The Beauty in Commercial Water Bottling Business - Complete Guide
Since public taps are not running does it not make sense to dig up a borehole and set up a commercial water factory that will serve your municipality and perhaps, even distant markets?
Entrepreneurs should embrace this call as an emergency because the taps are either non-existent or are existent, but not running. Governments always contend with the challenges posed by increasing population. And the water problem seems to be the most crucial.
The degree of need, health considerations and rising standard of living contribute in no small measure to the increasing demand for clean water. With an estimated population of over 140 million people, local market demand for mineral water is over 160 million litres.
Currently, too many people have illegitimately flocked into the pure water business but unfortunately only a very tiny proportion of these producers meet up with the required standards. Even though the number of mineral water producers has increased over the years, there is still a wide supply gap existing for prospective entrants into the business.
Two product brands - sachet and bottled (table) - will excellently serve different market segments. Nigerian cities offer very big markets for pure and mineral/or table water.
The major raw material needed for pure and table water production is natural water obtained from bore holes, or springs.
While nylon pouches or sachets serve as packaging materials for pure water, moulded food grade (PET) bottled plastics have gained prominence for table water production. PET bottle containers could be fabricated even within the same factory as an extended plant line. Similarly, the nylon bags are usually cut and sealed within the factory premises.
Most existing producers, however, outsource PET bottle production to established plastic firms.
Treatment and Filtering devices are built into the core processing plant. Some local fabricators have come up with efficient processing plant systems, though the clamour for the attainment of the highest hygienic standards has put the galvanised imported equipment ahead of the local equivalents in terms of preference.
During the purification process, calcium, potassium or sodium additives are added in prescribed standard proportion.
In the final analysis, this profile practically reflects two complementary production lines- one line with a daily output of 1000 litres (100,000 cl) or effectively about 2,000 nylon bags dedicated to the production of pure water per day; and the other line dedicated to the production and bottling of 2,000 litres per day.
Given that you sell each unit of pure water with 50cl liquid content at a very liberal ex-factory price of N5, it means then that about N10, 000 is accruable just in one day. In an operational year of about 300 days, gross revenue of N3 million is realisable from the pure water business. After deducting costs, your net revenue will be in the neighbourhood of two million naira.
Similarly, given that you process and sell the bottled water at a very liberal ex-factory price of N50 per litre, it follows that in an operational year of 300 days, you could realise a turnover of about N30 million. Making about 60percent provision for production and operating costs, it is reasonable to expect that you will be smiling and whistling to bank with about N12 million at the end of each operating year.
Looking at the investment profiles of the two lines side by side, it would be noticed that bottled water production is more capital intensive than sachet water production.
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