BUSINESS PLAN

ON
PRODUCTION OF ASHWAGANDA IN
AN ORGANIC WAY

Submitted by:
Arvind kumar

Index:
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S.no Particulars

1. Executive Summary

2. Company Description

3. Market Analysis

4. Organisation Structure

5. Product Description

6. Operations

7. Marketing & Sales

8. Funding Requirements

Project Glance:
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Name of the unit Orgo Herbs Pvt Ltd

Location of the unit V+P Sathri,Tehsil Khatuali,

Muzaffarnagar, Uttar
Pradesh
Form of organization Company

Name of the product Ashwagandha

Registration number Applied

Means of Finance Agriculture loan from

HDFC Bank & own capital

Name of the owner Varsha Raj

Executive Summary:

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There is an extensive and growing demand of herbal products. Nowadays major
portion of the population both in India and abroad prefer to use herbal products.
These products are made up of natural herbs, having no side-effects. This change
in consumer preference makes it a very lucrative business. In order to fulfil this
demand, Orgo Herbs Pvt Ltd comes with a solution to be a part in fulfilling the
demand of growing needs in a superior way i.e. in an organic way. Orgo Herbs
landmark product is ashwagandha which is an important ancient plant, the roots
of which have been employed in Indian traditional systems of medicine,
Ayurveda and Unani. Orgo Herbs produces ashwagandha in an organic way and
sell those products to drug making companies. Data suggest that the annual
requirement of ashwagandha is about 7000 tonnes while India is producing only
1500 tonnes. This necessitate the increase in the cultivation of ashwagandha and
its higher production. Orgo Herbs will cater and provide a quality product to all
drug making companies and acts as a supplier for them. This project report
include a detailed description of the production of ashwagandha, a detailed
description of personnel planning, operational issues and financials. In order to
smooth functioning of its operations, Orgo herbs will fulfil its monetary needs by
taking loan from bank and by infusing owner’s capital. Orgo Herbs foresee itself
as a leading supplier to major players in Ayurveda industry in the upcoming years.

Company Description:

4
Introduction:
Orgo Herbs Pvt Ltd is engaged in the production and selling of ashwagandha
which is a medicinal herb. It provides ashwagandha which is produced in an
organic way and sell this to drug making companies. Apart from conventional
methods of production, this company uses organic way which makes
ashwagandha free from pesticides and meantime protects the soil. This make the
ashwagandha more superior in quality which becomes a reason for drug making
companies to prefer this product. Though it is using an eco-friendly approach.

Mission:
To provide quality product to our clients and bringing a healthy life to people
around the globe and healthy returns to its stakeholders.

Vision:
To be the most admired company with eco-friendly approach.

Market Analysis:
Industry analysis:
Ayurveda Industry: With people choosing more ayurvedic products, the
industry is booming at a good pace. The introduction of new products and services
in the ayurveda sector has led to high demands which are in return generating
huge revenues for the companies in the industry. The Indian Ayurvedic industry
is expected to reach a CAGR of 16% during the year 2016-2021, according to a
research done by Techsci Research. The ayurvedic cosmetics and skin care
products market is likely to grow immensely over the next five years. With many
other categories and a wide product line, the Indian ayurvedic industry is set to
achieve growth and will go on expanding in times to come. The Ayurvedic
medicine industry is critically dependent upon uninterrupted supply of raw herbs.
It means that medicinal plants of right quality should be available in right quantity
for the sustained growth of Ayurvedic medicine industry. It is a fact that the
expanding Ayurvedic industry has had an impact on the raw herb supply position.

