JAR WATER PLANT

INTRODUCTION
Jar Water Plant in Bangladesh is most booming business now days. The
demand of pure drinking water is increasing year after year. The average per
capita consumption of pure drinking water has increased and given the limited
resource of fresh water it is difficult for the countries to make available its
population the fresh water. The crisis of pure drinking water in Bangladesh,
keeping this situation in mind many industries and individual personnel have set
up mineral water plant / Jar Water Project / Drinking Water Pant in order to obtain
fresh pure drinking water.
All Water Treatment Plants are designed as per WHO and BSTI
guidelines, recommended International code of Hygienic practice for the
collecting, processing, and marketing of Packaged Drinking Water/Natural
Mineral Waters / Pure Drinking and confirm to the Standards set by expertise for
Mineral Water.
PLANT CAPACITY
The unit is proposed to produce 2500 jar (20 liter) of drinking water per
day.
MARKET & DEMAND ASPECTS
Earlier bottled drinking water was privileged to high class, foreign tourist and
highly health conscious people but the present decade has witnessed increasing
popularity among average consumers, increasing living standards, disposable
income, education and awareness among the consumers domestic and foreign
tourist, sophisticated business houses and offices has increased rapidly the sales
of bottled water in recent years. The growing demand for bottled water speaks
volumes of the scarcity of clean drinking water and the quality of tap water. There
are around 20 players in the organized market who produce and market drinking
water on a large scale. More 30 companies have area-based market in the capital
and

elsewhere

in

the

country.

Industry insiders said the bottled water market is growing at a rapid rate of

around 20 per cent. At this growth rate, the 2.5 billion market is estimated to
overtake the soft drinks market soon.
Any water manufacturing, bottling and marketing company requires license
from the state-controlled Bangladesh Standards and Testing Institution (BSTI),
WASA, commerce ministry, environment ministry, labor ministry and City
Corporation. But most of the jar water producers have been operating their
business only with a trade license obtained from the city corporation.

-02PROCESS OF MANUFACTURING
The water is processed Eliminates load of total suspended solids in
with
multi
stage the raw water
purification
processes
such as sand filter,
activated carbon filter,
ultraviolet
disinfection,
ultra filtration, Reverse
Osmosis and Ozonization.
Sand filter
Activated carbon filter
This filter removes most of the organic
contamination and pesticide residuals from
the water. It also controls taste and odor of
water
Ultraviolet disinfection
Water is exposed to UV light of wavelength
(UV)
245 nanometers (nm). A dosage of 16000
microwatt/sq.cm at 40 C for effective
disinfection
Ultra filtration
A low pressure membrane process that
removes dissolved organic macro molecules,
viruses, pyrogen enzymes etc.
Reverse Osmosis
This process eliminates dissolved impurities
like unwanted salts and retain minerals
which are essential to human body
Ozonization
This
is
the
strongest
oxidizer
and
disinfection agent which acts on broad
spectrum of microbiological organisms.
Filtration
This pumps water through a microscopic
filter that is rated for a certain size
organism. The standard size rating is the
micron

Capacity flow rate

Raw water quality
(assumed)
Motive power

1000 lit/hour
1000 ppm as TDS
1KW

RAW MATERIALS
The main raw material is water which is purified and made into finished
product. Also reagent and chemical are required.
BASIS AND PRESUMPTIONS
This project has been drawn on the basis of following presumptions:
1
Working hours per shift
8
2
No. of shift /day
3
3
No. of working days
300
/annum
4
Handling loss of jar per
5000
year
5
Capacity Utilization
65%,70%,75%,80%
6
Production per day
2500 jar of 20 ltr
7
Selling Price per Jar
Tk 60/8
Rate of interest
12% per annum
9
Price of Empty Jar
10 Empty Jar required per
50000 pcs
annum
11 Empty Jar price
Tk 260/- pc
12 Total Employee & Labor
10
13 Source of water
own deep tube-well
14 Handling loss of jar per
5000
year
15 Chemicals and Reagents
etc. (L.S.
16 Total Cost of the project
Tk.140.70 lac
-03Fixed Cost of the Project
Items
incurre
d

To be
inc

Tk. in '000'
Total Cost

1.
Land:
a) Cost of Land (rental premises) and Land
Developmemt
b) Transfer of Project Land in Company
Name
Sub-Total :

0
0

0
0

0
0

02. Building & other civil works :

Civil Construction (As per Annexure-

II)
Sub-Total :
03. Imported Machinery &
Equipment :
CFR of Machinery (US$ 5,51,420) (As per
Annexure-III)
L/C Commission -1%
Clearing & Fording
-1%
Freight -Inland - 0 .5%
Pre Shipment
inspection -1%
Marine Insurance -1%
Sub-Total :
04. Local Machinery:
As per Annexure III/A
Sub-Total :
05 Installation & Other
Cost:
Civil, Mechanical &
Electrical
Transport, Food, Lodging, Local Expenses of
the erectors
Security Deposit for
Electricity
Electric line connection, pole, cable
etc.
Sub-Total :

