Water Project Profile

PROJECT PROFILE
MINERAL WATER
1. PROJECT EXECUTIVE SUMMARY

1.1 PROJECT BRIEF
This proposed project presents an investment opportunity for establishing a jar water plant
for providing pure drinking water. The proposed product line will consist of jars of 20
liters in the initital phase of the project will be introduced in the local market. After
successful introduction of the new brand of jar water the product line may be extended to
0.5 and 1.5 liters bottles.
The market for mineral water has been showing a mushroom growth trend over the last
few years. The countrys market is very small on a global scale and was estimated at
50 million liters a year by the end of 2012. The last three years have shown more
growth and the market have been estimated to grow 70 million liters and the per capita
consumption is 0.5 liter. The annual growth rate for jar water is 40%. The potential
markets for mineral water consist of foreign tourists and foreigners working in Bangladesh,
hotel, resturant, industry, patients and travelers. Moreover, the mineral water has been
emerging as a daily preference of the elite class.
The project can jar 40,000 liters of water per day, the size of bottles will be 20 liters
to make the water convenient and attractive to end users. The sale at 100% capacity
utilization is Tk. 36 Million. The project would be set up in Dhaka where all the required
infrastructure and amenities are available.
1.2 FINANCIAL SUMMARY
Sales
Gross Profit Margin
Payback period
Net Profit Margin before tax
Internal Rate of Return
Tk. 36 Million per annum

30%
2.2 Years
04%
79%
1.3 FOREIGN COLLABORATION SOUGHT: Foreign Investment
2. PROJECT RATIONALE
Dhaka and its surrounding areas is a land of many streams of water from glaciers, there
is ample opportunity to bottled this water locally. As the awareness of water born
diseases is increasing coupled with modern trends of living the market of mineral water is
growing faster than the supply. There is thus the opportunity for investment in this sector.
The market for purified bottled mineral water is a growing market. Usually the top target
market for bottled mineral water follows the perception. The stronger the distribution the
more successful will be the new brand.
3. MARKET OPPORTUNITY
There are around 30 players in the bottled water sector. According to the industry
sources, the number of bottles scales up well above 70 during summer season due to
increased demand for drinking water. Bangladeshs bottled water market comprises of two
main segments i.e. retail market and bulk market. The retail market consists of 0.5 liter,
1.5 liter, 3.1 liter and 5.0 liter capacity PET bottles. The bulk market consists of home
and office delivers in 20 liters jar.
The process of purified bottled water manufacturing consist of collecting water from a
suitable source, filtration, demineralization, blending with salts, aeration, testing for
standards conformation, bottling and packaging. But today there are more than 30 brands
of drinking water available in the market thus showing a substantial growth by the
industry.
4. BUSINESS PLAN
High quality goods to taste bottled water will be processed/produced for the end user.
The plant will start its operation from 60% capacity and finally reach 100% capacity by
the end of 5 years. There is also anticipated growth of 10% in sale price of the product.
4.1 PRODUCT SALES

Plant Capacity liters per day 40,000 liters
Production per year (liters) 14,400,000
Total annual production 14,400,000
Sale price of 20 liter jar (Tk.) 50
Capacity utilization in first yr 60%
Sales price growth rates 10%
Production capacity utilization growth rate 10%
Maximum Capacity utilization 95%
Sales 100% capacity 36,000,000
4.2 RAW MATERIALS

There are many sources of natural water from spring or ground water in Dhaka, the
project shall be located at site where require water is available.
4.3 PRODUCTION PROCESS
The first step for setting up a water purification plant is the analysis of source of water.
After the chemical analysis, the specifications of the purification plant are set. In the
purification plant, source water is stored in the feed water tank, passes through the sand
filter for preliminary water filtration.
Water then passes through the dosing pump-I where chlorine is added to kill the germs
in the water. After the chlorination, water passes through carbon filter. It helps in the
maintenance of proper odor and taste of the water. It also removes chlorine from water.
Water is then passes from dosing pump-II, where Sodium Meta Bisulphate is added. It
helps in dechlorination of water.
Water is filtered next and passes through dosing pump-III, where anti scallant is added.
It prevents scaling of membrane from calcium, magnesium and biological growth. Water
then passes through reverse osmosis module. This stage of the process makes water
clear from all the contaminations and minute particles. Water then passes through dosing
pump-IV, where minerals are added for taste development.
After this stage, water undergoes Ultra Violet treatment to avoid any contamination from
bacteria and other micro organisms. Water then passes through automatic washing, filling
and capping plant. Here water is filled into bottles. After filling bottles are taken into the
warehouse or shipped to the retailers. The complete process flow diagram is as under.
Food Water
Tank
Feed Water
Pump
Sand Filter
Dosing Pump
II
Carbon
Filter
Dosing Pump
-1
Micro Filter
Dosing
Pump - III
ReveTk.e
Osmosis Plant
Ultra Violet
Product
Water Tank
Dosing Pump
- IV
Ozonator
Automatic Washing, Filling & Capping Plant
Warehouse
4.4 DISTRIBUTION CHANNELS

