Agarbatti Business Plan Project detail with price, material

agarbatti business

Agarbatti manufacturing business engages in produces different types of incense stick like raw incense stick, scented incense stick, incense without stick or Dhup in different shape and sizes. Owing to Agarbatti making business profits, India stands as a leader globally.

India is a trailblazer of Agarbatti production and its user since time immemorial. But the specified period remained untraced; the earlier evidenced known to human knowledge is traced back to the 1700- 1100 BCE in the oldest sacred religious text of Hinduism which are Vedas. It is an essential part of Hindu rituals. During auspicious occasions, festivals and prayer ceremonies, agarbatti are lightened up for spontaneous movement of fragrance around to shower peace and tranquility and to grace the ceremonial rituals. After Hinduism, it is widely used by the people of Buddhist religion. It, too, has its origin in antiquity. The use of incense stick is registered in the Buddhist text, Pali Canon. The offering of incense stick to deities or revered person is a universal Buddhist tradition. Muslims also use Agarbatti while offering prayers; this seems to purify the air. Agarbatti has been deep rooted into cultural and traditional landscape of India.

It is a moment of great pride to acknowledge hat India is the world’s largest manufacturer and exporter of Agarbatti or Incense stick. India export Incense sticks to over 160 countries around the world. These are EU, Africa, UK, Latin America and Japan, in which US is the largest importer of incense sticks. India is also the largest user of Agarbatti. Every ritual is incomplete without Agarbatti. It is delightful to see the niche business originated as a ritual necessity has blossomed into a tremendously flourishing industry. Its worldwide increased use has accelerated Agarbatti business in India. In 2018, it has generated the export revenue of around Rs. 798 crore and this has risen to a Compound Annual Growth Rate of 15% , keeping the track of last four years and Agarbatti business is expected to grow in the near future. Domestically, it has generated annual revenue of Rs. 7,000 crore with south India is the major consumer among the other India states.  In India, the rising Agarbatti manufacturing business is attributed to the sweeping demand and huge Agarbatti profit margin.

Sounds financially attractive? Yes, it undoubtedly is. Want to start Agarbatti business but seems like an unknown territory? Don’t know how to start Agarbatti business? No worries. I will tell you how to start Agarbatti business.

Before entering into this field, make sure that you are aware of all the aspect of Agarbatti business. To formulate and operate Agarbatti business plan, first step is make your business, a legal entity. It can a one single firm, limited liability partnership or company, etc.  It is compulsory to register under GST and secure GST number. You can apply for SSI registration, it is voluntary but if you apply for this you will get several benefits from the government schemes and initiatives. Get pollution control certificate and trade license from the local authorities. Obtaining factory license is mandatory for the large scale manufacturing units. PF and ESI registration is mandatory to obtain if your business firm is employing more than 10 and 20 employees respectively. To operate smoothly, you need to make your business legal, by getting your firm register under the Registrar of companies under this you have to register your business as a cottage industry or small scale Industry or large scale business depending upon the size of business operations, followed by trail of legalities like get your business name secured with trademark registration, etc.

Market research is the crucial part which is helpful in smooth functioning of business operations. Get a handy knowledge about the different machinery available in the market. Decide whether you need a fully automatic machinery or semi- automatic Agarbatti making machinery. There is different machinery and equipments selling companies in the market, narrow down one company from the pool of companies based upon the reliability, offering machinery at reasonable prices and offering services like installation, guarantee/warranty and maintenance benefits. Repair and Maintenance is a critical part if they are not providing maintenance services then it’s no use buying machinery from them because it is possible that you may not find a service provider for that specific machinery. It is important purchase machinery that provides maintenance and repair service in your locality.

The price of machinery depends upon the production capacity and speed of the machine. There is wide range of different production capacity of 1-5 kg/hr with the machine speed of 100-150 strokes/ min and power capacity of 1HP, 25-40 kg/hr with the increased machine speed, etc. The normal semi automatic machine may cost upto 1-2 lakhs while the fully automatic machines are expensive than these. Now you have all the information required to make Agarbatti business plan.

