PACKAGED DRINKING WATER

PRODUCT CODE : 11043 (NIC Code)

PRODUCTION CAPACITY : 40 LAKHS LITERS (Per Annum)

ESTIMATED ANNUAL : Rs. 3,20,00,000/-

TURNOVER

PROJECT COST : Rs. 1,67,00,000/-

Fixed Capital – Rs. 1,05,03,070/-
Working Capital – Rs. 61,86,000/-

MONTH AND YEAR OF : February, 2021

PREPARATION

PREPARED BY Smt.Rekha.K
Investigator (Chemical)
MSME-Development Institute
Govt of India, Kanjani Road,
Ayyanthole P:O, Thrissur-680003
Tel: 0487-2360536; 0487-2973636,
Email- dcdi-
[email protected]

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1. INTRODUCTION
Water forms an essential part of every human being. Since it is a human
necessity it makes best sense to do business in. As a normal human being requires
an average of 2-3 liters of water every day and world population is more than one
billion (growing at 2-3% annually) the business opportunity is enormous and the
potential is largely untapped.

Increasing health concerns and unavailability of clean drinking water have

led to the growth of the bottled water market in India. The major bottled water
brands operating in India are Bislery, Kinley, and Aquafina.

In India, bottled water is sold in four main types - one-liter bottles, two-liter
bottles, 500 milliliter bottles, 250 milliliter bottles, pouches, and barrels of 15-20 liters.
Among the different SKUs, one-liter bottles have acquired the largest market share,
followed by 500 milliliter bottles and 250 milliliter bottles.

The bottled water industry in India, which was growing at double digits, has
now hit a roadblock due to Covid-19 as sales in offices, hotels and travel remain
restricted across the country.The sales volumes became down by 70% compared to
Pre-Covid months. Shutting down of low-end restaurants; sparse traffic on
highways and lack of public functions and business-related conferences — that
account for major consumption of smaller packs, including the 250ml ones — are the
other main factors that are hurting the industry.

2. MARKET POTENTIAL
Earlier bottled drinking water was privileged to high class, foreign tourist and
highly health conscious people but the present decade has witnessed increasing
popularity among average consumers, increasing leaving standards, disposable
income, education and awareness among the consumers domestic and foreign
tourist, sophisticated business houses and offices has increased rapidly the sales of
bottled water in recent years.

The growing demand for bottled water speaks volumes of the scarcity of
clean drinking water and the quality of tap water. It has become an icon of healthy
lifestyle emerging in India. Bottled water provides the distance advantages of
convenient packing, consistent quality and is ubiquitous.

According to Bureau of Indian Standards (BIS), Kochi, the office has issued
licenses for 202 units for setting up Packaged Drinking Water units in the State of
Kerala.

While away-from-home consumption in channels like travel, restaurants,

entertainment and hospitality may take a little longer to come back to normal, at-

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home consumption is robust and growing, especially bulk jars in the packaged
drinking water segment,

According to the Trade Promotion Council of India, the packaged drinking

water bottle market in India was valued at $24 billion in 2019, and was expected to
reach $60 billion by the end of 2023. However, this segment — 80% of which is
unorganized — could see de-growth of over 30% due to the pandemic. Brands such
as Bisleri, Aquafina and Bailley are adopting the direct-to-consumer model, by
launching their own online platforms or tying up with delivery apps. Bisleri, for
instance, has launched its own website, and is also taking orders for delivery
through its customer care number.
Bisleri International, has tied up with Zomato, Dunzo, Big Basket
and Amazon for delivery, and offline, it has ramped up its presence at pharma and
milk shops. Parle Agro’sBailley, which had started delivering 20 litre jars through
online channels during the lockdown months, is now looking at “aggressively”
expanding it. Most of these companies have also tied up with the micro delivery app
for delivery of water to residential areas. Fake packaged drinking water has been a
challenge for this category, given that it’s largely unorganized. However, in the
current scenario, consumers are even more cautious. Due to the pandemic,
consumers are keen on directly sourcing bottles from the companies.

3. BASIS AND PRESUMPTIONS

i. It is presumed that the unit will run single shift of 8 hours per day and 300
days in a year.
ii. The rate of interest has been taken 13% on an average both for fixed
investment and working capital.
iii. To achieve full production 1 to 2 months trial production required.
iv. The salaries and wages, cost of raw material, utilities, rent of the shed etc. are
based on prevailing rates in and around local region at the time of
preparation and are subject to necessary changes from time to time based on
local conditions.
v. The project preparation cost and non-refundable deposits may be considered
under the head of pre-operative expenses.

