Total Quality Management

Coca Cola Beverages Pakistan Limited.

Mineral Water Plant
A REPORT SUBMITTED TO THE DEPARTMENT OF LAHORE BUSINESS SCHOOL -
LBS, UNIVERSITY OF LAHORE.

Submitted by
1. Rohail Fakhar:70073602
2. Waqar Haider:70073603
3. Uzair Ahmad: 70073597
4. Hira Tahir: 70074586

Submitted to
Sir Syed Abbas Raza
Session 2018-2020
Lahore Business School
University of Lahore
 Table of Contents
1. EXECUTIVE SUMMARY --------------------------------------------------------------------- 1

2. INTRODUCTION TO THE COMPANY --------------------------------------------------- 2

2.1 Company Portfolio ------------------------------------------------------------------------------------------------------3

2.2 Company’s Mission -----------------------------------------------------------------------------------------------------3

2.3 Company’s vision --------------------------------------------------------------------------------------------------------3

2.4 Vision 2025 of CCI ------------------------------------------------------------------------------------------------------4

Winning culture --------------------------------------------------------------------------------------------------------------4

2.5 Company’s values -------------------------------------------------------------------------------------------------------4

3. PURPOSE OF THE DOCUMENT ----------------------------------------------------------- 5

Project Introduction. --------------------------------------------------------------------------------------------------------5

4. SUMMARY OF MARKET STUDY ---------------------------------------------------------- 5

4.1 Market Requirement as Per Local Population --------------------------------------------------------------------5

4.2 Market Study of Project Cost -----------------------------------------------------------------------------------------5

4.3 General Marketing Aspects -------------------------------------------------------------------------------------------6

Revenue Assumptions -------------------------------------------------------------------------------------------------------6

THE PROPOSED MARKET PRICE FOR SELLING 1 BOTTLE OF .5 ML AND 1.5

LITER IS RS. 40 AND 55 RESPECTIVELY. --------------------------------------------------- 6

4.4 CRITICAL FACTORS -------------------------------------------------------------------------------------------------6

4.5 STRATEGIC RECOMMENDATIONS ----------------------------------------------------------------------------7

4.5.2 Sector and Industry Analysis ---------------------------------------------------------------------------------------7

4.5.3 Location of Plant in Relation to other Plants --------------------------------------------------------------------8

Proposed Location -----------------------------------------------------------------------------------------------------------8

5. KEY SUCCESS FACTORS -------------------------------------------------------------------- 9

5.1 Marketing -----------------------------------------------------------------------------------------------------------------9

5.2 Pricing ------------------------------------------------------------------------------------------------------------------- 10

5.3 Product Packaging ---------------------------------------------------------------------------------------------------- 10

5.4 Competitors Brands available in Local Market ----------------------------------------------------------------- 10

6. PROJECT PROFILE --------------------------------------------------------------------------- 11

6.1 Size of Plant------------------------------------------------------------------------------------------------------------- 11

6.2 Land ---------------------------------------------------------------------------------------------------------------------- 11

6.3 Project Brief ------------------------------------------------------------------------------------------------------------ 11

7. PROCESS ----------------------------------------------------------------------------------------- 11

7.1 Plant Capacity---------------------------------------------------------------------------------------------------------- 12

7.2 Process Considerations ----------------------------------------------------------------------------------------------- 12

7.3 Project Time Lines ---------------------------------------------------------------------------------------------------- 13

7.4 Availability of Raw Material and Fuel ---------------------------------------------------------------------------- 13

8. LEGAL REQUIREMENTS ------------------------------------------------------------------- 13

9. THE PROCESS FLOWS ---------------------------------------------------------------------- 14

9.1 Suitability --------------------------------------------------------------------------------------------------------------- 16

9.2 Hygiene ------------------------------------------------------------------------------------------------------------------ 17

9.3 Packaging --------------------------------------------------------------------------------------------------------------- 17

9.4 Transportation --------------------------------------------------------------------------------------------------------- 17

9.5 Sampling ---------------------------------------------------------------------------------------------------------------- 17

9.6 Scale of Sample -------------------------------------------------------------------------------------------------------- 18

9.7 Criteria for Conformity ---------------------------------------------------------------------------------------------- 18

10. TOTAL QUALITY MANAGEMENT PLANNING IN COCA COLA ----------- 20

10.1 Planning---------------------------------------------------------------------------------------------------------------- 20
Business Planning ---------------------------------------------------------------------------------------------------------- 20

System Planning ------------------------------------------------------------------------------------------------------------ 20

10.2 Management Responsibilities -------------------------------------------------------------------------------------- 20

10.3 Total Productive Maintenance TPM ----------------------------------------------------------------------------- 26

10.4 Operational Excellence – OE -------------------------------------------------------------------------------------- 26

10.5 ISO Methodology Plan, Do, Check, Act ------------------------------------------------------------------------- 26

106 Plan-Do-Check-Act Cycle ------------------------------------------------------------------------------------------- 27

10.7 Total Quality Management System Standards of The Coca Cola ------------------------------------------ 27

10.8 5S Approaches -------------------------------------------------------------------------------------------------------- 27

10.9 Overview of the Coca-Cola Quality System -------------------------------------------------------------------- 29

The Modular Framework ------------------------------------------------------------------------------------------------ 29

11 MACHINERY & EQUIPMENT REQUIREMENTS --------------------------------- 31

11.1 SUPPLIER DETAILS ---------------------------------------------------------------------------------------------- 31

12 BUILDING DRAWING. -------------------------------------------------------------------- 32

12.1 PRODUCTION LINE LAYOUT ------------------------------------------------------------ 32

13 FINANCIAL ANALYSIS ------------------------------------------------------------------- 33

13.1 Project Investment --------------------------------------------------------------------------------------------------- 33

13.2 Land -------------------------------------------------------------------------------------------------------------------- 33

13.3 Building/Infrastructure --------------------------------------------------------------------------------------------- 33

13.4 Machinery & Equipment Requirement ------------------------------------------------------------------------- 34

13.7 Vehicles Requirement ----------------------------------------------------------------------------------------------- 35

13.8 Human Resource Requirement ----------------------------------------------------------------------------------- 35

13.9 Utilities and other costs --------------------------------------------------------------------------------------------- 36

13.10 Capital Structure --------------------------------------------------------------------------------------------------- 36

13.11 Project Returns ----------------------------------------------------------------------------------------------------- 36

1. EXECUTIVE SUMMARY
The demand for mineral water is constantly rising and there are a number of local
manufacturers producing mineral water bottles. The consumers are becoming increasingly
quality conscious and seek products offering value for money. This trend has led to strong
growth in mineral water bottling plant all across Pakistan. The focus of the New Production
Plant is to provide clean, hygienic and drinkable water.

