How to start packaged drinking water business in India [manufacturing process, brands,cost,machinery,profit]
Rampant water, land and air pollution has taken its negative toll on the earth. Dumping untreated waste directly into the waterways has reduced the quality of water. It is definitely unsafe to consume water from lakes and ponds. Untreated water is not safe for consumption. It will contain germs, dust, and pollutants, which will play havoc with our health. Thus, it is mandatory to drink treated and filtered water, obtained from clean source. It is this awareness that has increased the demand for packaged drinking water in the society. If you desire to make a mark in this lucrative business, then this article is a “must read.”
Estimated cost for starting business
Opening a bottled or packaged water manufacturing plant is cost intensive. A medium sized plant, with the capacity of dishing out around 45 lakh bottles, during one financial year, will require anything between Rs. 118 lakhs to 122 lakhs. It is a rough estimate, and will vary on several relative factors. It is the amount that you require to set up the plant. The overall financial expenditure necessary to get the desired production is around Rs. 240 to Rs 245 lakhs. Opting for a dealership is a better option. If you get a dealership, then you can start the business with anything between Rs. 15 to Rs. 25 lakhs. The actual amount will vary according to region, host company policies, demand and other factors.
Equipment list and estimated cost
Opening a mineral water manufacturing plant is a medium to big scale business. It cannot be done on a small scale. If you do not have necessary funds and resources, then it is better to opt for dealerships or franchise. But that is equally expensive proposition. Whether you open your own manufacturing unit or opt for a franchise, a number of high end machines are needed for purifying, processing and packing the water. A detailed list of these machines and their estimated costs are given in the table below.
|List of expenses in the packaged water production|
Land & Factory
|0.5 acres of plot for factory setup||Rs. 1 lakh|
|Constructing space for keeping machinery, processing, bottling and packaging||Rs. 26 to 30 lakhs|
|Fencing, wall and gate||Rs. 3 lakhs|
Equipment necessary for plant
|Alum. Treatment tanks (at least 3)||Rs. 1.20 lakhs|
|Chlorination tanks||Rs. 0.80 lakhs|
|Reverse Osmosis Equipment||Rs. 3.20 lakhs|
|Sand filters||Rs. 0.50 lakhs|
|Micron filters||Rs. 0.40 lakhs|
|Activated charcoal filters||Rs. 0.60 lakhs|
|Ultraviolet disinfectant unit||Rs. 0.32 lakhs|
|Electronic doser for chlorine & aluminum||Rs. 0.30 lakhs each|
|Ozone Generator||Rs. 3.15 lakhs|
|Water collecting systems||Rs. 1.60 lakhs|
|Automated washing, filling and capping units||Rs. 7.50 lakhs|
|Shrink wrapping unit||Rs. 0.15 lakhs|
|Other tools and gears||Rs. 1.50 lakhs|
|Lab testing and quality maintenance||Rs. 1.50 lakhs|
Fixed assets in the factory
|Furnishing and associated items||Rs. 088 lakhs|
|Deep bore tube wells||Rs. 1.30 lakhs|
|Security deposit with power department||Rs. 1 lakh|
|Delivery vans and others||Rs. 5 lakhs|
|Planning of operation cost||Rs. 1.50 lakhs|
|Acquiring bottles and caps||Rs. 13.50 lakhs|
|Reagents and chemicals||Rs. 0.50 lakhs|
|Boxes for transporting, binding tapes||Rs. 3.10 lakhs|
|Wage related expenses||Salary of official, technical and additional staff||Rs. 1 lakh (approx.)|
|Utilities expenses||Electricity, fuel and others||Rs. 0.45 lakhs|
|Contingency costs||Insurance, repair, taxes, permits, consumable items, postage fee etc||Rs. 0.11 lakhs|
|Total funds necessary for starting the business = Rs. 121 lakhs (approximately)|
How many employees are needed?
If you are opening a medium to large scale bottled water manufacturing agency, you will need a host of employees. They will assist in operating the machines, maintaining records and factory. Most of the processing, purification, filling, capping, labeling and boxing will be done by the automated machines. But you need trained people to operate these machines. Staring the setup with 5 labors, 5 technical staff, 1 manager, 2 maintenance men and 2 security guards will be adequate. Overall, one can manage the operations with 15 men.
|Financial Scrutiny of overall investments|
|Money necessary for one year operations||Rs. 221.16|
|Annual depreciation interest on building (5%)||Rs. 1.45 lakhs|
|Annual depreciation interest on machines, tools (10%)||Rs. 3.50 lakhs|
|Overall interest on funds invested (15%)||Rs. 18.40 lakhs|
|Total Production cost for one year = Rs. 245 lakhs|
|Total Turnover (45 lakh bottles) = Rs. 282 lakhs|
|Total Profit (282 – 245) = 37 lakhs|
How to start a packaged drinking water company?
