Agarbatti (Incense Sticks Manufacturing ) Making Business Idea Investment Profit

Agarbatti or Incense Sticks are highly used in households for mainly worshiping God or during any celebration. There are many countries in the world that have demand for incense sticks. India is one of the leading 90 countries in the world that regularly use Agarbattis. However not many countries manufacture Agarbattis. India has largest Agarbatti making industry.

Agarbatti Making Process

Agarbattis are made of bamboo sticks. A thick paste that contains different fragrances is being used to coat the sticks. These incense sticks have length of 8” to mostly 12”. Agarbattis can be made at home or the manufacturers can use machines. The process has few steps. They are as follows:

Step 1: Firstly the bamboo sticks are needed to be cut in shapes. As said the sticks are 8” to 12” long and needed to be cut in proper size so that all the sticks look similar in size.
Step 2: All the raw materials that come in powder form are required to be mixed in appropriate portions. Make a thick paste out of this powdered mix.
Step 3: Coat the bamboo sticks with the paste. Apply the paste on the stick evenly and roll it on a smooth wooden surface to coat it properly. Make sure to leave at least 1” area of the stick for holding purpose.
Step 4: The agarbattis are required to be dried. This dried form is ready to use. If the manufacturer wants fragrant, then he/she can add diluted scent in the process.
Step 5: For the scent or fragrance, add one portion of scent/fragrance and three portion of white oil or three portion of diethyl phthalate. That is the scent and white oil must be in ration 1:3.
Step 6: Make a diluted mix of scent. Dip the dried sticks in the diluted scent and keep them overnight to dry. Once dried the sticks must be packed.
Step 7: Then take the ones with same fragrance and pack them in a plastic packet. The number of in a single packet depends on the manufacturer. Finally pack them in a cardboard cartoon. Now the sticks are ready to sell.

Raw Material needed for Agarbatti Making (With Price)

Bamboo Sticks: The main raw material for the Agarbattis is bamboo stick. Sticks cost Rs. 10/- per stick. That is for 1000 sticks Rs. 10, 000/- will be required.
Charcoal Powder: Charcoal powder is used in the mix so that the agarbatti can be flamed. This powder is priced at nearly Rs. 4/- per unit. For 1000 units it will cost Rs. 4000/-.
White Chips: White chips are used for the aroma in the sticks. They come in packets of 50 Kg or more. One can get less than that as well. It costs Rs. 15/- to Rs. 22/- per Kg.
Kuppam Dust: Kuppam dust is another raw material that is needed to be mixed to make agarbattis. They are available at Rs. 30/- per Kg.
Jigat Powder: Jigat powder is also used in agarbatti. Jigat powder is available in retail shops. It costs Rs. 30/- per Kg to Rs. 50/- per Kg in the market.
Sandalwood powder: Sandalwood powder is also used in making Agarbattis. It is necessary for both aroma and it is highly flammable. For scent one can use many other varieties. Sandalwood is bit expensive compare to others. It costs Rs. 250/- to Rs. 300/- per packet.
Perfumes: Other than powdered fragrance, one can use concentrated scents as well. Perfumes come in various prices depending on the fragrance. It costs Rs. 350 per unit.
For dilution: For dilution the solutions cost nearly Rs. 40/- per unit or so. This diluents are used to dilute the concentrated perfumes for the aroma of the sticks.

Agarbatti Manufacturing Machine

Agarbatti can be handmade or can be machine made. In many remote areas still women make agarbattis using their hands only. Currently China is manufacturing such machines that are dominating Indian market as well. These machines do three types of work, mixing, coating and drying. Most of the machines do these three works smoothly. There are some differences in machines like automatic, manual or high speed.

Automatic: In these machines all the three processes are done automatically. The labours have to operate the machine one at a time. These machines cost from Rs. 50, 000/- to Rs. 1.5Lac.
Manual: Manual machines come with basic features. Here all the processes are done but not automatically. Labours might need to operate the machine several times for different process. It costs up to nearly Rs. 95,000/-.
High speed machines: These are high speed machines that produce many sticks at one go. These machines are costlier among the three. They cost more than Rs. 1 Lac.
https://dir.indiamart.com/impcat/agarbatti-making-machines.html

Packing Process

For any product it is necessary to have a proper packaging. It is needed because firstly the products don’t get damaged easily. Secondly consumers look for better packaging so it must be attractive.

Manual Packaging: In case of manual packaging few things are needed such as narrow plastic packs and cardboard cartoons for the outer packaging. Pack the bunch of incense sticks in the plastic pack and then pack them in the cartoon. Seal the packet with tapes.
Machine packaging: Now the time has changed and machines are widely used for packaging of Agarbatti. There are several machines where bunch of agarbattis were packed safely in sealed and printed cartoons with company logo. It requires less manpower than manual process.

Agarbatti Making Business Investment

The budget for Agarbatti making business in initial phase depends on the raw materials and machines. Roughly from Rs 20 Lac to 50 Lac is needed to invest. The machines cost Rs. 1 or 2 Lac. Also the raw materials will cost another Rs. 3 to 4 Lac. Apart from these labour charges, fixed costs and some other costs will be there.

Machines for making agarbattis are moderately huge and need some space to settle down. So it would be better if the machines are kept in wide area or factory sheds. The area must not be residential ones as the process can create externalities.

At least 7 to 8 people are needed in the initiation phase of production of agarbatti. Semi-skilled labours, delivery boy, production manager, clerk, watchman, sales man, store keeper and such are the designations where men should be appointed.

Licence Process

All the companies be it Agarbatti making or something else need to be registered first under Registrar of Companies. After registration the manufacturer can register for other documents.
If it is a proprietary business then it will be easier to attract investor for your business. Afterwards the trade licence must be issued from the local government body.
The manufacturer has to have a current bank account and a PAN card. Once they are done, he/she needs to register the company for Value Added Tax and also Goods and Services Tax.
Those who are in manufacturing business are required to have factory licence and also they have to have a no objection certificate from the pollution board that no pollution will be created while manufacturing.

Marketing Strategy

To set marketing strategy for agarbatti business, it is inevitable that the product is high on demand. Also we should not forget that there are competitors too. So definitely the manufacturer needs to sell them in proper packaging and attractive looking boxes to grab more consumers’ attention.
Also the area of selling the product should be chosen carefully. Not every where Agarbattis are on demand. The area of selling agarbattis is given below.

Target Area for Agarbatti Selling

As agarbattis are mostly needed while worshiping god, then temples and churches are the best places to sell agarbattis. Also places like retail shops, renowned local markets can be the area for selling the same.

Profit Margin

Roughly the small manufacturers get profit margin of Rs. 10/- per kg. If a manufacturer is making and selling 1000 kg sticks, then the profit margin would be Rs. 10, 000/-. Monthly on an average Rs. 30, 000/- worth of profit can be earned in this business.

Precaution

First of all the labours must be well trained to handle the machines. The mixture contains many elements which are not good for skin. In that case labours can use gloves.
Also the factory or the manufacturing unit must not be in residential area. It must be located somewhere in the bank of river.

Risk

As charcoal is used in making agarbattis and it is highly flammable, there is a risk of getting burnt. Hence the workers must be careful while mixing the powders.
Also the other elements such as Jigat and diluents can be harmful for the skin. Those who are mixing the paste with hands can damage their hands by doing so.

Conclusion

Agarbatti making business can start off with minimum raw materials and low investment, especially in rural areas. Now the industry has become huge hence the investment has become large as well. India has the biggest market for Agarbattis compare to other countries.