Water Investment in Brazil

by | Jul 8, 2001 | Archives

EClub member Eric Barnes has sent the following investment idea to me. I have not checked this out in any way so if it is of interest to you, proceed with all due caution. For more details contact Eric at Ericpres@capitalfundsgroup.com


	Commodity: Natural Spring Mineral Water
Country: Brazil
Investment required: US$600,000
Investment provides: Bottling plant for the water, modest salaries,
marketing funds, property royalties.
Investment includes: Equity in the property, mineral and water rights
Investor acquires: Significant permanent equity interest.

As we move into the 21st Century, the value of clean, clear water increases. This is a safe investment with significant long term returns. Current owner of the property has held this land in his family for many decades and has added significant land holdings in the areas surrounding his property. High in the hills near Petropolis, in the mountains surrounding Rio de Janeiro, there are bountiful supplies of the best natural water I have ever tasted.

The owner, a friend of mine, an attorney whose offices are in Rio, is looking to retire from his law practice and has been developing his land in preparation for building a factory to bottle this water in 10-20 litre plastic containers. Initial sales will be to businesses, universities and industrial office sites. This market is far from saturated and there is significant room for growth. Compared to the U.S. and Europe, local per capita water consumption is currently only 1/10. Later sales will include consumer-quantity bottled water, flavored natural 'refreshment' drinks, 'sports' drinks, etc.

Current development will easily support almost 2 million litres per year (at a cost of approximately $0.0415/litre to bottle), producing a profit of US$4,355 Dollars per day (US$1,589,580 *after taxes* per annum). Once the bottling plant is running, additional sites for water extraction will be developed on these and other properties. Beyond the Brazilian market, expansion is possible throughout Latin America, Europe, Arab countries and the U.S. markets. Think 'Evian' and 'Perrier'.

Additional income-producing uses of the land will be implemented, eco-tourism, trout farming, resort facilities (*very popular* in Brazil), etc., and the investor will share in these profits also.

This is a ground floor opportunity with a substantial equity position involved. Both the water and the profits will continue to flow throughout the 21st Century. The Brazilian Government, Federal and Local, is in full support of the development of this operation and, as expected, the legals are in excellent shape. I have been asked, and have agreed, to assist in the management and development activities as well as to function as the liaison between the Portuguese-speaking owners and the investor(s). I will be moving to Brazil this year and already have excellent contacts there to assist in the success of this endeavor.

For those interested in water and Brazil, check this out, be cautious and have good global investing!