- Comprehensive planning – Starting a mineral water business is no mean task. To achieve satisfactory goals, you must be ready to put in hard work. You need to be ready with contingency plans for meeting any unforeseen circumstance. For this, adequate planning at all stages is necessary.
- Market research is a must – If you desire to setup your own plant, you must have information about the mineral water business, permits needed, machines necessary, water processing technology and other associated features.
- Getting funds – Interested candidates need to opt for credit from any financial institution. 1.50 Crore is not a small amount. Once you have the funds in hand, you can start the next phase of planning.
- Opting for franchise – Opting for franchise is another way of starting your packaged water business. Each company has its specific rules for offering franchise. For instance, to get a franchise of Bisleri, you need to make sure that there is no other such service provider in the area. Otherwise, your application will be rejected by the company.
- Selection of location – A packaged water manufacturing plant requires a significant area. After arranging funds, it is time to attain a suitable plot, where you have power supply, transportation, and adequate natural water resource.
- Attaining the machines – All machines, which have been listed in the table, are available in the market. These high end machines can be custom made according to the requirement of the owner.
- Attain permits – This business is directly related to health and wellbeing of people. Thus, government has strict policies to ensure quality products. You need to apply for and prove yourself worthy of getting the necessary licenses.
- Hiring human resource – Next comes hiring people for operating the machines, and maintaining smooth functioning in the plant.
- Actual manufacture – Once all these steps have been completed, it is time to start work on the actual water processing and bottling.
Packaging of the product
Packaging is another important aspect of the mineral water manufacturing industry. If the capping and packaging is not done properly, then the quality of water will deteriorate. There are separate machines for manufacturing water pouches. These machines can cost anything between Rs. 1.25 lakhs to Rs. 1.75 lakhs. Other than that, automatic capping and packing machines are also available. The cost of these bottling machines can range from Rs. 5 lakhs to Rs. 7 lakhs.
Once a set of bottled have been filled, capped and sealed, they are grouped and sent to the packing unit. Here, with the help of an automated machine, these bottles are packed in transparent packets. Once sealing is complete, these are placed in cardboard boxes. These cardboard boxes are then sealed with tape. In medium sized plants, it is done manually, but in bigger factories, automated machines are installed for this task as well. After this, these boxes are coded and stacked on delivery vans to reach their destination.
Permits necessary for the business
- SSI registration – Appropriate license from the Small Scale Industries department is a must for starting the business. The permit helps in acquiring funding, equipment and related items with ease.
- BIS registration – License from the Bureau of Indian Standards is a must to manufacture any item. The ISI is the mark of quality and purity. Thus, this certificate is all the more important for mineral water business.
- Pollution control report – The state government issues Pollution Control Certification to several manufacturing industries. The experts test the water, surrounding, equipment, production process and packaging methods to ensure that the factory is not adding to pollution levels in the area.
- Water sample analysis – Water is the main resource you need to start mineral water factory. For that, you need a clean source of water. Getting samples of this water tested at government labs is a must. If they are happy with the quality of water, then you will get the permits.
- Pest control reports – Safety and hygiene is of utmost importance in a mineral water production company. Thus, you need to get permit from the pest control department
- NOC certificate – It is the responsibility of the factory owner to get no objection certificate from the Gram Panchyat or Municipality.
- Worker medical certificates – The owner of the company must get health reports of each employee. The owner needs to ensure that the workers are not suffering from any communicable disease. Otherwise, the health department will not give the license.
- Trademark and brand registration – It is better to pot for brand name and logo registration. It will safeguard the identity of the company.
- Land ownership registration – A significant land area is needed to establish the factory. Whether you own the plot or get in on lease, you need to submit the papers, and share the information with the state authority to attain land permits.
- Layout grant permits – You need to get the layout plan sanctioned from the Municipal or Gram Panchayat. For this, you need to submit all architectural plans of the plant, after getting thumbs up from a registered architect.
- Power certificates – Whether your mineral water plant is small or big, it will require a lot of electricity. All heavy duty machines require electricity to operate. It is not possible to do so with domestic connections. You must apply for commercial connection to the respective government department. Once you get this permit, the power company will install commercial meters at the plant.
