Business Plan

Mineral Water Plant

Company Name: White Wave

EXECUTIVE SUMMARY
In a recent studies by way of Ikon marketing consultants it has been mentioned that the Indian Bottled Water
enterprise is growing a very rapid price of 19% yearly and at gift it's far at a whopping amount of Rs. 8000 crores
annually and is anticipated to attain 10,000 crores by the end of 2013 and is predicted to develop over four folds to
36,000 crores by way of 2020. This growth in demand for mineral water is because of the following elements:

Submitted To:Vijaya bhatt

By;Jagannath Mondal
Roll number-ur18014
Sec-A
MBA-RM
 • improved consciousness about drinking water quality and fitness

• decreasing water quality and customers having to go for ground water

• Environmental pressures on wastewater discharge from authorities pollutants manipulate forums

• lowering availability of water forcing users to move for reuse & recycling of water

• widespread business and monetary increase mainly in chemical, pharmaceutical, strength flora, meals
and fabric industry

these elements have led many players to enter the mineral water enterprise and Parle’s Bisleri holds a leading
position with a 36% marketplace proportion in the organized mineral water industry, with Coca-Cola’s Kinley and
Pepsi’s Aquafina speedy catching up. Kinley has 25% and Aquafina approximately 15% percentage inside the
market. Parle Agro's Bailley has a 6% share inside the marketplace among the national gamers. The relaxation
consists of other organized manufacturers which includes Kingfisher, Himalaya, Oxyrich; McDowell’s number one
collectively with an 18% percentage. enterprise professionals say that first-class controls need to be in location to
decrease the boom of unorganized gamers. still the prepared mineral water industry is able to tap only 40% of the
whole demand of mineral water in India and relaxation of the demand is fulfilled through the unorganized gamers at
nearby degree.

South India is the largest consumer of bottled water representing extra than 50% of the whole marketplace
because of water-starved areas, observed by using the western area that is the house floor of primary countrywide
players.

To tap this ever increasing call for of mineral water in India we are setting up a mineral water plant through
the name of “White Wave” which we are making plans to installation in South India on account that it is the most
important market of Mineral water in India. principal participants to the call for in South India are from unorganized
players and prepared gamers have yet no longer able to penetrate deeply into south. searching at this possibility we
will set up our bottling plant inside the village of Agara in southern nation of Karnataka, India. it's far located in the
Bangalore East taluk, on Outer Ring avenue, near Koramangala and HSR layout. It has a lovely lake by using the
call of Agara Lake located very close to HSR format. This lake will serve to offer water for the mineral water plant.
the head workplace may be positioned in Keshvnagar in Bangalore town. Presence in Bangalore will help to tap the
requirement in Bangalore town as well as all the nearby cities like Mysore, Mangalore, Ooty, Pondicherry and so on.
and close by states like Tamil Nadu, Kerala and Andhra Pradesh.

Management Team

Ms. Giteshwari Bisht may be the owner and president of White wave.
The corporation will apply for certificates of ISI from the Indian Bureau of standards.
Key managers might be Mr. Girdhar Mohata who will assist inside the monetary components of the employer; Mr.
Millan Sahoo will appearance after the operational aspects. For the enlargement of the employer’s human resource
and number one client touch Ms. Chinky Chhiroliya might be accountable. Mr. Abhishek Mehrotra will look after the
advertising department. Mr. Abhishek Gupta will manage the distribution network.
The enterprise will look to fabricate bottles of 500ml, 1000ml, 2000ml and 20 liters and could serve the necessities

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of golf equipment, fitness centers, cinemas, department stores, malls, ice-cream parlors, cafes and stores, besides
eating places, hotels and supermarkets.

PREREQUSITES FOR A MINERAL WATER PLANT

 it is obligatory for all the manufacturers who intend to installation the processing unit, to reap the ISI
mark from Bureau of India standards. unless the inspection is carried out via the workforce, checks done in
an unbiased lab and authentic confirmation and license range is acquired, unit can’t start commercial
manufacturing.

