WATER BOTTLING

INDUSTRY PRE-
FEASIBILITY PROJECT

Rosana Daleska Vargas Perez – Pablo Marcelo Garcia Taborga

I. JUSTIFICATION:

The World Health Organization noted that: “In 2017, more than 220 million people
required preventive treatment for schistosomiasis, a serious and chronic disease caused
by parasitic worms contracted by exposure to infested water and that contaminated water
and poor sanitation they are related to the transmission of diseases such as cholera,
other diarrhea, dysentery, hepatitis A, typhoid fever and polio. Non-existent, insufficient
or improperly managed water and sanitation services expose the population to
preventable risks to their health. "

In relation to the above, the need to make the Water Bottling Industries feasible in all
departments of the Plurinational State of Bolivia is established, seeking to improve the
quality of life of all citizens, free of contamination, protecting health with technology and
modern infrastructure.

II. LOCATION AND SURFACE OF THE LAND TO BE COMPLETED

The location of the land will be adjusted to the industrial zone of each department (Santa
Cruz, La Paz and Cochabamba).
Due to the COVID 19 Pandemic declared worldwide, the sale and purchase of land in
Bolivia is affected by the low demand to acquire them, the advantages that this project
has is the availability of properties with better locations, the price when making the
purchase may have a better price.
Therefore, the prices for the acquisition of land for this project are shown below, with a
margin of error of approximately ten percent (± 10%).

LAND PRICE PER

PROJECTED
LAND M2
PRICE
(APPROXIMATE)
SANTA
1 $us.150,00 $us.600.000.00
CRUZ
2 LA PAZ $us.175,00 $us.700.000.00
COCHABAM
3 $us.150,00 $us.610.000.00
BA

III. CURRENT WEATHER CONDITIONS, LANDSCAPE DETAILS AND

GENERAL DETAILS OF THE ENVIRONMENT OF THE PROJECT FACILITIES

SANTA CRUZ DE LA SIERRA CITY

In Santa Cruz de la Sierra, the summers are long, very hot, and mostly cloudy, and the
winters are short, comfortable, humid, and partially cloudy. During the course of the year,
the temperature generally ranges from 15 ° C to 31 ° C and can drop sometime below 10
° C or it can rise to 34 ° C.

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Its hot climate intermingles with the great landscape and natural wealth of Santa Cruz,
between vegetation, colonial buildings and modernity. It is the capital city of the
department and is considered at the national level as the largest, most populated and the
economic and industrial center of the country.

Thus, several companies have expanded on Santa Cruz soil, maintaining headquarters
in western cities, this reinforces what Santa Cruz represents, a city that inspires business
initiatives and invites private investment.

LA PAZ CITY

In La Paz city, the summers are short, cool and cloudy; winters are short, very cold, dry
and partly cloudy. During the course of the year, the temperature generally ranges from
-2 ° C to 18 ° C.

Its rich landscape is surrounded by the high mountains of the Altiplano and guarded by
the beautiful Illimani, La Paz has its own rhythm and way of doing things. It is located at

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3,600 meters high, and its buildings are scattered among the hills forming a particular
brick landscape, its topography is irregular.

La Paz is the seat of the executive, legislative and electoral powers, which makes it the
seat of Government, the country's political and cultural epicenter, bringing together locals
and foreigners.

The transfer of industrial companies from La Paz (or El Alto) to other departments was a
worrying sign that has led to reformulate economic policies and consider ways to attract
private investment that seek to balance territorial, departmental and national
development.

The city of La Paz is the main logistics node in Bolivia, which implies that a large part of
the trade is still carried out within the department, which allows the department's
industries to be suppliers of finished products, raw material inputs for the rest of the
industry, but more importantly a water bottling plant has a wide market and a direct door
to export.

COCHABAMBA CITY

The climate of Cochabamba is, without a doubt, one of the most valued, considered the
capital of eternal spring, it is sunny most of the year, without extreme temperatures, with
a temperature between 15 ° C and 26 ° C in the summer and 6 ° C in winter. A city that
invites a quiet life, with a beautiful climate, ideal for people with health problems.

