fs (water refilling ) jun 2
TRANSCRIPT
FEASIBILITY STUDYFEASIBILITY STUDY
onon
WATER REFILLINGWATER REFILLING
STATIONSTATION
INTRODUCTION
The demand at the water refilling stations – water stores that sell purified water – is
now increasing. The quality of purified water conforms to the national standards for drinking
water and is even better than the quality of water produced by traditional water supply
systems in terms of removed impurities.
Over the years, as the demand for cleaner water becomes higher, the price of
household water purifiers and bottled water has become prohibitive. Water refilling stations
managed by private entrepreneurs offer a cheaper and more convenient solution to the
public’s drinking water needs than bottled water or the use of household filters.
At present, about 20 water refilling stations have proliferated in Nasugbu, Batangas.
They sell purified water of comparable quality with bottled water at a lower price. For
example, the current price per gallon of refilled purified water in Nasugbu ranges from P 20
to P 30 per 5-gallon container.
In Nasugbu, most of the water refilling stations is connected to the pipes of Nasugbu
Water District for their source of raw water while in other areas they opt to use private deep
wells. The “potable water” supplied by the providers is then further purified by utilizing a
combination of water treatment equipment, such as sediment filters, carbon filters, water
softeners, reverse osmosis membranes, ultra-violet lamps, and ozone generators. Typical
water refilling stations can produce 3,000 to 12,000 liters of purified water per day. In
previous years, most of the people were bringing a container to a water refilling station to buy
purified water.
Nowadays, because of convenience on the part of the consumers, purified water in 5-
gallon (22.7 liters) containers is delivered by the station directly to the people’s home.
Proponent:
CADP CONSUMERS COOPERATIVE
Proposed Location:
Brgy. Lumbangan, Nasugbu, Batangas
Objectives:
A. Provide a potable drinking water for the community.
B. Increase the income of the cooperative as it helps the community.
Nature of the Business
CADP Consumer Cooperative is an organization established by the employees of Central Azucarera Don Pedro, Inc. (CADPI). Its purpose, just like any other cooperative is to serve the members and provide them their immediate needs and help the members attain economic stability. Thus, the cooperative operates a consumer store to provide the members their basic needs at affordable prices.
The water refilling station; “Aqua Kabayan” as it would be named is going to provide additional services and benefits to the members as well as other residents in the community (Barangay Lumbangan). Potable water will be more accessible as it will be located at the center of Barangay Lumbangan (besides the Consumer Store) where almost all of the employees pass by on their home.
“Aqua Kabayan” will also offer additional services like free delivery and the product can also be availed on credit (for members only).
MARKETING ASPECTMARKETING ASPECT
Target Market
Members of the cooperative
Local Residents
Demand
The CADP Consumer Cooperative has a total membership of 523, working on three shifts a day and there are an estimated 100 families residing nearby the store who are neither members nor employee of CADPI.
On the average, a family of four members consumes three 5-gallon purified water every week or 12 containers a month. Using this data the projected demand for water refilling station in the specified area is:
Target Market PopulationEstimated Weekly Consumption (in 5 gallon containers)
Estimated Monthly Consumption (in 5 gallon containers)
Cooperative members
523 1,569 6,276
Local Residents 100 300 1,200
TOTAL623 1,869 7,476
Demand in Gallons9,345 37,380
Table 1 Demand Chart
Market Share
It is assumed that since the targeted market is members of the organization, 80% of
the member will opt to buy from “Aqua Kabayan” (members buying in the cooperative earns
dividends and refunds at the end of the year). While considering the accessibility factor, 80%
of the local residents are also going to consider getting their purified water supply from the
store.
Target Market
Estimated Weekly
Consumption (in 5 gallon containers)
Market Share
Estimated Monthly
Consumption (in 5 gallon
containers)
Market Share
Cooperative members
1,569 1,255 6,276 5,020
Local Residents 300 240 1,200 960
TOTAL1,869 1,495 7,476
5,980
in Gallons9,345 7,475 37,380 29,900
Table 2 Market Share
Proposed Marketing Strategy
Product Strategy – Refilling Station will be constructed with transparent glass and according to prescribed standards so that the customers will be able to see how carefully and cleanly the products are being processed. Excellent quality will be maintained by giving the workers training and guidance on good manufacturing practices.
Distribution Strategy – A delivery vehicle will be purchased to shorten waiting time of customers. Customers can order thru phone call or text and 20 minutes waiting time will be observed. It will also be assured that products will be handled properly and will maintain its quality during delivery.
