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Business Plan on Distilled Water Manufacturing and Packaging
Prepared by
SeshaRaja.V (19) ISBE
Sravan kumar (15) IIPM
Saravanan.S (15) ISBE
PGP/SS/10-12/Finance
IIPM
IIPM Tower, 145 Marshall’s Road,
Egmore, Chennai- 600008.
1
Executive Summary
This proposed project presents an investment opportunity for establishing a bottled
water plant for providing pure drinking water. The proposed product line will consist of
bottles of 0.25 to 20 liters. The market for mineral water has been showing a mushroom
growth trend over the last few years. The last three years have shown more growth and
the market have been estimated to grow 70 million liters and the per capita consumption
is 0.5 liter. The annual growth rate for bottled water is 55%. Moreover, the bottled /
mineral water has been emerging as a daily preference of the elite class. The project
can bottle 51000 liters of water per day i.e. 60% of the plants actual capacity during the
initial phase of production; the size of bottles will be .25 Lt and 20 Lt in the name of
“PYAAAS” to make the water convenient and attractive to end users. Therefore the
60% of production capacity would provide a sale of about rupees 99388800/- and also
the project is expected to break even within 5 years i.e. exactly in 4 years and 3 months.
Also as a part of our management ethics the company also cares for the welfare of its
employees by various policies and is also has ESOP.
2
Table of Contents
S NO CONTENTS
PAGE
NO
1 Executive Summary 2
2 Introduction 4
3 Vision and Mission Statements of the business 7
4 Marketing Plans 7
5 Financial Plans 11
6 HR Plans 20
7 Project Report for bank 21
8 Projection after 3,5,10 and 20 years including financials 21
9 Exit Plans 23
10 Conclusion 23
11 Bibliography 24
INTRODUCTION
3
It is needless to mention that water, a compound of Hydrogen and Oxygen is a precious
natural gift which is very essential for survival of mankind including animals. The water
used for potable purposes should be free from Undesirable impurities. The water
available from untreated sources such as Well, Boreholes and Spring is generally not
hygienic and safe for drinking. Thus it is desirable and necessary to purify the water and
supply under hygienic conditions for human drinking purpose. As the name implies, the
mineral water is the purified water fortified with requisite amounts of minerals such as
Barium, Iron, Manganese, etc. which can be absorbed by human body. It is either
obtained from natural resources like spring and drilled wells or it is fortified artificially by
blending and treating with mineral salts. The mineral water shall be manufactured and
packed under hygienic conditions in properly washed and cleaned bottles in sterilized
conditions.
TECHNICAL ASPECTS
Processing and Bottling 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 b e 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, color and also for dechlorination. 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.
PROCESS FLOW
4
5
Raw water from Source
Raw Water Storage
Raw Water Lifting Pump
Sand Filter
Activated Carbon Filter
Base Exchange Softener
Ultraviolet Disinfection
Micro Filteration System
High Pressure Pump System
Desalting
Mixing
Storage of Treated Water
Polishing Filteration
UV Disinfection System
Filling, Sealing & Capping M/C
Quality Control and Standards
The plain drinking water has to be bottled in pet bottle as per IS Specifications
(IS :14543 : 1998 :Packaged Drinking Water and IS:13428 : 1998 : Packaged Mineral
Water). The details of the specification can be obtained from Bureau of Indian Standard,
Manak Bhawan, 9, Bahadur Shah Zafar Marg, New Delhi 110002.
Mission
6
Contribute to make the best product for consumers. Build the positive image about
distilled water. Provide excellent services to consumers. And to produce the best quality
bottled drinking water.
Vision
Strive to grow and increases the market continuously contributes to make healthier
consumers. To become a market leader & to make every consumer to consume our
brand.
Marketing Plans
Introduction
PACKAGED DRINKING WATER INDUSTRY
• Rs.1500 crore packaged water industry
• The industry which is growing at the rate 55% per annum
• Estimated to grow around Rs.1800 crore by 2012
• Approximate 20% brands in organized market & around 80% Local Brands
Segmentation
• Geographic
- City Size: - Mostly Major Cities & Sub Metros
– Climate:- Hot & Humid
• Psychographic
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– Lifestyle:- Travel Freak
– Personality:- Health Conscious
• Demographic
– Family Size:- Mostly Individual & Sometimes Families
– Corporate
• Behavioral
– Benefit:- Thirst & Quality
Brand Loyalty:- Split Loyal
Targeting
• Targets middle segment people
• Price of the Bottle is such that can be affordable to the all segments
• Company planning to target more towards lower segment
Positioning
Top of mind of consumers when it comes to mineral water
8
Product
A range of products that suits all the occasion
– For daily traveling consumption (250ml packets, 250ml & 500ml
bottles)
– For Long traveling consumption (2 & 1 Ltr)
– For Office, Home, Marriage or Meeting use (5 & 20 Ltr. Returnable
packs
Price
• Comparative Pricing
– Competitive Pricing
– Product line pricing
250ml – Rs.3
500ml - Rs.5
1ltr - Rs.10
2ltr - Rs.15
20ltr - Rs.30
Place
The plant can be located at any suitable place where availability of clean water,
power, PET bottles and market access is ensured.
