HOW TO START A PURE WATER BUSINESS IN NIGERIA

Millions of Nigerians drink pure water daily throughout the 36 States and the FCT. Occasionally some very poor citizens may not even be able to afford three square meals in a day, but they would take water to compensate for the unavailability of food. Hence, the need to start a pure water business in Nigeria.

Others may have had a very busy day at work and not had time to eat, but they will endeavour to buy water since potable and hygienic drinking water is something the rich, poor, young and old need daily.

I believe every smart and intending business person should pay attention to this salient, daily growing and money-spinning industry. Although there is also bottled water in the water market, most persons, families and event planners would still prefer the budget-friendly sachet water (a.k.a pure water) primarily because it is cheap and affordable.

According to statistics from NAFDAC (National Agency for Food and Drug Administration and Control), the estimated sum realized from bottled and pure water in Nigeria reaches 8 Billion Naira daily. It’s a gaping mouth sum. I know you would love to see a good fraction of all that Naira in your bank account.

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Cost of Starting Pure Water Production Business

Depending on the kind and number of machines you want and whether you have already bought land and buildings for the factory layout, you could need between ₦4million to ₦15milion to start.

The startup capital seems large, but you could save it over time and considering the profitability at the end of the day, I believe it is worth it all. To give you an idea of how I arrived at ₦4million as the least amount of money required to start, take a quick look at this.

The estimated cost of materials needed

  • Materials Cost (₦)
  • Sealing Machine 600,000
  • Water Pump & Overhead Reservoirs 320,000
  • Industrial Generator 200,000
  • Distribution Truck 2,000,000
  • Land 1,000,000
  • Salaries 200,000
  • Nylon & Cellophanes 150,000/month

From the analysis above, you can see that the summation would amount to over a million naira. Not minding whether you already possess land or are sold for less than a million where you want to site your factory, the other expenses will run into millions.

Equipment Needed to Start a Pure Water Business in Nigeria

Every business has its peculiarities regarding materials needed, and Nigeria’s pure water business is no different. All of the materials listed below are not negligible.

  • A land or Rented room

The land is a key factor here because this particular business won’t be done online. Neither will you disassemble the machines and take them home when you close for the day. Your appliances and buildings must be fixed, and only land can guarantee that. You may decide to rent or buy the land. It is your only choice, and however, you choose, only note that land is key and must be available for this business.

  • A Registered business name

This is very important because:

 It will qualify you for the next steps of trade mark and NAFDAC registrations. It will also mean your product has a name through which it can be identified amongst the numerous varieties in the market.

Also, your company name will remain useful even after you die. It also serves to give your business legal backing.

The fee to register a business name is not very high because, according to the Corporate Affairs Commission (CAC). 10,000 Naira can register your business name.

  • Registration with NAFDAC

This would cost only ₦30,000 and is necessary because when your water is certified by NAFDAC, it gives the consumers of your product confidence in the quality of water they are buying and ensures better sales for you.

  • Water Machine

Some important machines needed for establishing your water factory are:

  • water pump
  • Boiling machine sizer
  • Overhead water tanks and water reservoirs
  • Water distiller
  • Filters
  • Ultraviolet atmospheric sterilizer.
  • It is connected to electricity or a generator.

 

  • Vehicles

You need a working transport system for the timely distribution of the produced pure water to your customers who have ordered them. Trucks, tricycles or vans could do the job, and the number of vehicles you purchase would depend not only on the quantity of water you produce but also on the number of customers you have.

  • Workers

Only one person cannot run a factory; you need to employ skilled workers to handle the machines and drive the vehicles. Also, you will need to hire semi-skilled workers who would pack the pure water in bags and tidy the factory environment. If you plan to open a very large factory layout, you may also need a manager and more administrative workers.

  • Nylon and Bags

Bags of sachet water in the factory, Nylon and bags should be bought for packaging the water into sachets, and kinds of cellophane should be purchased too for bagging the water.

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Risks in Sachet Water Production Business in Nigeria

As with all business ventures, small or great, you would very much agree with me that risk is an unavoidable part of the deal. It would therefore be wise for you to study and familiarize yourself with all the likely hazards that come with this business.

Comprehensive knowledge of what to expect will make you a better place to succeed in this competitive industry.