Promotion Strategy – Information dissemination will be done so that target market will be aware of the existence of the water refilling station. Members will be informed of the benefits and importance of drinking clean water and the added benefits of buying it from the cooperative
Pricing Strategy – Being a new entrant, “Aqua Kabayan” will offer an affordable price of 25.00 per container.
SALES PROJECTIONS
YEAR 1 YEAR 2 YEAR 3
in units of 5 gal containers 71,760
78,936
86,829
Selling Price 25 25 25
Total Sales 1,794,000.00
1,973,400.00
2,170,725.00
Table 3 Three Year Sales Projection
MARKETING BUDGET
Delivery Vehicle
There is a need to purchase a delivery vehicle to ensure the fast and timely
delivery of products. Consumers prefer to buy products that are readily available and
with minimal waiting time. Water is a basic need and there should be no delays in the
delivery. Estimated cost of a delivery vehicle is at Php 75,000.00. Estimated Useful
Life is five (5) years.
Fuel Consumption in the delivery of goods is estimated at 500.00 per day.
Information Dissemination
The awareness campaign will entail costs of printing flyers (for distribution) and
tarpaulins (to be placed at strategic locations). Cost of these materials is estimated at Php
10,000.00.
Packaging and Labeling
Initially, 100 units of containers (5 gal) will be purchased. Since most of the
consumers already have containers, the said containers will be replaced every
delivery. Empty containers will be refilled and delivered to other customers so that
consumers will only have to pay for the contents and not the containers.
All containers should have labels, bearing the name of Aqua Kabayan and all
containers should all be sealed to ensure that the product reaches the end consumer
with utmost quality. Fifteen thousand pieces of labels and seals will be printed on a
quarterly basis. Estimated cost is Php 3.00 per container.
Manpower
There will be 2 persons handling the delivery, both of which should know how to drive
the delivery vehicle so that they can work alternately on the tasks to be assigned to them.
They are going to receive salaries of Php 4,500 a month or Php 150.00 daily.
Account Title Amount in Pesos
Delivery Vehicle 75,000.00
Fuel and Lubricants 15,000.00
Promotions 10,000.00
Packaging (containers) 15,000.00
Materials and Supplies (stickers) and
seals (quarterly)45,000.00
Salaries and Wages 9,000.00
TOTAL 169,000.00
TABLE 4 MARKETING BUDGETTABLE 4 MARKETING BUDGET
MARKETING EXPENSES
Account Title YEAR 1 YEAR 2 YEAR 3
Delivery Vehicle ( Amount of Depreciation)
15,000.00
15,000.00
15,000.00
Fuel & Lubricants 180,000.00
198,000.00
217,800.00
Promotions 10,000.00
10,000.00
10,000.00
Packaging (containers) 5,000.00
5,000.00
5,000.00
Materials and Supplies (stickers) and seals (quarterly)
180,000.00
198,000.00
217,800.00
Salaries and Wages 108,000.00
118,800.00
130,680.00
TOTAL 498,000.00
544,800.00
596,280.00
Table 5 Marketing Expenses (three years)
PRODUCTION ASPECTPRODUCTION ASPECT
Production Process (water filtration & purification system)
1st unit Multimedia sediment process
Stage 1The water first passes through the 1st stage which makes up of a course gravel that traps solid particles of about 100 micron
Stage 2 Consists of sand filters that removes sediment of 50 micron ratings
Stage 3 Consists of fine sand that eliminates solid particles of 25 micron
Stage 4 Consists of fine clear slit that eliminates solid particles down to 5 micron
2nd unit Multi media carbon process
Stage 5 Makes use of a lignite carbon that removes foul taste and odor
Stage 6Makes use of bituminous carbon that eliminates yellowish and brownish discoloration brought by inorganic contaminants
Stage 7Makes use of granular activated carbon (GAC) as the last multi media carbon stage. This stage is where the water undergoes longer contact time with the carbon to eliminate other contaminants that might cause foul smell or taste
3rd unit Water conditioning and softening process
Stage 8Makes use of resin beads that attract mineral contents that convert hard water to soft water
Stage 9Makes use of ion exchange beads to condition water by extracting the organic and inorganic chemicals present in the water
Stage 10Makes use of another carbon that eliminates any ferrous iron (dissolved iron) in water
Stage 11Makes use of fine gravel that serves as a sieve which eliminates any residue that might come out during regeneration time. This is a cleansing agent.
