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A FEASIBILITY STUDY ON THE PRODUCTION OF SACHET WATER




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A FEASIBILITY STUDY
ON
THE PRODUCTION OF SACHET WATER




TABLE OF CONTENTS
Step I               -               Business Climate
Step II              -               Product
Step III             -               Market
Step IV             -               Technical
Step V              -               Raw Material
Step VI             -               Manpower
Step VII            -               Production Procedure
Step VIII           -               Quality Contract
Step         IX             -               Financial Requirement
Step X              -               Conclusion


STEP I
BUSINESS CLIMATE
The Engenes and the Ekpeyes areas have only wet and dry seasons, this are the two seasons in Nigeria. During the raining season, there is high rainfall which drains into the sea and the rivers and render them undrinkable, while that of the dry seasons are not without drains but with the activity of oils firms perpetually polluting the seas and the water rivers and render them undrinkable, which cause cholera and other water borne diseases. The people engage in so many petty trades which require good water, their population is very high and their income level is low, their consumption is very high, the amount of currency in circulation is by Naira and the gross consumption expenditure on water is high, the possibility of producing the product in that particular area by using the underground water.


STEP II
THE PRODUCT
The importance of safe portable water cannot be overemphasized. Water as well all know is one of the most abundant if not the most abundant substance in the world. Water is used for consumption, agricultural purposes, induction purpose etc.
Water everywhere, but is it safe or drinking is an important question, considering the fact that contaminated water when consumed is very harmful to humans. As I earlier stated even though we see water everywhere millions of people do not have access to safe portable drinking water. Various human activities both agricultural and industrial have helped rendered waters unsafe for both human and animals. The Engenes and the Ekpenyes being people of Riverline areas and also a place of very mud industrial activities makes their more prone to possible contamination from industrial waste. Also the fact that their water is acidic renders the water unsafe for consumption.


Because of the good qualities, it has gone beyond the region such as Ogba, big and small Elele, and some parts of Bayelsa.
Supply of sachet water
Ø Who are their competitors?
There are two competitors in the market, which is A.B. and Tom sachet water production.
Ø The competitors could increase their price which there is a price war there human relationship is too poor.
Their goods are not available when the consumers need them. They don’t give discount, and also there is no promote to their consumers. The lack sufficient product.
Ø What are their installed capacities?
They don’t have enough capacity to produce up to 60cl, because the capacity for the production of sachet water is 60cl, which their volume is not up that, and there is no enough space also the environment is not conducive and they don’t have the equipment.
Ø Their production rates over a period of time are of paramount importance?
No? It not important, because they don’t produce daily, they produce weekly and monthly. Sachet water production needs a daily production, which the consumers need it every day.
Ø Market Size
The Engenes and the Ekpenyes have a very large population size: the demand for sachet water will be high population of the area: 1,100,000 projected Market Share: -500 bags daily.
(Note: A bag contains 20 sachets, therefore 500 x 20= 10,000 sachets daily)
Monthly Consumption = 500 bags x 20 days
                                        = 10,000 bags
Yearly consumption = 10,000 bags x 12
                                        =12, 000 bags
Yearly Sales = 120, 000 x N60
                                        = 7, 200, 000
The above sales projection is based on the fact that there are only 2 competitors in the market. It is agreed that the competition could increase but since the population is growing, it is hope that the loss in sales will not be significant. The following projections are made in the other four years.
Year                 Market Share          Unit Price               Sales
2                      124,800                   65                            8,112,000
3                      127,200                   65                            8,268,000
4                      132,000                   70                            9,240,000
5                      132,000                   75                            9,900,000


STEP IV
TECHNICAL FEASIBILITY
Here I have considered the availability at a reasonable price of all technical factor and inputs. I have also looked at the suitability of the manufacturing production to be adopted and the best ways to plan the production programme. I have therefore decided to discuss this under the following subheadings:
  a.   LAND AND BUILDING
A suitable land has been looked at, the land that is required to put up the water production plant, this includes building of offices and (warehouse and two offices), conveniences, security gate, car parks, engine house, etc.
b.     FACTORY LOCATION
Ahoda is considered to be the most suitable place due to the presence of infrastructural facilities-electricity, road and water. This place is motorable and links the other major cities. It is also considered to be the heart of this region thereby making it closer to a large part of the population.
c.     PLANT MACHINERY AND EQUIPMENT
ü    Packaging Machine
ü    Membrane filtration unit
ü    Carbon canister
ü    Sand canister
ü    Corrosex
ü    Ultraviolet irradiation machine
ü    Temporary storage tanks (reservour)
ü    Generator (standby power supply)
ü    Water pumps