Branding and marketing of mineral water is as essential as water for the survival of the
human body. The traditional marketing tools include site advertisement, TV and print media
advertising and brochures. This study allocates 5% of the revenue for advertising and
promotional purposes. Apart from the traditional marketing tools, this study suggests to
focus more on other marketing magnets that include interactive marketing, interactive
marketing may include educating the general public about the importance of water and its
daily consumption requirements for human body through the participation in seminars and
in general public gatherings (e.g. College and University gatherings). One of the
marketing options is to sponsor public events like cricket matches or hospital campaigns,
distributing free brochures about water and its daily consumption, water requirements in
different age brackets. The interactive marketing may be designed through seminars and
workshops about the daily human consumption requirements and diseases originating from
the lack of pure water. Overall marketing strategy may change with the change of target
market. A market research study is recommended to design the different dynamics of
marketing before launching the new brand.
Marketing expense has been included in the total project cost and it has been estimated
around Tk.2 million. The entrepreneur may decide to increase or decrease the amount of
marketing expense depending upon this choice of promotion activities and type of media
used. Following table gives the breakup of the marketing expense.
TV Advertisement
SITE Advertisement
NewspapeTk.
Magazines
Point of Sales Marketing
In %age of the
marketing expanse
40%
10%
38%
4%
8%
Distribution is very important for the success of the new brand. The stronger the
distribution the more successful will be the new brand. The distribution strategy should be
designed after a careful study of the market for going for regional distribution or for
nationwide distribution.
4.5 HUMAN RESOUCE REQUIRMENT
The following requirement of staff along with their levels and monthly salary is foreseen
for this project.
Description
CEO
Admin & Accounts Manager
Sales & Marketing Manager
Sales Supervisor
Sales Rep
Driver
Washer
Filler
Loader
Plant Helper
Packing Supervisor
Watchman
Total
No. of Staff
1
1
1
2
25
2
1
2
2
1
1
1
42
Monthly Salary
50,000
30,000
40,000
30,000
10,000
20,000
9,000
15,000
15,000
8,000
8,000
5,000
Annual Cost
600,000
260,000
480,000
360,000
3,000,000
240,000
108,000
180,000
180,000
96,000
96,000
60,000
5,760,000
5.0 PROJECT FINANCIALS

OPERATIONAL DATA
The plant will be operated in the first year at 60% capacity and as the expertise
develops the 100% plant capacity will be attained by the end of fifth year.
FIXED COST
The fixed cost is expected to be Tk. 12.7 Million as described below.
Land
Bulding/Infrastructure
Machinery & Equipment
Furniture & Fixture
Office Vehicles
Office Equipment
Pre-operating Cost
Total Capital Costs
1,230,000
1,057,500
6,240,000
108,500
2,056,360
202,500
1,816,268
12,711,128
WORKING CAPITAL
The investment in the initial working capital is of Tk. 1,440,000
OVERHEAD COSTS
In the first year following overhead cost are estimated.
Administration Expenses
Utility expenses
Traveling
Office Vehicle and running
Office Stationaries
Promotional expenses
Insurance expenses
Depreciation
Amortization expenses
Miscellaneous expenses
Total
5,760,000
428,292
624,000
102,800
124,800
1,800,000
186,491
1,119,697
363,254
3,614,965
14,124,299

Water Project Profile

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PROJECT PROFILE

1. PROJECT EXECUTIVE SUMMARY

1.2 FINANCIAL SUMMARY

Tk. 36 Million per annum

1.3 FOREIGN COLLABORATION SOUGHT: Foreign Investment

4.1 PRODUCT SALES

4.2 RAW MATERIALS

Automatic Washing, Filling & Capping Plant

4.4 DISTRIBUTION CHANNELS

4.5 HUMAN RESOUCE REQUIRMENT

5.0 PROJECT FINANCIALS

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