Pure Water Business Plan in Nigeria

Executive Summary

AquaPure Ventures Ltd. is a pure water production and distribution business based in Port Harcourt, Rivers State, Nigeria, specializing in the production and sale of high-quality, purified sachet and bottled water. With Nigeria’s bottled water market valued at over $2 billion and driven by increasing demand for safe drinking water, AquaPure aims to provide affordable, hygienic water to households, retailers, and institutions. The company will leverage modern purification technology and efficient distribution networks to capture market share in the South-South region, targeting a leading position within five years.

Objectives

• Achieve ₦60 million in annual revenue by the end of year two.
• Produce and distribute 2 million sachets and 500,000 bottles annually by year two.
• Capture 10% of the Port Harcourt pure water market within three years.
• Expand distribution to three additional states (Akwa Ibom, Bayelsa, Delta) by year four.
• Maintain a 25% profit margin through efficient operations and cost management.

Mission

AquaPure Ventures Ltd. is dedicated to providing safe, affordable, and high-quality drinking water to Nigerian communities, promoting health and supporting local economic growth through sustainable practices.

Keys to Success

• Consistent production of safe, high-quality purified water.
• Strong partnerships with retailers and distributors.
• Efficient logistics for timely delivery.
• Robust marketing to build brand trust.
• Compliance with NAFDAC and other regulatory standards.

Company Summary

AquaPure Ventures Ltd. is a pure water production company operating a modern facility in Port Harcourt. The company will produce sachet and bottled water using advanced purification systems, targeting households, retailers, and institutions like schools and hospitals. AquaPure aims to address the critical need for clean drinking water while reducing reliance on unregulated water sources.

Official Website: www.aquapureventures.com (Note: This is a hypothetical website for the purpose of this plan)

Address: Plot 8, Trans-Amadi Industrial Layout, Port Harcourt, Rivers State, Nigeria

Social Media Accounts:

• Twitter: @AquaPureNG
• Instagram: @aquapureventures
• Facebook: AquaPure Ventures Ltd.
• LinkedIn: AquaPure Ventures Ltd.

Founder and Owner: Ngozi Okonkwo, an entrepreneur with 8 years of experience in water treatment and distribution. Ngozi has worked with water purification projects and has strong connections with local retailers and regulatory bodies.

Company Ownership

AquaPure Ventures Ltd. is a privately owned limited liability company, with 65% ownership by Ngozi Okonkwo and 35% by two private investors.

Start-up Summary

The start-up phase requires ₦80,000,000 to cover equipment, facility setup, raw material procurement, and initial marketing. Funding will be secured through owner equity, a bank loan, and investor contributions.

Start-up Requirements

• Start-up Expenses:
  • Legal and registration fees: ₦600,000
  • NAFDAC certification and compliance: ₦1,500,000
  • Marketing and branding: ₦1,800,000
  • Facility lease (first year): ₦2,500,000
  • Office setup and utilities: ₦1,200,000
  • Website and software development: ₦1,000,000
  • Total Start-up Expenses: ₦8,600,000
• Start-up Assets:
  • Water purification and packaging equipment: ₦50,000,000
  • Initial raw materials (sachets, bottles, water): ₦10,000,000
  • Delivery vans (2 units): ₦8,000,000
  • Cash reserve for operations: ₦3,400,000
  • Total Start-up Assets: ₦71,400,000

Start-up Funding

• Owner’s equity (Ngozi Okonkwo): ₦30,000,000
• Bank loan: ₦40,000,000
• Investor contributions: ₦10,000,000
• Total Funding: ₦80,000,000

Liabilities and Capital

• Liabilities:
  • Bank loan: ₦40,000,000 (6-year term at 14% interest)
  • Accounts payable (suppliers): ₦3,000,000
  • Total Liabilities: ₦43,000,000
• Capital:
  • Owner’s equity: ₦30,000,000
  • Investor equity: ₦10,000,000
  • Total Capital: ₦40,000,000
• Total Liabilities and Capital: ₦83,000,000

Company Locations and Facilities

The main production facility and office will be located at Plot 8, Trans-Amadi Industrial Layout, Port Harcourt, a strategic industrial hub with access to markets and transport routes. The facility includes a 2,000-square-meter factory for water purification and packaging, a 500-square-meter warehouse, and an administrative office.

Service Description

AquaPure Ventures Ltd. offers:

• Sachet Water: Purified water in 500ml sachets for household and retail use.
• Bottled Water: 500ml and 1.5L bottles for premium markets and institutions.
• Bulk Supply: Large orders for events, schools, and hospitals.
• Private Labeling: Customized packaging for corporate clients and retailers.
• Delivery Services: Nationwide delivery through partnerships with logistics firms.
• Water Testing Services: Quality assurance for businesses and communities.

