Geyser Island

Geyser Island is a windswept, cold rocky spot of land in the South Indian Ocean. Covering 86 acres, the island is rocky with little vegetation, limited to a few grasses. The tiny island, not specified on some navigation charts, was thought to hold no value. It was never claimed by any nation although it lies in international waters. The nearest neighbor is a meteorological station some 220 miles away.

In 1986 Mark Dean had the opportunity to stop at the island on one of those rare sunny days when a gale wasn’t blowing. As he and two others trekked across the tiny island, they found a hidden treasure. From the side of a rocky pinnacle water was flowing into a rock pool. Steam was rising but a bit too warm for bathing. Two more pools were found with jets of water feeding them from cracks in the rock. The most shallow was the perfect temperature. It was a rare treat following the 30 second showers on board the boat. Mark left the little island with an idea and the will to bring it to fruition. The island was named Geyser Island.

A second visit with some exploratory monies was scheduled for the next summer. A team investigated and a plan developed. Dean had seen how the bottled water market was exploding and the desire to find an exceptional water source could spell untold riches. Armed with the supporting documents, Mark began telling his story of a tiny rock in the South Indian Ocean containing a water source producing a flow of 1,600 gallons a minute from as deep as 2 miles below the surface. The depth cleaned the water of contaminants found in most water sources. Analysis showed the water in its natural form contained a healthy mineral content while being pure enough to go unfiltered and pass any international standard for drinking water.

Now seeking investors, Mark’s job was a tough one. Some thought he was insane. How could such an isolated spot produce a profit on such a low ticket item as bottled water? He pushed the fact few new water supplies so pristine have been found. He noted how it seems logical water will lead to wars in coming decades. In essence, they can become a country since no nation claims the tiny island, barely 1/8th of a square mile.

After a couple of years funding was secured and the business plan was in place. Improvements to the island were made and the company sent it’s first shipment of water in 1990 with ten scheduled shipments the first year.

Mark was lucky. There was a deep cut that was a mere 500 feet off shore meaning the cost of building a harbor that can handle cargo ships was not needed. Smaller boats could taxi the product from shore.

The plan for a 7,000 square foot facility that included a bottling plant and a 14,000 square foot living space was constructed. All the modern amenities within reason were brought in and others manipulated. With a staff of 7, the business began.

In a few years the population had soared to 39 and annual increases in sales were in the double digits, sometimes 30% or more. Best yet, less than 10% of the capacity was being utilized. In the final year, sales exceeded $10,000,000. The price points were working, producing about $3.50 per case. The numbers were looking good and the market penetration was minimal at best, resorting to ‘word of mouth’ to pick up new retailers.

At the two international offices, the heat was on as the staff worked to get product into new retail outlets. Some of the investors were upset. You see, the company was a fairy tale story of growing sales but a nightmare horror story in losses. How could this be? The non-operating costs were killing the company. They knew it would be this way in the beginning. It might cost several times revenue just to get a foothold in one country. There were all the government restrictions and third party fees involved in getting the water imported. Sure, $300,000 in sales and $2,500,000 in losses were not scary in the first year by in its final year, a $3,000,000 loss on $10,000,000 meant investors had lost hope.

The company breathed its last breath in 2004. In-fighting among investors and unapproved buyouts resulted. No cash was coming to the island. In short, everything came to a grinding halt. Over the next several years, lawsuits were the rule and the bitterness led to the founder saying if the company came back from the dead it would not be in his lifetime.

The limited customer base never forgot the taste of Geyser Island Geothermal Water in the 1.5 liter cobalt blue glass bottle. Remaining stock, at a suggested $64 a case (18 liters total) was quickly bought up from wholesalers.

Finally in early 2011, a new owner emerged from 3 months of negotiations. With a price of $18,000,000+, they signed a letter of intent and closed on the deal. They hope to begin operations after repairs are made in the summer of 2011. It should be noted the island had been uninhabited since 2004. The two international offices’ representatives (namely three of Mark’s team) renewed licenses and kept the company alive through those years as far as regulations are concerned. All that is left is to arrange shipping and get the physical plant going again. Certainly all the water testing must meet current regulations.

The new owner has a long record of success. Since the middle 1980s, a small company begun in a residential garage that averages $500,000 in sales a year, will assume the assets. The company, Flash Water, is not a bottled water company, but Dan Springer is involved with water. Dan sells ‘Flash Water’ a small $29.99 device that attaches to any water source and sends an electrical charge to the water. Dan says the electrical charge does the same thing as a lightning flash in a thunderstorm. It breaks up the elements in the water that allow plants and humans to better digest the water and get the most from the naturally occurring components. He began selling to gardeners, greenhouse and farm owners and later began selling to consumers wanting the same from their tap water. Dan says the water has that fresh smell like the air following a thunderstorm.

