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how much it cost to start a pure water business in nigeria - profitableventure nigeria

how much it cost to start a pure water business in nigeria - profitableventure nigeria

According to reports, the production of sachet water in Nigeria started in the late 90s and today the advancement in scientific technology has made sachet water production one of the fastest growing industries in the country. So many individuals and corporate bodies in Nigeria now engage in packaging water in polythene sachets of about 50-60 cl. which they sell to the public.

Hence, drinking water is commercially available in such easy to open sachets. In Nigeria, the production, marketing and consumption of sachet water have increased tremendously. There are now several brands of this sachet water marketed in Nigeria.

The majority of consumers tend to be more concerned with the appearance and taste of water than the invisible loads of potentially harmful micro-organisms as well as other contaminants that may be present in the water. Pure water is in high demand in homes, schools, institutions, offices, churches, hospitals, public gatherings, etc. As long as you can find humans there, water is needed.

So, if you can meet with the demands of providing clean and affordable drinking water, thisbusiness ideais for you. Starting a pure water business in Nigeria is very profitable but it needs a capital to run it effectively. Over millions of sachets are consumed every day. The high demand for sachet water continues to increase because of the rising population of the country.

Pure water business has now become one of the common areas of investment in Nigeria, especially since everyone drinks water. Aside from quenching thirst, it is affordable. Also, water is essential to life and important to the body. It moisturizes the tissue and other essential body systems such as blood, bones, brain, spinal cord, joints etc. So, if you are interested in starting this business, below are the estimated costs you should analyze and consider.

To start a pure water business in Nigeria, you need land, and depending on your capital, you can lease or build your own factory. Note that building can be big or small, it all depends on your budget, but ensure to follow the standard factory layout for overall ease of production. Your factory layout should include a general office, water production room, storage material room, toilet, changing/cloakroom, and laboratory.

In addition, you have to ensure that the production area is free from water and air pollution. You have to make sure that theres constant power supply at the factory. The factory should be situated in a secure area with a good road network. Note that you will need to drill a borehole or partner with water corporation agencies.

In the pure water business, water is a raw material for production and must be readily available. If need be, you will also have to install an overhead tank and reservoir for back up. Then, set up plans for periodical water treatment. Over all, expect to spend aboutN5 million N7 million to make thus particular sets of plans.

Next is registering your business with the Corporate Affairs Commission (CAC). Here, you can do a business name registration, register as a Limited Liability Company, or any other type of registration that suits your business structure. Registering your business name or company with the Corporate Affairs Commission can cost you as low as N10, 000 or as high as N100, 000.

You will also need to obtain NAFDAC approval to be able to make and sell your sachet water to the general public. NAFDAC approval for your water business means your water is fit for drinking. Start by going to the NAFDAC office to obtain and fill the relevant forms.

The process will take you as much as three months and up to six months before you get the certificate. You can also choose to get the Application Requirement, read it and start following the procedures as outlined. Note that getting NAFDAC Approval is one of the most difficult tasks when starting a pure water business and this step will cost at least N300, 000.

You will also need to buy some necessary equipment when starting a pure water business in Nigeria. Ensure to buy what you can afford and rent the rest till you can buy them. Work within your budget. Here are the things you will need to kick start your journey as a Sachet (Pure) water business owner:

This is one of the most sensitive aspects of your business. Human resources are the lifeblood that drives the whole mechanism of your production. Before employing any personnel in contact with water production operations, ensure that you ask/require for a proper food handlers medical test, and also provide proper training for machine handling and processes.

Indeed water is essential to life; the amount of water intake balances out dehydration, it helps in metabolic reactions for food breakdown, and internal waste removal, thats why medical experts advice humans to consume at least 8 glasses or 1.5 litres of water in a day.

Ideally, in Nigeria, one of the most popular means of getting drinking water isthe pure water. It is very convenient, easily affordable (N10), and easily recyclable into other plastics. Staring a pure water business can be very lucrative and the opportunity in the industry is endless and open to any savvy entrepreneur.