In Cochabamba, the most of the business occupation is concentrated in microenterprises

and a lesser proportion in large companies; It is important to develop the conditions for
the formulation of plans and projects with the greatest possible impact on the
development of the regions, a water bottler is a company that represents an impact on

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the regional development of Cochabamba, and represents employment opportunities,
direct and indirect.

COMMERCIAL MARKET
A growth that widely favors the Santa Cruz region can be observed, followed by the
departments of La Paz and Cochabamba over the other departments, being important to
know that the socioeconomic indicators register a development process that allows
reducing production costs, procedures and controls; that facilitates the efficient allocation
of resources, and the possibility of reaching the entire population that needs the product
at a lower cost.

However, some companies have been at a time with decreasing income, as well as these
companies have reinvented themselves, in that sense establishing a water bottling plant
in the aforementioned departments of the Plurinational State of Bolivia is essential to
support development economic benefit of the region.

Water consumption worldwide and in our Plurinational State of Bolivia has a growth of
twenty percent (20%) each year, where it is estimated that in 5 years the demand for
bottled water consumption in the Plurinational State will be doubling. of Bolivia, a press
report dated March 24, 2018, in a comparison of the 2014 management to the 2016
management: “more than the consumption of bottled water has grown by almost 400
percent, only in Cochabamba, as revealed the Regional Director of Water Management
and Basic Services. The families of La Llajta that do not have drinking water must buy it
in cisterns or bottled ”.

It is necessary to note that the population sees an alternative in bottled water that
guarantees its consumption and avoids the risk of diseases that comes from tap water.

IV. CONSTRUCTION AND PLANS

PLAN OF THE GENERAL PLANT LAYOUT

The construction area that is available for the project site is 3716.20 m2, in the plan you can
see the distribution of all areas such as: administrative area, production area, hygienic
services, industrial dining room, parking area, among others.

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The projected construction is designed on an area of 3,716.20 square meters, the reference
price of construction per m2 for this type of industrial facilities is between $ US1200 (One
Thousand Two Hundred 00/100 US Dollars) and $ US1500 (One Thousand Five Hundred 00
/ 100 US dollars) per square meter, it has been contemplated that construction materials must
be of the highest quality, for greater performance and an infrastructure that allows for a long
period of useful life, this will ensure that all operational and administrative personnel develop
in the best environments. (It should be noted that this area does not include parking lots and
green areas, which will be developed in the Final Design Project and with the land acquired
for this purpose).

Therefore, the reference price for the construction of each Water Bottling Plant located on a
surface of 3716.20 m2, will have a cost of: USD 5,574,300.00 (Five Million Five Hundred
Seventy Four thousand Three Hundred 00/100 US Dollars). This Water Bottling Plant Design
Project will be replicated in the first instance in the cities of Santa Cruz, La Paz and
Cochabamba.

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 V. INTEGRATED FINANCIAL PROJECTIONS ACCORDING TO REALIZED
COSTS BY PERIOD (WEEKLY, MONTHLY, ANNUAL)

5.1. COCHABAMBA BOTTLING PLANT

For the Cochabamba Bottling Plant, the income generated by the sales of the different products
was projected, each one with a projection of eight (8) years, the following table shows the
possible prices to the public of each type of water that is would produce, thus also the monthly
production.

PRODUCT PRESENTATION
PRODUCTION
PRODUCT Price Price Price
LITERS/MONTH 20 (l) 2 (l) 600 (ml)
($US) ($US) ($US)
PURIFIED
700.000 X 3.59 X 1
WATER
TONIC WATER 30.000 X 4.02
MINERALIZED
200.000 X 4.02
WATER
ALKALINE
80.208 X 4.31 X 1.72
WATER
"DIURETIC"
HYPOSODIC 30.000 X 5.02 X 1.43
WATERS
FLAVORED
90.000 X 3.73 X 0.72
WATERS
TOTAL 1.130.208

As shown in the previous table per month, a total of 1,130,208 liters would be produced at the
rate of the production capacity of the machinery that was quoted, and the demand that exists,
however, the quantities that are exposed by Product would be subject to changes, since they
may vary depending on the market study that will be carried out in the Feasibility Project.