STEP V
RAW MATERIAL
Bore hole is used
STEP VI
MANPOWER REQUIREMENT
Since this is one of the most sensitive part of the production process, only the best personal are employed. This section is divided into skill and unskilled manpower.
The skilled manpower includes:
A geologist, he or she helps identify a suitable soil, a microbiologist he/she carries out microbiological test on water, a biochemist or chemist help put the chemical parameter under control. You also employ the services of a manager, someone with knowledge about financial management.
Unskilled Manpower
This includes employing the services of a driver, one that can carries the finished from one place to another, also another person that can help in off-loading the finished products to large scale buyers; and also a cashier, cleaners and security personnel.
STEP VII
PRODUCTION PROCEDURE
This outlines the processes involved in the production of safe drinking sachet water. Water is pumped from underground by the means of piper into a temporary storage tank.
Water is then pumped from the temporary storage tank into the sand carnister, the sand serve as a filter medium. This helps filter out debris.
From the sand carnister water is then pumped into the carbon carnister, the carbon helps remove odour, and taste from the water.
The Corrosex
This chemical helps neutralize the acidic nature of the water reduces water hardness. The water is then pumped through the various micro filters this is to help remove possible microorganisms that have escaped previous filtration tanks.
From the microfilter water is pumped into the ultraviolet irradiation unit this helps ensure the destruction of the nucleic acid of possible microbes (microorganisms) that are present.
Water having passed through all these filtration processes is certified safer for consumption, is then pumped directly to the packaging machine where the finished packaged product is ready for supply.
Step viii
QUALITY CONTROL
These are measures put in place to ensure that the product conforms to standard specifications. This section is very sensitive as consumers can easily reject products if they do not measure up to standard and workers must be clean and health conscious to avoid possible contamination during packaging.
There are specifications or standard from NAFDAC, Government under government we have ministry of health and environment. All these par status help in carrying out test to ascertain the safety of the drinking water. NAFDAC after carrying out the test on water with wither reject or accept the water. The ministry environment help ensures that the environment under which the production process is carried out is safe.
STEP VIII
FINANCIAL REQUIREMENT
The sum of three million, five hundred thousand naira (N3, 500,000) is estimated to fully executive the project and would be financial as follows;
Contribution
Personal savings                      N1, 000,000
Family members                      N1, 500,000
Bank                                        N1, 000,000
Total                                        N3, 500, 00



Project cost
Description
Unit
Amount
1.   Land and building
Ø  Acquisition of land
Ø  Building
Ø  Sinking of borehole



500,000
1,000,00
100,000

1,600,000
2.   Plant and machinery
Ø  Delivery van
Ø  Power generator
Ø  Carbon carnister
Ø  Sand carnister
Ø  Corrosex
Ø  Rows of ploytene
Ø  Microfitters
Ø  Ultravoild radiation
Ø  Machine
Ø  Factory fan
Ø  Electrification


700,000
110,000
85,000
50,000
55,000
50,000
50,000


19,000
50,000
1,219,000
3.   Essential
Services/expenses
§  Fixtures, furniture and fittings
§  Expenses (product registration etc)
§  Working capital

166,000



300,00

586,000
4.   Development cost
ü  Business registration
ü  Feasibility study
ü  NAFDAC clearance
ü  Ministry of healthy clearance
ü  Ministry of environment

Cost of Project  








95,000

                  N3,500,000




Estimated sales volume (year one)
Price per bag                    =      N60
Daily output                     =      N500 bags per day          
Monthly output                        =      500 x 20 days                  = 10,000
Yearly (Annually)             =      10,000 x 12                     = 120,000

Year 1
Year 2
Year 3
Year 4
Year 5
Quantity (bags)
120,000
124,800
127,200
132,000
132,000
Unit Price
N60
N65
N65
N75
N75
Sales Revenue
7,200,000
8,112,000
8,268,000
9,240,000
9,900,000

Staff Salaries and Wages

Year 1
Year 2
Year 3
Year 4
Year 5
1Gen Manager
180,000
190,000
195,000
196,000
200,000
1 production manager
144,000
154,000
159,000
160,000
164,000
1 Account
126,000
136,000
141,000
142,000
146,000





 






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