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interview: cost of nigeria's oil production unsustainable - sylva

interview: cost of nigeria's oil production unsustainable - sylva

In this interview with Premium Times, the Minister State for Petroleum Resources, Timipreye Sylva, said in spite of the challenges posed by the COVID-19 pandemic, the ministry has done well in delivering its core mandates. Excerpts:

SYLVA: COVID 19 pandemic is devastating indeed, both medically and economically. For the oil industry, we are more concerned with the economic devastation. Although we also lend a hand medically, our main focus is on the economic side.

At my inauguration in August 2019, our ministry was given eight mandate areas to curb crude oil theft and products smuggling; completion of the gas flares commercialisation programme; increasing crude oil production to three million barrels per day; reducing the cost of crude oil production by five per cent; passage of the PIB; promotion of inland basin and deep-water exploration; collaborating with the private sector to increase domestic refining capacity, and creating jobs and opportunities.

SYLVA: On curbing crude oil theft and products smuggling across our borders, we have done a lot. The NNPC (Nigerian National Petroleum Corporation) launched Project White which, within a very short time, brought down the countrys daily petrol consumption from over 62 million litres to 52 million litres per day.

We started by stopping products smuggling across our borders. But, with deregulation and removal of subsidy, I foresee a situation where we might be encouraging the development of markets even outside our borders. Now, NNPC is no longer bearing the burden of subsidy payment.

On the completion of the gas flares commercialisation programme, this is progressing steadily. The bidders conference was held and 200 companies were pre-qualified to participate in the commercial bid. The response was very encouraging.

So far, the government has released about 45 gas sites. These companies were expected to visit the sites for assessment. But, again with COVID-19, the companies have not been able to inspect the sites.

I believe as soon as the lockdown is eased off, we will progress very fast with that process. Some companies were supposed to have taken final investment decisions on their projects in June. But, because of COVID-19, they were not able to travel to Nigeria.

We are still waiting for them between now and June, when we expect everything will relax, and they will be able to come. Then, we might be able to begin to see some FIDs taken by some investors under the gas flares commercialisation project.

However, on gas, the flagship project in the sector is the Nigeria LNG Train 7. Few days ago, shareholders released the EPC (engineering, procurement contracts) and the FID taken to show that Train 7 has taken off completely. This is something everyone is proud of.

On the CNG (compressed natural gas) and LPG (liquefied petroleum gas) penetration programme, what the government is trying to do is to get Nigerians to use CNG and LPG (otherwise called cooking gas) more.

In Nigeria, LPG is used most in the cities. In the rural areas, gas usage is almost absent. What the government is trying to do with this programme is to encourage the penetration, so that villages and rural areas will begin to use gas as well. That will safeguard our forest resources and our environment.

We are going to create a lot of jobs by making access to LPG cheaper. Today, people cannot really use gas, or why the penetration is low, because the initial capital outlay to using gas was quite high to the ordinary man, who had to invest in buying a gas cylinder, and each time the gas finishes, they will have to refill a full bottle.

SYLVA: This is a big problem for the industry, because it is not sustainable to have a situation where our average cost per barrel is around $30 per barrel. COVID 19 has taught everybody that we cannot continue like this.

NNPC is doing very well in this regard. They are looking deeper into the budgets of operating companies. Before now, NAPIMS (National Petroleum Investment Management Services) had completely abdicated its responsibility of auditing the cost of production with the joint venture companies and became the contracting agency. But, under the current leadership of the GMD (Group Managing Director), NAPIMS is now deeply more to its responsibility. And we are beginning to see a lot more compliance in the area of auditing of the accounts of the JVCs.

But, now our regulatory agencies and bodies are living up to their billing by shortening approvals and contracting cycles as a result bringing down the cost of projects. We will begin to see soon a reduction in the cost per barrel. NCDMB (Nigerian Content Development Monitoring Board), NNPC, DPR are involved very largely in this.

