Executive Summary
With the global debate on rapid environmental changes that threaten the very existence of human race, we examine how such changes complicates the delicate balance of water resources in UAE and the ever rising demand for the essential product by the residents. Al Ain Water Company, whose mineral water products are fully certified and who enjoys international ISO 9001, HAACP, and NSF accreditations, is used to demonstrate the role of the private sector in maintaining the high quality water products, environmental conservancy and civic education.
Introduction
Al Ain Water company, which is a private company owned by the Emirates Foodstuff and Mineral Water company (AGTHIA), was founded through the help of His highness the late Sheikh Zayed bin Sultan Al Nahyan ,and the processing plant was started on 5th August 1990. The company is well known as a market leader in bottled mineral water across the entire UAE. Al Ain Water Company has also maintained a very strong working relationship in the Emirate of Abu Dhabi, where its products have been the choicest among the consumers for a long time.
As the name suggests, Al Ain, which literally refers to a fresh spring, the company has become a living fresh spring for quality water that the entire population in UAE depends on. AL Ain region is known for intensive underground springs network a feature that feeds numerous boreholes and gives the company a source for the raw water. Since Al Ain Water Company was founded in 1990, its products have remained highly competitive in Middle East as they have consistently conformed to the requirements outlined by the Abu Dhabi Food and Healthy authority. The company’s products are also consistent to the various international standards including the United States Food and Drug guidelines.
Other than just sales of its quality products, the company contributes largely in matters of youth development and environmental planning and management. Only recently the company has initiated an ambitious program to reduce the plastic wastes that are harmful to the environment. The initiative which is branded as “Shrink a Bottle” is sensitizing the people on environmental consciousness and the importance of recycling waste materials. The company is promoting the reduction of polyethylene Terephthalate industrial wastes by using a specially designed machine achieves up to 85% success in reduction of waste sizes. In its effort to offer environmental assistance, the company has partnered with the Horizon Technologies Company, which is known for recycling plastic waste products into packaging products. The water bottles used by Al Ain Water Company are fully recyclable and therefore this eco-friendly approach of collection and reduction of plastic waste materials does not only help in environmental management but it also helps in availing raw inputs for the company. The company also helps the population by provision of cheap materials for fabrication of household items such as ice trays and other plastic containers. The company has established ways and means of involving school students in spreading the message of environmental conservancy as well as allowing them to participate directly in shrinking the wastes. This approach has effectively sent the conservancy message into almost every household. In addition the company plans to carry out the 2nd stage of its campaign that will see the establishment of accessible waste collection points in the residential places.
This extra operational activity is also a unique way that Al Ain Water Company has adopted as an advertising strategy that has made its products to be famous among the family households. The involvement of students in such activities makes the society feel like they own the main stream products. This approach has therefore made the company to maintain its leadership position in UAE a fact that has increased its earning and consequently made it possible for the company to maintain high quality standards (Marafia, et al 2002).
Conceptual Frameworks
The products for the Al Ain Water Company are produced in a modern process that is full automated. Water bottling and packaging in the state of the art manufacturing plant, utilizes highly innovative technological processes. The purification of water is done through a complex filter system during which important minerals are added to add to its quality and taste. Following consistent production in highly quality products, the company has won many awards both from local bodies and from international institutions to recognize their contribution in the society.
Certification processes in the UAE
All business carried out in the UAE must be accompanied by the relevant authentic government certification. The Abu Dhabi government is currently offering five different kinds of certification licenses for business activities such as sales of mineral water. The business activity must therefore be covered through the relevant body bestowed with the responsibilities of certifying the establishing businesses, such as the municipalities, chamber of commerce as well as the ministry of economy and commerce (Darwish, et al 2005). The certification licenses offered by the Abu Dhabi government are usually varied for a maximum period of one year, and may cover varied business operations, services and industrial activities. In addition an UAE based law issued in 1998 outlines the actual certification procedures in the region. The certification law categorized the licenses as either as agriculture based, industries processing, general commerce, profession based or based on vocation activities.
The Al Ain Water Company has always carried out its internal audits as provided by the guidelines contained in the certification procedures of the ISO 9001, ISO 14001, OHSAS 18001 and HACCP. The reports on internal audits are one of the essential requirements for renewals of local certification licenses and forms significant part in obtaining ISO certification. Constant management reviews are carried out to check for compliance with the audit reports and other company processes. The process analysis can take up to four months before the ISO certification license is awarded. UAE has taken enough initiative measures to ensure proper evaluation is done at all levels and that all complains from the investors are treated according to their merit.
A new certification program has mean developed to target mainly the service industries with their operations in UAE or intending to commence in such operations. The program is offering basic skills to industrial professionals on the application of the “Lean Six Sigma” methods to enhance effectiveness in business day to day operations (Darwish, et al 2005). The certification program was sponsored by 360 different institutes who were committed to ensuring that the professionals were up to date in finding solutions to common business problems. In addition the certification process was aimed at enhancing the professionals’ levels of competency in leadership skills as well as change management approaches.