4th unit Ultra micron process
Stage 12
Consists of a one (1) big blue housing that includes 1 micron cartridge that eliminates any microscopic residue that might go to the reverse osmosis membrane. This stage stands as a protection for the membrane against premature clogging
5th unit Reverse osmosis
Stage 13
It is the most important system in any water filtration and purification process. This makes use of reverse osmosis equipment which has semi-permeable membrane that only allows pure water to pass through and pushes the unpure water out of the system to the reverse side or the reject drain line.
6th unit Polishing process
Stage 14Includes one (1) big blue housing that consists of a carbon cartridge that serves as a polishing stage to make the water crystal clear and shiny
7th unit Anti-microbial process
Stage 15
This stage eliminates cyst micro organism that has a micron rating of 1 and has a very thick cell wall where UV light sometimes cannot penetrate; however a micron rating of 0.5 will eliminate such kind of micro organisms. Cyst causes diarrhea and gastro enteritis.
8th unit Water sterilization process
Stage 16
This last and final stage is the second most important system in a water filtration and purification system. This is the stage that kills all microorganisms and other diseases causing bacteria from infiltrating into the product water, thereby assuring safe and pure water.
Table 5 Production Process
Fixed Assets Required:
Item Amount Useful Life in Years Annual Depreciation
Land 50,000.00
Machineries & Equipment 300,000.00 15 20,000.00
Building (25 sq meters) 150,000.00 20 7,500.00
TOTAL 500,000.00 27,500.00
***Repairs and maintenance of equipment is assumed at 2.00 per month.
Table 6 Schedule of fixed Assets Required
FACTORY LOCATION AND LAY OUT
COST OF LABOR
There will be 2 workers tasked in refilling and cleaning of containers. The
cooperative manager will be the one to oversee the production and help in the
operation whenever it is needed. The two workers will be receiving Php 4,500 a
month.
MATERIALS AND SUPPLIES
Materials and Supplies are estimated at Php 6,000.00 monthly (water is the
major raw materials needed).
FACTORY OVERHEAD
Overhead expenses are composed of Utilities, Telephone Bills and
Depreciation. Electric consumption is assumed at Php 7,500.00 monthly and
telephone bills are at Php 1,000.00 per month. Please refer to Depreciation table
for depreciation expenses.
PRODUCTION COST
Account Title YEAR 1 YEAR 2 YEAR 3
Direct Labor 108,000.00
118,800.00
130,680.00
Materials & Supplies 72,000.00
79,200.00
87,120.00
Depreciation (Building) 7,500.00
7,500.00
7,500.00
Depreciation (Machineries & Equipment
20,000.00
20,000.00
20,000.00
Utilities 102,000.00
112,200.00
123,420.00
TOTAL 309,500.00
337,700.00
368,720.00
Table 7 Production Cost (three years)
PRODUCTION COST PER UNIT
YEAR 1 YEAR 2 YEAR 3
TOTAL PRODUCTION COST 309,500.00
337,700.00
368,720.00
MARKETING EXPENSES 498,000.00
544,800.00
596,280.00
Units Produced 71,760
78,936
86,829
PC PER UNIT 11.25
11.18
11.11
Table 8 Production Cost per unit (three years)
ORGANIZATION AND MANAGEMENT ASPECT
1. Form of Business
Multi-Purpose Cooperative
2. Business name
CADP Multi-Purpose Cooperative under the brand name: “Aqua Kabayan”
3. Organizational Chart
4. Key Personnel and Responsibilities
Cooperative Manager – In charge of the overall operation of the business. Acts as the marketing officer and represents the business in all external concerns. The manager will oversee the entire operation of the business and collects cash sales for remittance to the cooperative treasurer.
Board of Directors
Coop. Manager
Worker 1 Worker 2 Worker 3 Worker 4
Worker 1 & Worker 2 – will handle the plant operation. They will be in charge of cleaning and refilling containers. They will also observe proper sanitation of the plant and maintain excellent quality of the product.
Worker 3 and Worker 4 – will be tasked in the delivery and distribution of the products. They will ensure that all deliveries are done at the shortest possible time. They will also handle collection of payments and issuance of receipts during delivery.
