Start Your Agarbatti Manufacturing Business Plan: Materials, Process, and Profit

Agarbatti is an Hindi Indian word that is generally referred to as ‘Incense Sticks’ around the world, and as the actual name suggests, they are thin long sticks of bamboo of around 8″ to 12″ in length that is covered with an aromatic paste of natural concentrates of scented blossoms or other significant fragrant wood varieties like sandal.

The incense manufacturing business may not seem like a venture worth pursuing, but in reality it’s a very lucrative business to start in India. For a product with such a simplified manufacturing process, the market price for the finished product is high, this factor coupled with the sheer demand for agarbatti in India makes incense stick manufacturing one of the most underrated business ideas, with great potential if done the right way. One big upside of this business is that its demand is always high and goes considerably higher during the festive season. All thanks to such a diverse cultural mix in the country, the festive season in the country is almost never-ending! While some months may be comparatively slower, the demand usually is on the higher side throughout the year! And that’s not taking into account hundreds of thousands of places of worship where demand for such products never declines. Agarbattis are used in more than 90 countries. India is the only country that manufactures these Incense Sticks and fulfills all nations’ requests around the world, which allows incense stick manufacturers to enjoy relatively lower competition in such a high volume market.

Presently, one must be wondering how to set up an incense stick business from home. Here is a stepwise process from the first step that includes the business’s planning to the last step that involves getting a loan on this business. One will find a reasonably good market abroad as well as in India.

Basic Parameters For incense manufacturing Business Plan

Investment	Rs 80,000 to Rs 1.5 lakh
Production	3000 kg monthly or 100 kg per day
Manufacturing Cost	Rs 1 lakh or Rs 33 per kg
Turnover	3000 x Rs 100 per kg = 3 lakh per month
Gross Profit	Rs 2 lakh per month

Incense sticks manufacturing business – Initial Planning Phase

Agarbatti manufacturing business is quite lucrative due to ever increasing demand and potential for sales to grow both locally as well as internationally. Such businesses are really easy to set up, the business doesn’t necessarily require a big setup to start with. Hence, with some small machinery and equipment, one can begin this manufacturing business even at home.

It is a customary item and is a fundamental thing that is required in every family and holy places and other places of spiritual importance. Considering the fact that India has the highest number of places of worship, and the largest population in the world – there’s always space for new entrants to take a piece of the market!

The extent of the incense stick manufacturing business relies on individual capacity and the agarbatti manufacturing unit’s production capacity. It is also dependent on the market demand of the agarbatti. The demand is high and constantly increases during the celebration season.

Not only Indian markets, but one can also export Agarbattis to other Asian countries. India has exported over 500 crores of incense sticks to many Asian countries like Japan and China in the year 2017 and 2018. Over 90 foreign countries use these incense sticks, so the demand for them always remains quite high.

Since the foreign demand for agarbatti is always high, exporting it can be a great option too. This business requires inexpensive technology, and it is an export-oriented manufacturing industry. Therefore, the initial investment required in agarbatti making is quite low, and one can earn around Rs 500 for each 100 kg of 20 kg of machine production, i.e., around Rs 25 per kg of production and selling.

The GST for agarbattis was 12% initially later; it was reduced to 5%.

Different Licenses Required for Agarbatti Making Business

In case one is thinking on how to get an agarbatti business license to operate – listed below are the business licenses required to operate. The prerequisites or the documents required for an agarbatti making business permit may change from state to state; consequently, it is advised to check the state rule with respect to agarbatti permit license to operate.

1. Company Registration: This is the first step to start an agarbatti manufacturing business. One needs to register their business as a company or Proprietorship or ROC register of companies to get started.
2. GST Registration: GST registration is mandatory for every business holder. On successful registration, one will get a GST number for selling their goods or services.
3. EPF Registration: This registration is necessary only if one has more than 20 employees in a manufacturing unit.
4. ESI Registration: This Employee State Insurance or ESI has greater than 10 employees.
5. Trade License: This is necessary for every person having a business. One can get it from local authorities.
6. SSI Registration: Registration for this license is required for those having a SSI unit, though this is not compulsory.
7. Pollution Certificate: This certificate is necessary, and one gets it through inspection of the site where one has their manufacturing unit. It is done by the State Pollution Control Board, after which one will be allowed to conduct business.
8. Factory License: Large scale manufacturing commercial units must have a NOC and a factory license.

Raw Material required for Agarbatti Making Business

The materials needed for making incense sticks are accessible in the Indian market with ease. One simply needs to look or visit the agarbatti making unit or raw material provider. The amount of materials required depends on one’s production capacity.

Bamboo is the base material of the Incense Stick, which is easily available in the Indian market, that comes from Vietnam, and it costs around Rs 120 for every kg. One can also make their own by sticks through stick making machines.

