BOTTLED DRINKING WATER

PROJECT

1. INTRODUCTION

Bottled water is drinking water (e.g., well water, distilled water, mineral
water, or spring water) packaged in plastic or glass water bottles. Bottled
water may be carbonated or not. Sizes range from small single serving
bottles to large carboys for water coolers. As well now; new concept of
flavored bottled water also penetrating good market share. Such waters are
classified as: 1) Artesian Water: water contained within an artesian basin; 2)
Fluoridated: contains added fluorine, 3) Ground Water: from underground
sources, 4) Mineral Water: either from mineral spring or fortified with
minerals Barium, Iron, Manganese etc. in quantity absorbed by human body;
5) Purified Water: produced by distillation, deionization, reverse osmosis, or
other suitable processes. Purified water may also be referred to as "de-
mineralized water"; 6) Sparkling Water: contains some amount of carbon
dioxide, 7) Spring Water: water flows on earth from underground natural
water source; 8) Sterile Water: Water totally sterilized for specific uses.

2. PRODUCTS AND ITS APPLICATION:

The bottled water industry in India witnessed a boom in the late 1990s soon
after BISLERI launched its packaged drinking water in the country. This
significant growth was fueled by a surge in advertising by the industry
players that "bottled water was pure and healthy" As it is being considered as
healthy compare to tap water or other water sources, the people conscious
about health are opt for bottled water of known brand. Besides that, it is easy
and convenient to buy and keep during travelling or other occasions. These
are the key reasons for boost of bottled water market in India and elsewhere.
3. DESIRED QUALIFICATION FOR PROMOTER:

The promoter must aware of bottled water market in that area in which he
wishes to set-up the plant besides that must aware of type of treatment
required for water source to be used as well having exposure of FSSAI.

4. INDUSTRY OUTLOOK/TREND

It is increasingly becoming difficult to have safe drinking water from normal

supply in many parts of the country. Therefor people are searching for
processed water with less TDS and bacteria free. This industry in India is
growing at the rate of 20% per annum. Within this water packed in twenty
liters jar is gaining importance for use in households, offices, factories and
social events. The future of this industry is very bright, however location is
very important to have less competition.

5. MARKET POTENTIAL AND MARKETING ISSUES, IF ANY:

With a rise in health awareness, increase in tourism and the easy availability
of bottled water, the per capita consumption of bottled water in India is on
the increase. It is observed that bottled water market is increasing against
carbonates or soda with respect to liter volume, percentage increase in
volume and sales percentage as reflect in the following table:

MARKET VOLUME IN BILLION

LITERS
Category Year 2015 Year 2016
Bottled 5.6 6.8
Water
Carbonates 4.6. 5.0
GROWTH IN VOLUME PERCENTAGE
Category Yr. 2014- Yr. 2015-
15 16
Bottled 23.0% 21.7%
 Water

Carbonates 08.6% 08.2%

GROWTH IN TOTAL SALES %
Category Yr. 2014- Yr. 2015-
15 16
Bottled 24.9% 23.5%
Water
Carbonates 10.9% 10.8%
Juice 25.1% 25.3%

This market is expected to grow at a CAGR of 20 percent, to reach Rs.160

billion in 2018.
The bottled water industry in India witnessed a boom in the late 1990s soon
after Bisleri launched its packaged drinking water in the country. This
significant growth was fueled by a surge in advertising by the industry
players that "bottled water was pure and healthy". Today, with a rise in
health awareness, poor quality of tap water, and the ease of availability of
bottled water, the per capita consumption of bottled water in India is on the
increase.

India's packaged bottled water industry is currently dominated by the top five
players, including PARLE (BISLERI, BAILLERY), PEPSICO (AQUAFINA), COCA
COLA (KINLEY), DHARIWAL (OXYRICH) AND NOURISH CO. (HIMALYAN). Apart
from these other leading bottled water brands in India are: KINGFISHER, TATA
WATER PLUS, QUA, BLUEFIN, OVIVO, etc. These companies struggle to
penetrate the small non-tier cities and towns due to poor infrastructure, thus
providing an opportunity for small regional players to build a presence in
regional markets. Even as the industry is on a growth path, smaller local
players and the unorganized sector are eating into the market of the
established players, often by imitating their trademarks. Maximum sale of
bottled water comes from the retail sector; but this is changing with demand
coming from social functions and corporate events, especially for bulk water
or bottled water cups. With the aim to capture all the segments of society,
 players have started foraying into packaged water pouches at low price
points, but this is still in the experimental stage.