Unexpected Increase in cost of production

You may not have planned for it, nor will you be able to avoid it. Still, prices of production materials like nylon for packaging, diesel for the electricity generator and fuel for delivery vehicles may increase with time, depending on the economic situation.

This puts an investor in a tight spot because the corresponding price of the pure water is fixed at 10 Naira per sachet, even in such times. If such times are not well managed, there would be a loss instead of the desired profit.

Times of low patronage

Compared to the dry seasons, during the rainy seasons, there appears to be a drop in the purchase rate of pure water purchase. During such times you must reduce the quantity of water produced. Because if you still make the same amount and they are not being sold quickly enough, the pure water would lose taste and expire, leading to a huge loss.

Some manufacturers sometimes push expired and tasting water into the market to minimize losses. This may seem smart, but in the long run, it will cause your loyal customers to become dissatisfied, lose trust in your brand and earn you a huge decline in patronage. Please avoid all these by reducing production in times of low trade.

Unexpected breakdown of machines and distribution vehicles

With continued use, all machines and vehicles tend to develop with time. You may not expect it, but your engines and delivery truck may need repairs sooner than you are prepared for. An unexpected machine breakdown will hinder production and distribution, depending on how soon you can fix the fault.

Problems Facing Pure Water Business in Nigeria

In a country like ours in this present day, the challenges faced by potential investors in any business are quite numerous. I want to share with you some of the challenges faced by most potential future pure water manufacturers in Nigeria.

  • Little Capital:

Finance is the most challenging part of starting any business because almost nothing else can be put in place without it. You can do very little in the absence of the necessary fund.

As a result, you risk leaving the project halfway if you do not have the money needed to start. The machines, land, workers’ salaries and vehicles require money to be made available.

So, to prevent putting yourself in a position where you can neither go forward to production nor retreat backwards into another affordable venture, prepare adequately before you begin the pure water business in Nigeria. A loan with a moderate interest rate or savings may help with the capital.

  • Electricity:

The machines used in the pure water factory need a steady power source to work unhindered. Most devices are powered by electricity, and as we all know, power in our country is far from stable or dependable.

This means you would need a KVA power plant and an additional diesel or petrol cost to run production continuously. This is the reality faced by numerous businesses in Nigeria; therefore, acquiring a standby generator is a non-negotiable necessity.

  • Availability of other sources of water:

Some persons already have boreholes and wells in their vicinity and may not be interested in buying your pure water. This may sound defeating, but in reality, more people are willing to purchase your product. Most people buy and drink pure water during events to cater to guests and busy cities.

  • Numerous competitors:

You would not be the only one interested in this pure water venture. Many are in it already, while others will join later, causing the supply to exceed demand in most localities.

This creates a lot of work for you as you must invent more creative ways to earn and keep your customers amidst the high competition. Alternatively, if you can fund it, inquire about hard-to-reach rural communities where competition is reduced and get your water there before someone else does.

  • Personnel and vehicle maintenance:

Depending on your factory size, you will likely have workers ranging from administrators, drivers, security men and factory workers.

Whether business is good or not, your workers need to be paid. Likewise, your factory vehicles will need to be maintained. These could pose a challenge in seasons of low patronage, and your ability to manage all these in and out of season will ensure your business survives.

  • Unavailability of a hygienic source of water:

In certain areas of the country, all the water bodies are contaminated; even the underground borehole water is polluted with metallic deposits of contaminants like Iron and Sulfur. Within such localities, a business person must ensure that he finds ways to purify the water or forget the venture altogether.

Profitability of Sachet Water Production in Nigeria

As I mentioned, this is a very lucrative business because everybody drinks water daily, giving you a readily available market to invest in. In some places, a bag of pure water containing 20 sachets is sold for 150 Naira or 200 Naira.

Assuming you can sell 600 bags daily, you would earn 90,000 Naira daily and turn over a total of 2.7milion Naira monthly, right? I would want you to also keep in mind that the cost of running operations would be subtracted from your total sale; therefore, as much as possible, you must reduce your running cost to enable you to enjoy a robust profit.

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Conclusion

Despite the many challenges in the business, the pure water business in Nigeria remains very profitable; all it entails is effective management. The purified water market remains very large and competitive. Therefore you must also be willing to work hard to impress and retain your customers consistently.