How To Start Pure, Bottled Water Business In Nigeria: Success Guide To Setting Up Dis Biz
The justification for venturing is due to the facts that Government has failed to provide the basic drinking water need of every household in Nigeria. The popularity of Sachet and bottled water is growing on alarming rates even in towns and villages across Nigeria. And 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
The Bottled Water Industry In Nigeria
Nigeria’s bottled water industry has grown phenomenally over the past decade, with volume sales growing at an annual rate of 31% between 2002 and now. The market accommodates both multinationals, large local corporate and thousands of SMEs across the country. To 2016, per capita consumption BMI analysts expect to growth to hit about 8.5 litres per capita. Over this period, bottled water is expected to comfortably surpass carbonates as the most widely consumed soft drinks segment by volume.
On the value side, the outlook is equally strong as alternative source of drinking water across the country remains elusive. Hot weather, growing population and health consideration will continue to drive the dynamics bottled water demand and we expect the sub-sector to become more segmented as competition grows and consumers’ tastes and preferences evolve.
Competition In Bottled Water Production In Nigeria
Growth in total bottled water volume sales in 2012 and 2013 according to statistics shows an upward increase. This was partly due to increasing maturity, and growth in population and the inability for Government to providing adequate clean drinkable water.
Coca-Cola continued to lead bottled water in 2013, claiming an off-trade volume share of 20% 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 advertising support.
Cway is the second leading player overall, while Nestlé Nigeria Plc rounded out the top three its Nestlé Pure Life brand. Other prominent players competitors in this highly fragmented category included , Aquafina ,Aqua Dana, Cascade, Moowa, Voltic, Oak, Oval Blue, Ragolis, Swan, La Voitre, Lily, Gossy, Sapphire ,Coscharis. All of these accounting for 40% of the trade volume share.
Crucial factors we will take in decision making
Before taking this investment decision, associated risk factors are evaluated taking into consideration certain key elements for establishing bottled water plant.
Some Critical factors considered before launching are:
The market for packaged bottled is a growing market, but offers tough Competition.
Usually the top target market for bottled mineral water follows the perception. If the perception is positive, the results will be higher sales. The positive perception for distributors and final customers may result from direct consumer experience, awareness, direct promotional activities
Perception most times is due to correct name branding and quality and aesthetic of Print on the product.
Distribution is very important for the success of any bottled water brand. The stronger the distribution the more successful will be the new brand.
Compliance of the water quality standards of National Agency for Food drug administration NAFDAC and license from the authority is key to sustenance and profitability
Production Plan For Bottled Water Business In Nigeria
The plant will be located anywhere in Nigeria. It will have an installed capacity 0f 2000 Bottles per hour working on a single shift of 8 hours a day, and for 300 days a year. However to allow for brand and sales maturity the production has been planned at 120,000 bottled packs of 12 per annum in the first year of production and increasing capacity yearly.
The plant will use Reverse Osmosis coupled with micro filtration and Ozonator water treatment method this is to ensure compliance with the National Agency for food and drug administration and control Standard and to capture the high quality conscious Water drinking Nigerians.
Raw materials Required For Bottled Water Production In Nigeria
The major material used is water. The plant has the capacity to produce empty plastic bottles from PET bottles. Other materials includes treatment chemicals, bottle caps, bagging nylons, and bottle nylon labels
Machinery and equipment Needed For Bottled Water Production In Nigeria
The plant is a complete full automatic bottle production line from treatment to filling and capping, Labelling and bagging everything is automated and would require 4 full time factory workers and 4 Labour hands.
Equipment needed are:
1. Standard water Treatment Plant
2. Reverse Osmosis System
4. Industrial Filters
5. Industrial Ultra violet Light
6. Automatic bottling machine
8. Semi-automatic PET Blowing machine
9. Storage Tanks
12. Generating Sets
13. Desktop Computer + Printer for office use
14. Office and Factory Furniture
15. Safety and Protective Gears
16. Delivery/Marketing Van + Branding
17. Fire Fighting and Prevention Equipment
How Much Is Needed To Start A Bottled Water Company / Business In Nigeria
The total startup cost for this plant is 24 Million Naira which includes the Automatic production lines , 2 vehicles, 2 generators and working capital of 7milliion Naira but excluding Land and building Cost.
The startup cost can be scaled much lower to accommodate some investors, and this would require the substituting of some of the process to labour work force.
Turnover for this complete automated plant working at the projected at about 54.Million Naira is projected for the first year with about 21.Million Naira profit before tax. Higher margin can be attained with optimal cost and administration control
The project’s initial investment will be fully recovered within 2 years.