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 Ayurveda is predominant among Indian traditional health systems. It runs parallel
to the modern health care sector and has a seventy per cent share of the formal
medicine market.
WORLD HERBAL INDUSTRY
 Herbal Products Market :USD 80 billion
 Annual Growth Rate : 7%
 By 2050 : will reach 6 trillion
INDIAN HERBAL INDUSTRY
 Indian Market : Estimated at Rs. 4205 crores
 Export of Ayurvedic drugs & allied herbal products : Estimated as Rs. 440
crores
 Potential by 2020 : Estimated as Rs. 7000 crores
Competitors:
Organized Sector:
The major players in this category are Phyto Life Sciences P. Ltd, Kanta
Enterprise Private Limited.
Unorganized Sector:
Small manufacturing units manufacture a few medicines and operate in a small
area. The unorganised sector includes practicing ayurvedic experts (vaidyas) and
micro-units manufacturing only a few products and operating at local level.
Nonetheless, at times such units are quite strong in their area of operation. There
are certain small manufacturing units who cater to export markets only.

Target Market analysis:

We would offer products to commercial users i.e. B2B and unit will offer
products directly to retailers.
Major companies to whom Orgo Herbs wants to suppy ashwagandha are
Dabur, Baidyanalh, Zandu, Himalaya Drug Company, Charak Pharmaceuticals,
Vicco Laboratories, Aimil Pharma & Emami group, Patanjali.

Trend in the market:

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According to Ken Research, India is the largest supplier of ayurvedic medicines
and herbs in the world. The demand for Indian herbs and herbal medicines is
developing in the European and other developed countries. The chemical based
medicines give faster results in terms of curing a disease or an ailment as
compared to alternative medicines. Moreover, the presence of wide variety of
synthetic personal care product has given tough competition to herbal products.

The herbal skin care market has increased at a double digit CAGR FY’2011 to
FY’2016. Rising awareness about the benefits of using herbal skin care products
has enhanced the revenues of the market. People prefer more herbal products than
the products containing chemicals. The herbal skin care business has been the
new growth frontier in the cosmetics business in India. Even though herbal skin
care products are still competing with synthetic chemical based products, they
need to ensure quality that is similar to synthetic/ chemical based brands. During
this period, the highest growth in the market was witnessed due to the robust
growth in antacids and paediatric digestive formulation. The rising acidity
problems among the population because of unhealthy eating habits increased the
demand for these products, according to Ken Research.

Organisational Structure:
Personnel Planning:
 Chief Executive Officer: Miss Varsha Raj
 Administrative Manager
 Accountant
 Sales Representatives
 Farm worker
 Security Guard
 Temporary Labour (During sowing and reaping season)

Role & responsibilities:

Administrative Manager

 In charge of identifying, prioritizing, and reaching out to new markets for

our processed products, new partners, and business opportunities within
the agro – allied industry.
 In charge of developing, executing and evaluating new plans for expanding
sales of all processed foods.
 Tasked with documenting all customer contact and information.
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  Represents the company in strategic meetings.
 Aids to increase sales and growth for the company.

Accountant

 In charge of preparing financial reports, budgets, and financial statements

for the organization.
 In charge of financial forecasting and risks analysis.
 In charge of developing and managing financial systems and policies.
 In charge of administering payrolls.
 Ensures compliance with taxation legislation.
 Handles all financial transactions for the company.
 Serves as internal auditor for the company

Security guard

 In charge of protecting the farm and its environs

 Tasked with giving security tips when necessary
 Patrols around the farm on a 24 hours basis
 Presents security reports weekly

Compensation Chart:
Designation No. of employees Salary

Administrative Executive 1 15000

Accountant 1 10000

Sales Representative 1 10000

Farm Worker 3 4000

Security Guard 1 6000

Temporary Labour 15 200/- per day

Product Description:
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Introduction
Ashwagandha is considered to be one of the best rejuvenating agents in
Ayurveda. Its roots, seeds and leaves are used in Ayurvedic and Unani
medicines. Ashwagandha root drug finds an important place in treatment of
rheumatic pain, inflammation of joints, nervous disorders and epilepsy. Dried
roots are used as tonic for hiccup, cold, cough, female disorders, as a sedative, in
care of senile debility, ulcers, etc. Leaves are applied for carbuncles,
inflammation and swellings. Leaf juice is useful in conjunctivitis. Bark
decoction is taken for asthma and applied locally to bed sores. Ashwagandha and
its extracts are used in preparation of herbal tea, powders, tablets and syrups. This
provides a reason for Orgo Herbs to produce ashwagandha.