FINANCIAL ASPECTFINANCIAL ASPECT
TOTAL CAPITAL REQUIREMENTS
Account Title Amount
Fixed Assets:
Land 50,000.00
Machineries & Equipment 300,000.00
Building (25 sq meters) 150,000.00
Delivery Vehicle 75,000.00
Total Fixed Assets Required 575,000.00
Workling Capital:
Salaries & Wages 54,000.00
Returnable Containers 15,000.00
Materials & Supplies 45,000.00
Fuel, Gas & Lubricants 45,000.00
Promotions 10,000.00
Raw Material Supply (Water) 18,000.00
Utilities 25,500.00
Total Working Capital (first 3 months of operation) 212,500.00
TOTAL CAPITAL REQUIREMENTS 787,500.00
Table 9 Total Capital Requirements
INCOME STATEMENTYear 1 Year 2 Year 3
Sales 1,794,000.00
1,973,400.00
2,170,725.00
Less: Cost of Sales
Direct Labor 108,000.00
118,800.00
130,680.00
Materials & Supplies 72,000.00
79,200.00
87,120.00
Factory Overhead Expenses Depreciation Expense (Building)
7,500.00
7,500.00
7,500.00
Depreciation Expense (M & E) 20,000.00
20,000.00
20,000.00
Utilities 102,000.00
112,200.00
123,420.00
Total FOE 129,500.00
139,700.00
150,920.00
Cost of Goods Available for Sale 309,500.00
337,700.00
368,720.00
Gross Profit on Sales 1,484,500.00
1,635,700.00
1,802,005.00
Less: Operating Expenses
Marketing Expenses
Fuel, Gas & Lubricants 180,000.00
198,000.00
217,800.00
Promotions 10,000.00
10,000.00
10,000.00
Packaging (containers) 5,000.00
5,000.00
5,000.00
Materials & supplies 180,000.00
198,000.00
217,800.00
Salaries & Wages 108,000.00
118,800.00
130,680.00
Depreciation Expense Delivery Vehicle
15,000.00
15,000.00
15,000.00
Total Marketing Expenses 498,000.00
544,800.00
596,280.00
Net Operating Profit 986,500.00
1,090,900.00
1,205,725.00
Table 10 Income Statement
CASH FLOW STATEMENT
Cash Inflows Year 1 Year 2 Year 3
Initial Capital 787,500.0
0
Sales 1,794,000.0
0 1,973,400.0
0 2,170,725.0
0
Total Cash Inflows 2,581,500.0
0 1,973,400.0
0 2,170,725.0
0
Cash Outflows
Purchase Land 50,000.0
0 Purchase & Installation of Machineries & Equipment
300,000.00
Construction of Building 150,000.0
0
Purchase of Delivery Vehicle 75,000.0
0 Purchase Returnable Containers
15,000.00
Purchase of Labels & Stickers 180,000.0
0 198,000.0
0 217,800.0
0
Fuel, Gas & Lubricants 180,000.0
0 198,000.0
0 217,800.0
0
Payment of Salaries & Wages 216,000.0
0 237,600.0
0 261,360.0
0
Promotions Expense 10,000.0
0 10,000.0
0 10,000.0
0 Payment of Raw Material Supply
72,000.00
79,200.00
87,120.00
Payment of Utilities 102,000.0
0 112,200.0
0 123,420.0
0
Total Cash Outflows 1,350,000.0
0 835,000.0
0 917,500.0
0
Net Cash Inflows 1,231,500.0
0 1,138,400.0
0 1,253,225.0
0
Add: Cash Balance Beg. 1,231,500.0
0 2,369,900.0
0
Cash Balance, end 1,231,500.0
0 2,369,900.0
0 3,623,125.0
0
Table 11 Cash Flow Statement
BALANCE SHEET
Year 1 Year 2 Year 3
Assets
Cash 1,231,500.00 2,369,900.00 3,623,125.00
Land 50,000.00 50,000.00 50,000.00
Building 142,500.00 135,000.00 127,500.00
Machineries & Equipment 280,000.00 260,000.00 240,000.00
Delivery Vehicle 60,000.00 45,000.00 30,000.00
Returnable Containers 10,000.00 5,000.00 -
Total Assets 1,774,000.00 2,864,900.00 4,070,625.00
Liabilities & Capital
Coop Investments 787,500.00 1,774,000.00 2,864,900.00
Add: Net Income from Operation 986,500.00 1,090,900.00 1,205,725.00
Total Liabilities & Capital 1,774,000.00 2,864,900.00 4,070,625.00
Table 12 Balance Sheet
FINANCIAL RATIO NALYSIS
PROFITABILITY RATIOS
1)Return on Assets
(ROA)
Net Income=
986,500.00
= 0.5
6 Total Assets
1,774,000.00
2)Return on Equity (ROE)
Net Income=
986,500.00
= 0.5
6 Owner's Equity
1,774,000.00
3)Net Profit Margin
Net Income=
986,500.00
= 0.5
5 Sales
1,794,000.00
Table 13 Financial Ratio Analysis