- Certification from power agency – You will not be able to start production until you acquire the safety certificate from the power enterprise and department. The experts will visit the plant, check the meter, wiring, and safety equipment. If they are happy with the report, then they will give the grant to start production.
Franchise name of the business
There are no extra pints for guessing that opening a packaged drinking company on your own is a massive task. Arranging the necessary funds is the biggest hurdle that you need to cross. Though banks offer credit, interested applicants must have enough knowledge about machines, where to get these, and how to operate them. In case, a person is not comfortable with these risks, he/she can opt for franchise of packaged drinking water manufacturing brands, which are already reputed and well-placed in Indian market. Some of these brands are Bisleri, Kinley, Aquafina, Bailley, Qua, Himalayan Water, Tata Water Plus and others. If any person is interested in getting franchise or dealership of these companies, then he/she needs to log on to the official websites.
Bisleri – https://www.bisleri.com/
Kinley – https://www.coca-colaindia.com/brands/kinley/kinley-water
Aquafina – www.pepsicoindia.co.in/brands/aquafina.html
Bailley – www.parleagro.com/bailey.html
Qua – www.naranggroup.com/qua/home.html
Himalayan Water – www.tataglobalbeverages.com/brands/water/himalayan
Tata Water Plus – http://www.tataglobalbeverages.com/brands/water/tata-water-plus
Best marketing areas
- Schools, colleges and offices – If you desire to get a steady stream of orders, then these areas will be ideal. The regular attendance in schools, colleges and offices is high. If you crack a deal to supply purified water from your company to these places, your turnover will increase.
- Malls, fairs, events – As the footfall in big malls, movie auditoriums, fair and events us high, setting up stalls in these places will ensure high sale.
- Restaurants and café – There is no way to ensure that the quality of water, served at the cafes and restaurants is good. So, most people go for mineral bottled water. A deal with café and restaurant owners will also prove to be beneficial.
- Beverage and grocery stores – Make sure that your water is available in all beverage and grocery stores. This will increase exposure and salability of the product.
- Sell at domestic level – Many health conscious people try to cook food in mineral water. They opt for 20 liter water jars. Thus, selling these mineral water jars at domestic level will boost your sale.
Promotional tips for better business
- Online advertising – Today, online representation is a must for any company. If reputed agencies are taking assistance of online promotion, then it is a must for a person, just starting out in the business as well.
- Traditional advertising – Apart from online promotions, you can also harness the power of traditional media. Audio media (radio), audio – video media (television) and print media will offer your product positive exposure and promotion.
- Making use of social media – Social networks are potent platforms for getting in touch with the target clients. Maintaining a separate account for the brand will keep people posted about the upcoming events and launches. It also increases exposure that is a must for promotion and business.
- Distribution of pamphlets – If you are manufacturing and selling mineral water under your own brand name, then distributing handouts, and offering free samples to people will come in handy to create a hype in the market. It must be done before the actual launch of your product.
- Promotional hoardings and banners – Putting up promotional hoardings and banners, in places where a large number of people can see it, will increase the chances of your brand’s exposure.
Risks and management
- Preventing underground water pollution – As these plants depend on ground or underground water sources, and waste water is drained out, steps must be taken to prevent any risk to these natural water sources.
- Safe storage of fuel and chemicals – The commercial water purification plants use a number of chemicals. The machines also run on fuel. Better care must be taken to store these chemicals and fuel, to keep risks and accidents at bay.
- No faulty storage of products – A lot depends on the storage facility. If the storage areas are not clean, then the packaged water can turn bad in no time. Risks can be averted by paying attention to capping, sealing, boxing and boxing activities.
- Adequate quality control – Another risk, closely associated with the mineral water business is inability to maintain high quality of water. It is the responsibility of the R&D department to carry out batch tests to make sure that purification and addition of preservatives have been done accurately.
The bottled water manufacturing plants generate a high percentage of liquid waste on daily basis. The effluents have high potential to increase soil and water pollution. To prevent environmental degradation, these waste products must be treated. The plants must ensure that only treated wastes are going out in the sewage drains. The slant of main drains, going out of the plant, must be adequate. These drains must be covered, and should not be placed adjacent to water processing and packaging units. Back run of dirty water, into the plant must be stopped at all costs. Chemicals must not be stored alongside bottled water boxes.
It is necessary to create awareness among people. But hoping that everyone will readily purchase a bottle of mineral water is not right. Drinking packaged water is not the only option. Boil and strain water before consumption. It will kill germs, as well as remove insoluble particles from the water. One should never take chances with his/her health. Those who can afford it must stick to consuming treated mineral water.