Operational Issues:
Farm location: V+P Sathri,Tehsil Khatuali, Muzaffarnagar, Uttar Pradesh

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Area under cultivation: 3 Hectares
Retail unit: A room of size 20*20 is taken on lease for storage and retailing
purpose
Ashwagandha Producing States in India: Rajasthan, Punjab, Haryana, Uttar
Pradesh, Gujarat, Maharashtra and Madhya Pradesh

Process of ashwagandha production:

General Information:
Ashwagandha is also known as wonder herbs as it have multiple medicinal
property. It derives its named "Ashwagandha" as its roots smell like horse and it
vitalize body. Its seeds, root and leaves are used for preparing various drugs.
Drugs prepared from Ashwagandha used for stress reliever, to treat senile
dysfunction also used to control anxiety, depression, phobia, schizophrenia etc.
It is a branching shrub with average height of 30cm-120cm with fleshy, whitish
brown roots. Flowers are greenish in color with orange-red berries.
Climate:
Temperature: 20-25 Degree Celsius
Rainfall: 300-350mm
Sowing Temperature: 20 Degree Celsius
Harvesting Temperature: 20-35 Degree Celsius
Soil:
Ashwagandha gives best result when grown in sandy loam or mild red soil with
good drainage having pH in the range of 7.5 to 8.0. Growing Ashwagandha is not
possible in soil that retains moisture and remains waterlogged. The soil should be
loose, deep and well drained. Black or heavy soils having good drainage are also
suitable for ashwagandha cultivation.

Land Preparation:
For Ashwagandha plantation, it requires well pulverized and levelled soil. For
fine tilth, plough field 2-3 times and ploughing or harrowing should be done

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before rains and then farm yard manure is applied. Land is prepared in month of
April-May.
Sowing:
Time of sowing: For ashwagandha cultivation prepare nursery in the month of
June-July
Spacing: Depending upon the growth habit and germination percentage, use
spacing of 20 to 25 cm line to line distance 10cm plant to plant distance.
Sowing Depth: The seeds are usually sown about 1 to 3cm deep.
Method of sowing: Transplanting method is used of seedlings in main field.
Seed:
Seed Rate: For good varieties use seed rate of 4-5kg per acre.
Seed Treatment: To protect crop from seed borne disease and pest, before sowing
do treatment with thiram or dithane M-45 (Indofil M-45) @3gms / kg of seeds.
After treatment the seeds are then air dried and then use it for sowing.
Nursery Management and Transplanting:
Before sowing the land must be ploughed with mould board plough and harrowed
twice to bring the soil in fine tilth and fill the soil with plenty of organic matter
to nourish the soil. Treated seeds are sown on raised nursery bed from ground
level.
Before transplanting spray 10-20 tonnes of farmyard manure, 15kg of urea and
15kg phosphorus as a nutrient dose to the soil.
The seeds germinate in 5-7 days and are ready for transplantation in about 35
days. Apply water appropriately before transplanting so that seedling can be
easily uprooted. Transplanting should be done in the field with 40cm wide
furrows.

Fertilizer:
Fertilizer Requirement (kg/acre)

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 Urea SSP Muriate of Potash
14 38 -

Nutrient Requirement (kg/acre)

Nitrogen Phosphorus Potash
6 6 -

Weed Control:
Normally two weddings are done to keep the field free from weeds. One is done
in about 20-25 days of sowing and then second is done after 20-25 days of first
weeding. The dose of isoproturon 200g/acre and Glyphosate 600g/acre should
be used before sowing the seeds to control the weeds.
Irrigation:
Excessive water or rain will harm the crops. If rain fall is heavy, then irrigation
is not required otherwise once or twice irrigates the crops. Under irrigated
conditions, the crop can be irrigated once in 10-15 days. First irrigation should
be done after 30-35 days from germination and then second irrigation is done
after 60-70 days from irrigation.
Harvesting:
Plant starts yielding 160-180 days. Harvesting is done in the dry weather when
leaves are drying and berries change its color into red-orange. Harvesting is done
by hands by uprooting the whole plant or through machines such as power tiller
or country plough without damaging the roots.