❖ SALES PROJECTION BY PRODUCT.

YEARS
N° PRODUCTS
1 2 3 4 5 6 7 8

1
PURIFIED 2394000.00 2513700.00 2639385.00 2771354.25 2909921.96 3055418.06 3208188.96 3368598.41
WATER
TONIC
2 252000.00 264600.00 277830.00 291721.50 306307.58 321622.95 337704.10 354589.31
WATER
MINERALIZED
3 504000.00 529200.00 555660.00 583443.00 612615.15 643245.91 675408.20 709178.61
WATER
ALKALINE
4 1654992.00 1737741.60 1824628.68 1915860.11 2011653.12 2112235.78 2217847.56 2328739.94
WATER

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 "DIURETIC"
5 HYPOSODIC 611000.00 641550.00 673627.50 707308.88 742674.32 779808.03 818798.44 859738.36
WATERS
FLAVORED
6 1152000.00 1209600.00 1270080.00 1333584.00 1400263.20 1470276.36 1543790.18 1620979.69
WATERS
TOTAL ($us) $ 6,567,992.00 $ 6,896,391.60 $ 7,241,211.18 $ 7,603,271.74 $ 7,983,435.33 $ 8,382,607.09 $ 8,801,737.45 $ 9,241,824.32

The above table shows the projected sales for the next eight (8) years, considering a minimum
growth of five percent (5%) per year, with a lower margin than the projection that is estimated
to be a progressive growth of twenty Annual percent (20%), however, it can be increased
depending on the Feasibility Project to be carried out.

With these data, the Sales Projection is estimated in the first year of $ US 6,567,992.00 (Six
Million Five Hundred Sixty-Seven Thousand Nine Hundred Ninety-Two 00/100 US Dollars),
taking into account that the thirteen per cent has been reduced. one hundred (13%) of taxes,
and on that result, only the sale of eighty percent (80%) of the total production was considered,
the remainder can be considered as a net surplus, which may be entered as income or it can
be considered That this production goes on to cover the needs of the most needy population
as a Social Responsibility. (Populations where drinking water is not available, orphanages,
nursing homes, hospitals and where they are required).

❖ RETURN ON INVESTMENT (Expressed in US Dollars)

1 2 3 4 5 6 7 8
NET
OPERATING 2.022.142,15 1.935.567,99 2.101.233,06 2.319.755,86 2.215.037,42 3.883.583,81 4.211.452,74 4.530.451,08
RESULT
INVESTMENTS 16.308.167,07 16.308.167,07 16.308.167,07 16.308.167,07 16.308.167,07 16.308.167,07 16.308.167,07 16.308.167,07
PERFORMANCE 12% 12% 13% 14% 14% 24% 26% 28%

The return on investment shows that the water bottling plant will initially have a profitability of
12%, a percentage that represents the return on investment, which in the following years would
increase, reaching a profitability in year 8 of 28%.

5.2. CITY OF LA PAZ BOTTLING PLANT

For the bottling plant in the city of La Paz, the income generated by sales of the different
products was projected, each one with a projection of eight (8) years, the following table shows
the possible prices to the public of each type of water that would be produced, as well as the
monthly production.

PRODUCT PRESENTATION
PRODUCTION
PRODUCT Precio 600 Precio
LITERS/MONTH 20 (l) 2 litros 20 (l)
($US) mililitros ($US)
PURIFIED
450.000 X 3.59 X 1
WATER

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 TONIC WATER 100.000 X 4.02
MINERALIZED
320.000 X 4.02
WATER
ALKALINE
80.000 X 4.31 X 1.72
WATER
"DIURETIC"
HYPOSODIC 70.000 X 5.02 X 1.43
WATERS
FLAVORED
150.000 X 3.73 X 0.72
WATERS
TOTAL 1.170.000

As shown in the previous table per month, a total of 1,170,000 liters would be produced at the
rate of the production capacity of the machinery that was quoted, and the demand that exists,
however, the quantities that are exposed by product would be subject to change, since they
may vary depending on the market study that would be carried out in the Feasibility Project,
thus it is also clarified that the existing competition in the city in La Paz was considered,
therefore production reduced by comparison to the other cities.