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4. IMPLEMENTATION SCHEDULE
The approximate time required for various activities is given below.
However, it may vary from place to place depending upon the local circumstances
and enthusiasm of the entrepreneur:
Period
S. No. Activity
(in Months)
1. Scheme Preparation and Approval 0-1st Month
2. Sanction of loan 1st-2nd Month
3. Clearance from State Pollution Control Board 2nd-3rdMonth
4. Placement of order for machinery and delivery 3rd-4th Month
5. Installation of machines& Power connection 4th-5th Month
6. Trial Run 6th- 7thMonth
7. Commercial Production 8th Month onwards
Due to overlapping of some activities, normally 6-8 months are required to
implement the project.

5. TECHNICAL ASPECTS
5.1. Process of Manufacturing
The water is processed with multi stage purification processes such as – sand
filter, activated carbon filter, ultraviolet disinfection, ultra filtration, Reverse
Osmosis and Ozonization.

Sand filter Eliminates load of total suspended solids in

the raw water
Activated carbon filter This filter removes most of the organic
contamination and pesticide residuals from the
water. It also controls taste and odor of water
Ultraviolet disinfection (UV) Water is exposed to UV light of wavelength
245 nanometers (nm). A dosage of 16000
microwatt/sq.cm at 40˚ C for effective
disinfection
Ultra filtration A low pressure membrane process that
removes dissolved organic macro molecules,
viruses, pyrogen enzymes etc.
Reverse Osmosis This process eliminates dissolved impurities
like unwanted salts and retain minerals which
are essential to human body
Ozonization This is the strongest oxidizer and disinfection
agent which acts on broad spectrum of
microbiological organisms.
Filtration This pumps water through a microscopic filter
that is rated for a certain size organism. The
standard size rating is the micron
Capacity flow rate 1100 lit/hour

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Raw water quality (assumed) 1000 ppm as TDS
Motive power 1KW

5.2. Quality Control and Standards

BIS Standard (IS: 14543: 2016) & FSSAI License

5.3. Production Capacity

The unit is proposed to produce 40 lakh liters of packaged drinking water per
annum.

5.4. Pollution Control

There is no major pollution problem associated with this industry except for
disposal of waste water which should be managed appropriately. The entrepreneurs
are advised to take “No Objection Certificate” from the State Pollution Control
Board.

5.5. Energy Conservation

Suitable measures should be used for the appropriate use of electricity.

5.6. Motive Power Requirement

50 HP

5.7. Machinery Utilization

The capacity utilization is considered to be 80% of the total installed capacity.

6. FINANCIAL ASPECT
6.1. Fixed Capital
6.1.1. Land &Building:
Sl.No Description Amount (in Rs)
1 Land 0.5 acres 3,00,000/-
2 Built up area required for filtration, raw material 55,00,000/-
storage, packaging material storage, machinery spare
parts, store, finished goods, office, QC lab, Toilets,
Electrical switch room and miscellaneous etc. 6500
sq.ft. @Rs.800 per sq. ft.
Total 58,00,000/-

6.1.2. Machinery and Equipment’s

Sl. No. Description Quantity (in Value (in Rs.)
numbers)
1. Alum doses 3 liter/hr dosage 1
2. 2 nos. pump (1 W +IS) (SS) 1
3. Activated carbon filter flow rate 1
2000 lit/hr

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4. Pressure sand filter flow rate:2000 1
lit./hr 17,18,200/-
5. Softener 1
6. Reverse Osmosis system permeate
flow 500 lit/hr consist of 5 micron
filter SS-304 PP H.P. Pump with 3
HP Motor Membrane 4 nos.
7. Pressure vessel 4
8. Ozone generator 1
Capacity – 1 gm/hr
Flow rate – 1100 lit/hr
9. UV disinfectant flow rate-1100 lit/hr 1
10. Storage tank for pure water capacity
:1100lit
Bottling section
11. Stainless Steel Conveyor: 1 16,50,000/-
Made of S.S, 8 meter long for
conveying of empty washed bottles
onto the filling machine.
The different operations like rinsing,
filling, capping are done on the
conveyor.
Electrical Details: 0.5 H.P. with
variable speed drive..
12. Rinsing, Filling, Capping: 1
This machine is designed to fill 24
bottles per minute for 1 ltr bottle &
is capable to fill 500 ml, 1000 ml,
1500 ml bottles. Machine speed is
depended on the volume to be filled.
The bottles are holded in groups of 6
& moved on the conveyor together.
These grouped bottles are rinsed by
means of spraying pressurized
water inside the bottle.
After rinsing the bottles are again
placed on the conveyor & are loaded
on the filling & capping machine
one by one.
Filling & capping takes place by
indexing mechanism. There are total
8 indexes.
13. Change parts for 500 ml and 1500 ml 1 set each
1 set each
Spare for item 2 for 2 years
14. Shrink Tunnel: 1
This is fitted on the online conveyor
to shrink labels and neck sleeves. 2,25,500/-

