Mineral water is preferred by the majority of the urban population. Health and hygiene are top priority among most city residents, and, therefore, a mineral water business has good market potential. However, several aspects are involved in starting and running a mineral water business. Producing high quality mineral water, selecting the most appropriate location, and setting up an accurate price for your brand are key concerns. A good plan for a mineral water business must incorporate all information pertaining to strategic direction for marketing, finances, human resources, legal concerns, and the overall management of the mineral water business.
The two categories of bottled water available in the market are packaged water and mineral water. While mineral water is produced from mountain springs, packaged water is produced from sources such as groundwater or bore well water. Before starting, you must define the type of water you are going to produce in your purification plant.
Basic Purification Plant Infrastructure
A small scale mineral water plant requires 1000 square feet space for setting up its infrastructure. As per basic regulatory mandates, 500 square feet of covered space and 500 square feet of open area is required for setting up a mineral water plant. The cost of the plant also depends on the type of packaging facility required in the business plan. Further, packaged water generally comes in pouches, bottles of 500 ml, 1 liter, 2 liter, 5 liter, and 20 liter cans. Overall costs are also dependent on the type of packaging chosen for the final product. Lastly, the nature of the facility must be chosen, which is either fully automatic or semi-automatic.
An operational mineral water plant requires different types of equipment including an ozone generator, micron filters, activated carbon filter, and reverse osmosis system. Further, an alum treatment tank, sand filter, chlorination tank, ultraviolet disinfectant system, water collection tanks, shrink wrapping machine, and laboratory and quality control instruments are mandatory in most cases.
A range of documents are required to successfully register a mineral water business in India. The basic document required is the SSI registration which is mandatory for any small scale industry in India. The authority which may be helpful in this regard is the District Industries Center. An ISI mark certificate from the BIS registration is a mandatory standard required for packaged drinking water. The other important documents include pollution control and pest control certificates, test reports for raw and pure water, and professional verification for chemist, microbiologist, as well as medical certificate for workers in the mineral water plant.
Costs Associated with Setting up a Mineral Water Plant
The costs associated with mineral water plants include government licensing, ISI consultation, engineering, construction, and utility costs. Plant size is the major factor which determines plant costing. Another important class of costs is the maintenance costs. The machinery and equipment costs can be classified under utility costs including water and electricity, liaison expenses such as ISI and government license, consultancy charges, and building costs.
A typical facility requires an investment of INR 60-70 lakh for plant and machinery, about INR 40-50 lakh in the form of working capital, and a total investment of INR 170 lakh. This type of facility promises about 30-35% return on investment.
Risk Factors Related to Running a Purification Plant
Some of the risk factors associated with successfully starting and running a mineral water business include failure to execute tasks on time, which results in losses, and improper co-ordination. These factors result in a delay in execution, lack of proper documentation, improper or inadequate delegation, and a failure to accomplish tasks efficiently through parallel execution. Key areas which pose risks to business include improper market research, incorrect product mix, improper selection of infrastructure, plant layout, and an inappropriately drafted execution plan.
To sum it all up, this basic information on costs, infrastructure and documentation serves as a starting point to make viable adjustments to the final business plan. In the end, a successful business requires customization to reflect the regulatory and environmental factors applicable to that particular state.