The water industry in the UAE
The UAE water industry employs thousands of both nationals and international workers. UAE is known to consume more bottled mineral water than any other country in the world. Therefore the Emirate’s water industry constitutes a very significant part of the national’s economic cake. For example the total national sales on bottled water in 2008 grew by 24%, this was expected to grow further this year as the local producing companies like Al Ain Water Company, sustain the intense pressure to meet the daily growing demand of the essential commodity(Arar, 1991). Despite this perennial growth in the demand of bottled water, the local manufactured have continued to carry out multiple productions in other man made beverages. Al Ain Water Company, for instance, opened a fresh juice plant in April 2009 with an initial capacity of 240,000 servings (Marafia, et al 2003).
The global bottled water industry is generally growing and the UAE water companies are adjusting their productions in terms of capacity and quality to meet the ever rising standards in this industry. There has been an incentive by the government to try and fully restore the industries position in the UAE market share capital as well as in the other gulf countries amidst the stiff competition.
Though reports cites Australian town of Bundanoon as having categorically banned the use of bottled water due its environmental impacts, the trend is different in UAE. The Business Monitor International (BMI), which carries out in depth analyses in market trends, indicates that the mineral water industry is growing to become one of the highest profiting ventures in UAE. The report reveals that Emirates’ total annual consumption of bottled water is actually the leading in the globe, standing at 275 litres per capita that compares with only an average of 150 litres in the United Kingdom. This amounts to in excess of five hundred bottles for every person in UAE, a fact that synergizes the business industry which is worth US$ 350 million! The BMI predictions show that if the rate of consumption of the bottled water is maintained then the industry will be valued at USD420 Million by the year 2013. The situation is partly linked to the fact that most of the product except the 500 ml bottle in the UAE is bulk containers. In fact the sales reports indicates that the main bottled water companies including Al Ain, Masafi and Oasis each recorded an overwhelming increase in sales ranging from 20% to 50% in the last one year. Though the hot conditions and non competitive nature of the alcoholic drinks is a contributing factor to the high consumption rate, the attitude of the people towards the bottled water is seen as the most significant contributory factor. Bottled water is perceived as a way to demonstrate someone’s status symbol and the UAE people have a general mistrust of the quality of the tap water supplied by the government despite the recent declaration by the environmentalists that tap water was safe for drinking. The advice by the environmental groups that the desalinated tap water met the WHO standards was met by resistance to change. The environmental groups are therefore urging the bottled water companies to double their effort in recycling the waste bottles to mitigate their adverse effect on the environment.
Tap water purification companies such as Brita and Euro Forbes are stepping up their campaign efforts in UAE to encourage residents to use tap water along with their purifying apparatus. Though the companies are getting a massive following in the rest of the world, in stopping people from using bottled water, the pace is quite slow in UAE, but the companies are optimistic that people will be aware of the benefits of the purifiers and will result to using the tap water. Euro Forbes international has already announced a 40% growth in its sale this year (2009) alone. However, despite the intense anti-bottled water campaign in UAE, it is clear that the tradition is not about to go.
Quality issues on the water company
Local quality issues, Registration and Operational licenses
Al Ain Water Company has been undertaking intensive campaigns and research to ensure that the quality of its bottled water and supplementary drinks will retain its highest levels of quality and will not be beaten by the stiff competition in UAE. The company entered into a working agreement with a German based Wild Group in February 2008 to produce and sell Capri-Sun juices on behalf of the group, in the UAE. The merger marked the genesis of a great journey for the UAE based company, that benefited from the increased market capitalization which will not only diversify its earning potential but will also set a platform for better quality researches for its water industry (Wilson, 2000). This will give the company an advantage over the competitors who may have challenges in improving the quality of their products due to constrained environment of operation. The agreement with the German’s Wild Group is a step ahead for the bottled mineral water company’s owner, the Abu Dhabi-based AGTHIA Group. Capri-Sun juice is a renowned high quality children’s juice that has presence in many countries in the world, its entry in UAE through Al Ain Water Company is therefore not an issue that can be taken for granted. However the company is still committed to ensuring that quality bottled water will remain its main product. The rapid growth in UAE population is expanding the already bulge market for bottled water which currently stands at 1.2 billion litres, worth Dh1 billion.
Bottled water industry is singly accounting for 40% of the total volume of the water consumed in UAE, that amounts to a value of Dh570 million. The demand is however rising continuously partly due to high growth rate, growth in tourism sector and skewed attitude of the residence against tap water. Al Ain Water Company is widening the scope of its water business both in UAE as well as in the neighboring Gulf states so as to be strategically positioned to meet this ever rising bottled water demand. In 2007 the company acquired a new quality brand, Ice Crystal in Abu Dhabi, and doubled its production efforts for bulk water containers for home and office deliveries. Ice Crystal is contained in large five gallon plastic containers, which are meant for delivery to consumer an approach that accounts for 60% of the total Emirate’s water market. The entry of Ice crystal in the market completes the product portfolio for Al Ain’s Water Company whose products constitute 23% of all the bottled water market in UAE, being only second to Masafi bottled Mineral Water company that controls about 27% of the market share.The Al Ain Water Company has over 400 people employed at its various manufacturing and bottling plants that produces a massive capacity of 35,000 bottles of water every hour (Wilson, 2000).
