The document provides an overview of the packaged drinking water industry in India. It discusses the raw materials, manufacturing process, machinery used, sales and distribution, and problems faced by the industry. The key points are: 1) The packaged drinking water industry in India is growing rapidly due to increasing awareness of safe drinking water and a large population. Large brands like Bisleri and Kinley have established themselves successfully. 2) The manufacturing process involves purifying raw water through various filtration systems and then bottling it in preforms which are expanded into plastic bottles. The water is also filled into reusable jars. 3) The industry faces challenges like shortage of labor, inventory issues, and a highly competitive market with

1. Packaged Drinking Water
Industry
Manufacturing, Packaging & Sales
The report was submitted to satisfy part of course requirements for "MSC472: Study of Domains and
Communities"
Advisor: Dr. Pankaj Jalote
Co-advisor: Dr. Shreemoy Mishra
Sahil Jain
2010071
IIIT-Delhi
Summer Semester, 2013
Abstract: Packaged drinking water industry is one of the fastest growing beverage segments in the
country. As more and more people become aware of the need of safe drinking water, the demand
will keep rising. India has a huge population and there is a large scope for the packaged drinking
water industry. Large brands like Bisleri, Kinley, Aquafina etc. have established themselves
successfully.
The report provides in-depth information into this industry- the raw materials and machinery used,
the manufacture process, the market scenario and the problems faced by this industry. The
Appendix provides other necessary information like a tentative time structure required to set up a
packaged drinking water unit, its financial aspect, the details about BIS certification and few images
from the inside of a plant.

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1. INTRODUCTION
Water is very essential for mankind. Water available from untreated sources like bore wells, rivers
etc. is not safe for drinking. Thus it is necessary to purify water for drinking purposes. Safe potable
water is not available everywhere. Water is contaminated with impurities which cause diseases if
consumed. Due to this water is processed and bottled for the use of mankind. Packaged drinking
water means water from any potable water source including public drinking water supply systems
which is subjected to different treatments to meet the various standards and packed.
In India, access to safe drinking water is very difficult to mainly due to over-population and scarcity
of clean water resources. This has resulted in high growth in demand for packaged drinking water.
Though the rural population still does not use packaged water but as the literacy rate grows and
awareness of safe drinking water increases, this industry will experience a huge boom. Today
packaged drinking water is used in offices, restaurants, railway stations, airport, bus stands,
hospitals etc. Though a large number of units have been established for the production of
packaged drinking water but, due to the ever growing need, there is still a huge gap between the
demand and supply of packaged drinking water.
2. RAW MATERIALS
 Water: Raw water is generally pumped out from the ground. Municipal water supply may also
be used as a source of raw water.
 Chemicals- These are used in the treatment of water. Soluble salts precipitate over the
membranes of Reverse Osmosis (R.O) system and render them non-functional. Thus anti-
scalents are used to keep the membranes from fouling. Ozone gas is used for disinfection.
 Preform- It is a small plastic test tube which expands into a bottle when hot air is blown into it.
The quality of the bottle depends upon the quality of the preform. These bottles are for one
time use i.e. they are not refilled. Bottles are generally made in capacities of 1 litre, 1.5 litre and
2 litre.
 Cap- Caps are used for sealing the bottles after water is filled into them.
 Jar- These are reusable 20 litre plastic containers. They are washed and refilled. The average life
of a jar is 40 rounds i.e. they are refilled and used 40 times and then discarded for recycling.
 Jar seal- Similar to the cap of a bottle, it is used to seal the 20 litre containers. Once the seal is
broken, it cannot be used again on a jar. Thus, every time a jar is refilled a new seal is fitted on
it.
 Labels- These are of two types. The bottle labels are thin and circular which are slid onto the
bottle from the top. The jar labels are stickers which are put somewhere on the body of the jar.
 Miscellaneous: Cartons are brown paperboard containers in which water bottles are packed
(usually 12 bottles) for transportation. Laser ink is fed into the laser printer which is used for
printing batch number on the neck/bottom of the bottle. After the cartons are filled with
bottles, they are packed and sealed with cellotape.
Appendix-D contains images of the raw materials.

