How To Start Pure Water Business In Nigeria

Sachet water, commonly known as ‘pure water’ in Nigeria, is the most popular source of drinking water in most cities and villages. With over 200 million Nigerians relying on affordable packaged water for daily hydration, the market potential is huge. This guide covers everything you need – from registration requirements to production costs, marketing and distribution – to start your own successful pure water business in Nigeria.

Overview of the Pure Water Business in Nigeria

The pure water business in Nigeria is a fast-growing industry that presents immense opportunities for new entrepreneurs. Nigerians lack alternate sources of portable water, and pure water provides easy refreshment and convenience. Over 70% of Nigerians consume at least one bag of plastic sachet water each day. Approximately, 20 million drinking-water sachets are consumed daily, predominantly in urban areas.

In April 2024, Nairametrics carried out a survey which revealed that pure water is the fastest selling commodity in Nigeria’s micro business sector. This shows that the pure water business is highly profitable with a wide consumer base.

Why We Think You Can Make 300K from the Pure Water Business

Selling sachet water in Nigeria is a surefire way to make profit. Currently, a bag of pure water retails between ₦400 – ₦600 and two sachets come to a total price of ₦50. If your business produces 2000 bags per day and sells to distributors for ₦400 each, that is a total profit of ₦800,000 per day. If you sell directly to consumers at the retail price of ₦600, you can be making a profit of ₦1,200,000 per day, ₦8,400,000 per week, and ₦33,600,000 per month. This is a great recoup on your initial business investments.

How To Start a Pure Water Business in Nigeria

Carry Out Market Research

Market research is crucial if you want to start a pure water business. With market research, you can identify market demand, and ensure you make informed decisions. Market research can also reveal effective distribution channels, such as roadside vendors or retail shops, to optimize reach and sales. Additionally, insights into competitors’ pricing and marketing tactics allows your pure water business to position itself competitively.

Create Your Business Plan

A pure water business plan outlines its business strategy, goals, and operational roadmap, ensuring growth and sustainability. For example, a detailed business plan can help your business secure funding by demonstrating to investors the potential profitability and market demand for sachet water. It also sets clear objectives, such as expanding distribution to rural areas where clean water is scarce. Operational plans within your business plan ensure efficient production and quality control processes, reducing waste and maintaining high standards. Furthermore, having a well-thought-out marketing strategy helps target the right customer segments, such as schools and offices, thereby increasing sales and market penetration.

Select a Location

Choosing the right location to set up your pure water business is key. Ideal locations include industrial layouts on the outskirts of cities/towns. Benefits include lower rental costs, space for expansion and quick access to markets.

The location must have reliable electricity, good road connectivity and ample water supply from borehole or state water company. Avoid polluted environments that can compromise water quality.

The pure water sachet business has potential to thrive across Nigeria’s 36 states. When marketing your business, it is likely to see greater success in densely populated urban centers where clean drinking water access is limited.

Some of the top states with huge market demand for purer water are:

• Lagos – As Nigeria’s largest city, Lagos has a population of over 14 million with massive demand for affordable clean water. Areas like Ikeja, Victoria Island, Lekki, Surulere offer prime opportunities.
• Abuja – The capital city also presents a sizable market with population of nearly 3 million residents and commercial centers like Wuse, Garki, Maitama.
• Oyo – Major towns like Ibadan, with about 3.5 million residents, make Oyo a lucrative market for sachet water.
• Kano – Major northern commercial center and Nigeria’s second largest city with over 3 million population. Areas like Sabon Gari have high potential.
• Rivers – Busy cities like Port Harcourt and environs have both the population numbers and commercial activity to drive sales.
• Delta – Urban centers like Warri, Asaba and Effurun have the right demographics and density for your business.

The key is targeting locations with high foot traffic, commercial activity, growing populations and limited access to tap water. While rural demand exists, higher volumes will come from crowded urban areas within these states.

