Pure water production business is very lucrative that is what you often hear, I’m not disputing that but do you know that many are also failing in this business. The next building to where we are residing is a pure water factory that has folded. It was still operation 3 months before we moved in to the area. When I asked my neighbour why, he said the owner was owing his staffs’ salaries which resulted in series of crisis before the place was finally locked up. There are many challenges in pure water business but they are also surmountable. In this post you will get all the nitty gritty that will make you succeed as a pure water manufacturer.
List of what to expect in this post
- Pure water business in Nigeria
- Profits in the business
- Problems facing pure water production
- Prices of machines
- NAFDAC requirement
- Pure water factory layout.
- The type of nylon to use and price
PURE WATER PRODUCTION BUSINESS IN NIGERIA
The demand for pure water keeps increasing everyday because it is something an average Nigerian can afford, a satchet goes for #10. It is a very stressful business and capital intensive as such if you are not careful it will pack up. You have to carry out studies, strategise and do a business plan on pure water business before you jump into it.
You can cut the nylon for packing the satchet water yourself or buy the machine and emply someone to be cutting them for you instead of buying cut ones. In other to minimize cost and maximize profits.
Don’t run everything by yourself, get the services of an installer because 50% of your success lies on it. But you have to engage your installer because some of them will instal and connect all the instruments without showing you how to run them. They leave it for you to figure out how to use them.
Please ask them questions as much as you can especially the do’s and don’ts. Others will tell you to install more than the needed machines. So look for an installer with integrity, I mean to say hire the best installer.
REQUIREMENTS FOR PURE WATER PRODUCTION BUSINESS
- ACQUIRE LAND
- DIG BOREHOLE .
- PURCHASE MACHINES
- NAFDAC REGISTRATION
- BUSINESS NAME
BUSINESS NAME REGISTRATION
This is very important because you need it for NAFDAC and trademark registration. Chose a name that is unique, memorable and easy to pronounce. With #30,000 you can get a business name for your pure water production business. The nylon materials you will use must be Printed with logo and the product name.
PURE WATER FACTORY LAYOUT
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The site or factory should not be located close to refuse dump, latrine or pit toilet, fuel depot etc. Half plot of land is enough for establishing a standard pure water factory. Build a five room bungalow, the rooms should include; production room. Finished product store. Material store room. Cloak room. Office.
The first thing to do before starting the business is to first dig a borehole in the factory premises then carry out water analysis. This is very important because it will guide you on the cost and equipments to buy. But let your installer inspect the land to see if it is suitable for pure water business. He will give you the building plan and where you should dig the borehole. The borehole should be 50 feet away from septic tank.
MACHINES NEEDED FOR PURE WATER AND THEIR PRICES
- Automated Sealing machine the one that can seal up to 35 satchet a minute, #600,000.
- Borehole #250,000.
- Overhead tanks/reservoir for water supply #50,00 each
- 2-3 pairs of industrial filters,
- UV air steriliser.
- 3-4 Micro filter and their cartridges.
- Boiling machine.
- 25KV generator #400,00.
- Truck for distribution #2,000,000 tokubo buy diesel type.
- 2 Tricycle #700,000.
Instead of two trucks or van buy tricycle to service those in interior areas and to penetrate places without good roads. Tricycle will access remote areas and supply pure water and this will invariably increase sales. It will save #300,000 for every one ton of pure water sold.
This is because it can save #60,000 per 200Kg of pure water sold. Operating cost matters a lot in pure water production business. . And tricycle is good in saving running cost because it has efficiency in fuel consumption.
Tricycle can do turn over about 5 times and can accommodate 70 bags at a time. It uses between 8-10 litres while a car will use 30 litres.
Cellophane half a ton is about #700,000. While the price of pure water nylon is about #1100-#1300!per Kg depending on the quality of the nylon and the company. For cylinder printing, the least of materials to print is half a ton but with rubber printing less than have a ton can be printed for you.
Another way to increase profit is in the type of micron hdpe you use. The best micron to buy is 36 micron it is not every company that has the machine that can produce them in uniform and not all operators can also set your machine to produce satchet with it, so be careful. 1Kg of 36 micron will give between 30-32 satchets which is 30000-32000 against 20000-22000.
Don’t buy reverse osmosis or ozonator machines except there is need for them. You will need them if your water source is ironically contaminated but it is very rare. Also if the water is hard or has a high level of salinity you will need the reverse osmosis and it is the costliest of all the equipments mentioned.
Disclaimer: the prices of pure water machine is not fix and can change at anytime depending on the manufacturers. The prices mentioned in this post are based on the time of research.
HOW TO PAY STAFF IN PURE WATER BUSINESS
- Manager. #30,000
- Operator (2). #25,000 each
- Packers (2)). #10,000 each
- Drivers for truck and tricycle #20,000
- Motor boy. #10,000
- Total. #170,000
Salary plus incentives is the best remuneration to go for. For every one bag of pure water sold attracts #10. At least they should be able to sale 500 bags a day. So 500 multiply by 25 working days will be #12,500. When you have worked with your staff for a while you should be able to build some level of trust to allow them buy fuel by themselves. Otherwise buy fuel by yourself and distribute to the vehicles when needed.