• Intensive Distribution
• A fleet of 10 vehicles.
9
• Retail outlets across the city.
Promotion
• Advertising Campaign
• Bill boards across the city and
• Advertising Boards in front of retail shops
Physical evidence
Attractive bottle design and pure water are the physical evidences
People
Factory Manager -6
Production Manager/Chemist -6
Supervisory staff -6
Office Assistant -6
Skilled workers -30
Unskilled workers -20
SWOT Analysis
Strengths
• Generic name for packaged drinking water.
• Can be spelled by common man also. It’s so important in bottled water.
• Focus on safety.
• Growing market.
• Quoting a lower price to the target customers.
10
Weakness
• New entrant in the market
Opportunities
• Can enter in the market of juices & beverages
• Can enter in the market of water purifier
• Can tab the maximum rural market of the country
• Tie-up with railway canteen, stalls & marriage contractors.
Threats
• From the players like bisleri, Kinley, Aquafina, Himalaya Bailley, & Other local &
rural products
• New enters in the market like Amul
• If government ban on plastic use then company will be in trouble
FINANCIAL STUDY
PROJECT COST
THE PROJECT INVOLVES MACHINERY FOR
PURIFYING WATER
BOTTLE MANUFACTURING.
BOTTLING PURIFIED WATER.
LABELLING
CAPACITY
11
The plant is being designed for minimum economically viable capacity, such that
the capital outlay is optimized.
The capacity of the various units are as under:
-Purification: 1000 liters / hour i.e. 8000 liters / 8 hour shift.
- Bottle Manufacturing: 550 Bottles per hour per machine. 2 nos. machines will
give 1100 bottles per hour i.e. 8800 bottles per 8 hour shift.
-
Bottling: 24 Bottles per minute of 1000 ml. i.e. 1440 Bottles / hour i.e. 11520
Bottles per 8 hour shift.
- Labeling: Heat Shrink Tunnel would handle 1000 Bottles per hour.
All the 4 capacities have been nearly matched - for any adjustments some of the
machines can be run for longer duration.
BASIS & PRESUMPTIONS
This project has been drawn on the basis of following presumptions.
Working hours : 8 per shift
Number of shift/day: 3
Number of Working days: 300 per annum
Working efficiency: 75%
Total period for achieving from maximum capacity utilization: Third year the date of
12
commencement of production.
Rate of Interest : 15% per annum of Capital
MACHINES / EQUIPMENT OFFERED
Purification Section:
Flow rate : 1000 lit / hour
Raw water quality (assumed) : 1000 ppm as TDS
Description Quantity
Alum dozer 3 lit/hr dosage 1
2 nos. pump (1W+1S) (SS) 1
Activated Carbon Filter
Flow Rate : 2000 lit/hr.
MOC : SS 304
1
Pressure Sand Filter
Flow Rate : 2000 lit/hr.
MOC : SS 304
1
Softener 1
Reverse Osmosis System
Permeate Flow : 500 lit/hr.
Consist of :
5 Micron Filter SS-304 PP
H.P. Pump with 3 HP Motor
Membrane - 4 nos.
Pressure Vessel (SS-316) - 4 nos.
Instruments & panel
1
Ozone Generator 1
13
Capacity - 1 gm/hr.
Ozone Dissolution Col.
MOC : SS-316
Flow Rate : 1000 lit/hr.
UV Disinfectant
Flow Rate : 1000 lit/hr.
1
Storage tank for Pure Water
Capacity : 1000 ltr. SS-316
1
Total Cost 1543500/-
Bottle Manufacturing Section:
To achieve 1100 nos. bottles per hour production.
Description Quantity
Stretch Blowing Machine:
upto 2 ltr. Capacity
(Preform Manual Loading Machine from
Conveyor to Stretch Blowing Machine)
- 2 cavity bottle upto 2 ltr. (Neck dia upto 46 mm)
- Hydro-pneumatic locking system
- With Infrared heating system conveyor and
separate Control Panel with Microprocessor.
- Production : 550 Bottle / Hour
- Model No. TPD 2000
2
Refrigeration Unit : (Chiller)
Cooling Capacity : 1 Ton;
(Standard Make)
2
Air Compressor :
with after cooler and moisture separator
2
Mould sets: 2
14
Double Cavity 1.5 ltr. Round shape mould in
aluminium
Double Cavity 1 ltr. Round shape mould in
aluminium
Double Cavity 500 ml. Round shape mould in
aluminium
Approx. Spares for 1 Year 2
Total Cost 1777500/-
It is possible that the air compressor be bought locally.
