The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian bottled water supplier yesterday said a “significant” investment in new machinery will enable it to double output of key product lines and further put summer 2023’s “nightmare” behind it.

Christian Knowles, Aquapure’s operations chief, declined to detail how much has been invested in two new bottle-blowing machines but told Tribune Business they will both boost efficiency and reduce the company’s per bottle costs when fully installed before year-end 2024.

He revealed that their acquisition represents the latest step in Aquapure’s plans to prevent a repeat of summer 2023, when equipment failures and “break downs” disrupted domestic production of its key one-gallon bottles and forced it to really on imports, resulting in shortages that had “a quite severe” impact on sales.

With such problems avoided in 2024, Mr Knowles told this newspaper that demand had returned to “normal” with the traditional uptick occurring from May and lasting throughout the summer in line with the hotter temperatures. 

However, he added that there has been no overall “easing” in Aquapure’s raw material and other input costs given that almost all are imported into The Bahamas. But, while suppliers readily pass expense increases on to him, the operations chief said he “just doesn’t have the luxury” and has to “think now twice, but three or four times” before any increase in prices for Bahamian consumers.

“It was a good summer for us,” Mr Knowles said. “We didn’t have any of the breakdowns we saw last summer. We did a lot of planning to ensure we would not be in the same position. This preparation really paid dividends for us. 

“Last summer was a nightmare. The previous year, we had a break down in one of our major bottling machines for one of our biggest sizes, the one gallon. We had to import the bottles. It was a nightmare. You can’t plan for those logistics costs and get rolled.

“We rely on on-time inventory, and had a challenge with that last year. It was a crippling effect. I’m really happy it’s behind us. Sales this year were normally what they would be in summer. We didn’t see a massive uptick in demand; it was pretty standard, as the curve and uptick we saw in May was quite normal, and we are happy with that.”

Reflecting on summer 2023, Mr Knowles added of the impact on sales: “It was quite severe. I don’t know the actual number, but it was difficult. We were still able to function, but when one of your top-earning products takes a beating there’s little to replace that in terms of movement in revenue. We’re very thankful for the customers that stuck with us through tough times.

“We had a good plan this year, and continue to execute that plan. Towards the end of the year, we have some new machinery, new equipment that we will put online quite soon, and that’s another effort to ensure the tough times we had last year don’t happen again.”

Describing the investment as “significant, while declining to provide a dollar figure, Mr Knowles told Tribune Business that Aquapure and its owner, KLG Investments, have acquired “another two bottle blowing machines”.

“We’re replacing one of our aging machines and bought a brand new one-gallon bottle blowing machine to support what we have,” he explained. “We’re hopeful that will be on line before the end of the year. These pieces of machinery, a lot of them have to be custom built for your specific needs. 

“We’re confident that we made the right choice. You always have to reinvest in your operations and keep an eye on innovation in the marketplace as new technology makes things easier and more efficient. We’re looking forward to 2025. I think we’ll be as prepared as we have been this summer.”

Mr Knowles added that the new capital investments will also boost production efficiency, which he described as a “big focus” for Aquapure, and generate cost savings that will boost profits moving forward. “When you’re efficient you save a lot of money on the cost, and at the end of the year that’s a big chunk of money to put on the bottom line just by being efficient,” he explained.

“We do have the ability, because of our extra capacity, to really hammer down and focus on increasing sales. This gives us the option, the possibility to increase sales.” Mr Knowles affirmed that the new equipment will “easily double” Aquapure’s one-gallon bottle production capacity, while the replacement for the aged machine will be “much more efficient”.

“The cost of blowing per bottle is less, and we can do double the bottles in the same amount of time,” he added of the latter. “It offers us a lot more time to do maintenance before things get too far. We can make sure everyone does more proactive maintenance, which is always good.”

Asked whether input costs have finally eased following the post-COVID supply chain shock, Mr Knowles replied: “I will say no. I haven’t felt any sort of easing on that. The cost of goods, raw materials and the like, is still going up. Just as an example, the freight costs from China that spiked during COVID, they came back down to pre-COVID levels, and went right back up again to a crazy amount.

“I don’t think, to be fully honest with you, and this is my opinion, but I don’t think there’s some that will come back to pre-COVID prices. There’s some that will come to that level, but as a whole I don’t think we see anything come down to what it was pre-COVID.

“I think I just got another increase on my boxes a few weeks ago. That seems to be the normal thing. As suppliers spend more to make them, they pass the increases on to me. I have to think not twice, but three or four times before I pass the increase on to our customers. We just don’t have that same luxury. We just have to make things that bit better, more quickly and efficiently.”