PURE MINERAL WATER
The idea of business that we are going to carry out a study on establishment of a business of purified drinking water using only solar energy. We chose to use a solar still based on
the El Paso Solar Project model in
Methods/Materials
The El Paso Solar Still was improved by using aluminum backed rigid, insulation for the box. Our small Solar still (0.372m2) was used to purify saline water from an irrigation ponding basin. The water was tested before it was put into the still and tested after the water was purified. The cost of the improved solar
Still was used to determine the unit cost to produce a liter of purified water. The unit cost was compared to the cost of store bought water.
Introduction
The basic principles of solar water distillation are simple yet effective, as distillation replicates the way nature makes rain. The sun's energy heats water to the point of evaporation. As the water evaporates, water vapor rises, condensing on the glass surface for collection. This process removes impurities such as salts and heavy metals as well as eliminates microbiological organisms. The end result is water cleaner than the purest rainwater. The Sol Aqua still is a passive solar distiller that only needs sunshine to operate. There are no moving parts to wear out.
The distilled water from a Sol Aqua still does not acquire the "flat" taste of commercially distilled water since the water is not boiled (which lowers pH). Solar stills use natural evaporation and condensation, which is the rainwater process. This allows for natural pH buffering that produces excellent taste as compared to steam distillation. Solar stills can easily provide enough water for family drinking and cooking needs.
Solar distillers can be used to effectively remove many impurities ranging from salts to microorganisms and are even used to make drinking water from seawater. SolAqua stills have been well received by many users, both rural and urban, from around the globe. SolAqua solar distillers can be successfully used anywhere the sun shines.
The SolAqua solar stills are simple and have no moving parts. They are made of quality materials designed to stand-up to the harsh conditions produced by water and sunlight. Operation is simple: water should be added (either manually or automatically) once a day through the still's supply fill port. Excess water will drain out of the overflow port and this will keep salts from building up in the basin. Purified drinking water is collected from the output collection port.
Distillation Purification Capabilities
Solar stills have proven to be highly effective in cleaning up water supplies to provide safe drinking water. The effectiveness of distillation for producing safe drinking water is well established and recognized. Most commercial stills and water purification systems require electrical or other fossil-fueled power sources. Solar distillation technology produces the same safe quality drinking water as other distillation technologies; only the energy source is different: the sun.
Distillation is the only stand alone point-of-use (POU) technology with National Sanitation Foundation (NSF) international certification for arsenic removal, under Standard 62. Solar distillation removes all salts as well as biological contaminants (for example,cryptosporidium, E. coli, etc.). There are many studies in the literature, such as tests conducted on solar stills at
Satisfaction of Customers with long-lasting and never-ending developments in water purification systems
SELECTION OF LOCATION
There are three basic reasons for selection of
- Population & Area
Area 5,856 square kilometers
Population Density 1,110 people / square kilometer
- TDS
TDS means total dissolved solids and it is the measure of purity of water. It is calculated as mg / L (ppm – parts per million). Under international standards, the maximum level is 400 ppm. Currently, TDS level in
- Previously Available Water
There are two sources of water currently in use:
- Drilled Water
- WASA Water
There are some severe problems with these two resources.
WASA Water supply is not present in whole city. So a large population is using drilled water. The drilled water is very salty in nature, so it is undrinkable. WASA Water lines are very old and there is no proper maintenance of the system. So the lines are in damaged condition. There are some cases in which drain lines wastage was mixed with drinking water lines and cause some diseases. There is a large population whose demand is pure drinking water, hence a large growth for drinking water suppliers.
SURVEY
A survey from a private research company of
The results are as under:
| Faisalabad District | YES | 79 % |
| NO | 21 % | |
| | YES | 82 % |
| NO | 18 % |
This survey also gives an idea about the demand of the pure drinking water from the citizens of
INTERNATIONAL QUALITY STANDARDS
| pH | 7.2 |
| Bicarbonates | 50 ppm |
| Calcium | 30 ppm |
| Magnesium | 10 ppm |
| Sodium | 6 ppm |
| Potassium | 4 ppm |
| Fluoride | 0.6 ppm |
| Iron | 2 ppm |
| Total Hardness as CaCO3 | 56 ppm |
| Total Dissolved Solids | 170 ppm |
| Nitrate | 3 ppm |
KEY SUCCESS FACTORS
Following factors can be very important for planning of a business model and marketing plan of the business.