We are in a position to offer automatic molding machines also.
However that would result in higher investment hence is not recommended at the
initial stages.
Bottling Section :
This section receives the empty bottles, rinses them, fills and caps them.
Description Quantity
Stainless Steel Conveyor:
Made of S.S, 8 meter long for conveying of
empty washed bottles onto the filling machine.
The different operations like rinsing, filling,
capping are done on the conveyor.
Electrical Details: 0.5 H.P. with variable speed
drive..
1
Rinsing, Filling, Capping:
This machine is designed to fill 24 bottles per
minute for 1 ltr bottle & is capable to fill 500 ml,
1000 ml, 1500 ml bottles. Machine speed is
depended on the volume to be filled.
The bottles are holded in groups of 6 & moved
1
15
on the conveyor together.
These grouped bottles are rinsed by means of
spraying pressurized water inside the bottle.
After Rincing the bottles are again placed on the
conveyor & are loaded on the filling & capping
machine one by one.
Filling & capping takes place by indexing
mechanism. There are total 8 indexes.
Change parts for 500 ml and 1500 ml 1 set each 1 set each
Spare for item 2 for 2 years
Total cost 1237500/-
LABELLING & PACKING SECTION:
Description Quantity
Shrink Tunnel:
This is fitted on the online conveyor to shrink labels
and neck sleeves. The labels & neck sleeves are to
be manually inserted on the bottle.
Machine will be provided with suitable capacity
Heaters, Blower, Reduction Gear Box and Electric
Motor, complete in all respects ready to use.
1
Printing Machine ( for mfg. Date & batch nos.)
Semiautomatic machine is proposed.
This is a table top coding machine with a printing
area of 35 mm x 25 mm & capable of printing 3
variable line message on labels or caps.
1
16
Total cost 180000/-
TOTAL COST OF THE MACHINERY OFFERED = 4738500/- (for setting up one
plant)
FIXED COST
The fixed cost is expected to be as described below in INR.
Land & building 30000000
Machinery & Equipment (4
plants) 18954000
Furniture & Fixture 750000
Office Vehicles 3000000
Office Equipment 200000
Cost of boring for water 520000
Pre-operating Cost 1500000
Total Costs 54924000
Raw Materials per month
Raw Material Amount
plastics to manufacture and also to
reuse bottle @ 1.90 for 1 liter bottle with
1689600
17
cap
Chemicals and Reagents etc 1000000
Corrugated boxes, strip, tap etc 800000
Total 3489600
Salaries & Remunerations per month
No. of
staff Designation
Amount/Staff Amount
4 factory manager 10000 40000
2 clerk/typist 3500 7000
5 store cum purchase officer 3500 17500
2 Accountant 7500 15000
5 Sweeper 1500 7500
10 skilled workers like chemist 12000 120000
production manager etc
20 unskilled workers 3500 70000
4
remuneration for promoters
equity 25000 100000
Total 377000
Working capital for 1 month
18
Raw materials 3489600
salaries & remunerations 377000
electricity bill & others 500000
Total 4366600
(An working capital of is said to be maintained initially 13099800/- for the first three
months)
Total Capital Investment
fixed assets 54924000
working capital for 3 months 13099800
Total 68023800
Equity of capital investment is 40%=27209520/-
Debt raised through loan from external sources is 60%=40814280/-
ROI
Yea
r
Cash
Flow Cum CF
1
(13,856,09
2)
(13,856,09
2)
2
5,373,138
(8,482,954
)
3
19
9,844,091 1,361,137
4
14,770,890
16,132,027
5
19,569,351
35,701,377
Break – Even takes occurs during 4 years 3 months.
ROI=total profit-investment/investment
=31.2%
Cost of borrowing the loan is 15%.
HR PLANS
The company recognizes that the employees are the core and heart of our business so
as to make our employees feel happy at all points of time and to make them feel that it’s
their company we plan to initiate various measures few of those which shall be
implemented from the word go of our company are as follows
1) All Employees of all positions shall have same uniforms.
