December to April, when we produce between 100,000 to 300,000 bottles, of varying sizes, per month. Production then drops by half in rainy season and our sales are usually 50-75pc down,” U Aung Thant Zin said.

U San Myint, from Star drinking water, which also entered the market four years ago, said his company had taken a different tactic. Star reduces prices and consequently profit margins to increase sales and market share in the 20-litre container category.

“Looking from business point of view, we’re aiming to increase sales rather than get the highest profit.

“We do not spend on advertising and only make a one-third profit on the cost of producing the water. The transportation costs are also high so we can only distribute within Insein township,” he said.

“The demand is highest in summer, when we will produce about 30,000 containers per month but only about 20,000 in rainy season,” he said.

Purified drinking water has been widely used in Yangon since about 10 years ago. In the former capital there are about sixty water brands. Of these, the most well-known are Nay Pyi Taw, Alpine, PMG, Dagon, PGS, Oasis and Popa Aqua. The pioneering brand is PMG.