❖ SALES PROJECTION BY PRODUCT.

YEARS
N° PRODUCT
1 2 3 4 5 6 7 8
PURIFIED
1 1182300.00 1241415.00 1303485.75 1368660.04 1437093.04 1508947.69 1584395.08 1663614.83
WATER
2 TONIC WATER 470400.00 493920.00 518616.00 544546.80 571774.14 600362.85 630380.99 661900.04
MINERALIZED
3 1050000.00 1102500.00 1157625.00 1215506.25 1276281.56 1340095.64 1407100.42 1477455.44
WATER
ALKALINE
4 1544062.50 1621265.63 1702328.91 1787445.35 1876817.62 1970658.50 2069191.43 2172651.00
WATER
"DIURETIC"
5 HYPOSODIC 1242587.50 1304716.88 1369952.72 1438450.35 1510372.87 1585891.52 1665186.09 1748445.40
WATERS
FLAVORED
6 1508500.00 1583925.00 1663121.25 1746277.31 1833591.18 1925270.74 2021534.27 2122610.99
WATERS
$ $
TOTAL ($us) $ 6,997,850.00 $ 7,347,742.50 $ 7,715,129.63 $ 8,100,886.11 $ 8,505,930.41 $ 8,931,226.93
9,377,788.28 9,846,677.69

The above table shows the projected sales for the next eight (8) years, considering a minimum
growth of five percent (5%) per year, however, it can be modified depending on the Feasibility
Project to be carried out.

With these data, the Sales Projection is estimated in the first year of $ US 6,997,850.00 (Six
Million Nine Hundred Ninety-Seven Thousand Eight Hundred Fifty 00/100 American Dollars),
taking into account that it has been reduced by thirteen percent (13%) of taxes, and on that
result, only the sale of seventy percent (70%) of the total production was considered, the
remainder can be considered as a net surplus, which may be entered as income or it can be
considered that that production goes on to cover the needs of the most needy population as a
Social Responsibility. (Populations where drinking water is not available, orphanages, nursing

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 homes, hospitals and where they are required).

❖ RETURN ON INVESTMENT (Expressed in US Dollars)

1 2 3 4 5 6 7 8
NET
OPERATING
RESULT 2.374.117,70 2.372.757,96 2.620.865,92 2.872.814,95 2.826.436,89 4.338.605,69 4.680.758,29 5.018.876,50

INVESTMENTS
16.639.305,69 16.639.305,69 16.639.305,69 16.639.305,69 16.639.305,69 16.639.305,69 16.639.305,69 16.639.305,69
PERFORMANCE 14% 14% 16% 17% 17% 26% 28% 30%

The return on investment shows that the water bottling plant will initially have a profitability of
14%, a percentage that represents the return on investment, which in the following years would
increase, reaching a profitability in year 8 of 30%.

5.3. CITY OF SANTA CRUZ BOTTLING PLANT

For the bottling plant in the city of Santa Cruz, the income generated by sales of the different
products was projected, each one with a projection of eight (8) years, the following table shows
the possible prices to the public of each type of water that would be produced, as well as the
monthly production.

PRODUCTION PRODUCT PRESENTATION

PRODUCT LITERS/MONT
Price
H 20 (l) ($US)
20 (l) Price ($US) 20 (l) Price ($US)
PURIFIED
800.000 X 3.59 X 1
WATER
TONIC
70.000 X 4.02
WATER
MINERALIZED
400.000 X 4.02
WATER
ALKALINE
90.000 X 4.31 X 1.72
WATER
"DIURETIC"
HYPOSODIC 70.000 X 5.02 X 1.43
WATERS
FLAVORED
100.000 X 3.73 X 0.72
WATERS
TOTAL 1.530.000

As shown in the previous table per month, a total of 1,530,000 liters would be produced due
to the production capacity of the machinery that was quoted, and the demand that exists,
however, the quantities that are exposed by product would be subject to change, since they
may vary depending on the market study that would be carried out in the Feasibility Project,
thus it is also clarified that the existing competition in the city of Santa Cruz was considered,

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 therefore, production reduced in comparison to the other cities.

