PRELIMINARY BUSINESS PLAN ON 20 LITRE DISPENSER WATER

Introduction

This Business Plan describes the investment, cost and benefits for setting up our proposed 20 Litres bottle Table water factory in Nigeria.

The proposed Water factory will utilize the use of water from the borehole to produce premium table water in the 20 Litres dispenser bottles and optimized the best water treatment method to give it a premium quality taste in line with the best Bottled water brands in Nigeria.

Justification

Our justification for venturing into the business is due to the facts that

Government has failed to provide the basic drinking water need of every household in Nigeria.
The popularity of bottled water is growing on alarming rates even in towns and villages across Nigeria. Lagos, Kano, Jos and Onitsha with a large living household is one of the largest consumers of packaged water in Nigeria.
Consumption of bottled water is not restricted by any law or religious belief unlike alcohol or some other drinking products.
There is ready made market for the products. All that is needed is quality production program.
And it is a profitable venture


Industry

The Nigerian economy is set to have closed 2016 with its worst economic performance in over 20 years as tight liquidity, high cost of production and depressed private consumption dented economic growth, however it is expected to rebound in 2017 after last year’s contraction.

Economic Analyst at the Focus Economics Consensus Forecast project that the economy will grow 1.3% in 2017, which is down 0.1 percentage points from last month’s forecast. They foresee a 3.0% expansion in 2018 which may translate to a sort of rebound. However a 9% growth is expected in the Table water segment of the economy.

This forecast will see a slight improvement in earnings in the food and beverage sector. There are about 8,000,000 (Eight millions bottles of packed water consumed daily in Nigeria which represents 7.5% of the Nigerian Population. Although the figure is a far cry from the unofficial figure but put at about 16 million bottles daily. However 20 Litres Bottle water consumption in Nigeria represent only about 18% of that estimate.

Competition

Growth in total bottled water volume sales in 2016 according to statistics shows an upward increase of about 9%. Coca-Cola continued to lead bottled water sales in 2016 claiming an off-trade volume share of 15% with its Eva brand. Eva has an early mover advantage and a high quality reputation in the category. Moreover, like other soft drinks brands offered by Coca-Cola, Eva is widely distributed all over the Country and benefits from continuously strong distribution support.

Cway clearly leads the 20Litres dispenser Bottle segment and it is the only visible nationwide brand. There are other brands but at best they are localized within their production area.

Threats to the Industry

High cost of energy
High cost of raw materials especially packaging
Poor quality producers who are bringing disrepute to the industry.
Increasing cost of operation due to the current recession
Inability of operators to increase price arbitrarily to match rising cost of production

Marketing and Sales

The purpose of the Marketing strategy is to sell to the market that is prepared for the best quality premium dispenser bottled table water which is what the plant is positioning to do. Every marketing communications is channeled to making a maximum achievement of our stated goal.

The primary target market will be retailers within production vicinity and its environs and will cut across all consumers including homes, restaurants and business places, while the secondary market will be the Cities bordering the production plant.

The route to the market will be a combination of competitive and marketing strategies which will be emboldened to capture a significant size of the market within the Jos Axis. Every sales and marketing insignia will be designed to give the brand an effective penetration within the proposed sales Area.



Proposed capacity and technology

The plant have an installed Capacity 0f 1,800 Bottles per day working on a single shift of 8 hours a day, and for 300 days a year. However Capacity utilisation has been projected at 50% of installed capacity in the first year.

The capacity of the factory is such to allow gradual increase in production to meet market demand.


Year 1 Year 2 Year 3
Capacity utilization (%) 50% 60% 70%
In Single Bottle (Daily) 900 1,080 1,260
In Single Bottle (Annually) 270,000 324,000 378,000

Raw materials Requirement

The major material used is water. The plant has the capacity to produce empty plastic bottles from PET bottles. Other materials includes, bottle caps, tamper seals and bottle labels.



IMG_20141224_082106

Machinery and Equipment requirement

1 Semi-automatic washing filling capping machine

2 Ton Ultra violet sterilizer

3 Micron filters

4 Transfer motors

5 Manual batch Number Coder

6 Ozone generator

7 Treatment Module Tanks

8 Treatment media

9 2 Ton Reverse Osmosis Machine (for premium taste and quality)

10 Safety equipment and basic Laboratory equipment

11 30KVA Generator

12 Vehicle for Distribution

Image result for semi automatic 20 litres washing filling and capping machine

Finance

The total production Machinery cost is about 8 million Naira including Reverse Osmosis machine but excludes the cost of generator and vehicles for distribution.

Working capital requirement typically comprise of an initial stock of about 2,000 pieces of 20 Litres Pet Bottles, Caps, tamper seals and labels provided for at least between 1 and 3 months for a good and stable startup.

A per-operational Budget of about 700,000 Naira is needed to cater for product certifications and factory registration from NAFDAC and incidentals.

Turnover for this plant working at 50% of installed capacity is projected at about 94.Million Naira for the first year with about 40 Million Naira Gross profit and 19 Million Naira Profit before tax.

The Cost factor does not include cost of building structure. Factoring building cost, the project’s initial investment will be fully recovered within 2 years of operation.

