How Much Do I Need To Start A Sachet Water | Bottled Water Production Business In Nigeria
Water is essential to life; the amount of water intake balances out dehydration, it helps in metabolic reactions for food breakdown, and internal waste removal that’s why Medical Doctors suggest that you must consume at least 8 glasses or 1.5 liters of water in a day. One of the most popular and widely commercial means of getting drinking water is “the sachet water”, it is very convenient, easily affordable (N10), one serves of 60Cl, easily recyclable into other plastics if the population would just use a nylon recyclable bin!
The mineral water industry has remarkable growth in the last 5 year. With thousands of small-scale mineral water supplier in the market, the major consumer of this product is Indian railways; the Indian railway is a huge potential market for mineral water.
Water bottles are usually come in different variety according to water content present in it, in this fast mover traveling population mineral water is easier to sell, and a small-scale mineral water plant is a profitable business for the one who wants to start small-scale manufacturing business.
Water is essential to life; the amount of water intake balances out dehydration, it helps in metabolic reactions for food breakdown, and internal waste removal that’s why Medical Doctors suggest that you must consume at least 8 glasses or 1.5 liters of water in a day.
One of the most popular and widely commercial means of getting drinking water is “the sachet water”, it is very convenient, easily affordable (N10), one serves of 60Cl, easily recyclable into other plastics if the population would just use a nylon recyclable bin!
Going into a sachet water production business is profitable but expensive, time and energy-consuming, although there are several other ways to knock a bit of stress off your back, like;
1. Franchise: In this case, you buy your production machine and use an already set-up factory, brand name, NAFDAC number, purified water and other facilities, etc. The company charges you a franchise fee and other fees for production.
2. Distribution: This involves getting a delivery vehicle, buying at wholesale bulk prices and distributing to retailers and consumers alike.
Considering your interests, this is a bit of an expo on what your potential daily/weekly/monthly profits looks like;
Based on Market analysis, the current sachet water prices are as follows;
Consumer price: N120/150 – 1 bag (20 sachet),
Retail price: N83, which is N500 – 6 bags
For Bulk prices: N70 – 50 bags = N3500
Let’s say your daily production target is 500 bags:
Daily = N83 * 500 bags = N41, 500
Weekly = N41,500 * 6 days = N249,000
Monthly = N41,500 * 26 working days = N1, 079,000
This is excluding expenses such as maintenance, operation, labour, and transportation costs, but the cost of producing one bag of sachet water is estimated below;
1kg of printed nylon produces 25 bags, which means 20kg gives you 20 bags = N9400
Total profit after production: N41,500 – N9400 = N32,100
Potential startup costs
N8, 000,000 (This is excluding Land and building capital)
1. Get a place of business –
You need to acquire a property or rent a place, getting your own property and developing it is the most desirable option as that will save you cost in the long run.
2. Register your business name –
The name your water products will be known for. Branding is very important in business, so in addition to your business name, design a very professional logo for your product because perception is the best sales man. Make your brand stands out among others! This material contains how to Register your business Name with the Corporate Affairs Commission from any State in Nigeria.
3. Sink a Borehole –
The most common source of water for commercial drinking water production like sachet water and bottled water is borehole, let there be borehole within your premises for constant water supply to your pure water production factory. Material contains the contacts of the people that can help you in the borehole in case you need them.
4. Install Overhead Tanks –
This will serves as reservoir to supply water to the distillation system, it has to be overhead to ensure proper pressure to be able to pump down the distillation chamber.
5. Install Distillation System –
This could just be a micro filters and cup filters depending on your start up capacity, but if you can afford it, then you go for more comprehensive distillation system. Otherwise, use Purification process known as Ultra Violet sterilization bulbs process. After distillation, you need to take your product (the resultant water) to the laboratory for results.
6. Get NAFDAC Approved –
NAFDAC Is the agency that supervise foods and drugs in Nigeria, you need their approval to carry out business that involved consumable products of which water is one of them. This material contains a step by step on how you can get a NAFDAC Approval and Registration Number.
7. Acquire Automatic Sealing Machine –
Go for the ones that seals or produces about 40 sachets per minute.
This material contains the price and the contact of the Marketers of the sealing Machines. This include both the Locally made machine and the foreign Made machine.
8. Employ Staffs –
You will need minimum of five persons to work in your factory for a start then increase with time as the demand may be.
9. Distribution Mechanism –
Buy truck for your distribution of rent but renting can be expensive and disappointing most of the times. My recommendation is that you buy your own truck if you can afford it at the beginning.
