The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The investor group that acquired the former Bacardi plant is set to go head-to-head with Aquapure and Chelsea’s Choice by entering the reverse osmosis water market in April/May 2013, believing it can achieve “equal market share” with the incumbents.

Tennyson Wells, the former Cabinet Minister and MP, told Tribune Business that the 40-strong The Source River group was seeking to build on its existing distilled water business by “broadening our market base” via its new ECH2O Pure label.

Disclosing that “a couple of hundred thousands of dollars” had been invested in the initiative, including purchasing plant and equipment, Mr Wells said the reverse osmosis water move would create at least four-five jobs.

He also revealed that The Source River had since last May “doubled” the amount of space leased to other companies at the former Bacardi site, adding that its ‘unmatched’ security qualities were attracting inquiries from numerous Bahamas-based banks.

Noting that 15-20 per cent of the 62-acre site’s 380,000 square feet of warehouse and office space had been leased, Mr Wells also revealed that plans to construct a $90 million waste-to-energy plant had effectively been placed on the backburner, with The Source River focusing on other potential land uses and projects.

Emphasising that the investor group was taking a “one step at a time” approach to redeveloping the southern New Providence property, Mr Wells explained that the reverse osmosis label would broaden The Source River’s appeal to the mass market.

Its existing distilled brand, ECH2O bottled water, is a premium product targeted at the market’s higher-end, he added, costing eight times’ more than reverse osmosis water to produce.

“The water is growing gradually, and in the next eight-12 weeks we are going to introduce reverse osmosis water - the same kind of water produced by Chelsea’s and the other people here,” Mr Wells told Tribune Business.

“We will still be producing the distilled water, but this will make us more competitive and broaden our market base. If we compete with the other water producers here, we will get equal market share.”

Noting that “only certain segments of the market”, typically health-conscious consumers, would purchase ECH2O bottled water, Mr Wells said the reverse osmosis brand will be labelled ECH2O Pure.

Confirming that the expansion would be a job creator, the former Cabinet Minister said: “We’ve agreed to purchase the plant, and it will take 12-14 weeks to have it installed. That will take us to around April/May” for launch.

Another element to The Source River’s strategy has been renting out the warehouse and office space left by Bacardi to other tenants, but this has progressed slower than expected due to the overall economic climate.

“We have made some progress, but it is nowhere near where it should be,” Mr Wells told Tribune Business. “But people are recognising it is an ideal location, and we have had many, many inquiries for it.

“It’s another two years before we get the kind of space rented out that we had anticipated if the economy was good.”

Still, Mr Wells estimated that 15-20 per cent of the 380,000 square foot facility had been leased, and said “progress” had been made since mid-2012.

“We may have doubled what we had rented before,” Mr Wells told Tribune Business. “We have had many prospective clients calling on it. Most of the banks now recognise the value of the security.

“People looking for security and recognising the security of the site; how secure it is compared to any other site on the island, other than the prison and police compound.

“Banks have called in to inquire. They want to use space, but they’ve got to wait until their present leases expire. There’s nothing like it in the Bahamas.”

Meanwhile, Mr Wells told this newspaper that The Source River’s interest in constructing a waste-to-energy plant at the former Bacardi site had cooled.

He had last year revealed that the proposed plant was intended to reduce electricity costs by 50 per cent, giving people energy for $0.20 per Kilowatt Hour (KwH), instead of $0.30-$0.40 per KwH.

A waste-to-energy plant would also have the added environmental benefits through recycling much of the waste produced by Source River and its tenants, and Mr Wells said then that the investor group was looking at a waste-to-energy plant with 20 Mega Watts (MW) capacity.

However, while confirming that meetings had been held on the project with both the current and former governments, Mr Wells said “a lot of things have to happen before” a waste-to-energy plant could be built.

Foremost among these were reforms to the Bahamas’ energy legislation and regulatory platforms, and he told Tribune Business: “We have a proposal, but I do not believe anything will come from it. We were always hesitant as to whether we could fit it in, and there are other things we have been working on.”

Noting that there were at least 24 waste-to-energy and other renewable proposals before the Government, Mr Wells said there was not enough volume to “sustain economically” three-four such plants.

But, praising Bacardi for the “excellent job” it had done in land planning the site, Mr Wells told Tribune Business: “I don’t think it’s the perfect purchase, but the potential is there for it.

“When we purchased it, the bottom was dropping out of the economy. The timing was bad, but I continue to believe it will survive. It will take longer than we hoped, but will still happen.”