List Of Raw Material Required For Agarbatti Making:

The raw materials required for Agarbatti are:-

1. Aromatic Ingredients
2. Natural aromatic oil – Only natural

Bamboo Sticks: Bamboo sticks that ranges from 8″ to 12″ inches are required, or

Raw Bamboo Sticks: If one is manufacturing bamboo sticks, one needs to buy bamboo sticks in raw form for making incense sticks

Packing Materials: The packing material used must be airtight that locks the fragrance of the agarbatti

Different Color Powder: One can add different color powders to make agarbattis look attractive. The powders are:-

1. Crude Paper
2. Charcoal Powder
3. Gum Powder also known as Sticky Powder.
4. Nargis Powder
5. Jikit Powder
6. Perfumes
7. Oil Of Sandalwood
8. Sawdust

Addition of Fragrance: The addition of fragrance is a different manufacturing step. But it is optional. There are many agarbatti manufacturers that sell it without adding any fragrance. One can do the same if they are selling in local markets. Or one can add any fragrance as per their liking or can do a market survey to know which fragrances are preferred.

Area necessary for starting Agarbatti making business (location)

One can start the agarbatti making business from home or any place as this business doesn’t require any specific setup, but one must make sure that the place must be accessible by transport and one has easy access to raw materials.

The area required is dependent on the number of machines required to be installed.

Agarbatti Making Machines

This is the second last step. Machines are very important in one’s agarbatti making business. There are various types of machines available in the market, but one needs to select that as per one’s budget. There are various types of machines available in the market. The agarbatti making machine uses advanced technology, and they are some machines like dryer machine and powder machine.

Manual Agarbatti Making Machine:

Machines that are operated manually can be bought in a single pedal or double pedal type, whichever is convenient to operate such that one can achieve high production at low cost. Owing to the pedal mechanism, this machine can be run manually, and hence there is no use of electricity. By using pedals, it can be run manually. These manual agarbatti making machines are quite affordable as compared to Automatic.

Agarbatti Making Machines.

Suppose one wants to go in for the production of high volume. In that case, one should opt for these automatic agarbatti making machines because with the help of the latest technology; these automatic machines produce approximately160 to 200 sticks per minute.

One can also make a square shape Agarbatti with the help of these machines. These automatic Incense Stick making machines come in different attractive designs, patterns, size and shapes as per the customer’s requirement.

High-Speed Automatic Agarbatti Making Machine:

High-speed automatic agarbatti making machines need less manpower as it is fully automatic. Such machines can produce  300 to 450 sticks per minute. These machines have the feature of adjusting the production of the length of incense sticks. One can set one’s machine from 8′ inches to 12′ inches.

Dryer Machine:

If the area where incense sticks are produced is humid, one must buy a dryer machine to dry out raw agarbatti. This dryer machine also comes handy during the rainy season.

Powder Mixer Machine:

For the purpose of making a uniform mixture of raw substances for making agarbattis, a powder mixer machine is very helpful because it can mix the exact amount of wet or dry powder mixture. Supplier customizes this machine according to the production capacity of the customer. The powder mixer machine can mix  10 to 20 kg of mixture per minute.

Applying for loans

For starting out, one might not have the proper funds to buy the required machinery. For setting up, one can take loans from LendingKart. The business loans offered have the following features:-

1. They have lower interest rates : The first and foremost number that a borrower looks at is the interest rate, a loan with a lower interest rate makes the decision easier for the borrower. Please be advised that interest rates are dependent upon the applicant’s credit history and repayment capacity, i.e. riskier loans, will make higher interest. Hence, it is also advisable to maintain a clean credit history to avoid high interest bearing loans in the future.
2. Easily disbursed : We at LendingKart believe in efficiency, since we leverage big data and we are a highly efficient team, we are able to take up loan requests and assess the information in a lightning quick speed! Which makes the assessment process efficient. Once approved, the loan can reach your bank account in as soon as 3 working days!
3. One can apply online : With LendingKart the entire process, from discovering the loans on offer, application to even disbursement, everything is online! You no longer have to make multiple visits to the offices hoping for a quick processing and disbursement.
4. It requires minimal documentation : We only ask for relevant information and documentation, that helps us assess the risk factor of disbursing the loan to an applicant, the documentation required for applying for a loan is fairly short and quick! And yes, the entire process is online too!
5. Easily offered : We at LendingKart thrive on efficiency, the time taken for an application to be taken up for processing, assessment of the application, to approval and disbursement – everything is really efficient and quick, also the list of requirements for application isn’t as long as one might imagine. Loan application is really quick and convenient with lendingKart.

One can easily set up their incense stick manufacturing business with LendingKart:

The biggest hurdle with starting a business in most cases is the lack of funding. Having a reliable lender is imperative not only to start a business in incense stick making but also to run the business efficiently. Just like any business, an entrepreneur may often face a shortage of funds and a loan or line of credit comes really handy at such times. An incense sticks manufacturer may need extra money to fund working capital requirement, in scenarios such as an unexpected large scale order, or a need may arise to fund other aspects of the business like increasing workforce, modernizing the processes with the help of machines and better tools and equipments, expanding the current capacity, expansion into a new segment or a market. The needs are numerous, and funding these needs with pure business profits may not be possible every time. An entrepreneur must know how to efficiently use debt and leverage to succeed, and with LendingKart you can have a trusted finance partner to help you scale your business and grow in the entrepreneurial journey!

