Soft drinks sales boom as summer heats up

Summertime brightens the outlook for beverage business.

Add to the list of positive factors the resumption of political activities and market expansion in suburbs and rural areas. Sales are rising with processors expecting the market to grow between 15 percent and 20 percent this year, if the economy does not suffer a big blow from the global recession in the second half of 2009.

“People drink more to have a respite from the heat wave. Our supplies were much ahead of the March target. The April scenario was the same,” said Mohammad Ilias who delivers Pepsi products on behalf of his employer Sunflower Distribution.

Besides Pepsi products, including clear drink 7up, beverages such as Coca Cola, RC and Mojo mark rises in demand as the heat wave sweeps the country.

Early last week, temperature in Dhaka hit a 14-year high, while other parts of the country also passed through the blistering heat prompting people to drink in quest of a respite.

“We are struggling to cope with the rising demand every day. Whatever we make goes directly to truck from production. There is no scope for storage,” said an official of Abdul Monem Ltd (AML), Coca Cola’s bottler and franchisee in Bangladesh.

He said sales of Coca Cola products in AML’s territory, excluding Dhaka and Rajshahi, increased more than 60 percent in April. For March, sales growth was more than 50 percent, the official added.

“It’s a good year for the Coca Cola and beverage market as well. The industry should grow at least 20 percent this year amid no rain and high temperature,” he said.

Soft drinks marketers this time hope for a boost in sales after a recovery from losses.

Data on the actual market size of the industry varies. But the majority of operators figured it between Tk 800 crore and Tk 900 crore in 2008.

“Last year was good compared with other industrial sectors. Signs are still good and the industry is growing about 15 percent this year,” said Khurshid Irfan Chowdhury, general manager of Transcom Beverages, the franchisee of PepsiCo in Bangladesh.

But he feared: “If the domestic economy suffers from a recession fallout, soft drinks may witness a consumption-drop, so are other industrial sectors.”

“It’s a luxury product, not a necessity.”

Irfan attributed the growth to market expansion in semi-urban and rural areas.

Processors’ entry in making 250ml packs with relatively low prices also may also enable the market to grow, he added.

“Above all, the sweltering heat has led to higher sales,” said the Transcom Beverages official.

Md Aktaruzzaman, marketing manager of Partex Beverage, bottler of RC brand products, is upbeat on the 2009 sales.

Apart from pointing to high temperature and market expansion, he also observed that resumption of political activities in post-polls time would help boost sales.

“The more political gatherings, events and festivals, the more sales,” he said.

“I expect the market to grow by 20 percent to touch around Tk 1000 crore this year.”

S: the daily star.

Nuclear Power: Dhaka to sign MoU with Moscow in mid May

A Russian minister is expected to visit Dhaka in the middle of May to sign a Memorandum of Understanding (MoU) regarding peaceful use of nuclear energy and development of related infrastructure, officials said.

Schedule of the visit will be finalised once the Prime Minister’s Office (PMO) approves a draft proposal regarding signing an agreement with Russia on setting up two 1,000MW nuclear power plants. Ministry of Science and Information and Communication Technology (ICT) had sent the proposal to the PMO in the second week of April.

Earlier Bangladesh and Russia had agreed on their proposals for nuclear power plant set up and signing an MoU after three-day talks held in Dhaka in the first week of April. At the talks the Russian delegation expressed their interest to assist in the project while Bangladesh articulated its desire to set up two 1,000Mw power plants.

“We are waiting for the approval of the proposal…..we are expecting that the PMO will soon give a positive nod,” Joint Secretary to the Science and ICT Ministry MM Neazuddin told The Daily Star yesterday.

The Russian delegation also submitted a proposal to its authorities regarding the matter. Both the countries will inform each other after their respective high-ups approve the proposals, sources said.

According to a paper prepared by the ICT ministry, the estimated cost of a 1,000MW nuclear power plant ranges between $1.5 billion and $2 billion. Experts say installation of such a unit will take at least five years from commissioning of the deal.

Bangladesh has been negotiating with several countries for setting up nuclear power units. Recently, Dhaka sought assistance from South Korea. France and China have also shown interest while Bangladesh has bilateral agreements on nuclear cooperation with the United States, France and China.

“The government, which assumed office with the promise to improve the volatile power situation, is willing to strike a deal with a country soon so that installation of the power unit can be started immediately,” said an official of the ICT ministry.

S: The Daily Star