A packer can pack between 100-400 bags and a driver should be able to sell between 100-600 bags depending on how experienced the person is.
HOW PROFITABLE IS PURE WATER BUSINESS IN NIGERIA
It is highly profitable but the profitability depends on how well you are able to cut down on the running cost. For instance if you are producing 26-28 per kilo then you are producing at a loss. Let’s break the cost down in other to find out how profitable pure water production business is.
- Nylon. #1.4M
- Fuel. #174,000 for vehicles and factory
- Labour. #170,000
- Miscellaneous. #150,000 running cost for 6 months
- Total. #1,894,000
Vehicle consumes about 960 litres multiply by #145=#139,200 4 litres will produce 500 bags. And 30,000 bags can be produced in a month. So 240 litres multiply by #145 will be #34,800
Vehicle consumes four times that of factory consumption of fuel.
You should be able to sell 1200 bags a day. Multiply by 25 working days, you will have sold bags of water worth #3,000,000 because a bag goes for #100 each.
Cost of production minus sales will be
1,106,000 x12 (one year)=#13,272,000. This means you can recover your capital within a year.
NAFDAC REQUIREMENT FOR PURE WATER PRODUCTION/TRADEMARK
- Your installer will take care of NAFDAC registration. This he will do by going to their office and inform them about your readiness to open a pure water factory. NAFDAC will in turn give him some documents which comprises of all the requirements, forms and instructions for the registration.
- Also you will be required to pay a pre-inspection fee in their company account that will be given to you. It will be required of you to take the payment draft to their office for a receipt. They will then book a date with you for the pre-inspection. If their car is available, they will come with it but were otherwise you will have to take care of their mobility.
- NAFDAC registration fee is about #30,000 but are sometimes periodically reviewed meaning you may have to pay a little more. Trademark can be processed in Cooperate Affairs Commission (CAC).
- Someone may ask, can I open another pure water site with the same NAFDAC registration? The answer is no, because NAFDAC will still conduct pre-inspection in short you have to go through the whole process of registration. Also you have to analyse your pure water from the source. After production it can then be approved. But for trademark you will not need to worry.
- Contrary to popular believe that NAFDAC approval is tasking and takes a long while, as such many entrepreneurs shy away from pure water production business. NAFDAC approval takes between 3-4 months all things being equal while trademark takes between 3-4 weeks.
Keep your environment clean that is why you should employ at least one cleaner to assume that responsibility. Wash your tank every month, there are people who specialises on that you can engage their services.
CHALLENGES FACING WATER INDUSTRY
- Not being able to sale your pure water fast. Remember it has an expiring date once it gets closer to the time people will not want to purchase such pure water. Also if it stays too long before disposing them it will change taste and at one point may begin to draw. So plan your marketing strategy well so you can be able to sell fast.
- High increase in production rate. Prices of materials like nylon may increase at any time also fuel or diesel and yet the price of pure water remains #10 for a satchet and #100 for a bag. This will affect the cost of production and will eat into the profit.
- Vehicle maintenance. If you observe very well you will noticed that most vehicles used for pure water distribution are rickety. This is because of the stress and over use they undergo. Everyday you keep on loading pure water in the same vehicle and water can be as heavy as books. You have to as a matter of importance maintain constant vehicle maintenance and also have a good mechanic to be doing the vehicle servicing for you regularly. Buy European diesel truck and not Japanese brand.
- Not paying your staff their incentives as at when due. This is a very big issue that needs to be addressed right from the beginning. Because you need staffs’ that are dedicated to duty therefore you have to treat them well. So that they can work better for you, if the stop production for one day it will take you days to recover from the effect.
- Power. Because you need light for the pure water production it will be wise to use a KVA generator that won’t give you headache. And you have to service it regularly too. Buy China generator example Sifang engine with 10Kw coil.
HOW MUCH IS NEEDED FOR PURE WATER BUSINESS?
It depends on how you want to start, assuming you have all the fixed capital in place example land, building, vehicles, machines etc. Then #3,000,000 can start the pure water production.
For bottle water business you need more than that amount.
As a new company in pure water business, it is very important to study the market before you start distribution.. Reduction of #1 can give you an edge over big and long standing water companies. Supply to shops or customers very early in the money before other companies start waking up. Where we were staying in Akwa Ibom there is a water company that supplies pure water as early as 5a.m sometimes before that time. By the time owners of the shop resumes for the day, they already have pure water to sell to customers.
Your ability to penetrate the market will determine how successful you will be in the business. Never shy away from approaching the market.
It is a good business idea to invest in as an entrepreneur. You can rent a place for your pour water production business. Also you can start with one automated machine, it can produce 500-700 bags within 4-5 hours. If the water in your area has salinity instead of spending much money go and rent a place that is free of such.
Don’t ever assume you cannot fail in this business for your mind water is a free gift of nature so…
Out of 4,000 registering every year more than half of the same pure water companies also close down within a year, so be guided.
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