0
0

8000

80

8000
80

0
0

80
40

80
40

0
0
0

80
80
8360

80
80
8360

0
0

1500
1500

1500
1500

500

500

0
500

0
500

06. Vehicles
As per Annexure III/B
Sub-Total :

0
0

2000
2000

2000
2000

07.Office & Factory Furniture, Fixture &

Equipments :
As per Annexure III/C
Sub-Total :

0
0

200
200

200
200

08.
Consultant's
Fee
Servey,Plan,Design,Drawing, Technology
Support etc.
Sub-Total :

100
100

400
400

500
500

-04-

09. Pre-operating
Expense :
Evaluation & Documentation Fee
Different charges, registration fee,
VAT etc.
Promational and legal
etc.
Construction Period
Insurance
Trial
Run
Sub-Total :
Total Fixed Cost of the project :
10. Interest on Grace
Period:
On Tk. 35.00 lac Intt.
@ 12%
per annum for a period of 06 months
Sub-Total :
Total Cost of the
project :

200

200

100

200

300

100

100

200
300

0
500

200
800

400

11460

11860

210
210

210
210

400

13670

14070

Cost of the Project & Means of Finance

Items
Land & Land
Development
Civil Works & Building
Imported
Machinery
Local
Machinery
Cost of
Installation
Vehicl
e
Office Equipments & Other Assets
Consultant's
Fee

Cost
Incurred

Tk. in 000
Total Cost

Cost to be
incurred
0
0

0
0

0
0

8360

8360

1500

1500

500

500

0
0

2000
200

2000
200

100

400

500

Pre-operating Expense
Interest on Grace Period

300
500
800
0
210
210
--------------------------------------------400
13670
14070
======= ========
=======
==
===
=

Total Cost of the Project

-05Means of
Finance :
Loans
:
Bank's Term
Loan
Interest on Grace Period

0
0

3500
3500
210
210
------------------------------------------0
3710
3710

Total Loans
Sponsor's
Equity :
---------------------Sponsor's Investment

400
9960
10360
-------------------------------------------400
9960
10360
--------------------------------------------

Total Equity
Total Loans &
Equity

400
=======
==

13670
========
==

Debt : Equity
Ratio
Fixed Assets Coverage
Ratio

14070
=======
===

26%

74%
3.52

Assesment of Working Capital

A : Current

Tied up

1st

2nd

3rd Year

4th Year

Assets :

Year

Year

Raw materials (Local)

Period
60 days

1209

1302

1395

1488

Work in Process

02 days

119

132

146

160

Finished Goods Stock

10 days

591

677

746

818

Receivables at
cost

10 days

572

654

721

790

Stores & Spares

Total Current Assets:

90 days
16
31
47
62
----------- ----------- ----------- -------------- -----------------2507
2796
3055
3318

Bank
Borrowings:
70% raw materials, WIP, Finished
goods,
receivables &
spares
Sponsor's
Margin

1755

1957

2139

2323

752

839

917

995

-06Assumptions:
Requirement of Local Raw
materials:
Unit Price
Quant
ity
30000

Items
Empty Jar 20 ltr 2500 jar per day
Chemical &
Reagent
Transport Cost
Unloading
Total

Unit
pc

Raw Materials
Capacity
utilisation
Requirements of RM

1st Year

in Tk.
in '000'
260.00
7800
0

65%
6045

2nd
Year
70%
6510

Total
Tk.

0
3rd
Year
75%
6975

1000
500
0
9300
4th
Year
80%
7440

Total
requirement
Inventory 60
days)

6045

6510

6975

7440

1209

1302

1395

1488

No. of

Monthl
y

Total
Tk.

Post

Salary

in '000'

20000
15000
12000
0

240
180
288

Wages &
Salaries
Name of the
Post
Factory
Manager
Quality Controller
Skilled Labor
Non Skilled
Lobor
Security Guard
Driver
Machine Maintenance
Person

1
1
2
0
1
2
1
8

Total :
1st Year
Salari
es
Increment
10%
Total
Bonus 2 months basic
Total Salary

2nd
Year

144
1260
3rd
Year

4th
Year

1260

1260

1386

1525

0
1260
210
1470

126
1386
231
1617

139
1525
254
1779

153
1678
280
1958

-07-

Water

10000
12000
12000

0
120
288

:
Sources of
Water
Annual requirements
in litre
Power
:
Connected
load
Maximum
Demand
Operation
Hour
Cost per kwh
(average)
Vat
(5%)
Dmand charge per month in Tk.
Service Charge per month in Tk.

