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Shourav Fisheries & Agro Limited

Mineral Water Industry of Bangladesh

The bottled water market in Bangladesh was equal to 760.00 million USD (calculated in retail prices) in 2015. Until 2025, the water market in Bangladesh is forecast to reach 2.52 billion USD (in retail prices), thus increasing at a CAGR of 9.87% per annum for the period 2020-2025. This is a decrease, compared to the growth of about 16.58% per year, registered in 2015-2019.

The average consumption per capita in value terms reached 4.77 USD per capita (in retail prices) in 2015. In the next five years, it grew at a CAGR of 14.97% per annum. In the medium term (by 2025), the indicator is forecast to slow down its growth and increase at a CAGR of 7.54% per annum.

The growing consumer wellness and healthcare awareness is one of the most important drivers, which has contributed to the expansion of the global bottled water market in the past few years. The category has significantly grown, outpacing the carbonated soft drinks in many countries, including the USA. In addition, consumers are also increasingly adopting flavored and functional waters such as alkaline, Ph-balanced, protein and others, due to their additional health benefits.

Regionally, Asia and Pacific registered the highest consumption of bottled water over the past few years. Some of the main reasons include the poor public infrastructure, reduced access to safe drinking water and the increasing awareness about waterborne diseases such as malaria, typhoid and others. In the US, the bottled water market is expanding, driven by the consumers’ health consciousness. Countries from Europe and the Middle East rank among the leading positions when it comes to consumption per capita.

Sales of bottled water in Bangladesh are rising by 20 percent a year mainly due to consumers’ lack of confidence in public water service facilities. The bottled water industry in Bangladesh is estimated to be around BDT 7.00 billion industry providing employment to around 15000 people directly and indirectly. The current number of the bottled water manufacturing units is estimated to be 350.

Market Potential of Bottled Mineral Water

Water is an incredibly important aspect of daily lives. Bottled water is a necessary and reliable way to deliver safe drinking water. There are various types of bottled water such as spring water, purified water, mineral water, ground water and others. Bottled water is packaged in plastic or glass bottles. Bottled water can be carbonated or not. Bottled water offers a good taste, quality, and convenience.

The global bottled water market is mainly driven by increased health awareness and changing consumer lifestyle. The bottled water market is expected to witness rapid growth fueled by strong demand for clean, flavored and hygienic drinking water. Other important factors driving the bottled water market are an advancement in user-friendly packaging. Strong growth of tourism industry and portability of hygienic bottled water is also expected to trigger demand for bottled water. However, stringent regulations regarding packaging of water and bottled water standards are expected to hamper the growth of the market to some extent. Moreover, easy availability of tap water and rising concerns with regarding increasing plastic waste is expected to present a challenge for industry participants.

Still, carbonated, flavored and functional bottled water are the key product segments of the bottled water market. The still bottled water product segment held the largest share in the global bottled water market and accounted over 60% share in overall consumption in 2014. However, still bottled water segment is expected to exhibit moderate growth during the next few years. Carbonated was the second largest segment of the bottled water market in 2014. Carbonated bottled water is expected to witness a slight decline in its market share in the years to come. Flavored and functional water segment are also expected to witness rapid growth during the coming years. The rapid growth of bottled water market can be attributed to rising concern regarding health & wellness.

The global bottled water market was valued at approximately USD 170.0 billion in 2014 and is expected to reach approximately USD 280.0 billion by 2020, growing at a CAGR of around 8.5% between 2015 and 2020. In terms of volume, global bottled water market stood at around 290.0 billion liters in 2014.

The global market for bottled water has gained significant momentum in the past few years, chiefly owing to the increasing global demand for convenient, safer, healthy, and refreshing beverages. Rising concerns regarding the adverse effects of the high-sugar content of carbonated soft drinks and increasing disposable incomes of the population in Asia pacific, Latin America, and Eastern Europe have also significantly contributed to the increasing demand bottled water in the global market.

According to research, the global bottled water market will expand at a 6.6% CAGR over the period between 2016 and 2024. If the projection holds true, the market will rise from a valuation of US$169.9 bn to US$307.2 bn by 2024.

Flavored and Functional Bottled Water to Register Promising Growth

Of the key varieties of products available in the market, including still bottled water, flavored bottled water, carbonated bottled water, and functional bottled water, the segment of still bottled water dominates in terms of both revenue and volume. The segment is expected to hold 78.8% and 82.2% in terms of revenue and volume, respectively, of the global market by the end of 2016, and is also expected to remain dominant throughout the forecast period. The vast rise in the global population of health-conscious consumers and diabetics is key to the rising demand for still bottled water as this product variety does not contain artificial sweeteners or ingredients.

Rising concerns regarding the high sugars in carbonated soft drinks are also shifting the consumer’s focus from flavored and carbonated soft drinks to flavored and carbonated bottled water. The segment of carbonated bottled water is presently the second dominant segment of the market and is expected to grow at a healthy pace throughout the forecast period as well. However, the segment of flavored bottled water is expected to register the most promising growth, exhibiting an 8.4% CAGR from 2016 through 2024. The segment of functional bottled water is expected to register a slightly less but equally promising CAGR over the said period.

Developing Economies to Remain Key Growth Drivers

The markets for bottled water in regions such as Asia Pacific, Latin America, and Middle East and Africa are expected to register high growth rates between 2016 and 2024. The bottled water market in Asia Pacific is expected to dominate the global market in terms of market share owing to high demand for bottled water from India and China, Thailand and Indonesia. The region will remain ahead of other regional markets in terms of overall uptake of bottled water owing to the rising per capita consumption of bottled water across urban areas in developing economies. Also, the easy availability of bottled water through well-developed supply chain for bottled water products in the region will enable the bottled water market in the region gain traction.

In term of value, Asia Pacific accounted for a share of 26.9% in the global bottled water market in 2015 and is expected to account for 31.0% by 2024. In terms of volume too, the bottled water market in Asia Pacific is expected to remain the dominant regional market throughout the forecast period. The bottled water market in Latin America is also expected to witness favorable growth over the forecast period owing to the vast rise in focus of key manufacturers and suppliers of bottled water and an increasing number of manufacturing facilities in the region.

Project Overview of Shourav Fisheries & Agro Limited

Project Plan

Due to bright potentials of mineral water sector in Bangladesh, Shourav Fisheries & Agro Limited (SFA) has planned to set up a mineral water bottling plant where 500 ml fresh water bottles will be manufactured. The attainable production capacity will be 160,000 bottles per day, 4,000,000 bottles per month and 48,000,000 bottles per year. Sales revenue as per attainable capacity will be BDT 480.00 mln per year, BDT 40.00 mln per month and 1.60 mln per day.

For implementing this proposed project, total cost would be BDT 305.10 million in which total fixed investment is BDT 254.31 million including IDCP as long-term finance and variable investment is BDT 50.78 million as working capital. In this project, five years’ average sales revenue has been estimated BDT 330.94 mln where average net profit would be BDT 84.76 mln which is 25.50% by considering the utilized production capacity of 60% to 80% over the next five years.

This project has an Internal Rate of Return (IRR) of 39.11% and a discounted payback period of 3.20 years. This project will generate the employment opportunities for 69 people.

Full feasibility report and Business plan of Shourav Fisheries & Agro Limited is available to SRCA and Shourav Fisheries & Agro Limited.