This proposed Feasibility study presents an investment opportunity for establishing a

Mineral Water Production Plant with a capacity of 100,000 gallons per day. The proposed
product line will consist of 500 ml, 1.5 Liter bottles. Total utilized production capacity of
purified bottled water is 875,368 bottles per year, where initial capacity utilization will be
40%.

The total project cost for setting up a Mineral Water Processing Unit is estimated at Rs.
106.41 million out of which Rs. 100.48 million is capital cost and Rs. 5.92 million is
working capital. The project is proposed to be financed through 100% equity. The NPV is
projected around Rs. 89.96 million, with an IRR of 41% and a Payback Period of 3.29 years.
The most critical considerations or factors for success of the project are:
• Most significant consideration
▪ Location with respect to source of water.
▪ Compliance with standards & obtaining license from (PSQCA) Pakistan
Standards & Quality Control Authority.
▪ Maintenance of quality and hygiene standards.
▪ Efficient promotion of product through various TTL marketing activities.
• Equally important factors
▪ Experienced & Strong Distributor.
▪ Reasonable & competitive prices with respect to brand positioning.

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2. Introduction to the Company

Coca-Cola, the product that has given the world its best-known taste was born in Atlanta, Georgia, on
May 8, 1886. Coca-Cola Company is the world’s leading manufacturer, marketer and distributor of
non-alcoholic beverage concentrates and syrups, used to produce nearly 400 beverage brands. It sells
beverage concentrates and syrups to bottling and canning operators, distributors, fountain retailers
and fountain wholesalers. The Company’s beverage products comprise of bottled and canned soft
drinks as well as concentrates, syrups and not-ready-to-drink powder products. In addition to this, it
also produces and markets sports drinks, tea and coffee. The Coca- Cola Company began building its
global network in the 1920s. Now operating in more than 200 countries and producing nearly 400
brands, the Coca-Cola system has successfully applied a simple formula on a global scale: “Provide a
moment of refreshment for a small amount of money- a billion times a day.”

The Coca-Cola Company and its network of bottlers comprise the most sophisticated and pervasive
production and distribution system in the world. More than anything, that system is dedicated to
people working long and hard to sell the products manufactured by the Company. This unique
worldwide system has made The Coca-Cola Company the world’s premier soft-drink enterprise.
From Boston to Beijing, from Montreal to Moscow, Coca-Cola, more than any other consumer
product, has brought pleasure to thirsty consumers around the globe. For more than 115 years, Coca-
Cola has created a special moment of pleasure for hundreds of millions of people every day.
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2.1 Company Portfolio
CCI is the sixth-largest bottler in the Coca-Cola system in terms of sales volume. CCI produces,
distributes and sells sparkling and still beverages of The Coca-Cola Company (CCIC) across Turkey,
Pakistan, Kazakhstan, Azerbaijan, Kyrgyzstan, Turkmenistan, Jordan, Iraq, Syria and Tajikistan.

CCI employs more than 10,000 people and has a total of 25 plants, offering a wide range of
beverages to a consumer base of 400 million. In addition to sparkling beverages, the product portfolio
includes juices, waters, sports and energy drinks, teas and iced teas.

CCI’s shares are traded on Borsa Istanbul (BIST) under “CCOLA.IS”, American depositary receipts
(ADR) are traded over the counter in the United States under “COLAY”, Eurobond is traded on Irish
Stock Exchange under “CCOLAT” tickers.
2.2 Company’s Mission

The road map of coca cola is very enduring and inspiring, and it starts with a mission. The mission of
the company declares the purpose of company and serves as a standard against which the actions and
decisions of company are weighed down. The missions of Coca Cola Company are:

To refresh the world.

To inspire moments of optimism and happiness
To create value and make a difference.

2.3 Company’s vision

The vision of Coca Cola Company serves as a framework for the mission roadmap and guides every
aspect of the business by describing what is needed to be accomplished in order to continue achieving
sustainable quality growth. The vision of Coca Cola Company includes the following features:

Providing an inspiring place for people to work and inspire each other.
Introduce a portfolio of quality beverage brands that anticipate and satisfy people’s desires and
needs
Nurture a winning network of customers and suppliers creating a mutual enduring value.

Being a responsible citizen that makes a difference by helping build and support sustainable
communities.
Maximizing long term return to shareholders while being mindful of our overall responsibilities
Be highly effective, lean and fast-moving organization.

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2.4 Vision 2025 of CCI

Winning culture
Winning culture of the company defines the attitudes and behaviors that will be required for the
company to make the vision 2025 a reality.
2.5 Company’s values

The values of coca cola company serve as a compass for the actions and describe how the
company behaves. The major values of coca cola are:

Leadership

Collaboration

Integrity
Accountability
Passion
Diversity

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3. PURPOSE OF THE DOCUMENT

The objective of this Feasibility study is primarily to Identify the Project Viability of Water
Plant for COCA COLA in identification of project viability. This may form the basis of an
important investment decision and to serve this objective; the document/study covers various
aspects related to concept development, start-up, production, marketing & finance and
business management. The document also provides sectoral information, brief on
Government policies and international scenario, which have some bearing on the project
itself.
Project Introduction.
Coca Cola Beverages Pakistan desires to Build New Water Production Plant — 100,000
gallons Per day and assigned a Project Manager to prepare a feasibility study for Water Pant.
Following the Market Study, three potential sites were agreed: Rahim Yar Khan, Gujranwala
and Faisalabad Industrial Estate. The present feasibility report considers the three sites and
selected Finally Gujranwala Production Plant is selected for installation of Water Plant.

