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Water Bottling

Photo by Shutterstock / gabialbrie

Water Bottling

Compare IOA
Country
Lesotho
Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Consumer Goods
Sub Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Consumer Goods Retail
Indicative Return
Describes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
5% - 10% (in ROI)
Investment Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Short Term (0–5 years)
Market Size
Describes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
< USD 50 million
Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.
< USD 500,000
Direct Impact
Describes the primary SDG(s) the IOA addresses.
Clean water and sanitation (SDG 6)
Indirect Impact
Describes the secondary SDG(s) the IOA addresses.
Gender Equality (SDG 5) Sustainable Cities and Communities (SDG 11)

Business Model Description

Construct groundwater boreholes and install high volume electrical water pumps and set up facilities, including equipment, to collect and bottle water for supply to the local market, Southern African Development Community (SADC) region and abroad, including an integrated value-addition approach for water bottles and accessories.

Expected Impact

Contribute to public health and address water-borne illnesses, create jobs and facilitate effective catchment management of wetlands.

How is this information gathered?

Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.

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Disclaimer

UNDP, the Private Finance for the SDGs, and their affiliates (collectively “UNDP”) do not seek or solicit investment for programmes, projects, or opportunities described on this site (collectively “Programmes”) or any other Programmes, and nothing on this page should constitute a solicitation for investment. The actors listed on this site are not partners of UNDP, and their inclusion should not be construed as an endorsement or recommendation by UNDP for any relationship or investment.

The descriptions on this page are provided for informational purposes only. Only companies and enterprises that appear under the case study tab have been validated and vetted through UNDP programmes such as the Growth Stage Impact Ventures (GSIV), Business Call to Action (BCtA), or through other UN agencies. Even then, under no circumstances should their appearance on this website be construed as an endorsement for any relationship or investment. UNDP assumes no liability for investment losses directly or indirectly resulting from recommendations made, implied, or inferred by its research. Likewise, UNDP assumes no claim to investment gains directly or indirectly resulting from trading profits, investment management, or advisory fees obtained by following investment recommendations made, implied, or inferred by its research.

Investment involves risk, and all investments should be made with the supervision of a professional investment manager or advisor. The materials on the website are not an offer to sell or a solicitation of an offer to buy any investment, security, or commodity, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction.

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Country & Regions

Explore the country and target locations of the investment opportunity.
Country
Lesotho
Region
  • Lesotho: Maseru District
  • Lesotho: Leribe District
  • Lesotho: Mafeteng Dstrict
  • Lesotho: Berea District
  • Lesotho: Butha-Buthe District
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Sector Classification

Situate the investment opportunity within sustainability focused sector, subsector and industry classifications.
Sector

Consumer Goods

Development need
Lesotho is a food-deficient country with over 70 percent food needs addressed through imports (22). A combination of recurrent droughts, land degradation, floods, inadequate food supply chains and lack of access to markets and finance for many smallholder farmers has resulted in steadily decreasing harvests (28).

Policy priority
National Strategic Development Plan (20218/19 - 2022/23) plan outlines the development of local food systems, agricultural value chains, and supplier development systems, to create opportunities for farmers, including for women, youth. (13).

Gender inequalities and marginalization issues
Prices of food remain high, coupled with unstable income opportunities and low purchasing power, especially among poorer households which are predominantly in the rural areas. Overall, food inflation was 7.8 percent in May 2022 compared to 6.9 percent in May 2021 (22).

Investment opportunities introduction
Lesotho has many natural springs which flow year round, providing a sustainable input for investment in agriculture and beverages for both production and consumption (3).

Key bottlenecks introduction
Lesotho has the challenge of environmental degradation which may have long-term negative impact for the wetlands and sustainability of the water sources (13).

Sub Sector

Consumer Goods Retail

Development need
Lesotho has abundant water resources, but has only 28% of the population using a safely managed drinking water service (24).

Policy priority
Government intends to provide infrastructure that preserves water sources, the purity of Lesotho’s water and minimizes microbiological and chemical contamination, to improve access to safe water (3).

Gender inequalities and marginalization issues
Rural areas have only 5% of piped water compared to 26% in the urban areas, and about 74% of women are responsible for collection of water within households, and this is particularly prevalent in the rural areas (5).

Investment opportunities introduction
Lesotho has around 137 documented springs. Maximum yield of the springs is 8.5 litres of water per second, which is low in concentration of micro-organisms and chemical pollutants. There are also a total of 90 documented boreholes countrywide. (3, 17).

Key bottlenecks introduction
Lack of laboratory testing facilities in Lesotho forces water bottlers to take their samples to Bloemfontein in South Africa for testing (3).