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 The labels & neck sleeves are to be
manually inserted on the bottle.
Machine will be provided with
suitable capacity Heaters, Blower,
Reduction Gear Box and Electric
Motor, complete in all respects
ready to use.
15. Printing Machine ( for mfg. Date & 1
batch nos.)
Semiautomatic machine is
proposed. This is a table top coding
machine with a printing area of 35
mm x 25 mm & capable of printing 3
variable line message on labels or
caps.
Electrification and installation 3,59,370/-
charges @ 10% of plant and
machinery
Total 39,53,070/-

6.1.3 Other fixed Assets

Sl.No Description Amount (in Rs)
1 Cost of furniture 50,000/-
2 Cost of deep bore tube well for water 1,50,000/-
reservoirs
3 Security deposit to Electricity Deptt. 1,00,000/-
4 Preliminary and pre-operative expenses 1,00,000/-
5 Delivery van 3,50,000/-
Total 7,50,000/-
Total Fixed Cost

Sl.No Description Amount (in Rs)

1. Land and building 58,00,000/-
2. Plant and machinery 39,53,070/-
3. Other fixed assets 7,50,000/-
Total 1,05,03,070/-

6.2.Working Capital (per annum)

6.2.1 Raw material

Sl.No Description Amount (in Rs)

1 PET/PVC bottle including cap labels etc. 1 lit 12,00,000/-
size @ 3/- for 4 lakh bottles
2 Chemicals and Reagents etc. (L.S.) 50,000/-
3 Corrugated boxes, strips tap etc. 2,50,000/-
Total 15,00,000/-

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6.2.2 Salary and Wages Designation

Sl. Designation No. Salary Amount (in Rs)

No. (in Rs)
1. Factory Manager 1 10,000/- 10,000/-
2. Clerk-cum Typist 1 10,000/- 10,000/-
3. Store cum purchase 1 10,000/- 10,000/-
officer
4. Sweeper 1 8,000/- 8,000/-
5. Production Manager 1 15,000/- 15,000/-
6. Lab Assistant 1 8,000/- 8,000/-
7. Skilled worker 3 7,000/- 21,000/-
8. Unskilled worker 3 4,500/- 13,500/-
Total 95,500/-
Perks and benefits @ 8.5% of salary and wages 8,117/-
Total say 1,03,617/-

6.2.3 Utilities

Sl.No Description Amount (in Rs)

1. Electricity 50,000/-
2. Fuels and others 20,000/-
Total 70,000/-

6.2.4 Other contingent expenses

Sl.No Description Amount (in Rs)

1. Postage and stationery 5,00/-
2. Telephone/Fax charges 5,000/-
3. Consumable stores 1,000/-
4. Repairing and maintenance @ 10% 3,59,370/-
5. Transport Charges 2,500/-
6. Advertisement and Publicity 5,000/-
7. Insurance & Taxes 5,000/-
8. Other Expenses 10,000/-
Total 3,88,370/-

6.2.5 Working capital per month

Sl.No Description Amount (in Rs)

1. Raw material 15,00,000/-
2. Salaries & wages 1,03,617/-
3. Utilities 70,000/-
4. Other contingent expenses 3,88,370/-
Total 20,61,987/-
Say 20,62,000/-

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6.3 Total Capital Investment

Sl.No Description Amount (in Rs)

1. Fixed assets 1,05,03,070/-
2. Working capital (for 3 months) 61,86,000/-
Total 1,66,89,070/-
Say 1,67,00,000/-

7. FINANCIAL ANALYSIS

7.1. Cost of Production (per annum)

Sl.No Description Amount (in Rs)
1. Working capital (for 1 year) 2,47,44,000/-
2. Depreciation on building @ 5% p.a. 2,60,000/-
3. Depreciation on plant and machinery @ 3,59,370/-
10%
4. Depreciation on furniture @ 20% 1,60,000/-
5. Interest on TCI @ 13% 21,71,000/-
Total 2,76,94,370/-

7.2.Turnover (per annum)

Sl.No Description Amount (in Rs)

1. By sale of 40 lakh bottles @ Rs. 8 /- bottle 3,20,00,000/-

Cost of producing 1 litre bottled drinking water

Cap cost Rs.0.50

Bottle Cost Rs.2.50-Rs.3.00
Treatment Cost Rs.0.25-0.50
Label cost Rs.0.25-0.50
Carton Cost Rs.1.00
Transportation Cost Rs.0.25-0.50
Others Rs.0.50
Total Cost (excluding labor, marketing Rs.5.25-6.00
and tax)
Selling cost by manufacturer Rs.8/- per bottle

The costs are indicative only and even estimated in some heads and not absolute.Bottled
drinking water in Kerala cost Rs 13/liter (maximum retail price) as packaged water is
brought under the ambit of the Essential Commodities Act with a view to regulates
its price.

