Busi­ness Pro­file

Bot­tled wa­ter com­pany AQUA was founded in 1973 by the late Tirto Utomo. When Utomo passed away un­ex­pect­edly in 1993, his fam­ily was faced with a dif­fi­cult de­ci­sion re­gard­ing the busi­ness. They ap­proached the multi­na­tional com­pany Danone, who shared the sa

Indonesia Expat - - CONTENTS - BY AN­GEL A RICHARD­SON

Danone AQUA: Com­mit­ted to Healthy Hy­dra­tion

You’ve been with Danone for many years, from Sales Di­rec­tor in the Nether­lands to Pres­i­dent Di­rec­tor in In­done­sia. Tell us what your role at AQUA Danone en­tails to­day.

My role in AQUA is to work with my team on the long-term sus­tain­abil­ity and short-term am­bi­tions of the com­pany. We set out a vi­sion for this com­pany and work con­sis­tently with all peo­ple here to de­liver that vi­sion. I see it as my job to cre­ate con­di­tions for our em­ploy­ees to thrive in AQUA and de­velop them­selves pro­fes­sion­ally. There is not a sin­gle day that is the same.

Has your ex­pe­ri­ence as a Lieu­tenant in the Royal Dutch Navy in 1990 had any im­pact on the way that you con­duct busi­ness to­day?

Af­ter grad­u­at­ing from Univer­sity I was an Eco­nom­ics teacher at the Royal Dutch Naval Col­lege. In those days in the Nether­lands it was com­pul­sory to serve your coun­try. I learned val­ues like dis­ci­pline, re­spect and not giv­ing up when you want to achieve some­thing; val­ues I con­sider rel­e­vant for suc­cess­ful lead­er­ship.

Your wa­ter comes from 13 springs and 18 fac­to­ries in In­done­sia. What makes your wa­ter healthy? How is it pro­cessed?

We are very picky about the se­lec­tion of our springs and fol­low a strict cri­te­ria re­gard­ing se­lec­tion. We carry out sci­en­tific re­search look­ing at min­eral con­tent and other com­po­si­tions that tell us if it meets the AQUA taste pro­file, which is in­flu­enced by the min­er­als. We look at the amount of wa­ter the nat­u­ral area has with­out up­set­ting the wa­ter bal­ance. Then we drill and see if we can find the wa­ter, and we check to see how much we can take. If the com­po­si­tion is not good, we stop.

We make sure our wa­ter is fresh, tast­ing good, and meet­ing health stan­dards. We fil­ter it, of course, with a com­plex fil­ter sys­tem, and then ap­ply Ul­tra Vi­o­let light which kills mi­cro bac­te­ria. You can­not drink the wa­ter when it's on the line, but af­ter a few hours it's ready. The whole process is nat­u­ral.

We will be open­ing fac­tory num­ber 19 in April in South Su­ma­tra.

Danone AQUA is a pub­li­cally-listed com­pany. What are the pro­jec­tions for 2016?

We are the big­gest wa­ter brand in terms of vol­ume in the world; about ten times the size of Evian. The growth of our busi­ness comes mainly from two fac­tors: growth of the pop­u­la­tion (1.5 per­cent per an­num) and growth of the middle class. House­holds will switch from boil­ing wa­ter to safer, pack­aged wa­ter. More­over, mod­ern trade grew rapidly, par­tic­u­larly in mini-mar­kets which have helped us grow ex­po­nen­tially. Con­se­quently, pro­jected growth in the bot­tled wa­ter in­dus­try in In­done­sia is around 10-12 per­cent per an­num.

You have ap­prox­i­mately 2 mil­lion sales points across In­done­sia. How is dis­tri­bu­tion man­aged?

I think in­deed this is one of our key strengths. We use 75 fam­ily- owned dis­trib­u­tors who have been part of the busi­ness since the be­gin­ning. We have 220 de­pots that dis­trib­ute into whole­salers that then go to the warung and the toko. 85 per­cent goes through this sys­tem, and the rest goes through mini-marts and su­per­mar­kets, done through our own dis­tri­bu­tion cen­tres, of which we have 14 all over In­done­sia. How the prod­uct flows is an in­cred­i­ble spi­der web.

We also have a unique dis­tri­bu­tion method called AQUA Home Ser­vice, or ‘AQUA Ladies', where we cur­rently em­power over 7,000 women in In­done­sia to sell AQUA from their homes. We se­lect opin­ion-lead­ers and help them build a busi­ness sell­ing drink­ing wa­ter, mainly by the gal­lon us­ing de­liv­ery boys on mo­tor­bikes.

We have an am­bi­tion that ev­ery­where in In­done­sia you must be able to find AQUA.

Danone AQUA has 12,500 em­ploy­ees in In­done­sia. How does your com­pany en­sure per­sonal and pro­fes­sional de­vel­op­ment?