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3. MACHINERY
Three different machines are involved in the process:
 Preform Blowing Machine: The preform in passed through a heated chamber which makes it
soft. This soft preform is then picked and put into the blowing chamber where hot air is blown
into it and gives it the shape of a bottle. Techno-pet (www.techno-pet.com) is one renowned
preform blowing machine.
 Water purification system: This includes the sand and carbon filter and the R.O. system. Raw
water is processed and finished water is stored in the stainless steel tank. For every 5000 litres
of water produced by the R.O. system, 3500 litres of waste water is generated. This waste water
is recharged back into the ground via soak pit. The R.O. system can be purchased from various
sources. Indian Ion Exchange (www.indianionexchange.com) deals extensively in water
treatment plants and its parts (filters, membranes, chemicals etc.).
 Automatic Filling Machine: This machine comprises of four different sections- suction pump,
filling unit, cap feeder and the conveyor belt. Empty bottles from the blowing machine are fed
into a suction pump which pulls these bottles and pushes them into the filling unit. These empty
bottles are washed and filled. The automatic cap feeder unit feed caps to the filling machine
which are then tightened to seal the bottles. These sealed bottles are queued on the conveyor
belt where labels are put and batch number is printed. Hilda (http://www.hildaautomation.in)
manufactures the best automatic filling machines with speeds ranging from 30/60/90/120/150
bottles per min (bpm).
4. MANUFACTURING PROCESS
Three different processes are carried out simultaneously within a plant.
1. Preform  Heating chamber  Hot air blowing
The preform is passed into a heating chamber to soften it. Hot air is then blown into it to expand it
into a 1 litre bottle.
2. Raw water  Raw water storage tank  Raw water feed pump dosing system  Sand &
Carbon filter  High pressure pump  Reverse osmosis  Ozonisation  Finished water
storage  Filling  Visual examination Packing  Transported
Raw water is collected in the storage tanks. The water is then fed into the dosing system where
anti-scalent is used for softening of water. From the dosing system, water goes into the sand and
carbon filter where impurities are removed from the water. Carbon filter removes the organic
impurities.
Water then goes into the reverse osmosis (R.O.) system which removes 90-95% of dissolved solids.
The finished water is collected into a stainless steel storage tank. The tank is provided with a man-
hole for cleaning purposes. This tank is used for ozonisation. Ozone gas is passed for disinfection.
Water from this tank is used in filling machines to fill the bottles. Empty bottles are fed from one
end of the machine. The automatic filling machine washes the empty bottles, fills them with water
and seals them with the cap. These bottles are then examined against light to check any
defect/leakage. Labels are attached to the bottles as they pass on the conveyor belt. As the bottles

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move on the conveyor belt, a laser printer prints the batch number on every bottle. The conveyor
belt passes through a heated chamber which causes the thin plastic label to shrink and stick to the
bottle. Once the bottle reaches the end of the belt, it is picked up and packed in cartons. The
cartons are then taped and are ready to be sold.
3. Empty jar  Washing  Filling  Visual examination  Seal  Transported
A separate jar filling section deals with the 20 litre jars. Finished water from the stainless steel tank
is used here. The empty jars are washed from the inside and outside. They are filled with water and
then examined for any leakage. A seal is put on the mouth of the jar and the jar is ready for
transport.
Appendix-D describes all these steps with the help of images.
5. SALES & DISTRIBUTION
(MARKET ANALYSIS)
Packaged drinking water is available in the quantities of 250 ml (cups), 500ml, 1 litre, 2 litres, 5
litres, and 20 litres. But, the 1 litre bottle and the 20 litre jar are the two major products in the
Indian market.
The approximate cost of production of one carton (12 bottles) comes to around Rs.60 i.e. Rs.5 per
bottle. Depending upon the market and the brand the carton is sold at Rs.62-65 to the distributor.
The distributor forwards it to the retailer at a price of Rs.80-90. The retailer then sells each bottle
at the MRP or sometimes less than the MRP. Thus a shopkeeper earns around Rs.4-7 every bottle.
Thus, to summarise, every bottle of water that we buy at Rs.15 costs a maximum of Rs.5. This is the
scenario for small units which produce around 30,000 bottles per day. For bigger plants like Kinley
the cost of production would be a little lower and the selling price is higher.
A 20 litre jar of water is produced at an approximate cost of Rs.10 which is then sold at Rs.30-50 to
the customers. Big players like Bisleri and Kinley sell it at Rs.75. The distribution of jars is an
important factor. It can happen in two ways- either the jars are sent to the distributor who deals
with the customer or the jars are distributed to the customers directly from the plant i.e. no
distributor is involved. Since jars are reusable, they are usually not sold outside the town/city.
Filled jars are delivered at the customer’s door and empty jars are brought back to the plant for
refilling. To maintain good customer relations it is important that good service is provided to the
customers like timely delivery, right quantity, proper maintenance of records, good behaviour of
delivery guys etc.
Generally, the profit margin on the sale of water bottles is not very high. Brand that are only into
the bottling segment earn profits because of the huge quantity of bottles manufactured and higher
selling price compared to local brands (Local brands- Rs.15; Bisleri-Rs.18; Kinley- Rs.20). Jars, on the
other hand, have a huge profit margin. Though bottles do earn little profit, but for local
manufacturers, they mainly serve the purpose of brand marketing to promote the sale of jars.
When more and more bottles are seen in the market, people will definitely look forward to buy jars
of such a brand.