4. SUMMARY OF MARKET STUDY

The demand for mineral water is constantly rising and there are a number of local
manufacturers producing good quality mineral water bottles. The consumers are becoming
increasingly quality conscious and seek products offering value for money. This trend has
led to strong growth in mineral water bottling plant across Pakistan. The focus of the
business would be to provide clean, hygienic and drinkable water.
4.1 Market Requirement as Per Local Population

As Per Local Population Initially company need to install Mineral Water Processing Plant
with a capacity of 100,000 gallons per day. The proposed product line will consist of 500 ml,
1.5 Liter bottles. Total utilized production capacity of purified bottled water is 875,368
bottles per year, where initial capacity utilization will be 40%.
4.2 Market Study of Project Cost

The total project cost for setting up a Mineral Water Processing Unit is estimated at Rs.
106.41 million out of which Rs. 100.48 million is capital cost and Rs. 5.92 million is

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working capital. The project is proposed to be financed through 100% equity. The NPV is
projected around Rs. 89.96 million, with an IRR of 41% and a Payback Period of 3.29 years.
4.3 General Marketing Aspects
The most critical considerations or factors for success of the project are:
▪ Most significant consideration
▪ Location with respect to source of water.
▪ Compliance with standards & obtaining license from (PSQCA) Pakistan
Standards & Quality Control Authority.
▪ Maintenance of quality and hygiene standards.
▪ Efficient promotion of product through various TTL marketing activities.
▪ Equally important factors
▪ Experienced & Strong Distributor.
▪ Reasonable & competitive prices with respect to brand positioning.

Revenue Assumptions
Selling Price of Bottle:
The proposed market price for selling 1 bottle of .5 ml and 1.5 Liter is Rs. 40 and 55
Respectively.

4.4 CRITICAL FACTORS

It is advisable to evaluate the associated risk factors by taking into consideration of certain
key elements. For establishing water purification plant critical factors that should be
considered before launching are described below:

• The market for purified bottled / mineral water is a growing market, but offers tough
competition.
• Perception / positioning of the new brand. Usually the top target markets for bottled
mineral water follows the perception. If the perception is positive, the results will be
higher sales. The positive perception for distributors and final customers may result
from direct consumer experience, awareness, direct promotional activities, print
media and cable advertisement.

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 • Distribution is very important for the success of new brand. The stronger the
distribution the more successful will be the new brand. The distribution strategy
should be designed after a careful study of the market for going for regional
distribution or for nationwide distribution.
• Pre-launch advertising is vital for positive perception of the product, which will
result in higher product acceptance.
• Compliance of the water quality standards of (PSQCA) Pakistan Standards &
Quality Control Authority and license from the authority.
• Availability of product at A class, B class or C class shops should be decided before
launching the product and availability should be persistent.

4.5 STRATEGIC RECOMMENDATIONS

4.5.1 Market Entry Timing

The weather is the main dynamic that may bring changes in the market size of the purified
drinking water as the daily water requirement increases in summer. When launching a new
brand of purified water for bulk market, weather is the main dynamic and should be given
proper consideration. The demand pattern for retail market of purified bottled water is not
affected by the weather. However, it is suggested that the new brand of purified bottled
water is launched in the start of summer season. The Investor have to match the brand
launching time with the advertisement and weather that would drive the demand of bottled
water and willingness of consumers to switch towards new brand.
4.5.2 Sector and Industry Analysis

According to PSQCA website, there are around 284 registered players in the bottled water
sector. According to the industry sources, the numbers of bottlers are well above 300 due to
increasing demand for drinking water. However, the much-publicized laboratory report
published by the Pakistan Council of Research on Water Resources (PCRWR) after
conducting a survey of 111 registered brands in the Pakistan declaring that, 89 brands
available in the market are safe while 22 out of them are unsafe for drinking. Pakistan
Standards & Quality Control Authority (PSQCA) has made it obligatory for the companies
to obtain license from the authority before commencing operations.

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Pakistan’s bottled water market comprises of two main segments i.e. retail market and bulk
market. The retail market consists of 0.5 liter, 1.5 liters, 3.1 liters 5.0 liters, liters, 16 liters
and 500 ml,1.5 Liter capacity PET bottles, whereas the bulk market consists of home and
office delivering in 2, 3, 5 and 19-gallon cans. The price range for 19-liter category is from
Rs.50 to Rs.250 in the market depending upon the positioning and quality of the brand.

4.5.3 Location of Plant in Relation to other Plants

Gujranwala Plant is selected because of underground water SAMPLES as closely related to

Pakistan Standards & Quality Control Authority requirements or Required water Ph Level and
other critical Factors.
Chemical and Microbiological Requirements of Bottled/Mineral Water
Requirements Units
pH Range 6.5-8.5

• Most significant consideration

▪ Location with respect to source of water.
▪ Compliance with standards & obtaining license from (PSQCA) Pakistan
Standards & Quality Control Authority.
▪ Maintenance of quality and hygiene standards.
▪ Efficient promotion of product through various TTL marketing activities.
• Equally important factors
▪ Experienced & Strong Distributor.
▪ Reasonable & competitive prices with respect to brand positioning.

Proposed Location

Mineral Water processing plant can be set-up in Gujranwala Production Plant.

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5. KEY SUCCESS FACTORS
5.1 Marketing

The traditional marketing tools include site advertisement, print media advertising and
brochures. This study allocates 20% of the revenue for advertising and promotional
purposes.
Apart from the traditional marketing tools, this study suggests focusing more on other
marketing magnets that include interactive marketing. Interactive marketing may include
educating the general public about the importance of water and its daily consumption
requirements for human body through the participation in seminars and in general public
gatherings (e.g. College and University gatherings).

One of the marketing options is to sponsor public events like cricket matches or hospital
campaigns, distributing free brochures about water and its daily consumption. The
interactive marketing may be designed through seminars and workshops about the daily
human consumption requirements and diseases originating from the lack of pure water.
Overall marketing strategy may change with the change of target market. A market research
study is recommended to design the different dynamics of marketing before launching the
new brand.

Marketing expense has been included at the rate of 20% of Total Revenue. The investor may
decide to increase or decrease the amount of marketing expense depending upon the choice
of promotional activities and type of media used. Following table gives the breakup of
tentative marketing expense.

