The Rs 14-crore 50:50 joint venture between the Pune-based Thermax Ltd and the US Culligan International Co, which launched its bottled water in Mumbai, Pune and Surat, will first concentrate on consolidating its position in this market before going ahead with its expansion plans, Culligan International Company (international bottled water) director Scott Sibley said.

In the long term, Sibley said, the joint venture could have over 12 plants across the country in the next 20 years, as it would be uneconomic to serve distant markets from the Taloja plant. Moreover, the joint venture will be able to leverage Thermax' expertise and knowledge of water issues across the country.

The Taloja plant, which at present operates a single shift, produces 450 bottles of 20 litre capacity per hour. This is expected to be upgraded to 3,000 bottles per hour over the next three months, a Thermax Culligan official said.

The company's expansion plans, estimated to cost Rs 60 crore, are targeted at the huge market for bottled water in metros and `A' class cities. Shrinivasan admitted that for the next three years at least, they will be concentrating on the urban markets of these areas.

Sibley explained that bottled water in the US was pegged as a life style product while in emerging markets like India, Africa and Russia, it is focussed on issues of health and safety of individuals. In India, the joint venture is focused on quality and chain of custody. Thermax Culligan not only produces `safe' water but also has its own dedicated delivery network, thereby maintaining its control over the delivery of the product and the maintenance of the dispenser unit.

Culligan's worldwide practice is to keep the distribution with itself, since it views this as a service rather than commodity business, Sibley added. In the US, it has franchised the distribution of bottled water only to the extent of 25 per cent. He did not rule out adopting this approach in India but this would be done for reasons of logistics.

The company has introduced several novel features in its marketing of the product, which includes renting the dispensers, not providing refills on demand and packaging drinking water as a service.

The official said Thermax Culligan charges a monthly rent of Rs 350 in addition to a deposit of Rs 4,000 for a dispenser with hot and cold water. The company checks the unit on fixed days of the week, which means that the service is not on demand.

Sibley said breaking into the country's branded water market will be via stressing the quality of the product. He expects the customer base to be about 10,000 by the end of two years of operations. The company began commercial operations three months ago.