Tools & Machinery for Cultivation:

Power Tillers:

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The power tillers are machines powered with 1-5 horsepower engine and
designed to propel forward or backwards different agriculture implements.
Their frame can be adopted to suit its purpose e.g. to pull a disc plow or push a
reaper harvester.

Mini tractor tilling cultivator machine:

Cultivators stir and pulverize the soil, either before planting (to aerate the soil
and prepare a smooth, loose seedbed) or after the crop has begun growing.

Handmade tools:

Cost of cultivation- Ashwagandha

SI. No Materials Amount

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 A. Materials
1 Seeds 1200
2 Farm Yard Manure 13500
3 Fertilizers 2280
4 Seed Treatment Chemicals 900
5 Plant Protection Chemicals 1500
Sub Total (A) 19380

B. Operations
1 Land Preparation- Tractor, Ploughing, discing 6000
2 Making of ridges and furrows 8400
3 Nursery bed preparation, raising and maintenance 2100
4 Transplanting 12600
5 Application of manures and fertilizers 1050
6 Plant protection 1050
7 Irrigation 4200
8 Interculture 4200
9 Harvesting berries and post-harvest handling 25200
Sub Total (B) 52200
Grand Total (A+B) 71580

Techno economic parameters – Ashwagandha

I. Technical parameter
1 Variety Jawahar
2 Spacing (cm) 60*30
3 Planting materials Seeds
4 Seed rate (kg/hectare) 15
5 Plant population (plant/ha) 165000
6 Seed treatment chemicals (g/ha) 60
7 Manure & fertilizer1
FYM (t/ha) 45
N (kg/ha) 45
P (kg/ha) 45
8 Labour requirement
Permanent Labour 5
Temporary Labour 15
9 Yield (kg/ha)
Dried roots 1500
Seeds 180

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Marketing & Sales:
Sales forces bring revenue for the company by engaging customer or prospects.
Sales is the part of marketing function, as salespeople are the link between the
company and consumers involved directly with customers, either face to face,
over the phone or in online sales conversation.
Sales force objectives and strategies are mainly concerned with establishing
healthy and long term relationship and holding the consumers for life and at the
same time it also help the company to earn revenue and also strive to reduce
marketing costs for the growth of the company.

Segmentation & Targeting:

Segmentation:
Geographic segmentation: Uttar Pradesh
Uttarakhand

Demographic segmentation: All age groups

All classes (low, middle & high)

Behavioural segmentation: Health Conscious

Targeting:
 Commercial users
 Retailers
Positioning:
Produced in an eco-friendly way

SWOT Analysis:
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Strengths:
 High demand of herbal products
 Abundant amount of water available
 Near to the highway for easy transportation
Weakness:
 No experience in Agriculture
 Not very large land available
 Not huge hard cash available at this point of time
Opportunity:
 Expansion due to consumers switch from normal product to herbal
products
 Huge global export market
 Government subsidies
Threats:
 Variability in climate pattern

Marketing Mix:
Product: Ashwagandha
Price: Going rate pricing
Promotion:
Objectives of promotion
 Create awareness
 Pushing the products in market
 Increasing bulk purchase
 Attracting towards comparatively low price good quality products

Strategy used:

 Trade sales promotion for retailers and wholesalers

 Catalogue Marketing for the business consumers

Distribution Channel:

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Producer Business

Producer Manufacturer Business

Producer Manufacturer Retailer

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