Table: In %age if the marketing expense

Bill Boards / Float Operations 20%
Newspapers 25%
Magazines 15%
Point of Sales Marketing 40%

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5.2 Pricing

The pricing strategy should be in line with the going rate market prices of the different local
brands. Since a new brand has to face a lot of competition from the market, it is suggested
that the price strategy should be according to the market competition. Suggested price is
Rs.110 for 19 Gallon Bottle however different brands are available at Rs. 50 to 250 with
respect to their brand positioning and consumers perception.
5.3 Product Packaging
Coca Cola already have a Brand with their registered trade mark and standard bottle size
with the name of Dasani with below specs printed on Label.
• Water Specification
• Certificate mark of the Pakistan Standards & Quality Control Authority
• Expiry Date (Best Before Date)
• A brief intro of the company with the address
• Brand Name / Trade Name
• Net volume in System International / Metric system
• Batch number or code number

5.4 Competitors Brands available in Local Market

Table: Some popular Brands available in the market
Abc-Hayat Lucent
Springley Fission
Aqua Bara Safe Balance
Aqua Flex Aqua Plus
Nestle Pure Life Exact
Atlantis Pureza
Sparkletts XT
Aafi Aqua Nation
Classic Aala Pure Drop
AB-E-Tasneem Oasiss
Tws Horizon
Nayab Maya
Aspen Aqua Nino
Pineo Prime Pani

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Kinley Ok Lasani
Great Aqua Clear
ISIS Aab-e-Anoud
Aab-E-Wah Life Water
Salsabeel Water Habib
Piyaas Plus Fast Water
Aqualine Premium Quality
Aqua 7 Revielle
Akson Pure Water Water One
Deja Blue Blue Ever Pure

6. PROJECT PROFILE
6.1 Size of Plant
This study has been designed for a water purification plant with a capacity of 100,000 gallons
per day. The product consists of 500 ml,1.5 Liter bottles only.

Table: Recommended project Parameters

Human
Installed Capacity Technology/Machinery Location
Resource

100,000 Gallons per day 62 Imported Karachi

6.2 Land
The space requirement for the proposed Mineral water processing plant for 100,000 GPD is
approx. 01 acres and estimated by considering various facilities including management office,
production hall, storage, open space, etc. As per Company Space is already available at
already Build Coca Cola Production Plant.

6.3 Project Brief

This proposed Feasibility study presents an investment opportunity for establishing a bottled
water plant for providing pure drinking water. The proposed product line will consist of
bottles of 500 ml,1.5 Liter.

7. Process
Three sources of water can be used for purification purposes on commercial basis.
• Ground/Boring Water
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 • Water Supply from KWSB (in Karachi)
• Through Hydrants/Tankers

The ground water available in Karachi at different areas has different chemical composition
and treatment would vary depending upon the chemical composition from area to area. The
water supply from Ground Water is more feasible as compared to the water supply from
KWSB. Water can also be purchased from KWSB on commercial basis. This feasibility
focuses on Ground/Boring Water as source of water. Initially, we recommend Resistivity or
Geological survey at plant location, which consists of four tests and will cost Rs. 70,000. This
Resistivity survey report will identify the TDS (Total Dissolved Solids), time for the
availability of boring water at particular depth and feasibility of chemical and microbiological
composition of ground/boring water which will be more helpful for this project.
7.1 Plant Capacity

This study has been designed for a water purification plant with a capacity of 100,000
gallons per day. The product consists of 500 ml,1.5 Liter bottles only.

Table: Recommended project Parameters

Human
Installed Capacity Technology/Machinery Location
Resource

100,000 Gallons per day 62 Imported Karachi

7.2 Process Considerations

The process of purified bottled water manufacturing consists of collecting water from a
suitable source, filtration, demineralization, blending with salts, aeration, testing for
standards conformation, bottling and then packaging.

Most of the water purification plants being installed in the country are Reverse Osmosis
based. Government also recommends RO based technology. This study is based on Reverse
Osmosis technology. Most of the machinery is imported from China, Taiwan, Italy and
Germany along with some local components. Cost of the machinery is as following.

The total project cost for setting up a Mineral Water Processing Unit is estimated at Rs.
106.41 million out of which Rs. 100.48 million is capital cost and Rs. 5.92 million is
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working capital. The project is proposed to be financed through 100% equity. The NPV is
projected around Rs. 89.96 million, with an IRR of 41% and a Payback Period of 3.29 years.

7.3 Project Time Lines

S. No Activity Time (months)
1 Civil Works 06
2 Plant order and lay out 03
3 Pre-opening operations 03
The construction / renovation of civil works is estimated to be completed in six months
whereas the plant lay out and machinery order and installation is also estimated to be
completed in three months. The time required for pre-operations is three months. The project
time line may extend and cut back depending upon the start of activities on parallel basis or
one after another.
7.4 Availability of Raw Material and Fuel

Major Raw Material Which is Water will be Taken from Underground Natural Resources
Through Turbines and other Raw Materials will be taken through suppliers which are already
working with company.
• Chemical
• Reagents
• Bottles
• Bottle Cape
• Pouches
• Cartoon Boxes
• Salts

8. Legal Requirements
The Pakistan Quality Standards defines bottled drinking water as, “Bottled drinking waters
are waters other than natural mineral waters which are filled into hermetically sealed
containers of various compositions forms and capacities that are safe and suitable for direct
consumption bottled drinking water is considered food.”

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The Pakistan Standard Quality Control Authority (PSQCA) was established under section 3
of the Act-1996. The establishment of any mineral water plant in Pakistan is required to get
a license from the Pakistan Standards Quality Control Authority, which will cost Rs. 19,000.
An application form, which can be obtained for only from the office of the Pakistan Standard
Quality Control Authority and it is to be submitted to the Pakistan Standard Quality Control
Authority. The manufacturer is required to have a laboratory and a technical person, who
will be checking the samples for consistent quality. The team from the Pakistan Standard
Quality Control Authority then visits the plant and collects samples. After the conformity of
the samples to the standards the Pakistan Standard Quality Control Authority issues a
license.

