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Agarbatti Making Business Introduction

Agarbatti is an Indian Hindi terminology which is otherwise popularly


known worldwide as Incense Sticks and as the name itself suggests,
they are thin bamboo sticks of about 8 to 12 length coated with paste
of fragrance of natural ingredients extracts of scented flowers or majorly
forest yield. Agarbattis have huge potential as a manufacturing business
because its demand is at all time high and go even higher during
festivals. More than 90 countries use Agarbattis and India is the sole
producer of these Incense Sticks that caters to the demands of all
countries worldwide. Now, how to start agarbatti business from home? I
shall today walk you through the baby steps right from Stage-I of
manufacturing Agarbattis till making profit margins out of it as well
marketing it and finding a fair market share in India as well as export
markets.

Choose Right Area In Agarbatti Business


Choosing right area in this business mean that this business has lots of
other sub-category where you can make profits. For example, you can
produce raw agarbatti(without scent) and sell them in market. Profit
margin in raw agarbatti is around Rs10 per Kg. This profit margin is
actual data in north India and it may vary in southern part of India.
Rs10/Kg of profit is very attractive because one high speed automatic
machine can produce 100Kg of raw agarbatti in 10 hours. If you have 10
machines running for 10hrs a day then you are making very good profit.
Profit from 1 machine in 1 day = 100kg X 10 = Rs 1000/-

Profit from 1 machine in 1 month = 1000X30 = Rs


30,000/-

If you take weekend off then Rs 25,000 is total profit from one machine
only (Raw agarbatti without scent). Scented agarbatti has more profit and
in north India it is around Rs20 Rs25 per Kg.

Bamboo Sticks Agarbatti Business Sub-


Category
Bamboo sticks is the backbone of agarbatti business and the only country
who produces bamboo sticks are China and Vietnam. If you have good
budget then you can import bamboo sticks from China. Complete cost of
importing one container of bamboo sticks from china is around 20lakh
rupees and it takes 40 days to reach India. One container contains 25
tons of bamboo sticks. Selling price of bamboo sticks in Indian market is
Rs110 Rs125 per Kg.

25ton = 25000 KG so cost per KG = Rs 80 and selling price in India is =


Rs110(minimum)

Profit per kg = 110 80 = Rs30 So profit in 25000 kg is 25000X30 =


750000(7 Lac 50 thousands). As you can see that the profit in importing
bamboo sticks from china is very high and you can make 750000 in 40
days because import takes 40 days to reach India. Also, Bamboo sticks
sells like crazy and you do not need to worry about the market. You can
directly supply the sticks to your clients from Kolkata port.

Agarbatti Material Supplier Business Sub-


Category
Apart from bamboo sticks, you can also become supplier of various
materials used in agarbatti making like Jigat powder, charcoal powder,
gum powder, scents, etc.

So, basically there are three sub-category in this


business:-

1. Raw Agarbatti production and Scented Agarbatti production

2. Bamboo sticks supplier

3. Material supplier

Conceive the Agarbatti Manufacturing


Business Plan:
The very first step in any business will be to conceive the idea and what I
mean by conceiving the idea is to form the whole virtual picture in your
mind before even you start to speak about it. The whole business plan
should be ready with foolproof accuracy right from starting the business
and making a decent turnover which is the core reason why you started
this business. Agarbatti manufacturing business is a highly potential and
profitable business if you are willing to learn the ropes quickly and not to
miss out the fact that it can be as small as a Cottage Industry hence you
can find plenty of people around the country, especially women making
Agarbattis at home. This simply means that competition can be neck
tight and you need to device a solid manufacturing process with the right
raw materials and machineries as per demand and quality of your
Agarbattis.

Before You Put Your First Foot Ahead in


Agarbatti Manufacturing:
Now, that you have done your homework well and know for sure the raw
materials, machineries, space, manpower, demand for your Agarbatti is
going to be. Basically, Agarbatti manufacturing business is either a
Cottage Industry or Small Scale Industry (SSI) and hence you need to
register with your Registrar of Companies (ROC) according to your
company size and this follows other business procedures like obtaining a
Value Added Tax (VAT) registration, Business PAN, Trademark registration
(to protect your brand name and avoid cheap imitations or fake products
which is dangerous for your market share).