SYLVA: On the passage of the PIB, I am happy to report that we are almost ready. The general structure of the Bill is ready. What remains is for the Bill to be discussed with the Minister, who is the President, and presented to the Executive Council of the Federation. It is largely work in progress. Things can still change after the discussions with the President and FEC.

Our other mandate is to increase crude oil production to three million barrels per day. Apart from the usual OPEC (Organization of Petroleum Exporting Countries) constraint, which membership compels us to abide by whatever cuts have been agreed by members, the current COVID-19 crisis has not done the county very well these past few months.

COVID-19 wiped out demand for oil, forcing crude oil prices down so badly. The only way OPEC can react to it was to agree on very unprecedented cuts, which has affected the countrys ability to ramp up its oil production.

With the coming of the CNG and the LPG penetration, a lot more will be taken down. With gas flare commercialisation going on, by the time we finish, we will not be seeing any flares again in the next few years.

Bassey Udo is PREMIUM TIMES' Business & Economy Editor. He has coveredfinance, energy, oil, gas & extractive industries for over a decade. He is a winner of theWole Soyinka Award for Investigative Journalism, and the Thomson Reuters Foundation (Wealth of Nations) Award for Business Reporting. Bassey is an alumnus of the U.S. International Visitors Leadership Programme.Twitter:@ba_udo

nigeria can achieve $10 oil production cost, kyari insists

nigeria can achieve $10 oil production cost, kyari insists

The Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Mallam Mele Kyari has expressed optimism that companies working in Nigerias petroleum industry can achieve $10 oil production cost.

The end result is that we have been able to substantially pull down cost although I cant put a number to it. But I know that we have been able to bring down operating costs by at least 30 per cent, at least from what it used to be one year ago, he stated.

On implication of rising oil price, he explained that getting back to pre-Covid level will be achieved by at least 2022, stressing that the oil industry was not comfortable with high oil prices because customers will look for alternatives.

Kyari said that in the past, all the focus was on oil, pointing out that with renewed attention to gas as a transition fuel and plenty need for the product to power the country, gas will become the new oil.

nigeria plans to support oil price with lower production cost per barrel

nigeria plans to support oil price with lower production cost per barrel

On Wednesday, March 11th 2020, the Group Managing Director of the Nigerian National Petroleum Corporation, MeleKyari, sat among national stakeholders during the CBN roundtable and addressed the elephant in the Nigerian economy declining crude oil revenue.

Of course, he blamed everything on Coronavirus and the disagreement between Saudi Arabia and Russia to reach a deal on output cut. As you may well know, the disagreement between the two countries, which are two of the worlds biggest oil producers, has resulted in a full-blown global oil price war. Smaller producers like Nigeria are, therefore, left in a really precarious situation.

This is the question that has been on everybodys lips since oil price began to tank. What is Nigerias strategy towards handlingthssituation? MeleKyari, who heads the countrys state-owned oil company, attempted to answer this question yesterday by proffering two possible solutions. The first solution has to do with cutting down on oil production cost.

As the name implies, oil production cost basically entails how much it costs to produce a barrel of crude in a country. At the moment, the cost of crude production in Nigeria is about $30 per barrel of crude. And this is quite problematic when you consider the fact that oil is currently trading at $34.48 per barrelaccording toOilprice.com.

It is understandable to see how frustrating the current situation must be for Nigeria, a country whose main source of income is oil revenue. Unfortunately, all the odds are stacked against it, because not only are oil prices low, the countrys production cost is high and the country cannot even produce more than 2 million barrels of crude per day. Little wonderKyaridescribethe international oil market as voodoo market.

Hedid, however,come up with a second possible solution, and it is all about ramping up Nigerias oil output.According to him, the NNPC is working earnestly towards increasing Nigerias daily production to 3 million barrels per day. But even this plan is problematic.