9. The process flows

The first step for setting up a water purification plant is the analysis of source of water. After
the chemical analysis, the specifications of the purification plant are set. In the purification
plant, source water is stored into the feed water tank, passes through the sand filter for
preliminary water filtration. Water then passes through the dosing pump-I where chlorine is
added to kill the germs in the water. After the chlorination process, water passes through
carbon filter. It helps in the maintenance of proper odor and taste of the water. It also
removes chlorine from water. Water then passes through dosing pump-II, where Sodium
Meta Bicolpate is added. It helps in dichlorination of water. Water is filtered next, it passes
through dosing pump-III, where anti sealant is added. It prevents scaling of membrane from
calcium, magnesium and biological growth. Water then passes through reverse osmosis
module. This stage of the process makes water clear from all the contaminations and minute
particles. Water then passes through dosing pump-IV, where minerals are added for taste
development. After this stage, water undergoes Ultra Violet treatment to avoid any
contamination from bacteria and other micro- organisms. Water then passes through
automatic washing, filling and capping plant. Here water is filled into bottles. After filling,
bottles are taken into the warehouse or shipped to the retailers. The complete process flow
diagram is as under

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 The Pakistan Standard Quality Control Authority has developed standards for bottled
and mineral water. All the water plants being established in the country are required to follow
these standards. These standards are available for Rs. 1,700. A manufacturer cannot market
bottled / mineral water without obtaining a license from the Pakistan Standard Quality Control
Authority. The authority examines the availability of proper facilities including standardized
laboratory and purification- processing plant for ensuring the quality of purified drinking water
with a team of experts. Manufacturing, Stocking and sale of bottled drinking water and bottled
mineral water without certification marks license is prohibited under the Pakistan Standard
Quality Control Authority Act. Violation of the Pakistan Standard Quality Control Authority
Standards can lead to punitive action as per law.
The general requirements for establishing a bottled / mineral water plant as developed by
Pakistan Standard Quality Control Authority are as following:

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9.1 Suitability
The assessment of the suitability of water for human consumption shall be based on
consideration of its physical, chemical and microbiological requirements and limits for toxic
substances. The water should be free from all chemical and bacteriological contaminations
which are hazardous to health.
Table: Chemical and Microbiological Requirements of Bottled/Mineral Water
Requirements Units
pH Range 6.5-8.5
Total Dissolved Solids (TDS) Max 500 mg/L
Total Hardness as CaCO3 Max 250 mg/L
Chemical Requirements
Nitrite (NO2) 10 mg/L
Chloride 250 mg/L
Sulfate 250 mg/L
Sodium 50 mg/L
Potassium 10 mg/L
Magnesium 50 mg/L
Calcium 100 mg/L
Microbiological Requirements
Escherichia Coli 0/250 ml
Total Califon 0/250 ml
Entercooci (Streptococci) 0/250 ml
Sporulated SRA 0/100 ml
Pseudomonas Aeruginosa 0/250 ml
Parasites and pathogenic micro organisms Shall be free
Source: PCRWR Quarterly Report-Bottled Water Quality

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9.2 Hygiene

Drinking water for the purpose of bottling shall be prepared in accordance with PS:4639-
2004 for the code of practice-General principal of food Hygiene and in accordance with the
PS:4718-2001 for code of practice for the collecting, processing and marketing of natural
mineral waters.

9.3 Packaging

The containers shall be hygienic suitable completely clean and shall not cause any
undesirable changes in the tastes, odor or color or quality of the water. It can be inspected at
random, just prior to being filled and sealed. It should be packed in hermetically sealed
containers of Food Grade material to prevent contamination of bottled water. Filling and
sealing operations of containers shall be done in an aseptic atmosphere so as to prevent any
contamination.

9.4 Transportation

Bottles will be transported on Distributors vehicles as per implemented system.

9.5 Sampling

• In any consignment all the bottles of the same size and belonging to one batch of the
manufacturer or supply shall constitute a LOT
• Each bottle of the sample shall be marked with necessary details of sampling and the
bottles for bacteriological testing shall be marked separately

• The bottles of the sample shall be stored in such a manner that there shall be no
deterioration of quality of water
• The bottles for bacteriological testing shall be brought to the testing laboratory
within one hour, of sampling. If this is not possible the bottles shall be stored at 10
ºC or below and transported to the testing laboratory within 24 hours. In case of
small units, the original packing shall be treated as sample.

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9.6 Scale of Sample

Sample shall be tested from each lot for ascertaining its conformity to the requirements of
this specification. The number of bottles to be selected from a lot shall be in accordance with
the following table.
Table: R-1
Number of Bottles in the Lot Number of bottles to be selected
Up to 1000 15
1001 to 3000 17
3001 to 10,000 18
10,001 and above 24

R-2: If bottles are packed in cases, 10 percent of the cases subject to minimum of five cases
shall be selected from the lot and as far as possible an equal number of bottles shall be
selected from each case so selected to form a sample of sizes given in the table R-1.

Number of Test
A. Each bottle selected as in R-1 and R-2 shall be inspected for packaging and marking
requirements
B. The bottle shall be selected from the bottles, selected as in R-1 and R-2 and tested
individually for bacteriological limits
C. A sufficiently quantity of water shall be drawn from each of the remaining bottles
and mixed to form a composite sample thus obtained shall be tested for the
requirements for its suitability and chemical composition.

9.7 Criteria for Conformity

A Pallet shall be declared as conforming to the requirements of this specification, if the
following conditions are satisfied.
• Each bottle inspected as “A” satisfies the relevant requirements
• Each bottle when tested as in “B” satisfies the relevant information

• Composite sample when tested as in “C” satisfies the relevant requirements

Government of Pakistan as initiated steps to launch programs against substandard bottled

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water. The Pakistan Council of Research on Water Resources (PCRWR) has launched a
campaign against substandard and unlicensed brands of mineral water being sold in the
market. The PCRWR has conducted a serried of tests of 65 registered brands of mineral
water last month and 8 were found unsafe and some of them substandard. It is recommended
to fulfill all the requirements of the Pakistan Quality Control Authority for getting a license
for the production and marketing of bottled / mineral water in Pakistan

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10.Total Quality Management Planning in Coca Cola
10.1 Planning
Business Planning
Each organizational unit has a business plan that addresses its objectives and which promotes
continual improvement of the organization and the effectiveness of the quality management
system. This includes the determination of metrics that allow for the monitoring of
performance against objectives. Objectives and metrics have documented. Top management
of each unit is responsible for ensuring that the business plan is communicated to all
employees. All employees are responsible for understanding the business plan, its objectives
and metrics in order to assist with the achievement of the plan. Progress against the
objectives and metrics are communicated to all employees on a routine basis and insert them
to management review.