Source for Capital

Starting a pure water business is costly. Asides from your personal savings, explore financing from the following sources:

• Bank loans – Prepare a solid business plan and approach banks with strong SME lending like BOI, FCMB, Sterling Bank.
• Cooperative society loans.
• Equipment leasing – You can lease equipment instead of purchasing outright.
• Partnership – partner with investors looking to fund new businesses
• Grants – Apply for grants within your business or personal niche. Ensure that they’re legitimate grants before you apply.

Register Your Business

To start a sachet water business legally in Nigeria, you must register with the following regulatory agencies:

• Corporate Affairs Commission (CAC) – business name registration
• NAFDAC – National Agency for Food and Drug Administration and Control. Read this 5 page establishment guideline for sachet water production by Nafdac.
• SON – Standards Organization of Nigeria
• State Ministry of Water Resources – borehole license
• State Ministry of Environment – environmental impact assessment
• Local Government – business premises permit

The registration process can take 3-6 months and cost between ₦150,000 to ₦250,000 on average. Make sure that you engage consultants to avoid delays and ensure all approvals are secured before production starts.

Necessary Equipment and Costs

To produce sachet water at commercial scale, the key equipment you need includes:

• Industrial water treatment plant – ₦1.5 million to ₦3 million
• Sachet packing machines – ₦500,000 to ₦1.5 million
• Sealing machines – ₦200,000 to ₦500,000
• Shrink wrapping machines – ₦300,000 to ₦600,000
• Electric power generator – ₦500,000 to ₦1 million
• Distribution trucks – ₦2 million to ₦5 million

Other equipment like water pumps, tanks, industrial filters, and office equipment are important. In total, expect to invest ₦10 million to ₦15 million to set up a medium scale plant with a daily 10,000 bag capacity.

Production Costs

Major costs involved in pure water sachet production include:

• Raw materials – Sachets, nylon rolls, custom labels, additives etc. Cost is around ₦5 per sachet.
• Labor – Salaries/wages for production, technical and sales staff.
• Utility bills – Power, water etc
• Generator fueling and maintenance
• Equipment servicing/maintenance
• Vehicle fueling and maintenance
• Marketing and promotions

With efficient operations, you can keep production costs under ₦3.5 per sachet and sell for ₦10 or more per sachet. This allows for healthy profit margins. Start small and reinvest earnings to scale up production.

Sourcing Raw Materials

The major raw materials you will need regular supply of include:

• Sachet water films – Low density polyethylene (LDPE) nylon rolls
• Custom printed adhesive labels
• Sachet sealing sticks
• Water treatment chemicals such as calcium hypochlorite

Ensure that you develop relationships with reputable indigenous raw material suppliers to get quality materials at fair prices. You should also ensure that you inspect all materials thoroughly before purchase.

Hiring Staff

Your staff is a direct reflection of your business. Your pure water business will need qualified personnel in the following roles:

• Production manager – Oversees daily production operations
• Machine operators – Operate the packing and sealing machines
• Quality control officers – Ensure water quality standards are met
• Drivers – For product distribution
• Sales and marketing officers – For promotional activities and securing new outlets
• Accounts officer – To handle cash flows, payments, expenses monitoring
• Security guards
• Cleaners

Staff can be hired locally but you should ensure they undergo proper training to meet quality and efficiency targets.

Marketing and Distribution

Effective marketing is vital to make your brand known, boost sales and beat competition. Useful marketing strategies include:

• Distributors – Partner with major distributors in your target market for wider reach.
• Branding – Create an appealing brand name, logo and label designs to stand out.
• Social media marketing – Leverage Facebook, Instagram etc for brand visibility.
• Sales vans – Print branded distribution vans for high visibility and free publicity.
• Promos – Do free samples, price discounts and promos to secure new sales outlets.
• Sponsorships – Sponsor community events to gain traction and publicity.

With diligent marketing and selling through established distribution channels, your sachet water brand can capture a sizeable market share and sales volumes in Nigeria.

Conclusion

The pure water sachet business provides huge opportunities to earn significant profits in Nigeria’s fast-growing water industry. By securing the right equipment, registration licenses, financing, skilled staff and deploying effective marketing, your business can become a remarkable success story!