 Such Lab must be equipped to carry out all physical, chemical and micro biological exams prescribed
as according to IS: 3025, 1070, 4905, 5401, 5402, 5403, 5887, 10146 & 10500 and needs to be conducted by
means of expert chemist / micro biologist.

 best Packaged herbal Mineral Water governed below IS: 13428:1998, amendment 1-five as much as
15th October 2004 and Packaged ingesting Water ruled beneath. IS: 14543:2004

 If the water is drawn from herbal supply, confirms to composition indexed below IS: 13428:1998,
change 1-five as much as 15th October 2004 and is bottled without altering the composition, falls under
herbal Mineral Water. In packaged consuming water, any of the procedures of filtration / disinfection indexed
below is: 14543:2004 can be applied, altering the composition of subject water & subsequently, bottling it.

 below Ministry of Water sources, critical floor Water Authority [CGWA] regulates the use of floor
water. under strength conferred to them under segment 5 of surroundings [protection] Act, 1986, CGWA has
directed all processing gadgets of bottled water to get their bore well registered with them. The equal must be
applied beneath prescribed Performa.

MANUFACTURING STRATEGY
Raw Material: Water will be the raw fabric for the mineral water plant in order to be sourced from Agra Lake
near which the plant may be set up. Plastic Bottles could be used for the packaging and distribution of mineral water.
these bottles can also be made synthetic.

Production Process:
step one for setting up a water purification plant is the analysis of source of water. The lake water from Agara Lake
could be healthy for purification and intake through people. After the chemical analysis, the specs of the
purification plant are set. inside the purification plant, supply water is saved in the feed water tank, passes through
the sand filter out for initial water filtration.

Water then passes thru the dosing pump-I where chlorine is delivered to kill the germs in the water. After the
chlorination, water passes through carbon clear out. It helps inside the protection of proper odor and taste of the
water. It also gets rid of chlorine from water.

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 After this stage water is passed through Ultraviolet disinfection (UV) where water is uncovered to UV light of
wavelength 245 nanometers (nm). A dosage of 16000 microwatt/sq.cm at 40˚ C for effective disinfection.

Water is then exceeded from dosing pump-II, where Sodium Meta Bisulphate is delivered. It enables in de-
chlorination of water.

Water is filtered next and passes thru dosing pump-III, in which anti scallant is introduced. It prevents scaling of
membrane from calcium, magnesium and biological growth. Water then passes through reverse osmosis module.
This degree of the technique makes water clear from all the contaminations and minute particles. Water then passes
via dosing pump-IV, wherein minerals are delivered for taste development.

Water then passes via computerized washing, filling and capping plant. right here water is filled into bottles.

Packaging Process:
Our Mineral Water Packaging and bottling manner is achieved following the licensed exceptional
requirements norms and guidelines of transportable Water package deal experts, with the intention to separate us
from unorganized competition in the same field. we will hire distinctly certified and skilled specialists carry out
rinsing, filling, capping and labeling operations to make certain purity and delight of the customers.

Filling: Bottles are fed with the aid of an air conveyor from the blowing unit directly into the in-feed of the RFC.
The RFC system is neck run and it boasts of a mono block unit, which means that that each bottle is held with the
aid of the neck robotically while being inverted, rinsed and sprayed with ozonated water at 2 bar strain. After
draining, the bottles are re-inverted and transferred to the filler. on the filler, these bottles are straightened up and
progressively lifted to the filling valves which open handiest while a bottle is positioned beneath them. Filling is
then carried out systematically through gravity.

Capping: After completion of filling process the bottles are transferred to the capping section. right here ozonated-
water rinsed caps are screwed at the bottle with uniform torque. considering our water is ozonated all product touch
components are of 316L grade stainless-steel and the rubber elements are of EPDM. (All components are water
lubricated above the table top.)

Labeling: From the capping section the bottles are at once despatched to the labeling phase. All Mineral Water
Bottles are categorised on a warm melt reel feed BOPP labeling gadget. This gadget allows each individual bottles
to be spaced out and fed to the labeling station wherein exactly cut labels with a strip of hot soften glue at the main
and trailing area, get rolled across the bottle. those labels are fed into the system in a roll shape too.