Dan already has a staff in place who are already marketing the bottled water. The target is the restaurant industry, health food retailers and small grocery chains. His staff must be good. Before even closing on the sale, they nabbed a three year contract for 93 million gallons of water over three years for $36,000,000 with the first $12,000,000 payment to be forwarded once the first shipment is to sail toward Japan. Dan hopes to build sales to $10,000,000 within three years.

Springer’s business plan is to pay off the note and be in the black by the end of year three but notes unexpected costs may deter that breakeven to as late as the end of the fifth year. Backers seem fine with this. After all, bottled water, especially a specialty water like Geyser Island Geothermal Water, is a rapidly growing industry with no end in sight. Even with the added expenses, pricing will allow about $3 or more per case sold to go against those expenses outside normal operation expenses which include in-country shipping and storage. Springer’s objective is to keep everything ‘in house’ with water ready to sell once it leaves the island.

A few details are yet to be worked out, but Dan insists on keeping costs low. Wind power will power the island and word is the operation is efficient enough to be handled by fewer people. The 18 people (including family) are already residing on the island with production not far away.

At this point, Geyser Island has a population of 18 earning a theoretical $254,000 tax free. A minimal housing allowance is deducted as workers receive less pay for free housing (35% of pay). There is a store and several common areas. Internet is available (we doubt it is high speed) and a closed circuit TV station plays a 6 hour program of requested TV shows and movies through a cooperative exchange with their nearest neighbors, the five living at the meteorological station 220 miles away. There is even a tiny radio station playing blocks of music employees enjoy plus daily announcements and weather report segment. There is a small clinic with a doctor on staff.

Geyser Island is cold and wet. With almost 200 cloudy days a year, the temperature drops below 0° C. 232 days a year. The wind is almost constant and gales are frequent.

There are three sources of the geothermal water on Geyser Island. The most shallow pool has water the temperature most suited for bathing. A swimming pool and a natural pool offer recreation and relaxation.

Scientists warn this region of the South Indian Ocean is geologically active. There is one report claiming the island was once two islands, one was about 50 acres and the smaller was 7 acres. The report said recent activity lifted the ocean floor adding an additional 29 or 30 acres, connecting the two islands. Geographically this appears correct with an inward “C” shaped feature on the north central portion of this rocky outpost. They warn earthquakes and changes in the island could occur without warning. They suggest a well thought out escape plan in such an event. Springs does not doubt the report but feels they are ‘could happen’ events which may or may not happen and are just as likely a thousand years from now.

Environmentalists have had issues with the island opening for business again. “These tree huggers say the birds are not nesting in their original numbers now that we’re back. I know they’ll head for another nearby island and never suffer any ill effect from moving to a new spot but the tree huggers think we’ve traumatized the damn birds.” Dan admitted that, yes the numbers are down but they still have a good number who make Geyser Island a stop on their migratory path. He warned the environmentalists the island was private property and trespassers would be dealt with. He added the island was not beholding to any government so they had nowhere to turn if they caused problems for the company. He quickly added he was all for protecting the earth and her creatures, noting the use of wind power and other ‘green’ concepts to make his company ‘earth friendly’.

The history of this second life for Geyser Island remains to be written, but at the very least, Geyser Island has to be one of the most unusual places on earth with a very unconventional commodity, water. 

SUMMER 2013 UPDATE:  News indicates the island will enter the retail market in early 2014.  Springer indicates the company has paid off $14.7 million of the company’s debt and will center on building a retail presence he hopes will pay off the remaining 2.3 million dollars from the initial investment.  Although technically an independent nation, he has agreed to limit production to not more than 25 million gallons a year to appease international authorities who have demanded the company adhere to international environment impact agreements.  Springer states the bottler will only market a portion of the nearly 130+ million gallon annual flow.  The water should be available in .5, 1 and 1.5 liter bottles by Spring 2014.  The 9ph water with naturally occurring minerals is expected to be a popular mainstay among bottled waters.   


 Springer admits there is little use for money on the island. He says he could easily use charge accounts for the families living there or at least checks. That’s not Dan’s style. He wants employees to have a real tangible commodity. He insists on paying his people in silver. Dan notes how the current economic climate of fluctuating currencies, it is simply the wisest thing to do, noting the average employee will likely only stay a few years and can most likely leave the island with much more money than they actually earned. Dan commissioned the minting of silver coins.

The typical thinking would be for Dan to hire one of the major mints to make thousands, but that is not Dan’s style. He prefers the coins be made by primitive means on the island at intervals to meet demand. Additionally Springer decided to mint a few hundred for potential clients and then to mint 500 for a distributor to sell (Blue Waters Mint). The coins are 4.5 grams of .999 silver. The thinking is a limited number of such coins would be a novelty that might produce a bit of income. The distributor agrees to sell at a retail price of £16.99. The distributor may sell at wholesale but the percentage is limited.

Springer noted the 500 offered a distributor is a ‘test’ to see if there might be demand for such a coin. If the popularity exceeds expectations, he mentioned that perhaps Geyser Island Geothermal Water fans might like a souvenir coin from the island. Certainly Dan is already thinking about shirts and other items.  Bill Turner 2011

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