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6. PROBLEMS FACED BY THE INDUSTRY
Like any other industry, problems keep knocking the door of the packaged drinking water industry.
 Shortage of labour: As the literacy rate grows, there has been a decline in the blue-collar
workforce. It is not easy to find cheap labour to do jobs like loading and unloading of
trucks/auto, packing cartons, putting labels, filling jars etc. The scarcity of workforce causes hike
in wages.
 Stealing of jars by deliver guys: Incidents happen when the required amount of jar is not
delivered at the customer’s place. These jars are then sold to customers by the delivery guys
without any formal record. Example- A bank requires 10 jars every day. The delivery guy makes
a deal with the security guard (pays him a bribe) of the bank and delivers only 8 jars but charges
the bank manager for 10 jars. He sells the other 2 jars to his “private customer”, the record of
which is not available with the owner. The day this disorder comes into light, it will bring about a
bad name to the brand and will cause loss of customer.
 Inventory Problems: Sometimes missing/ broken jars go unreported and it is difficult to track
which jar came from which customer. All the empty jars are collected into one place and it is
difficult to track which delivery team is responsible for a missing jar. One solution to this
problem is to deploy separate personnel who keep a count of the number of empty jars brought
back by each delivery team. But even this becomes difficult when many delivery teams arrive
simultaneously for refilling.
 Slow Government Approvals/Clearance: Bureau of Indian Standards (BIS) has published the
Indian Standard for packaged drinking water namely IS-14543. It prescribes a large number of
requirements and guidelines (see Appendix-A) for setting up a packaged drinking water unit. The
government has made it mandatory to obtain BIS certification (formerly ISI) to commercially sell
drinking water. Also a no-objection certificate is required from the State Pollution Control
Board. A commercial electricity connection also needs to be obtained from the electricity
department. All these lengthy tasks prove to be costly and difficult when concerned officials do
not work efficiently.
 Unavailability of machine parts: The machines used in the manufacturing and packaging process
are not purchased from the local market. Thus, their spare parts are not easily available. Most of
the parts need to be purchased from the machine’s manufacturer. Procuring a spare part causes
delay which hinders the manufacturing process. The issue can be solved upto a certain level- the
machine parts which breakdown often, can be purchased and stocked so that immediate repair
can take place.
 Highly Competitive Market: With new rivals entering the market at regular intervals, the price
has to be regulated accordingly. This is clearly visible in the sale of water bottles where the
profit margin is just Rs.2-5 per carton. Also, brand loyalty is very low (especially among the rural
population and uneducated people in India) as all the brands taste the same so sometimes
people just buy the cheapest product on the shelf.
 Illegal Manufacturers: These are manufacturers who do not have a license to commercially sell
drinking water. They provide water at a cheaper rate than the licensed manufacturers.
Sometimes these manufacturers also fake the name of branded bottles and sell their products.
The possible solution is to report any unlicensed unit to the concerned authorities and get them
shut down.

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7. CONCLUSION
In spite all the problems faced, packaged drinking water industry is growing with leaps and bounds.
The demand for packaged drinking water is driven by higher disposable income, increased
preference for hygiene, improved affordability, easy availability of packaged water and shortage of
safe drinking water. The industry largely supports institutions like hotels, hospitals, offices and
parties, caterers, travel, tourism etc. The required machinery can be purchased easily from a
number of dealers and the unit can start selling water once the BIS certification is obtained.
8. ACKNOWLEDGEMENT
I would like to thank the owners of Nirmal Jal- Mr. Sammit Ajmera and Mr. Sushil Patni for allowing
me to study their plant and enlightening me with all the necessary information about the domain.
I would like to express my sincere gratitude to Professor Pankaj Jalote and Professor Shreemoy
Mishra for guiding me and providing me their valuable feedback throughout the entire duration of
the project.