I don't know where to start! We have very ex­ten­sive train­ing pro­grammes for all lev­els, from oper­a­tors to ex­ec­u­tives, lead­er­ship train­ings and very spe­cific func­tional, tech­ni­cal pro­grammes. We en­sure de­vel­op­ment of our peo­ple via four prin­ci­ples: 60 per­cent is on-the-job train­ing, 10 per­cent class­room train­ing, 10 per­cent on­line/dig­i­tal train­ing, and 20 per­cent through net­work­ing. As a re­sult, many of our peo­ple are typ­i­cally long-term em­ploy­ees for whom work­ing at AQUA is a ca­reer in­stead of a job.

How do you help those who do not have ac­cess or means of ac­cess­ing clean drink­ing wa­ter?

AQUA is com­mit­ted to proac­tively con­trib­ute in this field through an am­bi­tious WASH (Wa­ter Ac­cess San­i­ta­tion and Hygiene) pro­gramme aim­ing to im­prove the health of thou­sands of fam­i­lies around In­done­sia. Wa­ter com­mit­tees are formed and trained to de­sign the fa­cil­i­ties, mon­i­tor the works, and en­sure proper man­age­ment long-term. Three types of com­mu­nity groups are tar­geted: vil­lages sur­round­ing AQUA fac­to­ries, and re­mote vil­lages in NTT and NTB through our ‘ 1L for 10L' ini­tia­tive. Cur­rently, the WASH pro­gramme has pro­vided ben­e­fits to more

I come from a coun­try where I can drink wa­ter from the tap; it's a hu­man right. We hope that In­done­sians one day will also have that choice.

than 130,000 peo­ple in 18 dis­tricts, and will con­tinue to grow.

What is Danone AQUA do­ing to re­duce its im­pact on the en­vi­ron­ment, namely plas­tic waste, through your CSR pro­ject AQUA Les­tari? Are there plans to go largescale in th­ese en­deav­ours?

Our busi­ness model in­volves plas­tic, whether we like it or not. There are a lot of things we can do and have been do­ing. I made sure we stopped the plas­tic wrap­per on the lid and now our bot­tles are 100 per­cent re­cy­clable. I see huge op­por­tu­ni­ties for us to go fur­ther. The tech­nol­ogy is there.

AQUA de­vel­oped AQUA PEDULI (Plas­tics Waste Re­cy­cling Pro­gramme) in 1993 as a form of so­cial re­spon­si­bil­ity to man­age plas­tic waste. Since 2010, 600 scav­engers from three cities – South Tangerang, Ban­dung, Denpasar – in­volved in our Scav­engers Em­pow­er­ment Pro­gramme (PEP) have been em­pow­ered to im­prove their qual­ity of life through ac­cess to health­care and in­creased re­cy­cling ex­per­tise.

In Tangerang, we col­lect 80–90 tonnes of plas­tic per month, which is crushed in ma­chines and mainly ex­ported to China for re­cy­cling. Ev­ery month this unit makes enough profit to pay the pemu­lung, cover costs, and make prof­its. This pro­ject is scal­able and I'd like to see this repli­cated in other cities.

The World Health Or­ga­ni­za­tion (WHO) does not con­sider bot­tled wa­ter an im­proved or sus­tain­able so­lu­tion to wa­ter ac­cess in In­done­sia, and other sim­i­lar coun­tries. What would you say to this?

As the pi­o­neer of In­done­sia's bot­tled drink­ing wa­ter in­dus­try, AQUA con­tin­u­ally sets the bench­mark for the ap­pli­ca­tion of in­no­va­tive tech­nolo­gies geared to­wards im­prov­ing the pro­duc­tion process and prod­ucts. Pack­ag­ing re­mains a chal­lenge for the bot­tled wa­ter busi­ness, but some­how the im­pact on the en­vi­ron­ment is lim­ited by high re­cy­cling rates.

We have four pil­lars in the AQUA Les­tari pro­gramme: En­vi­ron­ment and Wa­ter Pro­tec­tion, Green Com­pany, Prod­uct Dis­tri­bu­tion and Com­mu­nity In­volve­ment and De­vel­op­ment. Th­ese pil­lars are re­al­ized by im­ple­ment­ing var­i­ous so­cial and en­vi­ron­men­tal pro­grammes rang­ing from up­stream (catch­ment area), middle (AQUA wa­ter source area) to down­stream.

Do you think there will be a day when In­done­sians will have ac­cess to clean and free drink­ing wa­ter? And if so, what will this mean for your in­dus­try?

Yes, of course. I come from a coun­try where I can drink wa­ter from the tap; it's a hu­man right. We hope that In­done­sians one day will also have that choice. Un­til then, we con­sider it our duty to make AQUA avail­able as much as pos­si­ble to pro­vide as many In­done­sians with a healthy hy­dra­tion op­tion.

What are the prin­ci­ples that Danone AQUA holds dear­est to its heart?

At the heart of AQUA's rea­son for be­ing is a very sim­ple goal: to make avail­able – to as many peo­ple as pos­si­ble – healthy, clean, and pure drink­ing wa­ter that is full of the nat­u­ral good­ness es­sen­tial to long-term health. We want to do it in the most sus­tain­able way; mak­ing sure that ev­ery­body in our ecosys­tem can ben­e­fit from AQUA. We make sure what­ever we do, we make oth­ers part of our story.

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