SUBMITTED TO AYESHA KHAN CHIEF TECHNICAL ADVISOR Community Based Livelihood Recovery Program (CBLRP) United National industrial Development Organization (UNIDO)

BY Sardar Shahid Farid Chartered Accountant

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In the initial phase of the project only 0. According to a study conducted in 2001. 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 Lt and . The proposed product line will consist of bottles of 1.5 liters and 1. Moreover. The sale at 100% capacity utilization is Rs 209 Million.1 PROJECT BRIEF This proposed project presents an investment opportunity for establishing a bottled water plant for providing pure drinking water.5 liters. the bottled / mineral water has been emerging as a daily preference of the elite class.5 and 0. Pakistan registered the highest growth of 140% in 2000 amongst the countries in Asia and Middle East region. The potential markets for bottled / mineral water consist of foreign tourists and foreigners working in Pakistan. The country’s market is very small on a global scale and was estimated at 33 million liters a year by the end of 1992.5 Lt to make the water convenient and attractive to end users.1. The project would be set up in Manshera or Balakot where all the required infrastructure and amenities are available. The annual growth rate for bottled water is 40%. The project can bottle 15. hotel industry. PROJECT EXECUTIVE SUMMARY 1. patients (bottle water is also used to avoid the possible consumption of contaminated water) and travelers.5 liters bottles will be introduced in the local market. the size of bottles will be 1.5 liter.2 FINANCIAL SUMMARY • • • • • Sales Gross Profit Margin Payback period Net Profit Margin before tax Internal Rate of Return Rs 209 Million per annum 30% 2. After successful introduction of the new brand of bottled water the product line may be extended to 13 and 19 liters cans. 1.2 Years 04% 79% Foreign collaboration sought Joint – Venture Loan Market access Sub contracting Buy – back arrangement Equipment purchase Feasibility study Other Specify 25 October 2007 Management expertise Technical expertise Marketing expertise Technology transfer Joint R&D Other :Project description Studies Available Date: 1 .000 Gallons of water per day.

5 liter.741 1995-96 2. As the expertise is developed the product can also be exported.249 3. The stronger the distribution the more successful will be the new brand.328. 3. The retail market consists of 0.e. there is ample opportunity to bottle this water locally and for export. for open and competitive commodity pricing and tough market competition. the number of bottlers scales up well above 70 during summer season due to increased demand for drinking water. According to the industry sources.951 10. demineralization.384 1994-95 1.2. PROJECT RATIONALE Manshera and its surrounding areas is a land of many streams of water from glaciers. There is also anticipated growth of 10 % in sale price of the product. testing for standards conformation. The bulk market consists of home and office delivers in 3 and 5 gallon cans.338 5.5 liter. filtration. But today there are more than 26 brands of drinking water available in the market thus showing a substantial growth by the industry. The process of purified bottled water manufacturing consist of collecting water from a suitable source.0 liter capacity PET bottles. 2 . MARKET OPPORTUNITY There are around 26 players in the bottled water sector. retail market and bulk market.856 There is no bottler of mineral water in the area 4. The plant will start its operation from 60% capacity and finally reach 100% capacity by the end of 5 years. 3. 1.460 12.1 liter and 5. Usually the top target market for bottled mineral water follows the perception. There is thus the opportunity for investment in this sector. bottling and packaging.188 1993-94 814. blending with salts. While exports are very lucrative there will be implementation of WTO. As the awareness of water born diseases is increasing coupled with modern trends of living the market of bottled mineral water is growing faster than the supply. Pakistan’s bottled water market comprises of two main segments i. BUSINESS PLAN High quality goods to taste bottled water will be processed/produced for the end user. The market for purified bottled / mineral water is a growing market. Mineral Water Imports in Pakistan Year Quantity Value (‘000’ Rs) 1992-93 694. aeration.660.

