DA 1

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Group 13:
Mishank Modi 15BPI0006
Hritik Tiwari 15BPI0009
Avinash Sahoo 15BPI0057
Anuj Kumar Jha 15BPI0077
Harsh Daga 16BIT0080
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 umigant
and is reputed to possess insecticidal and antiseptic properties. Agarbati also known, as
dubattis 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.

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.

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.

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 customers requirements.
IN A CITY AREA:-
LAND AND BUILDING
Covered area if 1000 sq.meters with electricity and water arrangements - Rs.1,5000
PER MONTH.

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 dipping 2 No. 1,600/-

7. Delivery van cycle 8,000/-

8. Plastic buckets, mugs, misc. 4,000/-
equipments
9. Office furniture, equipments 10,000/-
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% approx. 5,650/-
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

TOTAL COST
Machinery and equipment (FIXED COST) 38,800
Working Capital (VARIABLE COST) 4,42,350
481150

IN A TOWN AREA:-

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 dipping 2 No. 1,600/-

7. Delivery van cycle 12,000/-

8. Plastic buckets, mugs, misc. 4,000/-
equipments
9. Office furniture, equipments 10,000/-
fire extinguisher etc.
10. Freights, Installation, 8,000/-
electrification
Total 45000/-

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. 30,000/-
basis @ Rs. 60 per day)
Total 40000/-
Fringe benefits @ 15% approx. 6000/-
Grand Total 46000/-
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 400000/-

UTILITIES (PER MONTH)

Rs. 1500 Electricity, water etc.

OTHER EXPENSES (PER MONTH)

Rent 2,000/-
Stationery, postage, telephone 2000/-
Advertisement & Publicity 2000/-
Travelling Expenses 1,000/-
Miscellaneous 1,000/-
Repairs and maintenance 5,00/-
Total 10500/-
WORKING CAPITAL (FOR ONE MONTH)
1. Staff and Labour 46000
2. Raw Materials 400000
3. Utilities 1500
4. Other expenses 10500
Total 4,60,000

TOTAL COST
Machinery and equipment (FIXED COST) 45,000
Working Capital (VARIABLE COST) 4,60,000
5,05,000

IN A RURAL AREA:-

\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 dipping 2 No. 1,600/-
 7. Delivery van cycle 20000/-
8. Plastic buckets, mugs, misc. 4,000/-
equipments
9. Office furniture, equipments 10,000/-
fire extinguisher etc.
10. Freights, Installation, 10000/-
electrification
Total 60000/-

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. 60000/-
basis @ Rs.120 per day)
Total 75,000/-
Fringe benefits @ 15% approx. 11250/-
Grand Total 86,250/-

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 1,50,500/-
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 4,50,000/-

UTILITIES (PER MONTH)

Rs. 2500 Electricity, water etc.

OTHER EXPENSES (PER MONTH)

Rent 2,500/-
Stationery, postage, telephone 2,500/-
Advertisement & Publicity 1,500/-
Travelling Expenses 4,000/-
Miscellaneous 3,000/-
Repairs and maintenance 1,000/-
Total 15,000/-

WORKING CAPITAL (FOR ONE MONTH)

1. Staff and Labour 86,250
2. Raw Materials 4,50,000
3. Utilities 2500
4. Other expenses 15000
Total 5,53,000
TOTAL COST
Machinery and equipment (FIXED COST) 60000
Working Capital (VARIABLE COST) 5,53,000
6,13,000

Hence we can see the different Total Costs associated in setting up in three different areas. In
the city area the Total Cost is estimated around 481150 because of abundance available of
raw materials with cheap labour and machines and their set up and machinery whereas in
town the Total Cost is estimated around 5,05,000 as there is a demand of labour as well as
transportation cost as new developments are taking in the area and also the market and
customers are not so plenty whereas in rural it the Total Cost estimated is 6,13,000 a huge
difference than the other two because here a lot of set ups are required with more time for
production as both raw materials and transportation becomes expensive. So for me it will be
preferable to have a plant set up in the city area where I can get needful customers also.
CONCLUSION:-
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, one need little to worry. 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.
THE REAL EXAMPLES OF AGARBATTI FACTORIES SET UP IN INDIA ARE FEW
FACTORIES SHRINIVAS SUGANDHALAYA, GARDEN PERFUMERY WORKS,
MOKSH AGARBATTI, ESS KAY ENTERPRISES AND MANY MORE WHICH ALL
ARE SET UP IN BANGALORE.

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