System Planning
Top management of each organizational unit has ensured that:
• Planning of the quality management system is carried out in order to meet the
requirements of The Coca-Cola Company, as well as its objectives
• The integrity of the quality management system is maintained when changes
are planned and implemented.

10.2 Management Responsibilities

Management Commitment
Top management has demonstrated support and commitment to the development,
implementation, and continual improvement of the quality system by
• Ensuring the availability of appropriate resources
• Establishing a quality statement and ensuring that key objectives and metrics
are established
• Communicating to the organization the importance of meeting customer as well as
applicable food law requirements of The Coca-Cola Company and its business
partners
• Conducting planned management reviews

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 • Ensuring customer requirements are understood and consistently met with the aim of
enhancing customer satisfaction.

Resources
Top management of each organizational unit has determined and provides the resources
needed to:
a. Effectively achieve the organization’s objectives, as defined in the business Plan.
b. Implement and maintain the quality management system and continually improve its
effectiveness.

Quality Statement
Top management of each organizational unit has established and documents its quality
statement. Management of each organizational unit has developed a quality statement suited
to its own methods of operation and unique concerns. The Quality Statements are,
a. Appropriate to the purpose of the organizational unit.
b. Include a commitment to comply with requirements and to continually improve the
effectiveness of the quality management system.
c. Include a commitment to food safety.
d. Provide a framework for establishing and reviewing key objectives and Metrics.
Top management of each organizational unit has ensured that appropriate communication
processes are established within the organization and that communication takes place
regarding the effectiveness of the quality management system.

Management Review
Top management of each organizational unit has review the quality management system at
planned intervals to ensure its continuing implementation, suitability, adequacy, efficiency,
and effectiveness. A procedure establishes that includes, at minimum, a review and analysis
of the following inputs:
a. Results of audits and HACCP plan validation.
b. Customer and consumer feedback, including trends and individual incidents, as
appropriate.
c. Process performance and product conformity data.

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 d. Status of preventive and corrective actions.
e. The current Incident Management and Crisis Resolution (IMCR) procedure.
f. Follow-up actions from previous management reviews.
g. Changes that could affect quality management system performance.

The output from the management review includes decisions and/or actions related to:
a. Improvement of the effectiveness of the quality management system and its
Processes.
b. Development and implementation of effective action plans to manage risks to the
business.
c. Adequacy, suitability, and effectiveness of food safety objectives and the HACCP
program.
Documentation
Document Control
Each organizational unit is controlling all documents required by The Coca-Cola
Quality System. A documented procedure has to be established defining the
a. Structure and numbering of the documentation system
b. Protocols for creation and approval of documents prior to issue
c. Review, updating as necessary, and preapprovals of documents
d. Identification of changes and the current revision status

Quality Manual
Each organizational unit is document and maintains a Quality Manual that includes the scope
of the quality management system, including details and justification for any exclusion. The
documented procedures established for the quality management system, or reference to them
A description of the interaction between the processes of the quality management system

Process Integrity
Process Orientation & Organizational Structure Each organizational unit has:
a. Identify the processes and procedures needed for the quality management system
and their application throughout the organization
b. Determine the sequence and interaction of these processes
c. Define and communicate the responsibilities and authorities of all persons

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Process Monitoring and Control
Each organizational unit is planning, implementing, controlling, monitoring, measuring, and
analyzing its processes, and effectively ensure that new and existing processes continuously
produce material, product, and/ or service within Company specifications; and which meet
applicable laws and this standard.
a. Compliance to applicable laws
b. Assurance of required equipment process capabilities
c. Conformance to Company requirements for process monitoring
Raw Water Protection Plan:
Parameters Frequency / Specifications Responsibility
Water Source Deep well
Number of Turbines 04
Bore depth (ft) 450, 585, 650, 750 respectively.
Cleaning & Sanitation of 6 Month QA Manager
underground storage tank &
Pipe lines
In house Quality analysis of raw Daily / Weekly WT Operator
water
Full Analysis from External Yearly QA Manager
Source

Infrastructure and Work Environment

Each organizational unit has determined, provide, and maintain the infrastructure needed to
achieve conformity to product and service requirements. Maintenance procedures, including
routine, preventive, and corrective maintenance, needed to achieve product and process
requirements has been documented. Records of maintenance have been maintained.

Design and Development

Design and Development Planning The organizational unit is planning and controlling the
design and development of product and other process outputs. Design and development
planning has determined:
a. Design and development stages
b. Review, verification, and validation those are appropriate to each design
c. Responsibilities and authorities for design and development.

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 Training
Each organizational unit has identified and documents the skill requirements for each
position and competency levels necessary for each employee to perform their job safely and
effectively. Competency consists of appropriate education, training, skills and experience.
The competency, awareness, and training procedure include:
a. Compliance with applicable laws. Where conflict between Company requirements
and applicable laws exists, the most stringent apply
b. Determination of competency gaps of employees based on the requirements for their
position. Consideration must be given to the necessity for HACCP training
Audit
Each organizational unit has implemented an audit procedure to monitor conformance with
this Quality Management System Standard and other relevant Company requirements, and to
assess the intent, implementation, and effectiveness of its quality system. Audits have been
conducted at planned intervals.
The audit procedure includes
a. Determination of persons responsible for conducting audit activities, including
required competency
b. Auditors who are independent of the activity audited. Auditors must not audit
their own work

Consumer Responses and Customer Satisfaction

Determination of Contractual Requirements Each organizational unit has identified the
requirements of each order or contract.
These include:
a. Requirements specified by the customer including the requirements for delivery
and post-delivery activities
b. Requirements not stated by the customer but necessary for specified or intended
use, where known
c. Applicable laws related to the product

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Customer Satisfaction
Each organizational unit has implemented a procedure for measurement and analysis of
customer satisfaction data against established customer requirements and expectations and
takes actions to ensure they are met. The customer satisfaction procedure has included at
least one proactive method of the unit’s choosing for capturing customer perceptions.

