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Mineral Water Essay

3688 words - 15 pages

44. MINERAL WATER

44-2 TABLE OF CONTENTS PAGE I. II. III. SUMMARY PRODUCT DESCRIPTION & APPLICATION MARKET STUDY AND PLANT CAPACITY A. MARKET STUDY B. PLANT CAPACITY & PRODUCTION PROGRAMME IV. RAW MATERIALS AND INPUTS A. RAW MATERIALS B. UTILITIES V. TECHNOLOGY & ENGINEERING A. TECHNOLOGY B. ENGINEERING VI. MANPOWER & TRAINING REQUIREMENT A. MANPOWER REQUIREMENT B. TRAINING REQUIREMENT VII. FINANCIAL ANLYSIS A. TOTAL INITIAL INVESTMENT COST B. PRODUCTION COST C. FINANCIAL EVALUATION D. ECONOMIC BENEFITS 44-3 44-3 44-3 44-3 44-5 44-6 44-6 44-7 44-8 44-8 44-9 44-11 44-11 44-12 44-13 44-13 44-14 44-14 44-15

44-3 I. SUMMARY

This profile envisages the establishment of a plant for the ...view middle of the document...

The present study considers bottling, packing and distribution of mineral water. III. A. 1. MARKET STUDY AND PLANT CAPACITY MARKET STUDY Past Supply and Present Demand

Demand for mineral water in Ethiopia is met through local production except for insignificant import. The domestic suppliers were for a long time a few public sector companies. Ambo Mineral Water is the most reportable among these, enjoying the largest share of the market in most parts of the country. Tossa and Babile had also a long history of supplying mineral water through their geographic reach, which is limited to specific regions. The private sector supplier is Bure Baguna which is located 410 km north-west of Addis Ababa. Currently, Moha Soft Drinks S.C is refurbishing the Bure Baguna Mineral Water Factory which it bought from the Ethiopian Development Bank after it was foreclosed following the failure of the owners to pay their debts. Table 3.1 shows the combined production volume of mineral water by all local producers in a ten years period (1985-1994).

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Table 3.1 DOMESTIC PRODUCTION OF MINERAL WATER Year 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 Production (Liters) 15,926,000 19,928,500 29,837,700 35,775,410 37,425,700 39,006,800 42,141,700 39,976,410 39,545,100 39,463,200

Source: CSA, Survey of the Manufacturing and Electricity Industries, Annual Issues. Scrutiny to Table 3.1 will reveal that the supply of mineral water had nearly doubled in 1987 from the base figure of about 16 million liters. Subsequent years were also marked by significant growth and the supply reached the peak volume of 42 million liters in 1991. Since then, supply of mineral waters appears to have stabilized around 40 million liters per annum. The per capita consumption that derives from this is, hence, 0.56 liters which is low by any standard. Assuming a one liter per capita consumption, present demand for mineral water in Ethiopia would amount about 72 million liters, implying a gap of 32 million liters, which an aspirant plant could fill. Some proportion of the production could also be exported to Middle-Eastern and other prospective markets. 2. Projected Demand

The annual average growth rate in the past 10 years of local mineral water production was about 11%. The future demand for mineral water is a function of income, urban population growth and growth of catering and recreational establishments. After considering all the above factors, the demand for mineral water is forecasted to grow at a rate higher than the growth of the urban population in order to take account of effects of growth in income and other demand determing variables. Accordingly, an annual growth rate of 7%, (which is lower than the past trend) is deemed to be a reasonable growth rate to project future demand, and the result is as shown in Table 3.2.

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Table 3.2 PROJECTED DEMAND FOR MINERAL WATER Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Projected Demand...

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