Today, we’ll share with you a detailed guide on how to start a (sachet) pure water business in Nigeria.
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 and easily affordable.
Purified Water popularly called Pure Water is a very lucrative and profitable business in Nigeria due to the fact that man cannot do without clean water.
In our series of top 50 business ideas in Nigeria, we’ll talk about the sachet or pure water business.
The market is available in all the cities and villages, so it does not really matter where you are, you can set up a business of pure water in any part of Nigeria and be profitable if run properly.
With the increasing population, the government inability to provide clean and affordable drinking water and potentially, the fear in the public minds concerning the sugar content in soft drinks makes pure water the ever available common commodity that is sought at home, offices, markets and in the streets to quench thirst.
To emphasize the fact that the business of pure water is profitable, notable organizations such as Nigerian Bottling Company, Nestle, etc. are in the drinking water business, though in the more refined drinking water (table water).
Pure water production business has its own challenges but they are also resolvable. In this article, you will get all the needed strategy, plans and steps that will make you succeed as a pure water manufacturer and distributor.
10 Reasons to Invest In Sachet Water Production Business
The following are some of the key reasons to consider starting a (sachet) pure water business in Nigeria.
- The population is on the increase every year. The more the population increases, the more the need for people to drink water, and the more the demand for the product of sachet water.
- The government is only trying to provide the basic drinking water needs of every household in Nigeria. So, everyone makes provision for themselves, and buying pure sachet water is one of the most reasonable options.
- There is not going to be a day, people will stop drinking water. In fact, it is one of the most essential consumable products and the most consumed natural resources on earth.
- As the popular saying goes “no one goes into running water business and is at loss”, sachet water is very lucrative.
- Sachet water currently has no close or partially close substitute in Nigeria and it is very affordable.
- One can never run out of customers to supply to. There is a ready-made market for the product. All you need is just produce; it is one of the products out there that requires no much marketing to get the product accepted as it is already accepted by nature.
- The main material – water is a natural resource and will always be available for us to tap into as a free gift of nature.
- The popularity of sachet water is growing at alarming rates even in towns and villages across Nigeria.
- It is a major source of revenue for the government, so the government is even encouraging more producers.
- There is really no distinction between the consumers, it is widely acceptable to the rich and the poor, and is used for events and parties.
- Consumption of sachet water is not restricted by any law or religious belief unlike alcohol or some other drinking products and has no side effects.
- The payback period for the investment into the business is less than a year. It’s one business you confidently get a loan to do start with 100% assurance that the business would pay.
Requirements For Starting A Pure Water Production Business In Nigeria
To start and run a successful pure water business in Nigeria, here are important things to put in place:
Have A Business plan
Your business plan is a written document that includes all details of your pure water business startup and operational objectives and strategies.
The Business plan becomes imperative at this stage because it determines the level of funding required from the onset of financing of the project – the amount of money needed and where it is coming from.
You have to carefully write your business plan and how you plan to achieve your goal in the business.
A detailed business plan should include everything about the business such as cost analysis, Market Research, Marketing, and Management. You may hire a professional consultant to help write your plan.
Your pure water production business plan can be used for obtaining business loans, grants, securing investors and for other analytical purposes, and may be modified as the business matures to better outline and guide future operations.
During your market research get to know the machines needed and find out about the standards required by the regulatory bodies before erecting your factory.
Acquire Land and build
It is profitable and wise to purchase and own your piece of land instead of renting it. With a good foresight and expansion in view, get a considerable large plot of land.
Even if you want to start on a small scale, there will always be enough land to be used in the future should you want to expand your business.
Be sure the location for you factory site has good road network with easy access to the market. The drainage system should be adequate to prevent flooding.
Security, neatness of the environment, and power are other factors to consider. Build your factory to the standard required for the business.
Sink a Borehole and Install Tanks Overhead
This ensures an uninterrupted water supply as that is the main resource needed in the pure water business.
Be sure to carry out a subsurface water analysis before sitting in your factory, this would save you a lot of money during water treatment processes.
Do water analysis after digging the borehole; this will determine the water treatment and equipment to go for. Install at least 4 big overhead tanks (like 6,000 liters each).
Install A Water Treatment System
You may install the full-scale distillation system, reverse osmosis, or the ultraviolet sterilization bulb process depending on the startup capacity of the enterprise.
Get a good installer with known integrity and please ask them questions as much as you can especially the dos and don’ts of the water treatment system
Distilled water is water that has been heated to the boiling point so that impurities are separated from the water, which itself becomes vapor or steam. Steam is then condensed back into pure liquid form. The impurities remain as residue and are removed.
Pure Water Distillation Systems remove waterborne biological contaminants such as bacteria, viruses, organic and inorganic chemicals, heavy metals, volatile gases, cysts and other contaminants.
Distilled water contains virtually no solids, minerals, or trace elements. It is clean, natural, and healthy. Steam distilled water is the standard by which all other waters are measured.
Reverse Osmosis is one of the most widely used and easier to install. Reverse Osmosis also produces water with highest level of purity and very perfect for your pure water production if you can afford it.
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 reverse osmosis.
Although depending on your water source, the purification process varies, for water gotten from a spring the purification process might not be as elaborate as it would be from a borehole so as to sustain the taste from the natural minerals in the water.
Wash your tank every month, there are people who specializes on that you can engage their services.