To further increase in its market capitalization and therefore be able to improve on the quality of its products, the AGTHIA Group of Companies wishes to continue with its operations in Grand Mills for Flour and Feed Company as well as its Vegetable Processing and Canning Factory. Consequently, the Al Ain Water Company will be able to focus more on improving on quality and brand awareness campaigns in water and juice sectors. In addition the company will strengthen its involvement in health and wellness programs in UAE that will help in balancing their growth momentum that had risen from Dh 74 million in 2006 to over Dh138 million in 2008.
International quality issues
International water quality issues are usually complex to quantify and direct to specific jurisdiction due to diverse rules and different forms of government in different states. However setting of standards is done, along with political and technical support that go along with them on the guidelines on how the global water should be utilized. For example, as concerning the natural water bodies, a relevant estimation of the conditional requirements against encroachment of the sources is made. Diverse standards are considered in the utilization of water according to the many different concerns that may be raised from different regions of the world. Environmental scientists help the panelist in comprehending the systems that work best in advancing high quality of water standards and usage that do not compromise with the environmental nature and ecosystem. At the same time the environmental lawyers and international policy expert helps in defining appropriate legislations that would be enacted in individual member countries like UAE, to ensure that water sector is well managed and quality of water is enhanced (Marafia, et al 2003).
Water consultants International (WCI) has gained international reputation for its wealth of experience and skills in water quality issues. WCI staffs have been involved in many water related feasibility studies and design evaluation in UAE. They have given guidance and monitored quality dissemination as an eye of the global community. The staff team has special hand own experience and ability on major water design systems that would guarantee high quality water supply to the population.
In its effort to have quality water dissemination in UAE, the WCI team is reviewing the installation as well as the operational nature of the hybrid UAE’s desalination plant as a fulfillment of the entire review requirement of the water project plant. The WCI audit report would access the quality nature of the general fixtures and the primary fitness of the design, assessment of the methodologies of commissioning and any other relevant issue that may relate to the quality water services. This external influence in the operations on water plants ensures that basic operations that ensure quality of the water are not compromised.
Discussion and Findings
Al Ain Water Company has been seen as the second biggest supply of bottled water and bulk deliverable water to homes and offices in UAE. However it has also been observed that the rate at which the population is growing is really stressing the supply of the bottled water, which is already standing as the highest in the world with a great margin. Many efforts from diverse quarters are being geared to ensure that the residents of UAE continue to get quality water which shall not be compromised by the growth of the market demand. The reported social and economic expansion in the country is continuously piling more pressure on the available water resources. Desalination projects are sprouting up to throughout the country mitigate on the likely effects of strained resources. The government is developing reduced cost water replenishing solutions including dams that are meant to refill the underground waters, to maintain high levels of the water table and enable accessible use of the natural water supplies.
Despite the high growth in the sales of the Al Ain Water Company, the water usage in UAE still exceeds the available renewable resources. According to the government statistics the water demand by the residents is 7 times more than the available renewable resource. This means that if the current demand trend continues there is a danger of exhausting the ground water reserves and seriously compromise with the quality of water on the supply systems. The excess use of the underground water is seen also to increase the salinity of the soil of the farm. This is in effect leading to abandoning such farmlands where agriculture can not do well due to high soil salinity. This lowers the standard of living for those residents who naturally depend on agriculture for their livelihood. A decrease in the national agricultural output also reduces on the per capita income a fact that affect the general performance of the national economy.
The increasing rates of water consumption have also been seen as to reduce the consumption of the traditionally famous ground water. Consequently, this has led to increased reliance on very expensive desalination plants that has made UAE to lead in the usage of desalinated waters. Traditionally water was supplies were effected from ground water through shallow wells and falaj methods in which ridges were used to direct water from source to destination by gravity. However economic and population growth has with the resultant demand for more agriculture output has exerted excessive pressure on the water resources, with agriculture and forestry using 65%, drinking 24%, and industries 9% of the available water supplies. The Ground water now accounts for 53%, desalination 35%, recycled reserves 9% and surface run off 3%, with a total annual consumption of 2.2Bm3 that is expected to rise to 3.2Bm3 by the year 2025 (Malki, et al 1998).
Conclusions
Noting the sensitive nature of the balance that needs to be maintained between the demand of water by the residents of UAE and the depleting resources, deliberate measures to have the environment support the ecosystem is demanded. The temptations for the companies like Al Ain Water Company, to focus on profit, deprive the available water resources and forget about the environment conservancy must be discouraged.
However the high level of standards and environmental consciousness, observed in the various government departments like the ministry of Environmental Research and Wildlife Development Agency, Private agencies like Water consultants International and private companies like Al Ain Water Company is a step towards the right direction. Consulted efforts by the government and residents towards striking the delicate balance will reverse the situation and make UAE and the globe an excessive water reserve for us and for generations to come.
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