OST said it planned extend its OST-Aqua factory by 2,000sq.m and install a new automatic line for bottling carbonated and non-carbonated water by the end of 2005. The firm will also buy equipment to use polypropylene labels on automatic bottling lines.
Dmitry Gusev, director at the factory, said: "The extension of production capacity will allow us to increase manufacture of drinking water and non-alcoholic drinks by more than 40 per cent. It is planned that in the future, the factory will be able to manufacture more than 1m litres of non-alcoholic drinks daily."
An OST spokesperson said that market trends were too strong to ignore: "According to different forecasts, growth of non-alcoholic drinks will be twice that of the low-alcoholic drinks market. This is why the main part of îSò-Aqua's production will be changed to non-alcoholic drinks."
In 2004, this factory manufactured 37.5m litres of non-alcoholic drinks.
Russians consumed about 2,033bn litres of bottled water (excluding cooled water) last year, 12 per cent more than in 2003, according to Business Analytica. Market value rose faster, increasing 18 per cent to US$730m (ˆ630m).
Within the bottled water market, consumers are also becoming increasingly interested in non-carbonated water. This category still only has a 23 per cent market share against carbonated water's 73 per cent, yet major producers believe this will change soon.
Last year, the carbonated water market grew by five per cent, while non-carbonated increased by around 26 per cent.
"More and more consumers use bottled water not only for quenching their thirst, but also for making food and different drinks at home," said Vladimir Kravtsov, the Coca-Cola Export Corporation director. He said that one can easily see this tendency in Saint Petersburg and in Moscow.
îSò Group was founded in 1998 and now has a turnover of around $300m. Its main production assets are: OST-Aqua, the OST-Alko alcoholic drinks factory in Chernogolov, the Petrovsky distillery and Estrella, an alcoholic drinks factory at Petropavlov-Posad. The firm also has a glass works called OST-Tara.
OST is the fourth biggest seller of non-alcoholic drinks in the Moscow region with a 3.6 per cent share of the market, behind Ochakovo, PepsiCo and Coca-Cola.
However, analysts believe international giants Pepsi and Coca-Cola are almost unassailable. Different estimates give them between 30 and 60 per cent of the Russian market.