BrentCrude is trading about $35 per barrel. Thats the small problem, the bigger problem is where to sell the Nigerianhigh-gradeoil. Saudi Arabia and Russia are not just in a price war but a market share war. Nigeria can drop prices aswell;can she boost production?

This is a real problem by the way, one that was confirmed yesterday by Kyari. According to him, Nigeria has about 50 cargoes of crude that nobody wants to buy. Therefore, even if production cost is reduced and Nigeria slashes prices, if it cannot find buyers, the country is in for serious trouble.

Once again, Nigeria depends mainly on oil revenue to finance its budget. The country has recently been battling a revenue crisis, a situation that was exacerbated by the recent developments in the oil market. Earlier this week, Nairametrics reported that the Nigerian Government was taking stepsto scale down on the countrys N10.6 trillion 2020 budget, in response to the dramatic crash in global oil prices.

Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs.Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan.

nigeria: interview - cost of nigeria's oil production unsustainable - sylva

nigeria: interview - cost of nigeria's oil production unsustainable - sylva

In this interview with Premium Times, the Minister State for Petroleum Resources, Timipreye Sylva, said in spite of the challenges posed by the COVID-19 pandemic, the ministry has done well in delivering its core mandates. Excerpts:

SYLVA: COVID 19 pandemic is devastating indeed, both medically and economically. For the oil industry, we are more concerned with the economic devastation. Although we also lend a hand medically, our main focus is on the economic side.

At my inauguration in August 2019, our ministry was given eight mandate areas - to curb crude oil theft and products smuggling; completion of the gas flares commercialisation programme; increasing crude oil production to three million barrels per day; reducing the cost of crude oil production by five per cent; passage of the PIB; promotion of inland basin and deep-water exploration; collaborating with the private sector to increase domestic refining capacity, and creating jobs and opportunities.

SYLVA: On curbing crude oil theft and products smuggling across our borders, we have done a lot. The NNPC (Nigerian National Petroleum Corporation) launched "Project White" which, within a very short time, brought down the country's daily petrol consumption from over 62 million litres to 52 million litres per day.

We started by stopping products smuggling across our borders. But, with deregulation and removal of subsidy, I foresee a situation where we might be encouraging the development of markets even outside our borders. Now, NNPC is no longer bearing the burden of subsidy payment.

On the completion of the gas flares commercialisation programme, this is progressing steadily. The bidders' conference was held and 200 companies were pre-qualified to participate in the commercial bid. The response was very encouraging.

So far, the government has released about 45 gas sites. These companies were expected to visit the sites for assessment. But, again with COVID-19, the companies have not been able to inspect the sites.

I believe as soon as the lockdown is eased off, we will progress very fast with that process. Some companies were supposed to have taken final investment decisions on their projects in June. But, because of COVID-19, they were not able to travel to Nigeria.

We are still waiting for them between now and June, when we expect everything will relax, and they will be able to come. Then, we might be able to begin to see some FIDs taken by some investors under the gas flares commercialisation project.

However, on gas, the flagship project in the sector is the Nigeria LNG Train 7. Few days ago, shareholders released the EPC (engineering, procurement contracts) and the FID taken to show that Train 7 has taken off completely. This is something everyone is proud of.

On the CNG (compressed natural gas) and LPG (liquefied petroleum gas) penetration programme, what the government is trying to do is to get Nigerians to use CNG and LPG (otherwise called cooking gas) more.

In Nigeria, LPG is used most in the cities. In the rural areas, gas usage is almost absent. What the government is trying to do with this programme is to encourage the penetration, so that villages and rural areas will begin to use gas as well. That will safeguard our forest resources and our environment.

We are going to create a lot of jobs by making access to LPG cheaper. Today, people cannot really use gas, or why the penetration is low, because the initial capital outlay to using gas was quite high to the ordinary man, who had to invest in buying a gas cylinder, and each time the gas finishes, they will have to refill a full bottle.

SYLVA: This is a big problem for the industry, because it is not sustainable to have a situation where our average cost per barrel is around $30 per barrel. COVID 19 has taught everybody that we cannot continue like this.