❖ SALES PROJECTION BY PRODUCT.

YEARS
N° PRODUCTS
1 2 3 4 5 6 7 8

1
PURIFIED 2175000.00 2283750.00 2397937.50 2517834.38 2643726.09 2775912.40 2914708.02 3060443.42
WATER
2
TONIC 252000.00 264600.00 277830.00 291721.50 306307.58 321622.95 337704.10 354589.31
WATER
MINERALIZED
3 1176000.00 1234800.00 1296540.00 1361367.00 1429435.35 1500907.12 1575952.47 1654750.10
WATER
ALKALINE
4 1890000.00 1984500.00 2083725.00 2187911.25 2297306.81 2412172.15 2532780.76 2659419.80
WATER
"DIURETIC"
5 HYPOSODIC 1440000.00 1512000.00 1587600.00 1666980.00 1750329.00 1837845.45 1929737.72 2026224.61
WATERS
FLAVORED
6 1448000.00 1520400.00 1596420.00 1676241.00 1760053.05 1848055.70 1940458.49 2037481.41
WATERS
TOTAL SALES ($us) $ 8,381,000.00 $ 8,800,050.00 $ 9,240,052.50 $ 9,702,055.13 $ 10,187,157.88 $ 10,696,515.78 $ 11,231,341.56 $ 11,792,908.64

The above table shows the projected sales for the next eight (8) years, considering a minimum
growth of five percent (5%) per year, however, it can be modified depending on the Feasibility
Project to be carried out.

With these data, the Sales Projection is estimated in the first year of $ US 8,381,000.00 (Eight
Million Three Hundred Eighty One Thousand 00/100 American Dollars), taking into account
that it has been reduced by thirteen percent (13 %) of taxes, and on that result, only the sale
of eighty percent (80%) of the total production was considered, the remainder can be
considered as a net surplus, which may be entered as income or it can be considered that this
production go on to cover the needs of the most needy population as a Social Responsibility.
(Populations where drinking water is not available, orphanages, nursing homes, hospitals and
where they are required)

❖ RETURN ON INVESTMENT (Expressed in US Dollars)

1 2 3 4 5 6 7 8
NET OPERATING
RESULT 3.050.394,92 2.984.186,59 3.202.158,58 3.475.912,19 3.420.127,94 3.883.583,81 4.211.452,74 4.530.451,08
INVESTMENTS
18.873.527,12 18.873.527,12 18.873.527,12 18.873.527,12 18.873.527,12 18.873.527,12 18.873.527,12 18.873.527,12
PERFORMANCE 16% 16% 17% 18% 18% 21% 22% 24%

The return on investment shows that the water bottling plant will initially have a profitability of
16%, a percentage that represents the return on investment, which in the following years would
increase, reaching a profitability in the year 8 to 30%.

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VI. CONCLUSIONS.

This pre-feasibility project presents favorable results for its investment and recovery, the same
that are within the production and sales parameters of bottled water of other companies in the
same category, however these projections will be confirmed or established with the Design
Study Final, where it will be possible to define, among others, the preference of future
consumers and beneficiaries, the products expected by the population, the prices of
introduction to the market, the name of the product, the sectors with the greatest demand and
greatest need, the positioning that can achieve and the time required.

Regarding the infrastructure, the Final Design Study will have the land on which the
construction will be carried out, that is, it will have the study of soils, environment, topography,
and other studies that will allow to clearly define if the budget is greater than required or is less
than projected.

In the event that the projected investment is greater, and presents surpluses, attention to other
complementary products such as the production of ice, greater production equipment, may be
considered, and these may be considered for a financial support of the plants.

It is important to note that the most disadvantageous scenarios have been presented in this
Pre-feasibility Study, which allows estimating that even in these scenarios, the Water Bottling
Plants in the departments of Santa Cruz, Cochabamba and La Paz, will be self-sustainable
and you will arrive with quality products, within reach of the neediest people.

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