Quality Check: For quality checking out, the bottles will undergo guide checkup of every bottle for any leaks or
breakages. they're then packed into strong cartons which might be dispatched to the market

Following is the description of Machinery and its quantity that will be required to run the Mineral Water
Plant:

S.No.

Description

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 Quantity

1.

Alum doses 3 liter/hr

2.

2 No.s Pump

3.

Activated Carbon Filter Flow rate: 2000 lit./hr

4.

Pressure sand filter flow rate: 2000 lit./hr

5.

Softener

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.
1

7.

Pressure Vessel

8.
Ozone generator
Capacity – 1 gm/hr
Flow fate – 1000 lit/hr

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 9.
UV disinfectant flow rate-1000 lit/hr

Storage tank for pure water capacity :1000lit

10.

Bottling Section

11.
Stainless Steel Conveyor: 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. 1

12.
Rinsing, Filling, And Capping: This machine is designed to fill 24 bottles
per minute for 1 liter bottle & is capable to fill 500 ml, 1000 ml, and 1500
ml bottles. Machine speed is depended on the volume to be filled. The
bottles are hold in groups of 6 & moved on the conveyor together. These 1
grouped bottles are rinsed by means of spraying pressurized water inside the
bottle. After Ringing the bottles are again placed on the conveyor & are 13.
Change
loaded onparts
the for 500&mlcapping
filling and 1000 ml 1 set
machine oneeach
by one. Filling & capping takes
place by indexing mechanism. There are total 8 indexes.
1 set each

14.
Shrink Tunnel: This is fitted on the online conveyor to shrink labels and
neck sleeves. 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 1
use.
15.
Printing Machine (for mfg. Date & 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.
1

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 MARKETING STRATEGY
particularly for accomplishing the advertising goal of a company, the company desires a entire and an unbeatable

marketing strategy. The marketing method affords the layout for attaining the linkage among marketing techniques

and typical corporate achievement is certainly direct and vital. understanding the advertising objectives is the motive

of two normal classes.

1. charge based totally

2. Differentiation based

Price based marketing strategy

A business that opts for the rate course in its competitive battle will enjoy certain flexibilities in be counted of its

product and use costs as most important competitive stage. it will charge its product to match the varying competitive

demands. it will likely be playing certain inherent cost benefits, which lets in it to resort a price based totally fight.

The most important bureaucracy where such cost advantage can occurs are economies of scale, absolute value

blessings.

Market Segmentation: Mineral water comes under impulsive shopping for i.e. client purchases them on an
impulse whilst he's thirsty. So it's far very essential for this form of product to be visible to the client anywhere it is
to be had. patron segmentation is primarily based on the subsequent variables:

Segmentation Variables Data

1. Geographic

 Country India

 Cities All Major Cities of Karnataka & Nearby

States

 Density Urban

 Climate Moderate and Dry

2. Demographic

 Age All age groups

 Gender Male and Female

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  Family Size Any size

 Family Life Cycle Young and Single ; Young, Married, No

children; Young, Married, with children;
Older, Married, with children; Young,
Married with no children under 18; Older and
Single; etc.

 Income All income groups

 Occupation Any Occupation

 Education Any

 Religion All religions of India

 Race Asian

 Nationality Indian

3. Psychographic

 Social Class Lower class, Working class, middle class,

upper class
4. Behavioral

 Occasions On Impulse

 User Status Any time buyer

 Attitude towards product Positive

FINANCIAL ANALYSIS
1. Total Fixed Assets
SI. Description Amount (Rs.)
No.
1 Land 3500000
2 Building 1500000
3 Plant & Machinery 3500000
4 Furniture 50000
5 Gen Set 500000
6 Bore tube well 150000
7 Start-up cost 100000
8 Delivery van 450000
Total 9750000