Projects own deep tubewell

400KW

320KW

16

8.00

5.0%

:
:
:

80.00
360.00
Tk. in
'000'
12288

614

384

13290

Cost of Power per year at 100%

capacity
Vat
5%
Demand Charge per
year
Service Charge per
year
Total cost of power

Fuel
Lubricants :
Unit
Price
Items
Mobil,
Grease
Lub. oil
Diesel

Requirements
Water

Unit

Quantit
y

Kg
Litre
Litre

200
200
500

1st Year
0

2nd
Year

in Tk.
250
250
70

3rd
Year
0

Total
Tk.
in
'000'
50
50
35
135

4th
Year
0

Power
Fuel &
Lubricant
Capacity
Utilisation
Requirements at attainable
capacity
Demand Charge
(power)
Service Charge (power)
Total water, fuel &
power

12902

13548

14225

14936

135

142

149

156

65%

70%

75%

80%

8474

9582

10780

12074

384
4

384
4

384
4

384
4

8862

9970

11168

12462

-08General & Administrative

Expense
Items
Salary
(Administration)
Post, telephone &
fax
Stationery &
Printing
Travelling &
Conveyance
Depreciation &
Write off
Rent 15000/- per
month
Miscellaneous
Expenses
Total

Tk. in 000
4th Year

1st Year

2nd Year

3rd Year

308

338

342

342

60

72

84

96

48

60

72

84

100

120

140

170

190

190

190

190

180

180

180

200

120
150
160
180
------------- ------------- ---------------- ------------------1006
1110
1168
1262

Assumptions:
Salary & Allowances:
No. of
Name of the
Post
General
Manager
Assistant General Manager
Chief Accountant

Post
0
0
0

Monthl
y

Total
Tk.

Salary in '000'
0
0
0
0
0
0

Accounts
Officer
Office
Assistant
Driver
Office Peon

0
0
1
0
1
2

0
10000

1st Year
264

2nd
Year
264

3rd
Year
264

4th
Year
264

144
0
120
264
5th
Year
264

0
264
44
308

26
290
48
338

29
293
49
342

29
293
49
342

29
293
49
342

Total :
Items
Salaries
Increment
10%
Total
Bonus 2 months basic
Total Salary

0
12000

Depreciation & Write

2 Off
Depreciation
Items
Other Assets
Pre-operating
Expenses
IDCP

Depreciated
Amoun
Rate
t
15.00%
30

Amount
200
800
0

20.00%
20.00%
Total :

160
0
190

-0902. Sales
Revenue :
Item

Jer per day 2500

Unit

Pcs.

Quantit
y

Unit
Total
Price
Tk.
in Tk. in '000'
750000
60.00 45000
Total :
45000

Forecast of Earnings
Item
Net Sales
Revenue
Cost of Goods
Sold

1st Year

2nd
Year

3rd Year

4th Year

28086

31371

33656

35907

17148

19633

21626

23715

Gross Profit

10938

11738

12030

12192

General & Administrative Expenses

1006

1110

1168

1262

Profit before Tax & Interest (EBIT)

9932

10628

10862

10930

616

559

500

441

9316

10069

10362

10489

9316

10069

10362

10489

725

725

725

Retained
earnings

9316

9344

9637

9764

Cummulative retained
earnings

9316

18660

28298

38062

39%
35%

37%
32%

36%
31%

34%
29%

33%

32%

31%

29%

8.64

9.61

10.29

10.89

Financial
Expenses
Profit Before Tax (EBT)
Income Tax (Tax
Holiday)
Net profit after
tax
Dividend @ 7% on paid up capital

Ratios
:
Gross Profit to
sales
Operating profit to sales
Net Profit to
sales
Debt Service Coverage
Ratio

-10Break Even Analysis

Tk. in '000'

01. Sales and Service revenue at 60% capacity

( 4th year)
02. Total Cost : Operational, Administrative and
Financial

Item
Raw Materials
Wages & Salaries
Stores & Spares
Repairs & Maintenance
Depreciation & Write Off
Water, Power & Fuel
Rent, Tax & Insurance
Other Expenses
Salary (Administration)
Postage, telephone &
telegraph
Stationery & Printing
Travelling & Conveyance
Rent
Miscellaneous Expenses
Financial Expenses

Total
Cost

35907
25504

Fixed
Cost

7440
1958
207
207
1226
12462
141
350
342

0
392
104
104
1226
2492
141
175
342

Variable
Cost
7440
1566
104
104
0
9970
0
175
0

96
84
170
200
180
441
25504

48
42
85
200
90
162
5602

48
42
85
0
90
279
19902

Contribution Margin (CM)Ratio : Sales-Variable

cost/ Sales
Break Even Point = Fixed Cost/
12567
CM Ratio

0.45
35% of Attainable
capacity
28% of Rated capacity