On a daily basis all over the 36 States and the FCT, millions of Nigerians drinks pure water. 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 their places of work and not had time to eat but they will endeavor to buy water to drink. Since potable and hygienic drinking water is something that the rich, poor, young and old need on a daily basis.
I believe every smart and intending business man should pay attention to this salient, daily growing and money-spinning industry. Although there are 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 mouth gaping sum, right? I know you would love to see a good fraction of all that Naira in your bank account.
Cost of Starting Pure Water Production Business
Depending on the kind and number of machines you would want and weather you 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 off take a quick look at this.
Estimated cost of materials needed
|Water Pump & Overhead Reservoirs||320,000|
|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 a land or it is sold for less than a million where you want to site your factory, the other expenses are still obviously going to run into millions.
Equipment Needed to Start a Pure Water Business in Nigeria
Every business has its peculiarities when it comes to materials needed and pure water business in Nigeria is no different. All of the materials listed below are not negligible.
A land or Rented room
A land is a very 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 machines and buildings need to be fixed and only a land can guarantee that. You may decide to rent or buy the land it is your exclusive choice and however way you decide, 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 continually useful even after you have died.
- It also serves to give your business a 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.
Some important machines needed for establishing your water factory are
- water pump
- Boiling machineonizer
- Overhead water tanks and water reservoirs
- Water distiller
- Ultraviolet atmospheric sterilizer.
- Connected electricity or generator.
For the timely distribution of the produced pure water to your customers who have ordered for them you need a working transport system. 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 quantity of customers you have.
Only one person cannot run a factory, you will 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 are planning to open a very large factory layout, you may also need a manager and more administrative workers.
Nylon and Bags
Nylon and bags should be bought for packaging the water into sachets and cellophanes should be bought too for bagging the water.
Risks in Sachet Water Production Business in Nigeria
As it is 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.
A total knowledge of what to expect will set you at a better plane to succeed in this competitive industry.
- Unexpected Increase in cost of production
You may not have planned for it and neither will you be able to avoid it but 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 per time.
This puts an investor at 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
As compared to in the dry seasons, during the rainy seasons, there appears to be a drop in the rate of purchase of pure water. During such times you must reduce the quantity of water produced. Because if you still produce 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 would sometimes push the expired and awfully tasting water into the market to minimize their losses. This may seem smart but on 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. It would be better if you avoid all these by reducing production in times of low patronage.
- Unexpected breakdown of machines and distribution vehicles
With continued use all machines and vehicles tend to develop faults with time. You may not be expecting it but your machines and delivery truck may need repairs sooner than you are prepared for. An unexpected breakdown in machines will hinder production and distribution for a period of time 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 would want to share with you some of the challenges faced by most potential future pure water manufacturers in Nigeria.
Finance is the most challenging part of starting up any business because without it almost nothing else can be put in place. You can do very little in the absence of the necessary fund.
As a result, if you do not have the needed amount of money to start, then you are at the risk of leaving the project half way. The machines, land, salaries of workers and vehicles all require money to be made available.
So, to prevent putting yourself in a position where you can neither go forward to production nor retreat backward into another affordable venture prepare adequately before you begin the pure water business in Nigeria. Taking a loan with moderate interest rate or saving may help with the capital.
The machines that are used in the pure water factory need a steady source of power to work unhindered. Most of the machines are powered by electricity and as we all know power in our country is far from stable or dependable.
This means that you would need a KVA power plant and an extra added cost of diesel or petrol to run production continuously. This is the reality faced by numerous businesses in Nigeria; therefore acquiring a stand by 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 there is in reality a greater number of persons willing to purchase your product. During events to cater for guests and in busy cities most persons buy and drink pure water.
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 whole lot of work for you as you have to invent more creative ways to earn and keep your own customers amidst the high competition. Alternatively, if you can fund it inquire of hard to reach rural communities where competition is reduced and get your water there before someone else does.
Personnel and vehicle maintenance:
Depending on how big your factory is, you will likely have workers ranging from: administrators, drivers, security men and factory workers.
Whether business is good or not your workers would need to be paid. Likewise, your factory vehicles, they 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 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 businessman would need to ensure that he find ways to purify the water or forget the venture all together.
Profitability of Sachet Water Production in Nigeria
Like I earlier mentioned, this is a very lucrative business because everybody drinks water daily, giving you a readily available market to invest in. A bag of pure water containing 20 sachets is sold 150 Naira or 200 Naira in some places.
Assuming you are able to sell 600 bags daily you would earn 90,000 Naira daily and turn over a total of 2.7milion Naira monthly, not bad right? I would want you to also keep in mind that 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 enjoy a robust profit.
Despite the many challenges there are in the business, pure water business in Nigeria remains very profitable, all it entails is effective management. The pure water market remains very large and competitive therefore you must also be willing to work hard to consistently impress and retain your customers.