5 liter bottle (Rs.000 80:20 9. the project shall be located at site where require water is available. Water is filtered next and passes through dosing pump-III.5 liter bottle (Rs. 15. It helps in the maintenance of proper odor and taste of the water.5 liter and 0. It helps in dechlorination of water. This stage of the process makes water clear from all the contaminations and minute particles.5 liter bottle Production of 0. where minerals are added for taste development.463. the specifications of the purification plant are set. After filling bottles are taken into the warehouse or shipped to the retailers. After the chlorination.5 liter bottle Production of 1. magnesium and biological growth.484.1 PRODUCT SALES Plant Capacity liters per day Production per year (liters) Ratio of 1. Water then passes through reverse osmosis module. After the chemical analysis.) Capacity utilization in first yr Sales price growth rates Production capacity utilization growth rate Maximum Capacity utilization Sales 100% capacity 4. passes through the sand filter for preliminary water filtration.2 RAW MATERIALS There are many sources of natural water from spring or ground water in Mansehra.4.979.000 Gallons 18. filling and capping plant. Here water is filled into bottles.3 PRODUCTION PROCESS The first step for setting up a water purification plant is the analysis of source of water. It prevents scaling of membrane from calcium. Water then passes through the dosing pump-I where chlorine is added to kill the germs in the water. water undergoes Ultra Violet treatment to avoid any contamination from bacteria and other micro organisms. The complete process flow diagram is as under. source water is stored in the feed water tank. where Sodium Meta Bisulphate is added.711.) Sale price of 0.563.200 3 . After this stage.5 liter bottle Total annual production Sale price of 1. where anti scallant is added. 4.200 7. water passes through carbon filter.400 17. Water then passes through dosing pump-IV. It also removes chlorine from water. Water is then passes from dosing pump-II.600 15 8 60% 10% 10% 95% 209. Water then passes through automatic washing. In the purification plant.

g. The traditional marketing tools include site advertisement. College and University gatherings).4 DISTRIBUTION CHANNELS Branding and marketing of bottled water is as essential as water for the survival of the human body. The distribution strategy should be designed after a careful study of the market for going for regional distribution or for nation wide distribution. interactive marketing may include educating the general public about the importance of water and its daily consumption requirements for human body through the participation in seminars and in general public gatherings (e. water requirements in different age brackets. The entrepreneur may decide to increase or decrease the amount of marketing expense depending upon this choice of promotion activities and type of media used.5 million. The interactive marketing may be designed through seminars and workshops about the daily human consumption requirements and diseases originating from the lack of pure water. this study suggests to focus more on other marketing magnets that include interactive marketing. Following table gives the breakup of the marketing expense.4. Apart from the traditional marketing tools. distributing free brochures about water and its daily consumption. The stronger the distribution the more successful will be the new brand. A market research study is recommended to design the different dynamics of marketing before launching the new brand. This study allocates 10% of the revenue for advertising and promotional purposes. 4 . One of the marketing options is to sponsor public events like cricket matches or hospital campaigns. Marketing expense has been included in the total project cost and it has been estimated around Rs. Overall marketing strategy may change with the change of target market. Distribution is very important for the success of the new brand. TV and print media advertising and brochures.

500 2.000 1.816.000 5 . 5.360 202.580.0 PROJECT FINANCIALS OPERATIONAL DATA The plant will be operated in the first year at 60% capacity and as the expertise develops the 100 % pant capacity will be attained by the end of fifth year.500 6.711.230.268 12.056.7 Million as described below.128 WORKING CAPITAL The investment in the initial working capital is of Rs 3.057. FIXED COST The fixed cost is expected to be Rs 12. Land Building / Infrastructure Machinery & Equipment Furniture & Fixture Office Vehicles Office Equipment Pre-operating Cost Total Capital Costs 1.000 108.5 HUMAN RESOUCE REQUIRMENT The following requirement of staff along with their levels and monthly salary is foreseen for this project.

800 124.965 31.614.854.491 1.468.884 186. Administration Expenses Utility expenses Traveling Office Vehicle and running Office stationary Promotional expenses Insurance expenses Depreciation Amortization expenses Miscellaneous expenses Total 12.697 363.119.583 6 .800 12.292 624.049.OVERHEAD COSTS In the first year following overhead cost are estimated.400 428.000 102.254 3.

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