2) Holiday Trips shall be initiated (One day Trip every 6 months or yearly once)
3) Tax Planned salary structures
4) All Employees shall be covered under Gratuity Act
5) Children education Allowance & Hostel Allowance of Rs 400/- PM (For Each
Child)
20
6) Gratuity shall be paid to employees who are in employment for more than five
years in our company the schedule of calculation for payment of gratuity is given
below:
Sl.N
o
Particulars Amount
1 Salary Means Last Drawn Completed month Salary
for Gratuity Calculation
I Basic Salary XXX
Ii Dearness Allowance XXX
Total XXX
2 Gratuity Calculation
15/26 X last drawn salary X No of completed years
of service or part thereof in excess of Six Months
Subject to a Maximum of Rs 10,00,000/-
XXX
Grand Total XXXX
7) Pension schemes shall be initiated
8) In Exception to the above there shall be various on work facilities they are
a. Medical Facilities
b. Personal Accident Policy
c. Conveyance allowances
d. Tea or Snacks
e. Periodicals and Journals
9) PF shall be contributed to employees at 12% of their salary (Eligible Employees)
10)ESI shall be paid to employees @4.75%(Eligible Employees)
11)For Employees above Floor Lever shall be eligible for Voluntary Retirement
Compensation (Eligible for employees who have been in the organization for
more than 10 years)
12)After 2 years of start of operations the company would announce 1% of their
profits as ESOP.
21
Report to the Bank
The total capital investment required is 68023800/-.
The debt raised through loan i.e. 60% of total capital is 40814280/- @ 15%
interest.
The break even takes place in 4years and 3 months with a Return on Investment
of 31.2%.
The following projected balance sheet would clearly represent about the financial
performance of the company over a period.
PYAAAS water Private Limited
Projected Balance Sheet as on
31.03.2013 31.03.201
4
31.03.201
5
31.03.201
6
31.03.201
7
Particulars Projections
(1) (2) (3) (4) (5)
A LIABILITIES
Equity Share
Capital
27,209,520
27,209,52
0
27,209,52
0
27,209,52
0
27,209,52
0
Reserves &
Surplus
(19,856,092
)
429,978
5,395,247
10,766,93
0
15,965,78
7
Loans
32,640,000
24,480,00
0
16,320,00
0
8,160,000
-
22
Current Liabilities
20,938,172
5,718,942
6,617,329
7,907,061
10,181,82
2
Total Liabilities
60,931,600
57,838,44
0
55,542,09
6
54,043,51
1
53,357,12
9
B ASSETS
Fixed Assets
49,431,600
44,488,44
0
40,039,59
6
36,035,63
6
32,432,07
3
Current Assets
9,000,000
10,350,00
0
11,902,50
0
13,687,87
5
15,741,05
6
Cash & Bank
Balances
2,500,000
3,000,000
3,600,000
4,320,000
5,184,000
Total Assets
60,931,600
57,838,44
0
55,542,09
6
54,043,51
1
53,357,12
9
Exit Plans
If at all the project does not succeed then the following exit plans are practiced
23
Fixed assets such as land & building can be sold at an appreciated price.
Machineries can be sold at a scrap value.
The inventories that are being stored in the warehouses can also be sold to
other manufacturers for a discount price.
Or even the equity raised can be sold to others or transfer of ownership.
Using the amount collected from sale of above assets the debt that has been
acquired can be repaid.
Conclusion
Therefore it is found that the distilled water market is steadily growing every year and
the demand for water in the country can never decrease as it a basic necessity.
Therefore we believe that our project would be an success. And with our management
practice we could easily become market leader within a time span of 10 years.
Thereby we intend to start this project which has an profitability of 31.2% in order to
satisfy the needs of the customers.
Bibliography
Websites
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http://www.aquatech.com/casestudy/%2321%20Tenaska%20Cleburne%20(IC)_20070102132255.pdf
http://www.infoplease.com/cig/science-fair-projects/does-ph-water-affect-growth-bean-plants.html
http://www.sciencemadesimple.com/environmental_projects.html
http://www.pdfarticles.com/topic/distilled+water+plant+project+report.html
http://www.mineralwaterplant.com/mineral-water-autoturnkey-project.html
http://www.builditsolar.com/Projects/Water/Water.htm
http://www.alibaba.com/countrysearch/IN/distilled-water-plant.html
http://www.tradeindia.com/buyoffer/2401533/Distilled-Water-Plant.html
http://www.askme.com/mumbai/distilled-water-plant/listings
http://trade.indiamart.com/details.mp?offer=2476562395
http://meters.tradeindia.com/Exporters_Suppliers/Exporter20508.347624/Distilled-Water-Plant.html
http://www.aquachemsystems.com/services
http://allahabad.quikr.com/distilled-water-plant-equipment-Electronics-Technology/distilled-water-plant-equipment/x18222212656
http://www.sureshtraders.com/distillation-plant.htm
http://www.mapsofindia.com/sponsors/engineering-services/ro-di-water-system-india/
Books
1. The Business of Water: A Concise Overview of Challenges and Opportunities in the water market By Steve Maxwell page no 10.
2. Technology of bottled water By Dorothy A. G. Senior page no 160.
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