Summary

Agarbattis, or incense sticks, are aromatic bamboo sticks that are widely used in India and around the world. Coated with natural fragrances from flowers and woods, they play an important role in homes and in places of worship. Agarbatti industry in India is successful because of its diverse cultures and lakhs of places of worship. The agarbatti manufacturing business offers significant profit potential due to ever increasing demand. Agarbatti business profit is among the highest in the segment. Agarbatti’s demand in households surges especially during festive seasons, for places of worship and other commercial spaces, the demand is pretty much consistently high in the agarbatti industry.

To become incense stick manufacturers, an investment is necessary, albeit not necessarily a big one – as in the initial stage, this business can be started with a very little capital, and aiming for a solid production rate is key. Starting small from home is possible, requiring only a couple of incense sticks machines. With India’s multitude of worship places, the market for agarbattis remains consistently strong throughout the year. Essential raw materials include bamboo sticks, aromatic oils, packing materials, and color powders to enhance visual appeal.

Selecting the right machinery is vital. Manual machines can be cost-effective for a smaller production scale, however if you aim at a larger scale of production, investing in time efficient and modern incense sticks machine would make more sense.

Financial support can be accessed through loans from various institutions, which provide low interest rates and efficient processing through online applications with minimal documentation – You’re in luck because LendingKart offers all of the aforementioned perks.

Legal operation of the business requires several licenses, including company registration and GST registration. It is imperative that you comply with local rules and regulations and have necessary certifications to operate your business in place including permissions from relevant authorities and municipal corporations.

Marketing can involve local sales and online platforms, initially entrepreneurs can do sample distributions to collect feedback and establish brand presence. Popular fragrances, such as rose, lavender, and sandalwood, cater to a diverse range of customer preferences, hence it is essential to have multiple options to increase customer stickiness with the brand.

In summary, starting an agarbatti business blends creativity with entrepreneurship, offering a rewarding opportunity in a vibrant market.

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Agarbatti Business Plan FAQs:

1. What is the initial capital required for starting a small-scale Agarbatti manufacturing business?

The initial capital required for starting a small-scale Agarbatti manufacturing business varies based on factors like production scale and location. Generally, it includes costs for agarbatti raw materials, equipment, and marketing. Researching agarbatti manufacturers can help estimate expenses.

2. What are the steps required in Agarbatti manufacturing?

The steps required are:-

 Step 1.Know how to make agarbatti and your planned product offering
 Step 2.Mixture Preparation – Requires a paste of gigatu, charcoal and white chips
 Step 3. Mixture loading in the machine – Put semi-solid mixture into the machine and place bamboo stick
 Step 4. Collect agarbatti : The incense sticks are ready
 Step 5. Dry the agarbatti: Dry it for a day under the sun or by using a dryer machine.
 Step 6. Add Fragrance – This is optional
 Step 7. Pack the agarbatti – Pack in a high-quality box

3. Where can one sell all types of incense an offer?

One can sell their Agarbatti in the local market or can export it outside the country.But initially you may have to distribute a few samples to people to position your brand in the market and make it visible to the consumers. While distributing samples, make sure that you collect data in the form of feedback, price expectation of perceived value of the good, etc. Once you have enough data available, you can then position your agarbatti product and sell at an outlet more suited to the target market of your product..

4. What is raw agarbatti and different types of incense?

Raw agarbatti is one that has no perfume added in it. There are plenty of different types of incense, the main differentiator is the fragrance and the second differentiator is the purpose and burning rate.

5. Where can one sell raw agarbatti?

One can sell raw agarbattis to perfume adding industries. They will add perfume and sell it in the market.

6. Can one sell their agarbattis online?

Yes, one can sell their agarbattis online by creating a website or leverage an e-commerce platform.Brand positioning is really important in selling any product online, if you want to sell expensive incense sticks and target the high earning and high paying substrata of the demographic, then you may have to do branding which may appeal to the demography you’re targeting. 

7. What are the various types of incense making business?

The various divisions of agarbatti making business are
 Incense manufacturing
 Bamboo stick supplier unit
 Raw material supplier unit
 Perfume adding unit

8. Is LendingKart RBI registered NBFC?

Yes, LendingKart is an RBI registered NBFC. So, the loans offered by us are 100% safe.

9. What are some of the popular fragrances in agarbatti?

Some of the popular fragrances are:-
 Rose
 Lavender
 Marigold
 Sandalwood
 Cedarwood

10. Can one make eco-friendly agarbattis?

Yes, one can make eco-friendly agarbattis with dried flowers is more healthy and more preferred nowadays.