PROJECT PROFILE - Agarbathi Sticks

INTRODUCTION
The burning of incense in religious and social functions has been practised in India since early
times. Dhup an aromatic powder or paste is burnt in Indian homes as a fragrant fumigant and is reputed
to possess insecticidal and antiseptic properties. Agarbati also known, as Udubattis similar to joss sticks
are a development of Dhup.
Agarbattis are obtainable in different colors and with different perfumes. The burning time ;of an agarbatti
varies from 15 minutes to 3 hours according to quality and size. Agarbatti is also obtainable in other forms
such as dashang (stickly paste or powder) deep (cones and Dhup, tablets etc.).
About 75% of the agarbattis manufactured are of cheap quality containing only charcoal powder or
low quality sandal wood powder with a mixture of 50% of “wood gun” powder. Cheap perfumes are used
to give them a top note. In superior varieties, essential oils, purified resins, natural fixatives like amber,
musk and civet are used along with synthetic aromatics. Absolutes are use in the costlier types.
MARKET POTENTIAL
Agarbattis are used by all communities in India, Sri Lanka, Burma and by Indians residing abroad.
As on today about 90 foreign countries are using our agarbattis.
Agarbatti Industry is one of the labour intensive cottage type of traditional industries in India and
Karnataka State leads in this industry, the main centers of manufacture being Mysore and Bangalore. As
on today, about 1000 units exist through the State of Karnataka. Moreover, it is an export-oriented
industry also. In fact, this is one the items considered for boosting exports. Owing to the low level of
technology involved in this industry, this can be taken to rural areas without much difficulty, thus
implementing the rural industrialisation policy of Government of India to a greater extent.
PRODUCTION TARGETS (Per annum on single shift basis)
Quantity - 27,00,000 packets
Value - Rs. 59,40,000
BASIS AND PRESUMPTIONS
1. The estimates are drawn for a production capacity generally considered techno-
economically viable for model type of manufacturing activity.
2. The information supplied is based on a standard type of manufacturing activity utilising
conventional techniques of production at optimum levels of performance.
3. The costs in respect of Land & Building, machinery and equipment raw materials and the
selling prices of the finished products etc. are those generally obtaining at the time of the preparation of
the project profiles and may vary depending upon various factors.
4. Whereas some names of manufacturers/suppliers of machinery and equipment, raw
materials etc. are indicated at the end of the profile these are by no means exclusive or exhaustive.
PRODUCTION DETAILS AND PROCESS OF MANUFACTURE
All the ingredients in powder form are mixed well in the proper proportion with water to a semi solid
paste. This paste is applied to bamboo sticks and rolled on wooden-planks with hands uniformly. The raw
sticks re them dried and packed in suitable bundles. For manufacture of perfumed agarbattis the
concentrated perfume is diluted first with white oil or diethyl phthalate (Generally 1:3) and raw agarbattis
are dipped suitably in dipping trays. The perfumed batties are packed immediately in butter paper bags or
polypropylene bags and finally in printed cartons.
A typical composition for masala batties is as under:
White chips - 40% }
Gigatu - 20% } The composition can be modified
Charcoal - 20% } according to the requirements
Aromatic chemical Essential - 20% }
Oil and other ingredients }
QUALITY CONTROL & STANDARD
There is no ISI Standard for manufacture of Agarbatti at present. However, they are manufactured
as per customer’s requirements.
LAND AND BUILDING
Covered area if 250 sq.meters with electricity and water arrangements - Rs.1,500 PM
MACHINERY AND EQUIPMENTS
SI.No. Description No. Values
 1. Wooden planks for rolling 50 No. 3,000/-
size 2’ x 1’ x 1’
2. Weighing balance 10 kg. 2 No. 1,600/-
cap
3. Hand sieves 100 mesh 6 No. 250/-
4. Wooden Racks 8’ x 6’ x 2’ 9 No. 6,750/-
5. Plastic trays 20 lit. 20 No. 600/-
capacity
6. Aluminium trays for 2 No. 1,600/-
dipping
7. Delivery van cycle 8,000/-
8. Plastic buckets, mugs, 4,000/-
misc. equipments
9. Office furniture, 10,000/-
equipments fire
extinguisher etc.
10. Freights, Installation, 3,000/-
electrification
Total 38,800/-
STAFF AND LABOUR (PER MONTH)
Sl.No. Designation Nos. Rs.
1. Production Manager 1 No. 4,000/-
2. Storekeeper 1 No. 2,000/-
3. Clerk-cum-typist 1 No. 2,000/-
4. Sales Representative 2 No. 3,600/-
5. Delivery Van Boy 2 No. 3,000/-
6. Watchmen 2 No. 3,000/-
7. Semi-skilled workers (on contract 50 No. 20,000/-
basis @ Rs. 60 per day)
Total 37,600/-
Fringe benefits @ 15% 5,650/-
approx.
Grand Total 43,250/-
RAW MATERIALS (PER MONTH)
SI. Name Qty. Values (Rs.)
No.