Industry

Non-Alcoholic Beverages

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Pipeline Opportunity

Discover the investment opportunity and its corresponding business model.
Investment Opportunity Area

Water Bottling

Business Model

Construct groundwater boreholes and install high volume electrical water pumps and set up facilities, including equipment, to collect and bottle water for supply to the local market, Southern African Development Community (SADC) region and abroad, including an integrated value-addition approach for water bottles and accessories.

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Business Case

Learn about the investment opportunity’s business metrics and market risks.

Market Size and Environment

Market Size (USD)
Describes the value in USD of a potential addressable market of the IOA.

< USD 50 million

Critical IOA Unit
Describes a complementary market sizing measure exemplifying the opportunities with the IOA.

> 24,000 * 500 ml / day to fulfil the demand for both the local and export markets

According to Lesotho Economic Roadmap (2018/19 - 2022/23), Lesotho already imports M69 million (USD 3.8 million) of bottled water from South Africa, and Phokeng plans to capture M58 million (USD 3.2 million) of that (3, 4)

The potential quantities of allocated ground water provide expansion of the plant and production capacity from the current 3,000 * 500ml/day to >24,000 * 500ml/day to meet both the local and export markets (3).

Indicative Return

ROI
Describes an expected return from the IOA investment over its lifetime.

5% - 10%

Bottled water is considered safe for drinking, which has boosted consumption and Phokeng Spring Water Bottling achieved an ROI of 5% - 10% (4).

Investment Timeframe

Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.

Short Term (0–5 years)

A shift from consumption of tap water to bottled water has improved the turnover of Phokeng Spring Water Bottling and boosted sales within 5 years of operations (4).

Ticket Size

Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.

< USD 500,000

Market Risks & Scale Obstacles

Capital - CapEx Intensive

Borehole equipment and accessories are costly. Potential drying of wetlands could also render the equipment redundant.

Market - High Level of Competition

Given water abundance in Lesotho, there are numerous investors in the water bottling industry who are creating high level competition.

Market - Highly Regulated

Short-term water-use permit (5 years) constitutes a risk to financiers in offering long-term loans.
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Impact Case

Read about impact metrics and social and environmental risks of the investment opportunity.

Sustainable Development Need

In Lesotho, only 26% of households in the urban areas have access to piped water within the yard, while in rural areas only 5% have access to piped water. And it is lack of knowledge, infrastructure and technology, which are responsible for low access, with implications for women and girls (5, 6).

Gender & Marginalisation

Women and girls, low-income women, and women living in poverty and in the rural areas are significantly impacted by water insecurity and WASH-related diseases (7).

Expected Development Outcome

Bottled water can facilitate and improve technology for water harvesting and help create better access to water for populations across the country, considering the abundance of water resources in Lesotho (6).

Gender & Marginalisation

By providing safe and clean water through bottled water, women and girls can have access to a reliable and convenient source of drinking water. This can reduce the time and effort required to collect water, allowing them to focus on education, work, and other development activities (9).

Primary SDGs addressed

Clean water and sanitation (SDG 6)
6 - Clean water and sanitation

6.5.1 Degree of integrated water resources management

6.2.1 Proportion of population using (a) safely managed sanitation services and (b) a hand-washing facility with soap and water

Current Value

In urban areas 26% of households have access to piped water sources within the yard, while in rural areas only 5% have access to pipe water (5).

Population using at least basic sanitation services 50.3% in 2020 (21).

Target Value

By 2030, implement integrated water resources management at all levels (19).

By 2030, achieve access to adequate and equitable sanitation and hygiene for all (23).

Secondary SDGs addressed

5 - Gender Equality
11 - Sustainable Cities and Communities

Directly impacted stakeholders

People

Investors in water bottling benefit from the sales of bottled water, employees benefit from sustainable jobs and incomes, and consumers from safe drinking water and elimination of water-borne diseases.

Gender inequality and/or marginalization

Through safe and clean water through bottled water, women and girls can have access to a reliable and convenient source of drinking water, particularly the rural communities (9).

Planet

Reusable water bottles reduce plastic waste, minimizes resource consumption and mitigates carbon emissions (10).

Corporates

Producers of water harvesting equipment and water bottles and other inputs, haulage businesses all benefit from the water bottling investment.

Public sector

Ministry of Finance benefit from increased tax revenues, Department of Water benefits from implementation of sectoral policies.

Indirectly impacted stakeholders

People

Children benefit from more time with their mothers as they stop travelling for fetching water, and the broader communities benefit from the spill overs.

Gender inequality and/or marginalization

Women and girls can reduce the time and effort required to collect water, allowing them to focus on education, work, and other development activities (9).

Corporates

Bottled water creates jobs and contributes to the broader economy through the industry’s economic ripple effect that benefits agriculture, manufacturing, transportation, catering and other feeding programmes (11).