Get and Install Necessary Equipment
Important equipment which is the engine of your production line is Automatic sealing machine and it must be in place according to the scale of daily production envisaged. The number of sealing machines you will need depends on the scale of production.
Other important equipment includes power generating plants and supply trucks. Routine maintenance should be carried out regularly on all equipment to avoid production downtime, machine failure, health, and electrical hazards.
Get the Necessary Materials
Rolls of suitable nylon materials (sachet nylon and packing nylon) which must be printed with the company’s name and the brand name of the pure water must be procured.
The number of rolls procured should be according to the capacity of the enterprise. Other materials are Drums, buckets, plastic baskets Overalls, disposable hand gloves, and hairnets
Related: Meaning of a business model
Register the Business
Every business organization, whether a sole proprietorship or limited liability company must be registered with CAC for accountability.
In the same vein, every business in food and drugs including drinkables must be registered with the government regulator (NAFDAC).
Every business also must register with the relevant tax authority (Federal Inland Revenue or the State Internal Revenue).
You are not going to produce nor sell until your production is approved. Chose a name that is unique, memorable, and easy to pronounce. The nylon materials you will use must be printed with your business logo and the product name.
Human resources are the lifeblood that drives the whole mechanism of your production. Be careful in your selection.
Recruit staff, ranging from operators of the machines, packagers, cleaners, drivers, attending leaders, security personnel, and a supervisor, manager, or a cashier. This will ensure the specific positions are properly manned.
Make contacts immediately with retailers who are going to sell the water. Always establish their credit worthiness before granting credit, otherwise they can send you out of the business.
As a new company in the pure water business, it is very important to study the market before you start distribution.
Supply to shops or customers very early enough so that they will always have your products to sell to their customers.
Your ability to penetrate the market will determine how successful you will be in the business. Never shy away from approaching the market.
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. As part of marketing strategy always reward your loyal/bulk buying customers
BOTTLE Water Production
You can include producing bottle water to your business. The above steps and processes are the same for bottle water too except a few difference.
The complete production line consists of a PET bottle making machine, bottle rinser, bottle filler, cap lifter, capping machine, labeling machine, and a packaging machine.
Alternatively, you can order the bottles from a bottling company, you specify and agree on the design you want and they will produce it and deliver it to you.
All that is left is the filling of the bottles with the purified water which there are automated machines to do that. It is cheaper but having a complete production line is more beneficial on the long run.
Sachet 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, and General office room.
The building used in the manufacture, processing, and packaging of potable water should be maintained in a hygienic condition.
The site or factory should not be located close to a refuse dump, latrine, or pit toilet, near a cemetery, abattoir, quarry, sewage treatment plant, sawmill, and oil depot (Petroleum and Vegetable) or any such establishment that could be a source of contamination for processing, production, and packaging of potable water.
Quick Cost Analysis of Setting Up A Pure Water Factory
The following cost analysis gives you an insight into cost required to start and run a successful pure water busienss in Nigeria.
Cost of Materials
- 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
Factory Setup Cost
- Borehole system – N100,000
- Overhead tanks (2) – N40,000
- Water filtration unit and 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
- 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
Challenges Facing Water Production Industry
No doubt, every business has it downsides, but carrying out a perfect SWOT analysis before hand will help you glide through every challenges.
Below are some challenges that water production businesses face:
Not being able to sell 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.
When people get sachet water and they are checking the sachet, be sure it is either the expiry date they are looking for or the NAFDAC Registration number. So plan your marketing strategy well so you can be able to sell fast.
Fluctuation in production cost: Prices of materials like nylon, fuel, may increase at any time and yet the price of pure water remains the same. This will affect the cost of production and will eat into the profit.
Maintenances: 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 overuse they undergo.
Every day 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.
The same is true with other machines and equipment used for the production, like generators, sealing machines, and pumping machines.
High competition: The competition in the sachet water industry is a stiff one. Even your customers will still get goods from other factories at one point or the other because of varying reasons.
To make sure you always sell your products into the market every day, always treat your staff (especially those in charge of sales) well and reward loyal customers.
Once you take care of your staff’s welfare they will go the extra mile to sell your product knowing fully well there is a return for their good deeds.
Also, target locations where there are high traffic and movement to sell your products. It is noticed that food canteens and restaurants will always be in need of sachet water each day.
Power: The condition of the power in the country these days is not encouraging for pure water business. For that reason you will have to service two sources of power – from Power Company and from a power generating set.
That is an additional running cost. Because you need steady light for the pure water production it will be wise to use a good generator that won’t give you a headache whenever the light is ceased from Power Company. And as mentioned earlier you have to service it regularly too.
Summary of Starting A Pure Water Business In Nigeria
Starting a pure water business in Nigeria is very lucrative and will require passion, hard-work and a huge amount of startup capital considering the cost of land, building, vehicles, machines and registration.
You can rent a place for your sachet water production business for a start. That is why by all means if you have access to a grant, kindly ceased the opportunity and submit your proposals there. C
heck out our article on other means of obtaining startup capital for intensive capital projects like this.
If you wish to invest in the pure water business, I can assure you of the profit provided you do your homework very well which includes properly setting up your business and applying a good marketing strategy, and recover your capital within few years depending on how you start.
This is only a guide, the size of the organization determines the scale of operations, the investment in cash, human capital, and machines.
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