Pakistan

How to Start Mineral Water Bottling Business in Pakistan

The market for mineral water has been showing a mushroom growth trend over the last few years due to the increasing population in a country, less availability of clean drinking water in majority of areas and awareness of hygiene with respect to drinking water. The demand for mineral water is constantly rising and there are a number of local manufacturers producing good quality mineral water bottles. The consumers are becoming increasingly quality conscious and seek products offering value for money. This trend has led to strong growth in mineral water bottling plant all across Pakistan. The focus of the business would be to provide clean, hygienic and drinkable water.

Pakistan has an estimated population of more than 189 million, due to this increase in population, demand of pure drinking water has increased. Most of our population is facing the problem of drinking water shortage. This further integrates the demand for pure drinking water. This business can be set-up in any major city with significant population such as Karachi, Hyderabad, Lahore, Rawalpindi, Islamabad, Multan, Peshawar and Quetta.

The potential markets for bottled / mineral water consist of Households, Hotel Industry, Hospitals, Offices, Homes, Educational Institutions, Commercial Markets and Hygiene conscious people. Moreover the bottled / mineral water has been emerging as a daily preference of Upper, Middle & Lower Middle Class due to unavailability of clean/pure drinking water.

Sources of Water for Bottling in Pakistan

Three sources of water can be used for purification purposes on commercial basis.

  • Ground/Boring Water
  • Water Supply from KWSB (in Karachi), WASA (in Lahore), CDA (in Islamabad) etc
  • Through Hydrants/Tankers

This article focuses on Ground/Boring Water as source of water. Initially, we recommend Resistivity or Geological survey at particular plant location, which consists of four tests and will cost Rs. 70,000.This Resistivity survey report will identify the TDS (Total Dissolved Solids), time period for the availability of boring water at particular depth and feasibility of chemical and microbiological composition of ground/boring water which will be more helpful for this project.

This article has been designed for a water purification plant with a capacity of 100,000 gallons per day. The product consists of 19 liters bottles only.

Purification of Water for Bottling

The process of purified bottled water manufacturing consist of collecting water from a suitable source, filtration, demineralization, blending with salts, aeration, testing for standards conformation, bottling and then packaging. Before 2010 much of the mineral water was being imported. But today the demand is being met by local producers / suppliers. According to PSQCA, there are 111 registered / licensed brands available in the market thus showing a substantial growth by the industry. Other than registered brands it is estimated that there are hundreds of unregistered brands being supplied in the market.

How Mineral Water Bottle is Produced in Pakistan (9 Steps)

  1. The first step for setting up a water purification plant is the analysis of source of water. After the chemical analysis, the specifications of the purification plant are set.
  2. In the purification plant, source water is stored into the feed water tank, passes through the sand filter for preliminary water filtration.
  3. Water then passes through the dosing pump-I where chlorine is added to kill the germs in the water.
  4. After the chlorination process, water passes through carbon filter. It helps in the maintenance of proper odor and taste of the water. It also removes chlorine from water.
  5. Water then passes through dosing pump-II, where Sodium Meta Bisulphate is added. It helps in dechlorination of water.
  6. Water is filtered next, it passes through dosing pump-III, where anti scallant is added. It prevents scaling of membrane from calcium, magnesium and biological growth.
  7. Water then passes through reverse osmosis module. This stage of the process makes water clear from all the contamination and minute particles.
  8. Water then passes through dosing pump-IV, where minerals are added for taste development. After this stage, water undergoes Ultra Violet treatment to avoid any contamination from bacteria and other microorganisms.
  9. Water then passes through automatic washing, filling and capping plant. Here water is filled into bottles.

After filling, bottles are taken into the warehouse or shipped to the retailers.

Requirements for Packaging of Bottled Mineral Water in Pakistan

Product packaging and presentation is one of the main dynamics, which control the flow of target customers towards the product. Packaging should be in line with the industrial norms. Packaging may also vary with the understanding of the target market. It is suggested that the bottles of 19 liters capacity should be used. Bottles should be clear. The bottle should give a reflection of light sky blue color, which is considered a natural symbol of the water. This color also adds a tinge of purity. The water should give a shiny and a glossy reflection. The bottles should be placed in special racks and strand meant for bottled water at retail outlets, which will be having a unique color and a unique design. The color and the design will create a positive perception for the new brand. The lamination on the bottle is suggested to be on four-color printing and should have the following information in addition to the logo of the company.

  1. Water Specification
  2. Certificate mark of the Pakistan Standards & Quality Control Authority
  3. Expiry Date (Best Before Date)
  4. A brief intro of the company with the address
  5. Website address of the company
  6. Brand Name / Trade Name
  7. Net volume in System International / Metric system
  8. Batch number or code number

How to Set Pricing of Mineral Water Bottle in Pakistan

The pricing strategy should be in line with the going rate market prices of the different local brands. Since a new brand has to face a lot of competition from the market, it is suggested that the price strategy should be according to the market competition. Suggested price is Rs.110 for 19 Gallon Bottle however different brands are available at Rs. 50 to 250 with respect to their brand positioning and consumers perception.

The weather is the main dynamic that may bring changes in the market size of the purified drinking water as the daily water requirement increases in summer. When launching a new brand of purified water for bulk market, weather is the main dynamic and should be given proper consideration. The demand pattern for retail market of purified bottled water is not affected by the weather. However, it is suggested that the new brand of purified bottled water is launched in the start of summer season. The Investor have to match the brand launching time with the advertisement and weather that would drive the demand of bottled water and willingness of consumers to switch towards new brand.

Machinery for Mineral Water Bottling in Pakistan

Most of the water purification plants being installed in the country are Reverse Osmosis based. Government also recommends RO based technology. This article is based on Reverse Osmosis technology. Most of the machinery is imported from China, Taiwan, Italy and Germany along with some local components.

Details can be found at machinery for water bottling in Pakistan. It is advisable to evaluate the associated risk factors by taking into consideration of certain key elements. For establishing water purification plant critical factors that should be considered before launching are described below:

  • The market for purified bottled / mineral water is a growing market, but offers tough competition.
  • Perception / positioning of the new brand. Usually the top target markets for bottled mineral water follows the perception. If the perception is positive, the results will be higher sales. The positive perception for distributors and final customers may result from direct consumer experience, awareness, direct promotional activities, print media and cable advertisement.
  • Distribution is very important for the success of new brand. The stronger the distribution the more successful will be the new brand. The distribution strategy should be designed after a careful study of the market for going for regional distribution or for nationwide distribution.
  • Pre-launch advertising is vital for positive perception of the product, which will result in higher product acceptance.
  • Compliance of the water quality standards of (PSQCA) Pakistan Standards & Quality Control Authority and license from the authority.
  • Availability of product at A class, B class or C class shops should be decided before launching the product and availability should be persistent.

Required Investment for Mineral Water Bottling Business in Pakistan

This proposed project presents an investment opportunity for establishing a Mineral Water Processing Plant with a capacity of 100,000 gallons per day. The proposed product line will consist of 19 liters bottles. Total utilized production capacity of purified bottled water is 875,368 bottles per year, where initial capacity utilization will be 40%. The total project cost for setting up a Mineral Water Processing Unit in Pakistan is estimated at Rs. 106.41 million out of which Rs. 100.48 million is capital cost and Rs. 5.92 million is working capital. The project is proposed to be financed through 100% equity. The NPV is projected around Rs. 89.96 million, with an IRR of 41% and a Payback Period of 3.29 years. Detail financial can be studied in the pre-feasibility study of mineral water business in Pakistan by SMEAD.

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