- Low Cost
- Strong Distribution Network
- Production Efficiency
- Effective Quality Control
- Low Price with Good Quality
- Effective Promotional Activities
- Good Relations with Customers
- In Time Supply
COMPETITOR’S ANALYSIS
COMPETITORS
There are a number of competitors present in the city:
· WASA Water
· Drilled Water
· Nestle
· Aquafina
· Kinley
· Sufi
The private companies do not include MNCs because our business model is to provide bulk water supplies which these MNCs are not actively providing.
ANALYSIS OF COMPETITORS
The analysis of competitor’s can be done on three bases as follows:
- Quality
- Price
- Supply Schedule
Quality
Sawera & Private Companies > Drilled Water > WASA Water
Clearly, the standing of Sawera is above all the competitors along with the private companies. Sawera will ensure high quality by periodic maintenances at a higher frequency than competitors.
Price
Drilled Water > Private Companies > Sawera> WASA
The price of Sawera will be in reach of lower middle class of the city easily. The other competitors are costly because the electricity expenses are growing so fast that drilled water is not feasible at all (if calculated). The private companies are working for some small portion of people in elite parts of the city so there is no big danger from them.
Supply
Drilled water can be available to all but it needs some initial cost and high electricity expenses. So it is not considered when comparing supplies. WASA water has a limitation of supply. Its supply is not in the entire city and there is a limitation of reserves and machinery also. So there is no problem of competing with it. The private companies are very good with supply schedules. There are very less complaints about these companies for delayed supplies.
GAP IN MARKET
The following table shows the part of the population which can be targeted by Sawera clearly showing the population gathered by the private companies. So a large gap is available for my company.
| Faisalabad District | WASA | 31 % |
| Drilled | 49 % | |
| Others | 20 % | |
| | WASA | 10 % |
| Drilled | 68 % | |
| Others | 22 % |
MARKETING PLAN
5 P’S OF MARKETING
- Product
The product is bottled water which will be taken from earth, filtered it and just sell it in the market directly to the customers. The distribution channel will be own. There will be no multi range of product. The product will be only in one size that is 10 liters.
- Price
The pricing strategy will be of penetration. The price offered will be different in city and surrounding villages without any discount strategy. The expenses of 10 liter water are approximately Rs 15.8. The price offered will be Rs 20 per 10 liter bottle in surrounding villages and Rs 25 per 10 liter bottle in cities. The profit margin is almost 30 % in this case. Prices will be varied with increasing prices of electricity and petroleum products. But this will be done after considerable penetration in the market.
- Place
The location of the plant is near
- Packing
The packing will be free of cost for the customers. This will be a tactical gift from us to capture the market by attracting the sympathies of customers towards us. The estimated number of bottles is 2000. 1000 of which will be delivered to customer and 1000 will be used for refilling. The cost of one bottle is almost Rs. 35 plus sticker cost of Rs.15.
So, total cost of one bottle will be Rs 50.
- Promotion
Promotions are the way to create awareness and create some positive association with the brand in a persuasion style. Effective promotion definitely affects the consumer direct marketing.
For promotions, my strategy is to use four ways as follows:
ü Advertising Brochures
ü Sampling
ü Public Meetings
ü Making Announcements
Printing the advertising brochures will be done only for residents of town. Public meeting and making announcements will be a good strategy for uneducated rural regions. Sampling will be done at both places that are city and villages. The first bottle can also be used as sampling. This strategy will help to capture market very quickly.
HUMAN RESOURCE
MAN POWER DETAIL
The man power requirements will be as follows:
- Admin Officer 1
- Electrical engineers 2
- Technician (Electrical) 1
- Watchman 1
- Sweeper 1
- Driver 1
- Helper 2
This man power is only for 8 hour shift because our plan is to work 8 hours a day. If business grows the working hours can be increased with increasing man power.