Price Range:

• Sachet water (per sachet): ₦10–₦20
• Bottled water (500ml): ₦100–₦150
• Bottled water (1.5L): ₦200–₦300
• Bulk supply (per 100 sachets): ₦1,000–₦1,500
• Delivery fees: ₦5,000–₦15,000 (based on distance and quantity)

Competitive Comparison

Competitors include large brands like Nestlé Pure Life and local sachet water producers. AquaPure differentiates through:

• High-quality, NAFDAC-approved purified water.
• Competitive pricing for sachet and bottled water.
• Eco-friendly packaging options.
• Fast and reliable delivery through dedicated logistics partnerships.

Sales Literature

AquaPure will develop:

• Product catalogs showcasing sachet and bottled water options.
• Flyers for distribution at markets and community events.
• A professional website with product details and an online ordering system.
• Social media content highlighting water safety and affordability.

Fulfillment

Water will be sourced from boreholes, purified using reverse osmosis and UV systems, and packaged in-house. Quality control checks will ensure compliance with NAFDAC standards. Distribution will be handled through in-house vans and logistics partners like GIG Logistics for regional deliveries.

Technology

• Water Purification Systems: Reverse osmosis, UV sterilization, and filtration systems.
• Packaging Equipment: Automated sachet and bottle sealing machines.
• Inventory Management Software: Tracks raw materials and finished products.
• Online Ordering Platform: Website and mobile app for order placement and tracking.

Future Services

• Expand product line to include flavored water and vitamin-enhanced water.
• Offer subscription-based delivery for households and businesses.
• Develop a mobile app for real-time order tracking and water quality reports.
• Introduce water dispensers for offices and public spaces.

Market Analysis Summary

Nigeria’s bottled water market, valued at over $2 billion, is driven by a population of over 200 million and increasing concerns about water safety. Port Harcourt, a major urban center in the oil-rich South-South region, offers a strategic base for AquaPure to serve growing demand for clean drinking water.

Market Segmentation

• Households: Families seeking affordable, safe drinking water.
• Retailers: Supermarkets and local stores requiring consistent supply.
• Institutions: Schools, hospitals, and offices needing bulk water.
• Event Planners: Requiring large water supplies for events.

Target Market Segment Strategy

• Households: Partner with local shops and online platforms for retail sales.
• Retailers: Offer competitive pricing and private labeling.
• Institutions: Secure long-term contracts with bulk discounts.
• Event planners: Provide customized bulk packaging and delivery services.

Market Trends

• Growing demand for safe drinking water due to health concerns.
• Increasing preference for packaged water over unregulated sources.
• Shift toward eco-friendly packaging and sustainability.
• Rising use of online platforms for purchasing water.

Market Growth

The bottled water market is projected to grow at a CAGR of 7% through 2030, driven by urbanization, population growth, and increasing health awareness.

Market Needs

• Affordable, high-quality drinking water for consumers.
• Reliable supply for retailers and institutions.
• Hygienic packaging to ensure safety.
• Fast and dependable delivery services.

Service Business Analysis

The pure water industry includes large bottled water brands, local sachet producers, and informal vendors. AquaPure will compete through quality, affordability, and efficient distribution, capitalizing on government regulations enforcing water safety standards.

Business Participants

• Major Players: Nestlé Pure Life, Eva Water.
• Local Producers: Small-scale sachet water factories in Port Harcourt.
• Distributors: Retail chains like Shoprite and local wholesalers.

Competition and Buying Patterns

Consumers prioritize price, quality, and availability. Institutions prefer bulk suppliers with reliable delivery, while households buy from local shops or supermarkets. AquaPure will offer competitive pricing and NAFDAC-certified quality to attract both segments.

Strategy and Implementation Summary

AquaPure will focus on quality production, strategic partnerships, and aggressive marketing to build brand trust and market share.

Strategy Pyramid

1. Core Strategy: Deliver safe, affordable drinking water.
2. Tactics: Partner with retailers and institutions, optimize logistics.
3. Programs: Launch health-focused marketing and community water safety campaigns.

Sales Strategy

• Direct sales team to target institutions and event planners.
• Online platform for retail and subscription-based sales.
• Promotions during festive seasons and events to boost sales.

Promotion Strategy

• Social media campaigns highlighting water safety and affordability.
• Sponsorship of community health and environmental events.
• Participation in trade shows to attract distributors.
• Partnerships with health influencers to promote safe drinking water.

Value Proposition

AquaPure offers safe, affordable, and high-quality drinking water with reliable delivery and eco-friendly packaging, supporting community health and sustainability.