Public sector

Given the current import bill of bottled water, the economy earns forex and preserves its foreign reserves.

Outcome Risks

If the cost of bottled water is not affordable, it has the potential for inequalities and access, particularly for households with low or no incomes.

Plastic water bottles can end up in the landfills and take years to decompose with implications for the environment (10).

Global market of bottled water grew by 73% from 2010 to 2020 with fears that disposal of water bottles threaten the environment through plastic pollution (12).

Impact Risks

Poor management of the water sources may dry up the water and undermine the impact of bottled water, particularly on women, girls and rural populations.

Impact Classification

B—Benefit Stakeholders

What

Water bottling provide safe drinking water for communities and as a food product and nutrition component, it also contributes to public health and addresses water-borne illnesses.

Risk

Unsustainable management of the water sources have negative impact, particularly for women, girls and rural populations, including exposure of plastic pollution from disposal of water bottles.

Contribution

Bottled water contributes to access of safe drinking water, alleviates the burden of water collection by women and girls, allowing them to focus on education and development activities.

Impact Thesis

Contribute to public health and address water-borne illnesses, create jobs and facilitate effective catchment management of wetlands.

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Enabling Environment

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Policy Environment

National Programme for Integrated Catchment Management: Operational Plan 2022 promotes integrated, sustainable, and risk-informed development and management of water, land, and related resources for water preservation and sustainability that guarantees availability of water (1).

Gender and Development Policy (2018 – 2030) advocates for equitable participation and representation of women and men and other groups at all levels of water and sanitation management to promote equitable access, which facilitates fairness in business (5).

National Strategic Development Plan (2018/19 - 2022-23) commits to improvements in land and water management which it notes it is critical to infrastructure to reduce environmental degradation and increase productivity in the natural resource sector (13).

Lesotho Water and Sanitation Policy (LWSP) promotes proper management of water resources and its sustainable utilization, including adequate and sustainable supply of potable water and sanitation services to the population of Lesotho, critical for industry and livelihoods (14).

Financial Environment

Fiscal incentives: Water bottling is classified as manufacturing and is charged 10% company tax compared to the standard rate of 25% (17).

Regulatory Environment

Lesotho Electricity and Water Authority regulates electricity, urban water and sewerage services in the interests of all stakeholders and support their growing and ever-changing needs (15).

The Department of Rural Water Supply (DRWS) is responsible for developing water supply and sanitation infrastructure and service delivery in rural areas. This is done through community-managed water schemes and support for on-site sanitation (16).

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Marketplace Participants

Discover examples of public and private stakeholders active in this investment opportunity that were identified through secondary research and consultations.

Private Sector

Maluti Pumps and Water Tanks, Leso Plastics, Phokeng Natural Spring Water Bottling, Dew Drop, HPL Consortium (Pty) Ltd.

Government

Lesotho Electricity and Water Authority (LEWA), Department of Rural Water Supply (DRWS), Department of Water Affairs (DWA), Lesotho Highlands Development Authority (LHDA), Water and Sewerage Company (WASCO), Lesotho Meteorological Services (LMS), Revenue Services Lesotho.

Multilaterals

World Bank, African Development Bank, World Health Organization, European Union.

Non-Profit

Lesotho Council of Non-Governmental Organizations.

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Target Locations

See what country regions are most suitable for the investment opportunity. All references to Kosovo shall be understood to be in the context of the Security Council Resolution 1244 (1999)
country static map
semi-urban

Lesotho: Maseru District

Maseru offers natural water wells in the peri-urban areas and is strategically located for water bottling value-chains, including proximity to major transportation routes for distribution. Water from the wells is also cheaper to harvest (26, 27).
semi-urban

Lesotho: Leribe District

Leribe has plenty of groundwater, which in combination with surface water sources, provide drinking water in the district. Water bottling can benefit from the groundwater sources and from the district's proximity to the South African border, facilitating trade and access to a larger market (26, 30).
semi-urban

Lesotho: Mafeteng Dstrict

Mafeteng's Likhoele area has abundant groundwater for bottling. The district has the third best infrastructure and services after Maseru and Leribe. Water bottling in Mafeteng will benefit from long-term abundance in water resources for both local and export markets (3, 4, 18, 29).
urban

Lesotho: Berea District

Berea has underground water and more springs are being identified in recent years. Being the fourth largest district, which also hosts relatively big market and infrastructure, water bottling has the potential of being impactful for a considerable proportion of the population (26, 31).
urban

Lesotho: Butha-Buthe District

District's availability of water (gateway of water to South Africa) and electricity infrastructure and accessibility to major road networks, as well as proximity to the Caledonspoort border make it an attractive location for water bottling investment (26).
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References

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