Implementation & Sourcing Stage of Agarbatti


Manufacturing:
So, you have just completed the legal provisions of starting a Agarbatti
Manufacturing Unit and its time to start the implementation stage which
has to be vigorous because delay at this stage is going to cost you since
you have made investments and you need to see returns, the sooner the
better. Every element in Agarbatti Manufacturing process need to be
perfect and in tune to your business plan. For example, if you have
sourced a huge demand and obtained lavish order then you definitely
need to go for a High Speed Automatic Agarbatti Manufacturing machine
instead of a manual one that has a production capacity of less than half
of the former. Next comes the raw materials which is very crucial and
this includes the composition of mixture drying procedure and packaging.

The Machinery for Agarbatti Manufacturing:


Agarbattis can be produced or manufactured either with the help of
machineries or with hands, the difference being a cottage industry and an
SSI. If your plan is to go slow and take one step a time and grow slowly
then go for the handmade ones which beyond doubt is a labor intensive
manufacturing process and the output is going to be less than one fourth
that of a machine production. One staff can make 15kg of agarbatti in
one day manually without machine, and the same staff will produce
100Kg per day with the help of automatic machine.

MORE MACHINES = MORE


PROFITS
Semi Automatic Agarbatti producing machines

Fully Automatic Agarbatti producing machines

Price of a semi automatic manufacturing machine could be around INR 1


lakh and that of a high speed one could be up to INR 2 Lakh/- or more
depending upon the technology and quality.
Semi-Automatic machines are slightly less efficient as compared to the
fully automatic ones on the basis of labor requirement and production
capacity but are less expensive and might require less maintenance. This
type of agarbatti manufacturing machine is the largest selling since it is
one way to reduce cost while keeping production at pace.

The manual agarbatti manufacturing unit is labor intensive with low


production capacity and lowest maintenance cost, ideal for start-ups or
trial plans. In the long run these machines might have to be replaced
because the very core purpose of any business is growth and increasing
production and turnover. Hence, before zeroing on with a manual
machine we need to go deep into our long term vision and business
mission.

Raw Materials for Manufacturing Agarbattis:


I have good news on this front because raw materials for manufacturing
agarbattis is easily available in India and is inexpensive hence, you dont
have to invest a fortune on it and worry. Bamboo sticks are usually high
in demand in India because of import issue.

The following raw materials are required for manufacturing Agarbattis;

Sticky powder (Gum Powder)

Charcoal powder

Raw bamboo sticks

Nargis powder
Different kinds of aroma oils

Water

Essence of aromatic flowers from the woods

Essences of Aroma

Rose petals

Oil of Sandalwood

Aromatic ingredients both natural as well as chemical

Gelatin papers

Saw dust

Crude paper

Scissors

Packing materials which is crucial since it should be able to lock


the fragrance.

Different color powder.

FOR RAW AGARBATTI


PRODUCTION, YOU ONLY NEED
BAMBOO STICKS, JIGAT POWDER,
CHARCOAL POWDER AND GUM
POWDER
As I mentioned earlier, raw materials are easily available with your local
merchant and even from online stores which should be quite inexpensive
and worthwhile.

The Process of Manufacturing Agarbattis:


The entire process of manufacturing is very easy all you need to have is
coal powder, sticky powder, dough, thin sticks and scents. By mixing coal
powder and sticky powder in equal proportion in water then you need to
roll the stick in mixed content and should be exposed to sun for few
minutes until they dry up. Make sure you are not going to keep it under
hot than recommended time. You can use wide varieties of scents to
make different Agarbatti. Different people have different penchant to
different scents so it is good that you manufacture Agarbatti with various
scents available in the market. If you want to survive in the market then
you must come up with innovative.

Just in case yours is a start-up or you are new to this line, take
professional help from those who have dirtied their hands in this business
for long. This is crucial because it not only about manufacturing and
delivering but about marketing and growing your market share or to be
precise, inventing markets for your Agarbatti brand. This is going to suck
a lot because this is where your entrepreneurial skills will be deployed
and you need to be damn good at it or you would be out of this business.
One thing is common for all business whether you produce planes for
British Airways or make Agarbattis and it is Innovation which has to be
incorporated as a daily routine and not as and when required.