1. Charcoal Powder 1320 5,280/-
2. Gigatu 1100 9,900/-
3. White chips powder 150 2,250/-
4. Sandalwood Powder 225 6,300/-
5. Bamboo sticks 1320 13,200/-
6. Kuppam Dust 450 1,320/-
7. Perfumes 350 1,22,500/-
 8. Diluents like DEP etc. 1100 44,000/-
9. Paper cartons 250000 1,25,000/-
10. Wrapping paper 250000 37,500/-
11. Inner Paper bags 250000 22,500/-
Total 3,90,300/-
UTILITIES (PER MONTH)
Rs. 800 Electricity, water etc.
OTHER EXPENSES (PER MONTH)
Rent 2,500/-
Stationery, postage, telephone 1,500/-
Advertisement & Publicity 1,500/-
Travelling Expenses 1,000/-
Miscellaneous 1,000/-
Repairs and maintenance 5,00/-
Total 8,000/-
WORKING CAPITAL (FOR ONE MONTH)
1. Staff and Labour 43,250
2. Raw Materials 3,90,300
3. Utilities 800
4. Other expenses 8,000
Total 4,42,350
For Three months 13,27,050
Say 13,27,050
TOTAL CAPITAL INVESTMENT
Machinery and equipment 38,800
Working Capital 13,27,000
13,65,800
COST OF PRODUCTION (PER ANNUM)
Recurring expenditure per annum 53,08,200
Depreciation on machinery and equipment @ 4,250
20% per annum
Interest on total investment @ 15% per 2,04,900
annum
55,17,350
TOTAL SALE (PER ANNUM)
Receipts by sale of 27,00,000 packets of 62,10,000
agarbattis @ Rs.2.20
PROFITABILITY (PER ANNUM)
Rs. 62,10,000 -- Rs. 59,17,3500 = 4,22,650
Net Profit per year 4,22,650
Net Profit Ratio = Net profit x 100 / Turn over = 4,22,650x 100 / 62,10,000 = 7.11%
Rate of Return = Net profit x 100 / Total Investment = 4,22,650x 100 / 13,65,800 = 30.94%
Break Even Point = Fixed Cost x 100 / Fixed Cost + Profit
FIXED COST
Depreciation of Machinery 4,250/-
Interest on total investment 1,63,900/-
 Rent 30,000/-
40% on salary and wages 2,07,600/-
40% of Other expenditure 38,400/-
4,44,150/-
BREAK EVEN POINT = 4,44,150 x 100 / 8,66,800 = 51.24%
ADDRESSES OF RAW MATERIALS SUPPLIERS:
1. M/s Ravi Flour Mills & Industries, 339 Bapujinagar, Mysore Road, Bangalore – 26
2. M/s H.P. Nanjudiah Setty & Sons, 62, Gundopath Street, Bangalore – 53
3. M/s Ramachandra Pulverisers & Industries, IV Main Road, New Tharagpupet, Bagalore-2
4. M/s Mahalakshmi Flour Mills, T-64 Gundopanth St., Bangalore – 53
5. M/s Shakti Flour Mills, Swantantra Building, R.K. Puram, Bangalore – 9
6. Shri Venkateswara & Co., No.11, Thulasi Thota Road, Bangalore –53
7. Lakshmi Grinding Mills, Mysore Road, Bangalore – 26
8. Mastan Khan & Sons, 14 Pension on Mohalla, I Cross Mysore Road, Bangalore – 18
9. G. Anand Rama Setty & Sons, 242 Sulthanpet, Bangalore.
PERFUMES :
1. Pushpa Perfumery Products, 138 Akkipet Main Road, Bangalore – 2
2. Lala Banara Dass, Khattri, Kannauj (UP)
3. Saibaba Sugandh Bhandar, 53, Sultapet, Bangalore – 53
4. Goodwill Agencies, Keshav Nivas, 24 I Main Road, P.B. No. 9715 Gandhinagar, Bangalore
– 560 009
5. Naresh Trading Co., 36 K.V. Temple Street, Bangalore – 53
6. The Easter Essence Emporium, 204, Nagarthpet, Bangalore – 2
7. Aromatic Agencies, 36 K.V. Temple Street, Bangalore.
8. G.M. Ahuja & Co., 15-Old Kasai Road, Behind Raja Market, Bangalore – 2
9. M/s Bharani Agencies, P.B. 9506, Gandh Nagar, Bangalore – 9
10. Mascheijer Aromatics (India) Pvt. Ltd., I Floor, Haji Market, OK Road, Bangalore – 2
11. Aromatic (India) Pvt. Ltd., 38 Link road, Bangalore – 3
BAMBOO STICKS:
1. R. Ramaiah Arumugamgalli Kalasipalayam, New Extn., Bangalore – 2
PACKING (PAPER, POLYTHENE COVERS, POLYTHENE PRINTING AND LITHO PRINTING)
1. M/s Lakshmi Paper Industries, 33-Town Rly.Station Road, Salem – 1, Tamilnadu.
2. The Paper Products Limited, 60 Chinthamani Street, Madras – 1
3. R.K. Paper Industries, C-18 Ambattur Industrial Estate, Madras – 58
4. The National Litho Press, P.B. No. 30 Railway Feeder Road, Sivakasi (India)
5. The Orient Litho Press, P.B. No. 17 Shivakasi.