REMUNERATION & QUALIFICATION
| Designation | Qualification | Experience | Salary (Rs / Month) |
| Admin Officer | Graduation | 2 years | 9,000 |
| Engineer | Electrical Diploma | 5 year | 35000 |
| Watchman | Metric | 2 year | 6,000 |
| Sweeper | Middle | 1 year | 3,000 |
| Driver | Metric | 2 years | 8,000 |
| Helper | Metric | 6 months | 6,000 |
OPERATIONS
SELECTION OF LOCATION
· Condition of Water
· Water Specification
· Chemical Structure
· Availability of utilities
· Availability of Labor
· Economically Suitable
· Production Convenience
FLOW CHART OF OPERATIONS
Step wise operations are as follows;
o Water from Source
o Combat Pump
o Pipe Lining
o Tank Filling
o Purification through
o Ultimate Filling
o Bottling
o Loading
o Sorting
FINANCIAL PLAN
INITIAL EXPENSES
| Item | Specification | Cost Rs | Remarks (if any) |
| Land | 1 Kanal | 1,000,000 | |
| Building | 1 Room + | 250,000 | |
| Boring | 200 ft | 30,000 | |
| Motor Pump | 5 HP | 10,000 | |
| Filling Tanks | Stainless steel * 2 | 60,000 | |
| E1 Paso Solar Stills equipment | | 140,000 | |
| Aluminium | | 18,000 | |
| Bottles | 2000 in number | 100,000 | |
| Transportation Vehicle | Mazda | 700,000 | |
| Staff Salary | 6 person | 46,000 | Per month |
| Advertising | 1000 brochures | 3,000 | Per year |
| Sampling | | 21,000 | Per year |
| Public Meeting | | 30,000 | Per year |
| Initial Operating Cost | | 50,000 | |
| Total Initial Expenses | | 2,393,000 | |
SALES AND PRODUCTION ESTIMATES
Total initial cost Rs. 2,393,000
Initial Working Hours Hr 8
Production Capacity (8 hours) Lt / day 10,000
Production capacity (340 working days) Million Lt / year 3.4
Assumption:
The number of customers initially is 1000.
Consumption of each customer liters 10
Daily Consumption liters 10,000
So we can sell our production of 8 hours to only 1000 houses. If 80 % of our customers are permanent, we have only 20 % of our production to be sold through direct marketing.
ESTIMATION OF PAYBACK PERIOD
Total initial cost Rs 2,393,000
Cost per Liter (working 8 hours / day) Rs / liter 1.58
So we have a lot of cushion for making penetration pricing strategy.
Suppose
500 customers belong to villages, price Rs / 10 liters 20
500 customers belong to city, price Rs / 10 liters 25
Revenue earned from villages per day Rs 100,000
Revenue earned from city per day Rs 125,000
Total revenue earned per day Rs 225,000
Total working days in a year 340
Total revenue earned per year Rs 7,650,000
The Payback period will be Year 0.33
The Payback period will be Months 4
RESOURCES
For starting this business, we will need almost 2,500,000 rupees initially. The land and building expenses will be borne by us and our fathers from some family savings. This will cost almost 50 % of the expense. The remaining will be arranged through mortgaging of the facility for 2 years.
our plan is to return the loan amount within first 2 to 3 months from revenues, as soon as we could pay.
RISKS TO THE BUSINESS
There is not a big risk present because of following reasons:
· No presence of strong competitor
· WASA has failed in providing drinkable water
· Drilled water is very salty to drink
· Our penetration price is very low as compared to our private competitors
· The target market of private competitor is different from us so there is no danger of strong bargaining of buyers
· The bottles price is our operational cost. Our competitors are charging this price to their customers.
· We have better placed in the market w.r.t. location and approach.
The can be two risks for this business:
· Currently present private companies can make a strategy to target the lower middle class with lower prices.
· As the initial cost is very low, there is a large threat of new entrants into this business. This will lead to price war between the competitors which eventually reduce the profit margins.