10. Get Power Generation –
You know the situation of power supply in Nigeria, except if things change tomorrow. If not, you will need a standby power generating set.
With all these in place, you are good to go! For a startup and depending on what you already have like land and other things, you may need up to five million naira for a start up in order to get the sealing machines, nylon and other materials, and pay for labor for about some months before it begin to yield profits. Your cost could be higher if you are also paying for rent and hiring trucks.
The Profit Potential In Sachet Water Production Business
Assuming you have only one Automatic sealing machine that produces your sachet water and you can afford to have only one delivery van that distribute your products. one automatic machine (at 100% utilization) Capacity: 40 sachets per minute i.e.
2,400 sachets in 1hour Which is equivalent to 120bags in 1 hour.
Let’s conclude that; On the average, you produce 100 bags in 1hour, and assuming you was able to work for 4hours in a day.
i.e. one machine producing 400 bags of pure water in a day. (sincerely, an average sachet water factory in Nigeria today produces between 700 bags to 800 bags per machine in a day) so it all depends on you.
Still based on our assumption of 400 bags in a day and a bag is being sold between N70 and N80. So let’s also assume N70 per bag;
400 bags x N70 per bag = N28, 000 per day.
N28, 000 x 28 working days in a month = N784, 000 per month.
Wait and see; N784, 000 x 12 months in a year, = N9, 408,000
Other Reasons To Invest In Sachet Water Production Business
* Government has failed to provide the basic drinking water need of every household in Nigeria. So, everyone make provision for themselves and buying pure sachet water is one of the most reasonable option.
* The more the population increases, the more the need for people to drink water, and the more the demand for the product of sachet water.
* There is not going to be a day, people will stop drinking water. In fact, it is one of the most essential consumable product and the most consumed natural resources on earth.
* Sachet water currently has no close or partially close substitute in Nigeria where the majorities are poor to depend on bottled water which is more expensive.
* One can never run out of customers to supply to. The more the producers, the more the consumers of sachet water.
* The popularity of sachet water is growing on alarming rates even in towns and villages across Nigeria.
* At five naira for a sachet, pure water is very cheap and affordable to buy even by the poorest man on earth.
* It is a major source of revenue for the government, so the government is even encouraging more producers.
* There is really no distinction between the consumers, it is widely acceptable to the rich and the poor, and is used for events and parties.
* Consumption of sachet water is not restricted by any law or religious belief unlike alcohol or some other drinking products and has no side effects.
* The set up requires little start-up capital compared to other factories. with five to 10 million naira, you are go to go and the return is guaranteed.
* There is ready made market for the product. All you need is just produce, it is one of the product out there that requires no much marketing to get the product accepted as it is already accepted by nature.
* The payback period for the investment into the business is less than six months. It’s one business you confidently get loan to do start with 100% assurance that the business would pay.
* The return on Investment (ROI) is more than 50% and it is subject to increase on expansion of the business.
* It requires little or no periodical acquisition of raw materials for production; water is a free gift of nature.
Pure Water Factory layout
Your factory, if you’re building one or remodeling, should have the following layout;
• Water production room
• Storage material room
• Finished product room
• Changing/cloak room
• Laboratory room
• General office room
Be sure to carry out a subsurface water analysis before siting your factory, this would save you a lot of money during water treatment processes.
Materials required to set up a pure water factory
• Printed nylon sachets – N470/kg
• Packaging bags – N3200/Bundle
• Water micron filters – N250/one
• Micron filter casing – N3500/one
• Treatment materials (Activated carbon, Hydrolite, Brim, Calcite, Sand, Gravel) – N64,000
• Morning Fresh for monthly tank cleaning maintenance – N450
• Diesel – N190/liter
• Fuel – N140/liter
• Drums, buckets and plastic baskets – N400/one
• Overalls, crocs, disposable hand gloves and hair nets – N7200
4 Raw Materials Required for Water Processing Unit
The basic raw material required for Mineral Water Plant Manufacturing is, of course, Raw Water which will easily available from the natural resources of water or from the municipal corporation water supply lines.
Apart from raw water, there are some other raw materials required for the Mineral Water Plant Manufacturing that is mentioned below
• Bottle Cape
• Cartoon Boxes.
Equipment required to set up a pure water factory
Routine maintenance should be carried out regularly on all equipment to avoid production downtime, machine failure, health and electrical hazards.
