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With exit of foreigners, demand for mineral water falls

With exit of foreigners, demand for mineral water falls

By
On
Mar 18, 2015 - 15:50

KABUL (Pajhwok): Following the pullout of most international combat troops from Afghanistan, demand for mineral water has declined by 50 percent.

Foreigners and people working with them have been major consumers of mineral water. Most of Afghans, suffering from poverty, view mineral water as a luxury. 

The Afghanistan Investment Support Agency (AISA) says 85 companies have been granted licences for mineral water production since 2003.

Of them, 57 were established in Kabul. Abdul Karim Arifi, head of the Industrialists Union, said only 20 companies produced pure mineral water in Kabul.

Declining demand

Arifi told Pajhwok Afghan News with the drawdown of foreign forces and closure of some international organisations’ offices, demand for mineral water had fallen.

In addition, some factories have cut production due to decreasing demand. The Natural Mineral Water Factory, which produced 20,000 cartons of water daily last year, has slashed its production by 50 percent in 2015.

Established in Pul-i-Charkhi area in 2005 at a cost of $3 million, the plant provided job opportunities to 100 people, according to Arifi, who also noted a 20 percent fall in production by the Tabiyat Mineral Water.   

Initially, foreigners used to import mineral water, but after the establishment of factories in Kabul, they started consuming domestically-produced water.

Gulabuddin, owner of a general store in the Taimani locality of Kabul, also confirmed the production of mineral water had witnessed a major decrease.

Quality

Arifi said Tabiyat and 19 other factories produced quality mineral water. Equipment being used by the factory was purchased in the US. Majority of foreigners used to consume Tabiyat Factory’s water.

Factory officials say they sell pure water, coming from 80 meters deep wells and containing appropriate amounts of calcium, magnesium, sodium, potassium and iron.

Abdul Karim, who recently returned from Ukraine after 20 years, said he consumed many types of mineral water. “The mineral water really has good quality.”

Gulabuddin, a retailer in Taimani locality, said there were different kind of products, however, his customers preferred Crystal.

Purchasing power

A bottle of mineral water, weighing half litre, costs 15 to 20 afghanis. Majority of the people do not have the capacity to buy mineral water.

Gulabuddin confirmed majority of their customers were expatriates and non-governmental organisations.

Abdul Mansur, a Taimani resident, said people could not buy mineral water because of its high price. “Water in our area is salty. If the mineral water were cheap we would definitely consume it.

“When I’m out I buy mineral water. But at home we have no choice but to use the salty water. We are a 10-member family and the cost would be too high,” reasoned Ahmad Sayar -- another resident.

Domestic products

Arifi said if the government was willing to support the use of domestic products, he could halve down the price of mineral water. A half-litre bottle of water costs 8 afghanis in the wholesale market.

He asked the government to reduce the taxes on raw material and other imported goods. Last year, he recalled, he had paid one million afghanis in tax.

Water bottles and labels are imported and the company pays 10 percent tax to the government. Production levels could increase and price fall if the government allocates land to the factory.

“The government should support industrialists by cutting taxes on raw materials and jacking up the import duty if it really wants to improve the economy,” Arifi argued.

AISA paid less attention to domestic promotion and addressing requirements of industrialists in the past 13 years, he acknowledged. “I respect the AISA chief, but we have received little cooperation from him.”

He asked the agency to pave the ground for loans, reduce taxes, distribute land plots and provide electricity to industrialists.

AISA’s Deputy Director Mohammad Ibrahim Shams confirmed some problems, but said: “We don’t accept the claim the agency has done nothing to solve problems of the industrialists and investors.”

Eight industrial parks have been created in the country in the past 12 years, while three other such parks are being set up, according to Shams, who claimed the industrial parks did not encounter power outages.

Abdul Qadir Jilani, Ministry of Finance spokesman, said they had always supported industrialists. Taxes on eight kinds of raw material imports had been reduced, he maintained.

But the tax on water bottles and labels had not been changed because such factories were already active inside the country, the spokesman explained.

For his part, Arifi said the number of bottles produced inside the country was not enough and the labels printed in Afghanistan were of poor quality.

Under Article 4 of the tax law, industrial units have to pay 20 percent of its income in taxes to the government annually.

Ministry of Commerce spokesman Musafir Qoqandi said 3,000 factories were functioning in the country as a result of efforts by the government in the past 13 years.

In an effort to encourage investors and jump-start the economy, he added, land plots had been distributed to industrialist in Kabul and other provinces. But plots in Kabul are fewer.

nh/mds/hg/mud

 

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