NNPC is doing very well in this regard. They are looking deeper into the budgets of operating companies. Before now, NAPIMS (National Petroleum Investment Management Services) had completely abdicated its responsibility of auditing the cost of production with the joint venture companies and became the contracting agency. But, under the current leadership of the GMD (Group Managing Director), NAPIMS is now deeply more to its responsibility. And we are beginning to see a lot more compliance in the area of auditing of the accounts of the JVCs.

But, now our regulatory agencies and bodies are living up to their billing by shortening approvals and contracting cycles as a result bringing down the cost of projects. We will begin to see soon a reduction in the cost per barrel. NCDMB (Nigerian Content Development Monitoring Board), NNPC, DPR are involved very largely in this.

SYLVA: On the passage of the PIB, I am happy to report that we are almost ready. The general structure of the Bill is ready. What remains is for the Bill to be discussed with the Minister, who is the President, and presented to the Executive Council of the Federation. It is largely work in progress. Things can still change after the discussions with the President and FEC.

Our other mandate is to increase crude oil production to three million barrels per day. Apart from the usual OPEC (Organization of Petroleum Exporting Countries) constraint, which membership compels us to abide by whatever cuts have been agreed by members, the current COVID-19 crisis has not done the county very well these past few months.

COVID-19 wiped out demand for oil, forcing crude oil prices down so badly. The only way OPEC can react to it was to agree on very unprecedented cuts, which has affected the country's ability to ramp up its oil production.

With the coming of the CNG and the LPG penetration, a lot more will be taken down. With gas flare commercialisation going on, by the time we finish, we will not be seeing any flares again in the next few years.

AllAfrica publishes around 900 reports a day from more than 130 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

AllAfrica is a voice of, by and about Africa - aggregating, producing and distributing 900 news and information items daily from over 130 African news organizations and our own reporters to an African and global public. We operate from Cape Town, Dakar, Abuja, Johannesburg, Nairobi and Washington DC.

nigeria talks tough on production costs - news for the energy sector

nigeria talks tough on production costs - news for the energy sector

Some companies are producing at $90 per barrel, while others are at $9. This is unacceptable and industry must work together to bring this down. There are no subsidies for the upstream, if it is not economic it must shut down, Kyari said on a webinar organised by the Nigerian Association of Petroleum Exploration (NAPE).

The need for the country to reset its cost structure has been made more likely as a result of the coronavirus pandemic, Kyari continued. We need to focus on projects that generate more cash, produce more resources and at cheaper costs, he said, citing the adoption of new technologies as one way in which things can be done cheaper.

Data provided by the NNPC official demonstrated that one of the companys joint venture partners had been producing at $93 per barrel in 2019. While this unnamed operator has reduced costs, to $57 per barrel in the 2020, this remains too high.

The drive for lower production costs is linked to the recent oil price crash and reduced demand, with Kyari saying he had never seen anything like this. As prices fell, and some turned negative, NNPC decided to offer discounts of as much as $4 per barrel but this failed to provide much impetus.

We still had a cargo overhang and this created uncertainty for producers. Partners are less likely to invest and with no cashflow banks will not lend money. Every company took some form of project deferment, Kyari said, with plans for new projects suffering.

The official said there were two deepwater projects that were close to reaching sanction and plans were also moving ahead in the downstream, particularly on plans for a 200,000 barrel per day condensate splitter.

Kyaris comments about cutting costs comes as questions are being asked at a high level about NNPCs efficiency. Various senators on the Committee on Finance expressed concern about Nigerias high production costs, averaging $21.2 per barrel.

The countrys future is gas, the NNPC official said. No country has developed without power and if you dont have power you dont have development. We need at least 30,000 MW, while available capacity was only 5,352 MW.

Writing of the new Petroleum Industry Bill (PIB) had been due to be delivered by the end of July but has been delayed because of the coronavirus. Despite this delay, Kyari was certain that legislation would be delivered this year.

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