6. RAW MATERIAL REQUIREMENTS:

Adequate and proper quality water resources like well, bore, river, etc. and
some additives.
7. MANUFACTURING PROCESS:

Raw water to be processed is collected in tanks. A known quantity is pumped

into the above tank where the water is dozed with alum for coagulation with
heavy metals or insoluble matters. The water after coagulation is allowed to
settle for an hour. The impurities may be removed by Reverse Osmosis
techniques also. The supernatant water is taken to the chlorination tank
where primary disinfection is brought about by bubbling chlorine gas. The
water is then passed through sand filters for trapping of un-dissolved
impurities. The water after sand filtration is passed through Carbon filters for
removal of odour, colour and also for de-chlorination. It is then passed
through series of micro fillers comprising 5 micron, 1 micron and 0.4 micron
filter followed by ultraviolet disinfection system for terminal disinfection.
Packing is done in PET bottles of 1 litre capacity through an automatic rinsing,
filling, and capping machine fitted with an Ozone generator. The bottles after
capping are shrink wrapped (Optional) and packed in corrugated boxes of one
dozen each

8. MANPOWER REQUIREMENT:

Manpower
Requirements Persons
Technical Staff 6
Adm. Staff 4
Marketing Staff 15
Labour 20
 Total 45

9. IMPLEMENTATION SCHEDULE:

Project Stages Months

1 2 3 4 5 6 7 8 9 10
Purchase of Land
Completion of Building
Ordering of Machinery
Delivery of Machinery
Term/Wkg Loan Sanction
Installation of Machinery
Commissioning of Plant
RM/Inputs Procurement
Manpower Appointments
Commercial Production

10. COST OF PROJECT:

COST OF PROJECT
No Rate/ Rs.
. Costing Heads Qty. Unit Lakh
Land in Sq. M. + 1,00
1 Expenses 0 1,000.00 10.00
2 Building 500 9,000.00 45.00
3 Plant & Machinery 54.25
4 Contingency 1.00
Total Cost of Project 110.25

11. MEANS OF FINANCE:

MEANS OF FINANCE

Means Heads Rs.

 Lakhs
Promoters Capital 27.56
Term Loan 57.88
MFPI Subsidy 24.81
Total Means of
Finance 110.25

12. WORKING CAPITAL CALCULATION:

Particulars Total Stock Value of Promot Promot Bank

Amount Period Stock Period er er Borrowing
Days Margin Share s
Raw Material 360.00 15 18.00 0.60 10.80 7.20
Packing
Material 2,574.00 30 257.40 0.75 193.05 64.35
Work in Process 3,168.80 3 31.69 0.40 12.68 19.01
FP Stock 3,240.00 15 162.00 0.40 64.80 97.20
Bills Receivable 3,240.00 15 162.00 0.40 64.80 97.20
Working
Expense 25.00 30 2.50 1.00 2.50 0.00
12,607.8
Total: 0 633.59 348.63 284.96

13. LIST OF MACHINERY REQUIRED:

Sr. Type of Machinery Qty.