2. Working Capital (Yearly)

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SI. Description Amount (Rs.)
No.
1 Electricity 1200000
2 Fuel & Others 90000
3 Postage & Stationery 6000
4 Telephone/Fax charges 36000
5 Maintenance & Repairs 60000
6 Advertisement 60000
7 Miscellaneous Expenses 180000
8 Raw Material 21600000
9 Salary & Wages 2340000
Total 25572000

3. Total Capital Investment

SI. Description Amount (Rs.)
No.
1 Capital Expenditure 9750000
2 Working Capital 25572000
Total 35322000

Risk Analysis
 Fixed Cost
SI. Description Amount(Rs.) Yr-I Amount (Rs.) Amount (Rs.)
No. Yr-II Yr-III
1 40% Salary & Wages 936000 936000 936000
2 40% Utilities & Expenses 652800 652800 652800

3 Depreciation 485000 439250 398088

4 40% Raw Material 720000 720000 720000
5 Interest 405000 342000 252000
Total 3198800 3090050 2958888

 Cost of production
SI. Description Amount (Rs.)
No.
1 Working Capital 25572000
2 Depreciation on Building @ 5% 75000
3 Depreciation on machinery @ 10% 350000
4 Depreciation on Furniture @ 20% 10000
5 Depreciation on Gen Set @ 10% 50000

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 6 Interest on TCI @ 25% 9541903
Total 35598900

 Turnover
SI. Description Amount (Rs.)
No.
1 19.5*493000*12 63591000

 Net Profit Ratio:

SI. Description Amount (Rs.)
No.
1 Profit * 100/ Turnover 44.02%

 Rate of return:
SI. Description Value (%)
No.
1 Profit*100/Total capital investment 73.34

 Break-Even Point:
Year Value (%)
1 42
2 37
3 33

 Sensitivity
Particulars Expected Possibility
Initial Outlay 33013200
Optimistic 5851370 (Profit for a sale of 83591000)
Most Likely 4451370 (profit for a sale of 63591000 )
Pessimistic 3051370 (profit for a sale of 43591000 )
Range(Optimistic to Pessimistic) 2800000 (5851370 - 3051370)

Assumptions taken by us:

 40% of the contingent costs are fixed cost.
 Cash flows are on yearly basis.
 Other assets are taken just to tally the balance sheet.
 Loan is 4500000 @ 9% (rest is capital by partners).
 Cost of 1l bottle is rs. 9.5/- (1st year).
 Cost of 0.5l bottle is rs. 6.25/- (1st year).
 Cost of 2l bottle is rs. 19/- (2nd year).

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  Cost of 20l bottle is rs. 57/- (3rd year).
 3rd year bottles of 1l, 0.5l, 2l, 20l were sold at rs. 12, 7, 24, and 65 respectively.
 Tax is assumed to be 30%.
 Contingent liability is assumed for any type of risk.
 Retained earnings are at the 3rd year because of the extra surplus.
 Minimum rate expected by us is 10%.
 Depreciation is calculated on the basis of written down value method.
 We have assumed 20% as accounts receivables.

Projected

Projected Profit and Loss/ Income statement for year - I

Particulars Amount (Rs.) Amount (Rs.)
Income
Revenue
For 1 liter Bottle 50715000
For 0.5 liter bottle 12876000 63591000
Total 63591000
Expenditure
Cost of goods sold
For 1 liter bottle 39330000
For .05 liter bottle 11100000 50430000
Operating Expenses
Fixed Cost 3198800
Variable Cost 3463200 6662000
Promoter’s salary 2000000
Net Profit 4499000
Total 63591000

Projected Balance sheet for year – I

Particulars Amount (Rs.) Amount (Rs.)
Assets
Current asset
Cash at hand 15679840
Accounts Receivable 3919960
Inventory 888000
Cash at bank 7794400 28282200
Fixed asset (Note financials 9750000

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 1)
Less: Depreciation 485000 9265000
Total 37547200
Liabilities
Capital
Owner’s Equity 28822000
Loan 3800000
Net profit 4499000 37121000
Interest on Loan @ 9% 405000
Contingent liability 21200
Total 37547200