Sales Forecast

• Year 1: ₦40,000,000 (1.5 million sachets at ₦15, 300,000 bottles at ₦125)
• Year 2: ₦60,000,000 (2 million sachets, 500,000 bottles)
• Year 3: ₦90,000,000 (3 million sachets, 750,000 bottles)

Management Summary

The management team, led by Ngozi Okonkwo, oversees production, sales, and distribution. Key roles include a production manager, sales manager, and accountant.

Personnel Plan

• Production Manager: ₦2,400,000/year
• Sales Manager: ₦1,800,000/year
• Accountant: ₦1,200,000/year
• 5 Production Workers: ₦3,000,000/year (total)
• 2 Delivery Drivers: ₦1,200,000/year (total)
• Total Payroll: ₦9,600,000/year

Management Team

• Ngozi Okonkwo (CEO): 8 years in water treatment and distribution.
• Chinedu Eze (Production Manager): 7 years in water purification operations.
• Amaka Nwosu (Sales Manager): 5 years in B2B sales.

Management Team Gaps

• Need a marketing specialist with expertise in digital campaigns.
• Require a logistics manager to optimize delivery operations.

Financial Plan

The financial plan focuses on achieving profitability within 18 months through efficient production and strong sales growth.

Important Assumptions

• Stable water supply for purification.
• Annual market growth of 7%.
• Access to reliable power or backup generators.
• Loan repayment at 14% interest over 6 years.

Break-even Analysis

• Monthly fixed costs: ₦2,500,000
• Average price per unit (sachets and bottles): ₦20 (weighted average)
• Variable cost per unit: ₦10
• Break-even units: 250,000 units/month
• Break-even revenue: ₦5,000,000/month

Key Financial Indicators

• Gross margin: 50%
• Net profit margin: 25% (target by year 2)
• Sales growth: 50% year-over-year for first three years

Projected Profit and Loss

• Year 1:
  • Revenue: ₦40,000,000
  • Cost of Goods Sold: ₦20,000,000
  • Operating Expenses: ₦15,000,000
  • Net Profit: ₦5,000,000
• Year 2:
  • Revenue: ₦60,000,000
  • Cost of Goods Sold: ₦30,000,000
  • Operating Expenses: ₦18,000,000
  • Net Profit: ₦12,000,000
• Year 3:
  • Revenue: ₦90,000,000
  • Cost of Goods Sold: ₦45,000,000
  • Operating Expenses: ₦22,000,000
  • Net Profit: ₦23,000,000

Projected Cash Flow

• Year 1:
  • Cash Inflow: ₦40,000,000 (sales) + ₦80,000,000 (funding)
  • Cash Outflow: ₦73,600,000 (expenses + loan repayment)
  • Net Cash Flow: ₦46,400,000
• Year 2:
  • Cash Inflow: ₦60,000,000
  • Cash Outflow: ₦50,000,000
  • Net Cash Flow: ₦10,000,000
• Year 3:
  • Cash Inflow: ₦90,000,000
  • Cash Outflow: ₦67,000,000
  • Net Cash Flow: ₦23,000,000

Projected Balance Sheet

• Year 1:
  • Assets: ₦80,000,000 (cash, equipment, inventory)
  • Liabilities: ₦43,000,000 (loan, payables)
  • Equity: ₦37,000,000
• Year 2:
  • Assets: ₦90,000,000
  • Liabilities: ₦36,000,000
  • Equity: ₦54,000,000
• Year 3:
  • Assets: ₦110,000,000
  • Liabilities: ₦29,000,000
  • Equity: ₦81,000,000

Business Ratios

• Gross Margin: 50%
• Return on Investment: 13% (Year 1), 22% (Year 2), 28% (Year 3)
• Debt-to-Equity Ratio: 1.16 (Year 1), 0.67 (Year 2), 0.36 (Year 3)
• Current Ratio: 1.5 (Year 1), 1.8 (Year 2), 2.2 (Year 3)

Key Notes

• Regulatory Compliance: Adherence to NAFDAC and SON standards for water safety is critical to maintain consumer trust.
• Community Engagement: Partnerships with local communities to promote water safety and hygiene.
• Market Volatility: Fluctuations in fuel and packaging costs may impact operating expenses.
• Sustainability Focus: Use of eco-friendly packaging to align with environmental trends and enhance brand appeal.

Summary and Conclusion

AquaPure Ventures Ltd. is well-positioned to meet Nigeria’s growing demand for safe drinking water by producing high-quality, affordable sachet and bottled water. With a modern purification facility, strong distribution networks, and a focus on regulatory compliance, the company aims to capture significant market share in Port Harcourt and expand regionally. The experienced management team, robust financial projections, and commitment to sustainability ensure AquaPure’s potential to become a leading pure water brand in Nigeria within five years.