Continual Improvement
Each organizational unit has continually improved the effectiveness of its quality
management system using the business plan, quality statement, objectives and metrics, audit
results, analysis of data, corrective and preventive actions, and management review.
Continual improvement of the overall performance, efficiency, and effectiveness of the
organization demonstrates continual improvement of the effectiveness of the quality
management system.
Corrective Action
Each organizational unit has implemented a corrective action procedure that ensures action is
taken to eliminate the cause of nonconformities in order to prevent recurrence.
a. Review of nonconformities (including customer complaints)
b. Determining the causes of nonconformities
c. Evaluating the need for action to ensure that nonconformities do not recur.
Preventive Action
Each organizational unit has determined preventive actions, and implements a preventive
action procedure that ensures that the actions are taken, to eliminate the cause of potential
nonconformities in order to prevent occurrence. Preventive actions have been appropriate to
the effects of the potential problems. A documented procedure has been established that
includes:
a. Determining potential nonconformities and their causes
b. Evaluating the need for action to prevent occurrence of nonconformities

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10.3 Total Productive Maintenance TPM
TPM (Total Productive Maintenance) is a holistic approach to equipment maintenance that
strives to achieve perfect production:
• No Breakdowns
• No Small Stops or Slow Running
• No Defects In addition, it values a safe working environment:
• No Accidents

10.4 Operational Excellence – OE

What is Operational Excellence?
Operational excellence can simply be described as a philosophy that embraces problem-solving
and leadership as the key to continuous improvement. People are often unsure of how to
approach the subject of operational excellence. It is a difficult term to define and most people
either find the topic to be too ambiguous or too broad to talk about. Operational excellence,
however, is not a set of activities that you perform. It’s more of a mindset that should be
present within you and your employees.

10.5 ISO Methodology Plan, Do, Check, Act

The PDCA cycle can be briefly described as follows:
❖ Plan: establish the objectives of the system and its processes, and the resources needed
to deliver results in accordance with customers’ requirements and the organization’s
policies, and identify and address risks and opportunities
❖ Do: implement what was planned
❖ Check: monitor and (where applicable) measure processes and the resulting products
and services against policies, objectives, requirements and planned activities, and report
the results
❖ Act: take actions to improve performance, as necessary.

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106 Plan-Do-Check-Act Cycle

10.7 Total Quality Management System Standards of The Coca Cola

• ISO 9001:2015 for Quality Management System
• FSSC (Food Safety Certification Scheme) Version 5
1. ISO 22000:2018
2. ISO TS Technical Specification 22002-1:2009
3. Additional Requirements
• ISO 14001:2015 Environment Protection

10.8 5S Approaches
5S consists of these five steps:
1. Sort through and sort out
2. Standardize and share information
3. Set in order
4. Sustain the improvements made
5. Shine and inspect through cleaning.
•Sort

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The first S focuses on eliminating unnecessary items from the workplace. An effective visual
method to identify these unneeded items is called red tagging. A red tag is placed on all
items not required to complete their job. These items are then moved to a central holding
area. This process is for evaluation of the red tag items. Occasionally used items are moved
to a more organized storage location outside of the work area while unneeded items are
discarded. Sorting is an excellent way to free up valuable floor space and eliminate such
things as broken tools, obsolete jigs and fixtures, scrap and excess raw material.

•Set In Order is the second of the 5Ss and focuses on efficient and effective storage
methods. Strategies for effective Set In Order are: painting floors, outlining work areas and
locations, shadow boards, and modular shelving and cabinets for needed items such as trash
cans, brooms, mop and buckets.
•Shine: Once you have eliminated the clutter and junk that has been clogging work areas
and identified and located the necessary items, the next step is to thoroughly clean the work
area. Daily follow-up cleaning is necessary in order to sustain this improvement. Workers
take pride in a clean and clutter-free work area and the Shine step will help create ownership
in the equipment and facility. Workers will also begin to notice changes in equipment and
facility location such as air, oil and coolant leaks, repeat contamination and vibration,
broken, fatigue, breakage, and misalignment. These changes, if left unattended, could lead to
equipment failure and loss of production. Both add up to impact the company’s bottom line.
•Standardize: Once the first three 5S’s have been implemented, should concentrate on
standardizing best practice in your work area. Allow employees to participate in the
development of such standards. They are a valuable but often overlooked source of
information regarding the work.

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 •Sustain: This is by far the most difficult S to implement and achieve. Human nature is to
resist change, and more than a few organizations have found themselves with a dirty
cluttered shop a few months following their attempt to implement 5S. The tendency is to
return to the status quo and the comfort zone of the "old way" of doing things. Sustain
focuses on defining a new status quo and standard of work place organization.

10.9 Overview of the Coca-Cola Quality System

Now Coca-Cola follows third evolution of CCI and this offers the following improvements
to managing quality and accelerating quality system implementation:
▪A simplified, streamlined, modular structure;
▪Alignment with externally recognized standards; and
▪A provision to leverage external resources such as training and auditing, while
addressing the unique requirements of the Coca-Cola system.
This evolution further enables improved quality performance and business excellence
driven by

The Modular Framework

The framework of CCI is much like their business: multifaceted with Quality at its core. In
addition to Quality, CCI has Environmental and Safety facets. The CCI framework allows
other business units to seamlessly align with it. The CCI pyramid model has four layers,
starting with The Promise at the pinnacle.

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The Promise.
The Coca-Cola Company exists to benefit and refresh everyone it touches. This is The Coca-
Cola Promise. Regardless of business function, each facet of the CCI framework supports
The Promise.
Each of the pyramid facets has the same component parts. For example, there is an
Environmental Management System Standard supported by environmental performance
requirements as well as a Safety Management System Standard supported by safety
performance requirements. Each facet – for Quality, Safety and Environment – has the same
four layers. Those layers are:

The other layers are:

• Policy
• Assurance
• Control

Policy.
As the pyramid model illustrates, this layer consists of a Policy Statement. The
Environmental Policy and the Safety Policy are found on their respective sides of the
pyramid, just as the Quality Statement appears on the Quality side of the model.

Assurance.
This layer contains the management systems designed to ensure that control compliance
activities are consistent and effective; ultimately making sure performance requirements are
met. In the pyramid model, notice that on the Quality side, the management system features
the Quality Management System Standard, which meets the requirements of the ISO
Standard 9001:2015 and was constructed with the intent to embody the management system
requirements of the Food Safety Initiative (GFSI) Guidance Document.

