The pure water business in Nigeria is a fast-growing industry that presents immense opportunities for new entrepreneurs. 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.
What We Covered In This Article
Industry Overview
- The sachet water, commonly known as “pure water” in Nigeria, is the most popular source of drinking water in most cities and villages. Over 70% of Nigerians consume at least one bag of plastic sachet water each day
- In Nigeria, approximately 20 million drinking-water sachets were consumed daily, predominantly in urban areas.
Registration Requirements
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. Engage consultants to avoid delays and ensure all approvals are secured before production starts.
Required Equipment
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 will also be required. 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 e.g. calcium hypochlorite
Develop relationships with reputable indigenous raw material suppliers to get quality materials at fair prices. Inspect all materials thoroughly before purchase.
Location Selection
Choosing the right location is key for your sachet water business. 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.
Financing Your Sachet Water Business
Besides using your personal savings, explore financing from:
- Bank loans – Prepare a solid business plan and approach banks with strong SME lending like BOI, FCMB, Sterling Bank.
- Cooperative society loans
- Equipment leasing – lease instead of purchasing equipment outright
- Partnership – partner with investors looking to fund new businesses
- Grants – Apply for youth/women empowerment grants. Beware of scams.
Hiring Staff
You will need to hire qualified personnel in these key 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 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 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.
Top States with Growing Demand
The pure water sachet business has potential to thrive across Nigeria’s 36 states. However, 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 include:
- 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 keys are 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.
In summary, the pure water sachet business provides huge opportunities to earn significant profits in Nigeria’s fast-growing packaged water industry. By securing the right equipment, registration licenses, financing, skilled staff and deploying effective marketing, your business can become a remarkable success story!
Image Credits: All images on this website are sources from Getty Images, Pexels and Unsplash.
