Construction of a plant for production of mineral and mineralized water

An honorable place in the range of business plans developed by specialists of Intesco Research Group belongs to the project on construction of a plant for production of mineral and mineralized water in the town of Belorechensk of Krasnodar Krai.

Basic factors required for implementation of the bottled water production project

Having conducted a market research, our specialists revealed a high demand for bottled drinks, especially in the warm time of the year. Besides, the region is rich in natural water sources. These two factors became basic ones in taking of the decision on further project development.
The aim of the business plan was justification of the cost effectiveness of construction of a plant for production of mineral and mineralized high purification category water with the capacity of 10 million decaliters a year and “tastes of childhood” soft soda water with the capacity of 5 million decaliters a year.

The imitator of the construction was a closed joint-stock company, the standard plant project was provided by the famous KRONES company.

A land plot of 10 ha was allocated for construction, the land use borders were established. The total plant building area will amount to 25 thousand m2 with the ceiling height of not less than 7 m. The building will be equipped with a ramp.

Calculating of plants construction costs

The project costs included the construction and installation works and the following required items:

• Development of project documentation and its coordination with state authorities
• Drilling and certification of three boreholes with the depth of 850 m each.
• A power plant with min. capacity of 3550 kW and its certification.
• Sewage, ventilation and fire alarm system works.
• Installation and piping (pipelines, electric cables) of processing lines in accordance with the plan of equipment arrangement in workshops.

Apart from the above mentioned, the project costs included logistic costs and insurance.

According to calculations of financial specialists of Intesco Research Group, project implementation will require investment in the volume of 3.5 billion rubles.

Plant construction investment structure

Having conducted all the required calculations, we developed the following structure of investment:

The investor is capable of investing his own funds in the volume of 548 950 thousand rubles in project implementation. The rest (2 985 955 thousand rubles) of the required funds, which will cover a greater part of capital and current costs, is to be the bank loan funds. At suggestion of our specialists, this sum will be acquired in three tranches.

Range of products of the mineral water plant

According to the project initiators’ intentions, the plant is to produce soft soda water. Its production will be based on existing technical specifications and formulae with observation of all sanitary regulations and standards. It is planned to use natural and nature-identical raw materials of Russian and foreign production.

The range of products will include:

• Soft soda water made of Russian and foreign production raw materials in bottles of 0.5 l; 1.5 l; 2 l (PET);
• Mineral hydrocarbonate water and artesian mineralized pure water of the highest purification category in bottles of 18.9 l (a large bottle); 10 l; 5 l; 1.5 l; 0.5 l (PET) and gas water with the total salt content of 1-10 mg/liter, up to 3 names of bottles of 0.5 l; 1.5 l; 2 l (PET).

Project effectiveness rates

At the time of all calculations the project planning horizon amounted to 10 years, with the planning step of 1 quarter. The annual discount rate was 15%.

Thus, the initial project rates were the following:

The project rated planning horizon is 8 years. During this period:

• The net cash flow will amount to 4 409 375 thousand rubles;
• The net present value will amount to 529 932 thousand rubles;
• The discounted payback period will be 7.85 years;
• The profitability index will be 1.16. It means that the returns for each ruble invested in the plant will amount to 1.16 rubles;
• The internal rate of return, which shows the expected rate of project returns, is 19.1%.

The business plan was developed in close cooperation with the customers. Such a professional approach made it possible for Intesco Research Group to execute the order of the customer with high quality and in the shortest term possible.

You can order development of a business plan for your project by calling at +7 (495) 212-91-91 or filling in a request at the website, after which our manager will call you.

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