Projected Profit & Loss/Income statement for year – II

Particulars Amount (Rs.) Amount (Rs.)
Income
Revenue
For 1 liter Bottle 5296000
For 0.5 liter bottle 13230000
For 2 liter bottle 14256000 82782000
Total 82782000

Expenditure
Cost of goods sold
For 1 liter bottle 43776000
For .05 liter bottle 11812500
For 2 liter bottle 11286000 66874500
Operating Expenses
Fixed Cost 3090050
Variable Cost 5417450 8507500
Promoter’s salary 2500000
Net Profit 4900000
Total 82782000

Projected Balance sheet for year – II

Particulars Amount (Rs.) Amount (Rs.)
Assets
Current asset
Cash at hand 15414800
Accounts Receivable 3853700
Inventory 1218000
Cash at bank 5101750 25588250
Fixed asset (Note financials 9265000
1)

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 Less: Depreciation 439250 8825750
Total 34414000
Liabilities
Capital
Owner’s Equity 26322000
Loan 2800000
Net profit 4900000 34022000
Interest on Loan @ 9% 342000
Contingent liability 50000
Total 344144000

Projected Profit & Loss/Income statement for year – III

Particulars Amount (Rs.) Amount (Rs.)
Income
Revenue
For 1 liter Bottle 56592000
For 0.5 liter bottle 13188000
For 2 liter bottle 22752000
For 20 liter bottle 46410000 138942000
Total 138942000

Expenditure
Cost of goods sold
For 1 liter bottle 47160000
For .05 liter bottle 12246000
For 2 liter bottle 18960000
For 20 liter bottle 40698000 119064000
Operating Expenses
Fixed Cost 2958888
Variable Cost 8019112 10978000
Promoter’s salary 3000000
Net Profit 5900000
Total 138942000
Projected Balance sheet for year – III
Particulars Amount (Rs.) Amount (Rs.)
Assets
Current asset
Cash at hand 13217600
Accounts Receivable 3304400
Inventory 1938000
Cash at bank 6856338 25316338
Fixed asset (Note financials 8825750
1)
Less: Depreciation 398088 8427662
Total 33744000
Liabilities

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 Capital
Owner’s Equity 23322000
Loan 1400000
Retained earnings 2800000
Net profit 5900000 33422000
Interest on Loan @ 9% 252000
Contingent liability 70000
Total 33744000

Projected Cash flows for three years

Particulars Year 0 Year 1 Year 2 Year 3
Initial investment :
Capital expenditure 9750000
Working capital (Monthly) 2131000
Total 11881000
Operating cash flows :
Units produced 493000 591000 688500
Sales revenue 63591000 82782000 138942000
Cost of goods sold (50430000) (66874500) (119064000)
Operating expenses (7772000) (10226250) (13327912)
Total cost (58202000) (77100750) (132391912)
EBIDT 5389000 5681250 6550088
Depreciation (485000) (439250) (398088)
EBIT 4904000 5242000 6152000
Interest (405000) (342000) (252000)
EBT 4499000 4900000 5900000
Tax (1349700) (2220000) (1770000)
EAT 3149300 5180000 4130000
Depreciation 485000 439250 398088
CFAT 3634300 5619250 4528088

Projected Net Present Value:

Year Cash flows P. V factor @ 10% Present Value
0 -11881000 - -
1 3634300 0.94 3416242
2 5619250 0.88 4944940
3 4508088 0.82 3696632
Total 12057814

Net Present Value (NPV) = present value of cash inflows – present value of cash outflows

= 12057814 - 11881000

NPV = 176814

Since NPV is positive with the high value, therefore we accept the project.

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Internal Rate of Return (IRR):
Year Cash Flows
0 -11881000
1 3634300
2 5619250
3 4508088

Calculated on excel = 7%
So, it implies that at 7%, NPV is zero.

Payback period:
2 Years & 4 months.

Profitability Index:
Year Value
1 1.15

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