Agarbatti business offers a parasol roof, offering various business options in Agarbatti business industry. These are three business options on Agarbatti business which are as follows:

Supply Bamboo Stick

If you are interested in Agarbatti business and have sound capital investment capacity then you can think of supply Bamboo sticks to the manufacturing units by importing these.  Importing of bamboo become necessary given the forest stringent regulations, authority’s permit and labor dearth have made manufactures to import these sticks, a more economical option. Bamboo sticks are prerequisite in manufacturing Incense sticks. Every manufacturing unit places huge demand for bamboo sticks. The world’s leading producers of bamboo stick are China and Vietnam.

Acquaint yourself with all the aspect of import procedures. Import can be done easily from China.   First thing that you need to do is find a bamboo stick supplier, you can easily find Chinese supplier from reliable sites like Alibaba, Indiamart, etc. Contact the supplier and get the sample for testing. Specify your raw material requirement ranging from 10mm to 15mm, place your order, complete import formalities and collect raw material from the port and supply it to the manufacturing units. In this Agarbatti business profit is massive. Let’s have rough ideas.

Suppose, you are importing 25 ton of bamboo sticks costing around 20 lakh (approx)

25 ton = 20 lakhs

1 ton = 907.185 kgs

25 * 907.185 kgs = 22679.625 kgs

22679.625 kgs = Rs. 20, 00, 000

1 kg = 20, 00,000/ 22679.625 = Rs. 88.1

In India the price of I kg bamboo stick is Rs. 110 per kg. So, the difference = Rs. 110 – Rs. 88.1 = Rs. 21.9

There is profit margin of Rs. 21.9 on 1 kg bamboo stick then the profit from 25 tons of bamboo comes out to be Rs. 21.9 * 22679.625  = Rs. 4,96,683 .

In Agarbatti business profit margin is huge.

The business transactions are fully protected, backed by government insurance scheme that secured all export and import.

Supply raw material

In the production of Agarbatti, various flavoured fragrances, charcoal powder, joss powder, gum powder, wood powder, kumkum dust powder, nudwa powder, rap powder, nargis powder, different aroma oils, essence of aroma, rose petals, gelatin papers, crude paper, packaging material, different color powder, etc is required. You can supply the raw material to the manufacturing units keeping the profit margin in mind. This Agarbatti business profit is substantially high. You can expand your business by setting up a huge dealer and distributor network.

Agarbatti Manufacturing business

To set up the production unit, you have to install machinery depending upon the type of operation whether it is fully automatic or semi-automatic. Ensure easy availability of raw material and road accessibility with fully equipped electricity and water supply. It is upon you whether you want to manufacture scented Agarbatti and raw Agarbatti. In Agarbatti making business profit is huge as there is around profit of Rs. 11-12 per kg.  On an average fully automatic machine produce 15-20 kg/hr. If there is 200 kg of Agarbatti is produced in a day then there is a profit of around Rs. 72,000 in a month.  You can also opt for this business if this Agarbatti business profit margin serves your entrepreneurial thirst.

Once the manufacturing is done, you should pay attention on its packaging. Packaging done by Indian manufacturing remained a hot topic in the international market. Owing to Indian outdated pouched Incense stick packaging, India is facing competition from Chinese and Vietnam market that are offering innovative packaging boxes and kits. Chinese products are in tune with the modern design and trend as they are using modern technology and machinery. If we want to sustain our position as world’s leader in the international market, we just can’t afford to take this trend lightly. Use your innovative and creative ideas to align with modern and new international demand. Also the proper labeling on the incense stick boxes was the point of concern few months before. European countries demanded the proper labeling and direction of use this include that proper ventilation in the room should be there where they are lit and avoiding excess use of it. These are the key areas that needs proper attention if Indian market want to secure major market share by hogging Agarbatti making business profits to themselves and aspires to sustain their position at the top in the global market.