Blow molding in Afghanistan

Here's a story that makes complete sense, but it still took me by surprise. According to this report from the Ottawa, Ontario, Citizen, all of the Canadian soldiers (and the Americans, too) in Afghanistan are under strict orders to use bottled water -- not tap water. So local contractors must provide about six one-liter bottles per day for every person on base.

When you're talking about thousands of soliders -- more than 10,000 at the Kandahar Airfield alone -- that means there's quite a demand for plastic water bottles. Not to mention bottled water for all the foreign government officials and aid workers. According to the story, the resulting business is worth more than $100 million annually.

"It offers entrepreneurs a profitable opportunity and is a niche that several Afghan companies have exploited," according to the story. "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 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.

"You've got your expat community, which drinks bottled water. You've got your Afghans who have grown up outside of Afghanistan and have now come back -- they will drink bottled water. Your more affluent local Afghans -- it's because of the status -- they will start leaning toward bottled water."

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 percent tariff on bottled-water importers in an effort to encourage domestic producers.

Afghan Beverage Industries has a new $26 million plant on the outskirts of Kabul that can make 13,000 half-liter bottles per hour, and it includes everything from blow molding to rinsing, filling, labeling and packaging. The company plans to add a production line that will triple the plant's capacity.

Obviously Afghanistan isn't an easy place to operate a manufacturing plant. Check out the story link for details about the hurdles the company has overcome.