For More Preliminary Business Plan: youngoliki./category/feasibility-reports/

easytask:

PRELIMINARY BUSINESS PLAN ON 20 LITRE DISPENSER WATER

Introduction

This Business Plan describes the investment, cost and benefits for setting up our proposed 20 Litres bottle Table water factory in Nigeria.

The proposed Water factory will utilize the use of water from the borehole to produce premium table water in the 20 Litres dispenser bottles and optimized the best water treatment method to give it a premium quality taste in line with the best Bottled water brands in Nigeria.

Justification

Our justification for venturing into the business is due to the facts that

Government has failed to provide the basic drinking water need of every household in Nigeria.
The popularity of bottled water is growing on alarming rates even in towns and villages across Nigeria. Lagos, Kano, Jos and Onitsha with a large living household is one of the largest consumers of packaged water in Nigeria.
Consumption of bottled water is not restricted by any law or religious belief unlike alcohol or some other drinking products.
There is ready made market for the products. All that is needed is quality production program.
And it is a profitable venture


Industry

The Nigerian economy is set to have closed 2016 with its worst economic performance in over 20 years as tight liquidity, high cost of production and depressed private consumption dented economic growth, however it is expected to rebound in 2017 after last year’s contraction.

Economic Analyst at the Focus Economics Consensus Forecast project that the economy will grow 1.3% in 2017, which is down 0.1 percentage points from last month’s forecast. They foresee a 3.0% expansion in 2018 which may translate to a sort of rebound. However a 9% growth is expected in the Table water segment of the economy.

This forecast will see a slight improvement in earnings in the food and beverage sector. There are about 8,000,000 (Eight millions bottles of packed water consumed daily in Nigeria which represents 7.5% of the Nigerian Population. Although the figure is a far cry from the unofficial figure but put at about 16 million bottles daily. However 20 Litres Bottle water consumption in Nigeria represent only about 18% of that estimate.

Competition

Growth in total bottled water volume sales in 2016 according to statistics shows an upward increase of about 9%. Coca-Cola continued to lead bottled water sales in 2016 claiming an off-trade volume share of 15% with its Eva brand. Eva has an early mover advantage and a high quality reputation in the category. Moreover, like other soft drinks brands offered by Coca-Cola, Eva is widely distributed all over the Country and benefits from continuously strong distribution support.

Cway clearly leads the 20Litres dispenser Bottle segment and it is the only visible nationwide brand. There are other brands but at best they are localized within their production area.

Threats to the Industry

High cost of energy
High cost of raw materials especially packaging
Poor quality producers who are bringing disrepute to the industry.
Increasing cost of operation due to the current recession
Inability of operators to increase price arbitrarily to match rising cost of production

Marketing and Sales

The purpose of the Marketing strategy is to sell to the market that is prepared for the best quality premium dispenser bottled table water which is what the plant is positioning to do. Every marketing communications is channeled to making a maximum achievement of our stated goal.

The primary target market will be retailers within production vicinity and its environs and will cut across all consumers including homes, restaurants and business places, while the secondary market will be the Cities bordering the production plant.

The route to the market will be a combination of competitive and marketing strategies which will be emboldened to capture a significant size of the market within the Jos Axis. Every sales and marketing insignia will be designed to give the brand an effective penetration within the proposed sales Area.



Proposed capacity and technology

The plant have an installed Capacity 0f 1,800 Bottles per day working on a single shift of 8 hours a day, and for 300 days a year. However Capacity utilisation has been projected at 50% of installed capacity in the first year.

The capacity of the factory is such to allow gradual increase in production to meet market demand.


Year 1 Year 2 Year 3
Capacity utilization (%) 50% 60% 70%
In Single Bottle (Daily) 900 1,080 1,260
In Single Bottle (Annually) 270,000 324,000 378,000

Raw materials Requirement

The major material used is water. The plant has the capacity to produce empty plastic bottles from PET bottles. Other materials includes, bottle caps, tamper seals and bottle labels.



IMG_20141224_082106

Machinery and Equipment requirement

1 Semi-automatic washing filling capping machine

2 Ton Ultra violet sterilizer

3 Micron filters

4 Transfer motors

5 Manual batch Number Coder

6 Ozone generator

7 Treatment Module Tanks

8 Treatment media

9 2 Ton Reverse Osmosis Machine (for premium taste and quality)

10 Safety equipment and basic Laboratory equipment

11 30KVA Generator

12 Vehicle for Distribution

Image result for semi automatic 20 litres washing filling and capping machine

Finance

The total production Machinery cost is about 8 million Naira including Reverse Osmosis machine but excludes the cost of generator and vehicles for distribution.

Working capital requirement typically comprise of an initial stock of about 2,000 pieces of 20 Litres Pet Bottles, Caps, tamper seals and labels provided for at least between 1 and 3 months for a good and stable startup.

A per-operational Budget of about 700,000 Naira is needed to cater for product certifications and factory registration from NAFDAC and incidentals.

Turnover for this plant working at 50% of installed capacity is projected at about 94.Million Naira for the first year with about 40 Million Naira Gross profit and 19 Million Naira Profit before tax.

The Cost factor does not include cost of building structure. Factoring building cost, the project’s initial investment will be fully recovered within 2 years of operation.

For More Preliminary Business Plan: youngoliki./category/feasibility-reports/

Pls what is the break down cost of starting bottle water business presently .....having that space is available for production.