An Overview Of How To Start A Pure Water Business in Nigeria

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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 serve 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)

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

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

Total: N6,563,000

Expected Labour 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

Registration requirements for pure water factory

  • Corporate Affairs Commission Business registration: this is a necessary documentation for your company band and identity. Total costs is N20,500 for company name, business registration and lawyer fees.
  • 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.

How to market a pure water factory

This is the one of the most important part of this business, if you’re going to succeed and achieve more than the figures I quoted above. First thing, study your competition in every way (not corporate espionage oh) “SWOT ANALYSIS”.

  • Improve on your delivery time (early morning/early evening)
  • Have customers far and wide such as personal friends/acquaintances, student hostels, restaurants, chemists, interstate traffic hawkers, shop owners, and market stands.
  • Introduce a distribution program whereby distributors buy at your factory a cheaper bulk price to resell
  • Reward your loyal/bulk buying customers

Note that during the rain season, there’s bound to be a drop in water purchase, but picks up during the harmattan season.

I do hope that I’ve provided you with valuable insight into the sachet water production business, please share your thoughts, requests and enquiries below!

 


Comments

  • Yes its quite noble reading this, keep it up

    Chuks April 16, 2018 12:54 pm
  • Thanks for the insight. Hope to start one in Jos soon. Do you do consultancy for start-ups?

    Emmanuel April 19, 2018 12:48 pm

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