The manufacturing process for Agarbattis is not complex or not Rocket


Science, basically a paste of most of the raw materials is coated over a
thin bamboo stick, treated with aroma or scent, dried and finally packed
in airtight packages. We have machines and know hows for this hence,
you need little to worry except that you keep your research on because
as mentioned earlier in this article, competition is going to squeeze your
neck to suffocation. It is at this stage that you are going to need tons of
smartness because you can cut on costs while satisfying the customer by
understanding the needs and what the end consumer is looking for.
While there are prominent brands in India like ITCs Mangaldeep
Agarbattis which have their own market share and no other brand has
been able to overtake it.

What is the Kind of Margins we are looking at?


Agarbatti manufacturing business has huge potential and is without doubt
a highly profitable business and we can expect to make a decent to
unbelievable profits or margins and this could be even more when we
plan to export because Indian Agarbattis are in great demand in more
than 90 countries worldwide. India is the only country which makes
Agarbattis and this business is one of those businesses that can be
started with minimal investment hence the risk factor is too low or in fact
is well tolerable even for first timers. For a fully automatic plant you
wont have to invest more than INR 10 Lakh and we are good to go
smiling all the way to the bank.
Agarbatti producing business stands on two major pillars; marketing and
innovation. We need to continually improve upon our process leading to
minimizing cost while improving on quality of agarbattis whether it is the
scent, aroma, fragrance, durability or shelf life. One thing is assured;
you will not be making a blunder by investing in an agarbatti
manufacturing unit because there is huge market potential as well
demand in local as well as international markets especially during
festivals in India. During festivals the demand for agarbattis raises
several manifolds as compared to other seasons. The best part of the
story is that India has plenty of festivals at every single month of the
year.

Packaging
Try to be unique when it comes to be packing your agarbattis
because people first see the packing box before they buy agarbattis when
they find packing attractive then they will make an attempt to buy it. This
business needs hard work too to gain profits since this business needs
less investment you dont have to worry about loss. With dedication its
easy to excel in this risk free business. As long as you make good
agarbatti you can make profits. Setting up this business does not need
taking loan from bank for financier. If you have 7 8 lakh then you can
start with 3 machines at the beginning.
This machine reduces man power to a greater extent. With one time
investment in this machine you can reduce man power moreover you can
make more Agarbatti in day than you usually do manually. Plan this
business carefully and do it with hard work and you can make a
good amount of money in short period of time. Feel free to ask any
questions you have.

Price of automatic machine with production capacity of 10kg/hr is around


1.3lac. You can start with 3 machine if your budget is under 5lac.
Cost of material is as follows:-
Jigat rs 40/kg
coal powder rs 9/kg
gum powder rs 85/kg
bamboo sticks 115/kg

You can start this business with 2 machines in 5 lac. Machines cost is going to
be 2.5 lac(for 2 high speed automatic machines) + 1 dryer machines for 60k
and material of rs 2 lac.

Aggarbatti raw material and machinery in jaipur distt. Query are as follow..

You may our video on youtube.com


WWW.PARAMAGARBATTIWORKS.COM
https://www.youtube.com/watch?v=icbUnpmRrmw&feature=youtu.be
https://www.youtube.com/watch?v=m1ceSTY6WyM
http://www.indiamart.com/paramagarbattiworks/
https://www.justdial.com/Rajkot/Param-Agarbatti-Works

3. Raw material price


Param Brand Black Ready mix powder 20 rs/kg (Deeping 3.0)
Vietnam ready mix powder 29rs/kg.
Vietnam white powder 38 Rs per kg
Vietnam Bamboo stick 95 Rs/kg (8 inch & 9 inch)(counting 3600)
China stick for automatic machine 100 /-(8 inch & 9 inch) (counting 3900)
Shag Wood powder 11 Rs /kg
Charcoal powder 10.50 Rs/ kg
Jiggut powder 40 Rs /kg .
Koopam Powder 35 Rs/Kg.

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