• Borehole system – N100,000
• Overhead tanks (2) – N40,000
• Water filtration unit + treatment charging – N250,000
• 20 KVA generator – N700,000 to N1,200,000
• Pumps, valves and pipes – N150,000
• UV sterilizing unit (55 Watts) – N23,000
• Reverse osmosis unit (optional, 2000L) – N2,500,000
• Ozone generator – N450,000
• Dingli automatic filling/sealing machine – N650,000
• Delivery truck (most popular is the Mitsubishi Canter) – N1,200,000
Lists of Machinery for Mineral Water Processing Plant
There are different types of machinery available for mineral water processing you needs to select the right machinery according to the investment capacity and desired packaging.
You can go with the fully automatic machinery or semi-automatic machinery the cost of the machinery totally depends on the features present in the machine so it is advisable to choose the machinery on the basis of the capital investment.
We have listed here some of the major machinery and equipment required for the mineral water plant business.
• Storage Tanks
• Sand Filter Activated Carbon Filter And Micron Filters
• Treatment Tanks
• Reverse Osmosis Plant
• Chlorination Tanks
• Sand Filter
• Activated Carbon Filter
• Micron Filters
• Ultraviolet Disinfectant System
• Electronic Doser For Alum And Chlorine
• Ozone Generator
• Water Sterilizers And Dispensers
• Water Filling Machines
• Bottle Wrapping Machine
Expected Labor costs for pure water factory
Before employing any personnel in contact with water production operations, ensure that you ask/require for a proper food handler’s medical test, and also provide proper training for machine handling and processes.
• Machine operators (2) – N12,000, above daily production target would earn them extra N3 commission/bag
• Quality Control – N20,000 – N30,000 depending on your profit margin
• Marketing/Administrative personnel – N20,000, N200 commission for each new client
• Cleaner (1) – N8000
• Driver – N15,000 with extra N3 for extra bags sold
• Motor boys (2) – N8000, commission amount are the same as driver.
• Security – N10,000, this is compulsory, because you don’t want your property going missing at night.
Total: N123,000 excluding commissions
Water Purification Process
Step 1 Collect The Water
Collect the raw water into the storage tank, the specific quantity of water is pumped into the above tank where water is dozed with alum for coagulation with heavy metals or insoluble matters.
Step 2 Remove Impurities
Allow water to settle for an hour, and you can remove the impurities present in water with the help of osmosis technique.
Step 3 Bubbling Chlorine Gas Processes
The purified water is transfer to the chlorination tank where primary disinfection is brought about by the bubbling chlorine gas process.
Step 4 Sand Filtration
After the bubbling chlorine gas process water is passed through the sand water filters where filters trap the undissolved impurities
Step 5 Carbon Filtration
After sand filtration water is passed through the carbon filtration for removal of color, odor and dechlorination process is takes place.
Step 6 Micro Filters
After dechlorination water is passed through the micro filters for terminal disinfection. Micro filters having a comprising series of 5 microns, 1 micron and 0.4-micron filter followed by ultraviolet disinfection system.
Step 7 Bottle Filling
The mineral water is passed through a bottle filling machine where water is filled into the bottles, then bottles further send to the capping machine where caps are fitted on the bottle with ozone generator or shrink wrapping.
Step 8 Packaging
After passing through all the processes the mineral water is ready to drink, mineral water needs to packed for transportation and selling. Finally, mineral water bottles are packed with corrugated boxes, one corrugated box contains one dozen bottles.
Registration requirements for pure water factory
• Corporate Affairs Commission Business registration: this is a necessary documentation for your company band and identity.
• Tax Identification Number: This registration is free, but always ensure you file your taxes as soon as possible.
• Community/Local tax: This registration is for the community which you’re located, a sum of N5,000 should cover the initial phase.
• NAFDAC Registration Number: this is the most important registration to kick off your business, factory inspections, borehole and water quality analysis by a NAFDAC certified Laboratory will be required for this process, along with a fee of N30,000.
• Association of Table Water Producers: These associations are your comrades and competitors alike; they regulate the market and price economics.
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Uses of this Business Plan (PDF and Word)
This business plan can be used for many purposes including:
• Raising capital from investors/friends/relatives
• Applying for a bank loan
• Start-up guide to launch your business
• As a business proposal
• Assessing profitability of the business
• Finding a business partner
• Assessing the initial start-up costs so that you know how much to save
• Manual for current business owners to help in business and strategy formulation
Contents of this Business Plan (PDF and Word)
This business plan include:
• Marketing Strategy
• Financial Statements (monthly cash flow projections, income statements, cash flow statements, balance sheets, break even analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortization)
• Industry Analysis
• Market Analysis
• Risk Analysis
• SWOT & PEST Analysis
• Operational Requirements
• Operational Strategy
• Why some people in this business fail, so that you can avoid their mistakes
• Ways to raise capital to start your business