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7.3.Net Profit (per annum)

Sl.No Description Amount (in Rs)

1. Profit = Turnover- Cost of production 43,05,630/-
ie; 3,20,00,000 – 2,76,94,370

7.4.Net Profit Ratio

Sl.No Description Value (in %)
1. Net Profit ratio = Profit x 100 / Turnover 13.45
ie; 43,05,630 x 100 / 3,20,00,000

7.5.Rate of Return
Sl.No Description Value (in %)
1. Rate of return = Profit x 100 / Total capital 25.78
investment
ie; 43,05,630 x 100 / 1,67,00,000

7.6 Fixed Cost

Sl.No Description Amount (in Rs)

1. Depreciation on building @ 5% p.a. 2,60,000/-
2. Depreciation on plant and machinery @10% 3,59,370/-
3. Depreciation on furniture @20% 1,60,000/-
4. 40% of salary and wages 4,97,361/-
5. 40% utilities and other expenses 22,00,176/-
6. Total interest 21,71,000/-
7. Tax and insurance 60,000/-
Total 57,07,907/-

7.6.Break-even Point
Sl.No Description Value (in %)
1. Break-Even point = Fixed cost x 100 / Fixed 57.00
cost + Profit

ie; 57,07,907 x 100 / 57,07,907+ 43,05,630

= 57,07,90,700 / 1,00,13,537/-

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Addresses Of Machinery Suppliers

1. MR VINOD D
V-TECH WATER TECHNOLOGIES (I) PVT LTD
NO 10, NEAR LIONS CLUB KALYANAMANDAPAM,
VALLUVAR STREET,SIVANANDHA COLONY,
GANDHIPURAM,
COIMBATORE – 641012
TEL: +(91)-(422)-4213005 , +(91)-9842424499 FAX: +(91)-(422)-
2493736 EMAIL: [email protected]
[email protected]

2. I - TECH SYSTEMS
473, C. S. R. BUILDING, BROUGH ROAD, ERODE - 638 001,
INDIA
PHONE: +(91)-(424)-2265188/2260238 FAX: +(91)-(424)-
4020098
MOBILE / CELL PHONE: +(91)-9787778888
WEBSITE: HTTP://WWW.THEWATERMILLS.COM/

3. GEORGE V. THOMAS (CEO)

TOOL TECH
31-100, NANDA NAGAR, I. D. A., GANDHI NAGAR,
BALANAGAR, HYDERABAD - 500037, TELANGANA
TEL: 08048765172; WEBSITE-
HTTPS://WWW.TOOLTECHINDIA.IN/

4. INNOVATIVE SOLUTIONS FOR WATER TREATMENT

ADDRESS: 4-4-70/46, KOUNDINYA NAGAR, NACHARAM,
RANGAREDDY - 501507, HYDERABAD - 500 076, INDIA
MOBILE / CELL PHONE: +(91)-9885655133/9848655133
WEBSITE: HTTP://WWW.INDIAMART.COM/INNOVATIVE-
SOLUTIONS/

5. M/S. ENVIRO TECH UTILITY,

32A, MAIN PATEL ROAD,
OPPOSITE WINGS SHOW ROOM,
WEST PATEL NAGAR,
NEW DELHI-110 008

6. M/S. WATRION WATER AND FILTER ENGG. PVT. LTD.

1 HARSIVAN APARTMENT, GROUND
FLOOR, (BEHIND CANARA BANK),
WEST J.P. ROAD, ANDHERI (WEST),
P.B. NO. 7372,
MUMBAI-700 059

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7. M/S. RITAL AGENCIES
55 III MAIN ROAD, GANDHI NAGAR,
CHENNAI-700 020

8. M/S. ION EXCHANGE INDIA LTD.

TICCON HOUSE,
DR. E. HOUSES ROAD,
MAHALAXMI,
MUMBAI-400 011

M/S. ALPHA ENGINEERING

158, POCKET-E-20, SECTOR-II,
ROHINI, DELHI-110 085

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