Mineral Water Plant Profit Margin


We all know water is the basic need of human being; it would be a good idea to do a business with it. The increasing population in India around 2-3% every year shows that there is a good scope of setting up a mineral water plant in India irrespective of the amount of competition we have in this industry. Though there are giant players in the industry like coco cola, Bisleri, Kingfisher etc, the bottled water industry is still expected to grow in the coming years. Total revenue of 1600 crores is earned from this business in the current year! This is a tremendous growth from the previous years as the revenue from bottled water industry is increasing at a high pace up to 30-40% annually compared to the last four years.

Potential Market/Buyer

If you are planning to start at a small-scale level within your locality, it can be one of the most lucrative and profitable business. You can think about distributing the mineral water to houses in your locality as 2-litre jars at the rate of Rs.35 to Rs.40, a very nominal rate. You will find that almost every alternative day you may get new orders from the houses. In this way, you will be able to make your mineral water plant profit margin.

You can also distribute the small or large bottles to nearby restaurants, bakeries, fitness clubs, cafes, retail shops, the list goes on, and it increases Mineral water plant profit margin.

If you are confused at starting which type of bottled water plant at what capacity, here are some ideas that can help you out.

Plant Layout Cost For A Small-Scale Mineral Water Plant

2000 LPH Economic Plant:

An economic plant will have almost all the facilities and machinery of a big plant and along with it; you can ensure speedy bottled water production with good quality output.

The cost of setting up each plant with different capacity will vary. For a 2000 LPH economic plant, you may need to have a building of approx 2000 square feet area and the building cost can come up to 16 lakhs. The required fund of 70% of the total cost can be arranged from financial institutions in the form of a business loan. The machinery will include water treatment plant, bottle blowing unit, bottle filling machine (30B30 BPM auto), Pouch packing machine, Ink Jet Coder etc. It would come around the cost of 26 lakhs for all machinery. To begin with, you may need some 5-6 people in the plant including a manager and workers.

For a just Jar plant, the investment is little lower than this, which can be around 16 lakhs for building cost and 20 lakhs for the machinery.

These are just approximate estimates. However, there are options to reduce the expenses even more when you take the building for rent or lease initially or setting up the plant in your owned building. Even machinery and accessories can be taken for lease initially rather than buying the same. By this, you will find a reduction in the overall cost of setting up the bottled water plant. This gives an increased Mineral water plant profit margin also.

What Is The Profit Margin In Mineral Water Plant?

A mineral water plant is something that can be easily set up provided you have a good business plan. Mineral water plant profit margin you can expect from small bottles is approximately 15% and for the large bottles it is around 60%. Thus, we can say, the average profit margin that you can expect from your small-scale mineral water plant would be 25% to 30%.

Now let’s have a look at the profit margin of a single unit of 1-litre jar. The profit margin can be finalized based on the operating cost of manufacturing a single unit of 1-litre bottle and its selling price. For a one-litre bottle, the operating cost will come to Rs.4.29 (approx) including all the expenses like cost of bottle and cap, shrink label, R.O water cost, packing cost, interest on Capital and other miscellaneous costs. The selling price per unit can be around Rs.5.85 (approx). Thus, the profit margin for one-litre bottle comes to Rs.1.56 (Approx).