Control.
Controls, or performance requirements, are not new to the Coca-Cola system. Testing and
inspection requirements have been part of the Company’s day-today operations for more
than 100 years. However, today’s requirements differ from the historical, prescriptive

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 requirements because they focus on the results that must be achieved. Although each local
operation must achieve the same end results, exactly how they do so varies from location to
location and from process to process. Notice that the CCI pyramid model depicts a clear
separation between Control activities and Assurance activities. Examples of Control
activities include Good Manufacturing Practices, cleaning and sanitizing methods, and Good
Environmental Practices.

Scope.
CCI evolution brings some changes to the scope of CCI. As the framework illustrates, CCI
reaches well beyond manufacturing and testing operations.
Quality Record.
SAP

11 MACHINERY & EQUIPMENT REQUIREMENTS

Most of the water purification plants being installed in the country are Reverse Osmosis
based. Government also recommends RO based technology. This study is based on Reverse
Osmosis technology. Most of the machinery is imported from China, Taiwan, Italy and
Germany along with some local components. Cost of the machinery is as following.

Table: Machinery Cost

Machinery Name Cost
R.O Plant Unit (Imported with duty and taxes) Rs. 25,000,000

11.1 SUPPLIER DETAILS

To facilitate potential investors, contact details of private sector service providers relevant to
propose project is given:

Name of Address Cell E-mail Website

Supplier

Mr. Plot # 4/33 Sector- 0300- rotackwater@gmai www.rotackwater

Ayaz 21, Korangi 2457198 l.com .com
Attari Industrial Area,
Karachi-
74900

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12 Building Drawing.

12.1 Production Line Layout

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13 FINANCIAL ANALYSIS
13.1 Project Investment

The total cost of the project has been worked out to be Rs. 106,411,600 This includes a fixed
cost of Rs. 100,484,300 and a working capital requirement of Rs. 5,927,300

Table Project Cost Details

Description Amount in Rs.
Land 10,018,800
Building/Infrastructure 32,355,500
Machinery, Equipment & Laboratory 29,200,000
Bottles 2,200,000
Furniture & fixtures 1,490,000
Office vehicles 19,050,000
Office equipment 1,100,000
Pre-operating costs (Connections charges, Surveys & Accruals) 4,070,000
Legal, Licensing & Promotional Expense 1,000,000
Total Capital Cost 100,484,300
Working Capital Requirement 5,927,300
Total Project Cost 106,411,600
13.2 Land

The space requirement for the proposed Mineral water processing plant for 100,000 GPD is
approx. 01 acres and estimated by considering various facilities including management
office, production hall, storage, open space, etc. Details of space requirement and cost
related to land & building is given below:
13.3 Building/Infrastructure

Description Estimated Unit Cost Total Cost (Rs.)

Area (Sq. (Rs.)
ft.)
Management building 1,500 1,400 2,100,000
Factory 5,000 1,400 7,000,000
Store 8,000 1,400 11,200,000
Pavement/driveway 2,000 500 1,000,000
Boring (Running Ft.) 500 3,500 1,750,000
Rest Room for Management 1,000 3,000 3,000,000

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 Rest Room for Labors 23,560 50 1,178,000
Open Space 835 3,500 2,922,500
Total 42,060 32,355,500

13.4 Machinery & Equipment Requirement

Description Total Cost (Rs.)

Complete Mineral Water Processing Plant 27,200,000

Full Automatic RO Plant

Mineral Water Filling Machine

Brush bottle & Cap remover

Steam type shrink machine with steam generator

Lamp check

Conveyor

Conveyor driven motor

Cap Sterilizer
Barcoding Machine

Total Machinery Cost 27,200,000

Laboratory Equipment 2,000,000

Total 29,200,000
Description Quantity Unit Cost Total (Rs.)
Bottle (Empty) 4,000 550 2,200,000

Total 2,200,000

13.5 Furniture & Fixtures Requirement

Description Quantity Unit Cost Total Cost

(Rs.) (Rs.)
Table & Chairs 20 30,000 600,000
Chairs & Stools 20 10,000 200,000

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 File Cabinets 10 15,000 150,000
Shelves 10 15,000 150,000
Air Conditioners 1.5 Ton 06 65,000 390,000

Total 1,490,000

13.6 Office Equipment Requirement

Description Quantity Unit Cost Total Cost

(Rs.) (Rs.)
Computer server 01 150,000 150,000
Computers/Laptops 08 70,000 560,000
Computer printer 02 25,000 50,000
Telephone exchange 01 40,000 40,000
Telephones 20 2,500 50,000
Fax machines 01 25,000 25,000
Copier 01 225,000 225,000

Total 1,100,000

13.7 Vehicles Requirement

Description Quantity Unit Cost Total Cost

(Rs.) (Rs.)

Truck (Mazda or Equivalent)3 10 1,800,000 18,000,000

Motor Bike 15 70,000 1,050,000

Total 19,050,000

13.8 Human Resource Requirement

Description4 No. of Monthly Monthly

Employees Salary per Salary
person (Rs.) (Rs.)
QA Manager 01 250,000 400,000

Engineer 01 75,000 100,000

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Foreman’s 02 30,000 60,000

QC Officer 01 30,000 30,000

Plant Operator 02 30,000 60,000

Customer Service Officer 02 20,000 40,000

Filler 02 18,000 36,000

Washer 02 18,000 36,000
Loader 20 18,000 360,000

Driver 10 18,000 180,000

Peon 02 18,000 36,000

Total 62 1,980,000

13.9 Utilities and other costs

An essential cost to be borne by the project is the cost of electricity. The direct electricity
expenses are estimated to be around Rs. 213,006 per month. Furthermore, promotional
expense being essential for marketing of Mineral water bottling plant is estimated as 20% of
Revenue.

13.10 Capital Structure

The proposed project is based on 100% quity.

Table: Capital Structure Details

Description Debt/Equity Ratio Amount in Rs.

Debt 0% -
Equity 100% 147,134,153
13.11 Project Returns

The details of project returns are as following:

Table: Returns

IRR 41%
PAYBACK (Yr.) 3.29

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