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Appendix-A
Requirements for BIS Certification
(www.bis.org.in)
A. GENERAL REQUIREMENTS
General requirements for grant of BIS Licence, please see BIS website http://www.bis.org.in/
B. PRODUCT SPECIFIC REQUIREMENTS (FOR PACKAGED DRINKING WATER)
1. List of Test Equipments, Glass wares & Chemicals
(see Annex A of the application form)
2. List of BIS approved outside lab for the Product Water, Containers (including lids/caps)
(see Annex B of the application form)
3. Details of samples of the product/containers to be drawn during BIS visits.
(see Annex C of the application form)
4. Acceptance of Marking Fee
(see Annex D of the application form)
5. Acceptance of Scheme of Testing and Inspection (STI)
(see Annex E of the application form)
6. Guidelines for assessment of Hygienic conditions with explanatory notes for guidance
(see Annex F of the application form)
7. List of Indian Standards which a Packaged Drinking Water Industry
8. Undertaking for getting the samples tested as per STI frequency from BIS approved/NABL accredited
outside lab.
9. Consent letter from concerned outside lab for testing of sample (Ref. Sr. No. 8).
10. Copy of the appointment letter, qualification certificates for Chemist and Microbiologist.
11. No Objection Certificate (NOC) from the concerned office of Central Ground Water Authority.
12. Detailed Manufacturing process indicating treatment for disinfection along with Process Flow Chart.
Clause 3.2 of IS 14543:2004 specifies various processes for manufacturing Packaged Drinking Water for
guidance only.
13. Copies of Medical Examination Reports of the employees engaged in washing/filling of the product for
any communicable/skin diseases and fitness to work in a food industry.
14. Details about the arrangements of pest control treatment such as an agreement/contract with the
agency. Also details of Cleaning in Place (CIP).
15. Declaration of Shelf-life of the product separately for each type of container (e.g. 1littre, 2 litre, 20 litre
etc.).
16. Undertaking Regarding clause 6 (Packing) of IS 14543:2004 and clause 7.2 of IS 14543:2004 (Labelling
Prohibitions)
17.Obtain request letter from BIS for getting the sample tested for Radio Active Residues, from BARC before
submitting the application and test report received from BARC is to be submitted along with the
application form.
Annexes available online at http://www.bis.org.in/cert/requirementsis14543.htm

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Appendix-B
Tentative Implementation Timeline
ACTIVITY TIME PERIOD
Preparation of Project 0-1 months
SSI Provisional Registration 1-3 months
Loan Sanction 2-5 months
Obtaining License/Certification 2-5 months
Purchasing Machinery 4-6 months
Installing Machines 6-8 months
Obtaining Electricity Connection 2-6 months
Appointing staff member 5-8 months
Trial Run 8-9 months
Data obtained from-
Development Commissioner (MSME),
Ministry of Micro, Small & Medium Enterprises,
Government of India,
www.dcmsme.gov.in

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Appendix-C
Financial Aspect
Amount (in lakhs)
A. FIXED CAPITAL
 Land & Building 50.00
 Plant & Machinery 25.00
 Other Fixed Assets
(Furniture, Bore-well,
Delivery Van)
10.00
 Total Fixed Cost 85.00
B. WORKING CAPITAL
(per month)
 Raw Material 17.00
 Salary & Wages 0.75
 Utilities
(Electricity, Fuel)
0.50
 Other Expenses
(Stationery, Telephone)
0.10
 Total Working Capital 18.35
 Fixed Capital
 Working Capital
(for 3 months)
Total Capital Investment
85.00
55.05
140.05
Data obtained from-
Development Commissioner (MSME),
Ministry of Micro, Small & Medium Enterprises,
Government of India,
www.dcmsme.gov.in

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Appendix-D
Images
Preform Few preforms become defective when hot air is not blown properly
Preform Blowing machine Preform expands into bottle like this
Raw water tank  Carbon Filter R.O. System Stainless Steel Storage Tank
Automatic Filling Machine Washing of bottles Filling & Capping

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Caps Bottle stuck in the machine Leaked/Defective Bottles
Filled bottles on Conveyor Belt Bottle Labels Workers attaching labels
Laser Printer Batch Number on bottle neck Heat Chamber to shrink label
Assembling raw cartons with tapes Bottles being packed Final Stock

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Empty jars Jar Filling Sealed jars ready for transport