No.
1 Raw Water Tank 2.00
2 Raw Water Pump 2.00
3 Multi Media Filter 3.00
4 Dosing System 1.00
5 Micron Cent ridge Filter 2.00
6 High Pressure Pump 1.00
7 Reverse Osmosis Plant 1.00
8 Product Water Tank 1.00
9 Ultra Violet System 1.00
10 Transfer Pump 1.00
 11 Ozone Generator 1.00
12 Ozone Circulation Pump 1.00
13 Ozone Water Transfer 1.00
Pump
14 Pouch Packing Machine 1.00
15 Bottle Filing & Washing 2.00
Mc
16 Jar Filling Machine 1.00
17 Jar Washing Machine 1.00
18 Chilling Machine 1.00
19 Blow Moulding M/c 1.00
20 Utility Equipments 1.00
Misc. Equips. + Lab
21 Equips 1.00
 Raj Water Technology
Survey No. 47,
Jivraj Industrial Area,
Opp. Falcon Pump, 27,
Gondal Road, Vavdi,
Rajkot, Gujarat

 Nishu Enterprise
Rughani Palace 1,
B-103, S M Road,
Next To Bhurabhai Hall,
Kandiwali West,
Mumbai, Maharashtra

14. PROFITABILITY CALCULATIONS:

Sr.
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
No.
A Gross Sales 2268 2592 2916 2916 2916
Less:
Raw Materials, Rs.
1
1/lit 252 288 324 324 324
2 Packing Material 1801.8 2059.2 2316.6 2316.6 2316.6
3 Fuel 0 0 0 0 0
4 Power 28.224 32.256 36.288 36.288 36.288
 5 Manpower 71.5572 80.7312 89.9052 89.9052 89.9052
6 Depreciation 12.971 14.824 16.677 16.677 16.677
7 Sundry Expenses 17.5 20 22.5 22.5 22.5
Interest on Term
8
Loan 4.865 5.56 6.255 6.255 6.255
Interest on WC
9
Loan 29.589 33.816 38.043 38.043 38.043
Repairs &
9
Maintenance 7 8 9 9 9
2225.50 2542.38 2859.26 2859.26 2859.26
B Production Cost
6 7 8 8 8
Gross Profit (A-
C
B): 42.4938 49.6128 56.7318 56.7318 56.7318
12.7481 14.8838 17.0195 17.0195 17.0195
Taxes @ 30%
4 4 4 4 4
29.7456 34.7289 39.7122 39.7122 39.7122
Net Profit
6 6 6 6 6

The proposed unit will have the production capacity of 360 lakhs bottles per year.
The unit cost of power is taken at Rs. 8. The depreciation on building is taken at the
rate of 5% whereas for plant and machinery it is at 10%.

The average sales price of drinking water bottle is taken at the rate of Rs.9 per
bottle for proposed project.

15. BREAKEVEN ANALYSIS:

Particulars Rs in Lakhs
Break Even Point
Annual Fixed Cost
x100/ 72.82
Annual Fixed Cost +
Profit

16. STATUTORY/ GOVERNMENT APPROVALS

There is statutory requirement of ISI and FSSAI license for setting up of bottled
drinking water production facility. Moreover, MSME & GST registration, IEC Code
for Export of end products and local authority clearance may be required for
Shops and Establishment, for Fire and Safety requirement and registration for
ESI, PF and Labour laws may be required if applicable. Entrepreneur may contact
State Pollution Control Board where ever it is applicable.

17. BACKWARD AND FORWARD INTEGRATION

Once the market is well established, promoter may think of backward integration
by way of producing PET bottles for filling water. Similarly for forward
integration, it is possible to introduce water in 200ml pouches and 20ltr jar.

18. TRAINING CENTERS/COURSES

For drinking water industry training and short term courses are available at
Indian Institute of Food Processing Technology, Thanjavur, Tamil Nadu and
Central Food Technological Institute, Mysore.
Udyamimitra portal ( link : www.udyamimitra.in ) can also be accessed for
handholding services viz. application filling / project report preparation, EDP,
financial Training, Skill Development, mentoring etc.
Entrepreneurship program helps to run business successfully is also available
from Institutes like Entrepreneurship Development Institute of India (EDII) and
its affiliates all over India.

Disclaimer:
Only few machine manufacturers are mentioned in the profile, although many
machine manufacturers are available in the market. The addresses given for
machinery manufacturers have been taken from reliable sources, to the best of
knowledge and contacts. However, no responsibility is admitted, in case any
inadvertent error or incorrectness is noticed therein. Further the same have
been given by way of information only and do not carry any recommendation.