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Agarbatti Project

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PROJECT PROFILE

ON
AGARBATTI (INCENSE STICKS)

PRODUCT : AGARBATTI (INCENSE STICKS)

PRODUCT CODE : KSL22

QUALITY & STANDARDS : As per Customer’s specification

Quantity : 30,000 Pkts


PRODUCTION CAPACITY (P.M.) :
Value (Rs.) : Rs. 2,25,000/-

MONTH & YEAR OF PREPARATION : February, 2020.


1

PROJECT PROFILE
ON
AGARBATTI (INCENSE STICKS)

1. INTRODUCTION

The burning of incense in religious and social functions has been practiced 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 insecticide and antiseptic properties.
Agarbatti also is known, as Udubattis similar to joss sticks are a development of
Dhup.

Agarbatties is an Indian Hindi terminology which is otherwise popularly known


worldwide as ‘Incense Sticks’ and as the name itself suggests, they are thin bamboo
sticks of about 8” to 12” length coated with paste of fragrance of natural ingredients
extracts of scented flowers or majorly forest yield. Agarbatties have huge potential as
a manufacturing business because its demand is at all-time high and go even higher
during festivals. More than 90 countries use Agarbatties and India is the sole
producer of these Incense Sticks that caters to the demands of all countries
worldwide.

Agarbatties are obtainable in different colours and with different perfumes. The
burning time of an agarbatti varies from 15 minutes to e hours according to quality
and size. Agarbatti is also obtainable in other forms such as dashang (sticky paste or
powder deep (cones and Dhup, tablets, etc.).

About 75% of the agarbaties manufactured are of cheap quality containing only
charcoal powder or low quality sandal wood powder with a mixture of 50% of wood
gum powder. Cheap perfumes are used to give them a top note. In superior varieties,
essential oils, purified resins, natural fixatives like amber, must and civet is used
along with synthetic aromatics. Absolutes are used in the costlier types.
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2. MARKET POTENTIAL:
The product Agarbatti (Incense sticks) is now-a-days becoming very popular in ritual
ceremonies like havan etc. In market Agarbatti is also sold in bulk quantities. The
local vendors do repacking in small quantities. Hence, it is presumed that if this type
of unit is set up in Cuttack or nearby area it will earn good profit.

3. BASIS AND PRESUMPTIONS:

1. The unit will run on three shifts basis of 8 hours per shift for 300 days per year.
2. The unit will run at 80% capacity utilization.
3. Rolled sticks are purchased directly and then essencing is carried out .
4. The name and addresses of plant & machinery of raw material suppliers are
neither exclusive nor exhaustive.

4. IMPLEMENTATION SCHEDULE :

Every project requires some specific time for commercial production and are briefly
as under:-

Sl. Activity Expected time


No.
1 Scheme preparation and approval 0-½ Month
2 MSME Registration. ½-1 Month
3 Sanction of loan 1-2 Months
4 Procurement of Machinery 2-3 Months
5 Installation, electrification and commissioning 3-5 Months
of machinery and other facilities
6 NOC from Pollution Control Board N.A
7 Trial run & Commencement of production 5 Months
3

5. TECHNICAL ASPECTS

1. Process Outline:
There are mainly two types of agarbatties manufactured:

(i) Dipped varieties or perfumed Agarbatties.

(ii) Masala batties.

(i) Dipped Agarbatties: Powders of Charcoal, Gigatu, White chips, etc. are
mixed with water to semi solid paste. This composition is taken on a wooden
plank and applied to sticks by rolling with hands. Then raw sticks are dipped in
suitable perfumery compound diluted with white oil or other solvents like
diethyl phthalate (D.E.P.) and dried and packed.

(ii) Masala Agarbatties: The powder of charcoal, gigatu, white chips,


indigenous herbs, resin, etc. are mixed along with perfumery compound
consisting of essential oils, aromatic chemicals, purified resins and natural
fixative like Civet, musk, etc. to a semi solid paste with the required quantity of
water. This compound is applied to bamboo sticks by hand rolling and dried.
The finished agarbatti sticks are bundled either according to the number or
according to weight and wrapped in moisture proof cellophane paper or butter
papers and packed in printed carton which again are wrapped in clear
cellophane paper.

i) Production detail & Process of Manufacture:

ii) Quality Control & Specification:

As such there are no quality specifications for incense sticks. However, good
perfume, burning till last point make incense sticks more popular for sale among
people.

iii) Production Capacity ( per annum )

a) Quantity : 38,500 Kgs


b) Value (Rs.) : Rs. 38,70,000/-

iv) Motive Power Requirement:


5 KW

6. FINANCIAL ASPECTS:

(A) Fixed Capital:

i) Land and Building :

Land & Building – 200 Sq. Mtrs. (Rent) Rs. 15,000/-


Total: Rs. 15,000/-
MSME-DI, KANPUR.
4

ii) Plant & Machinery:

Sl. Description Qty Value (Rs.)


No. (Nos.)
1 Roller Mill Machine 1 40,000/-
2 Leaves Cutting Machine 1 25,000/-
3 Water Bath (Mixing Machine) 1 10,000/-
4 Powder Mixing Machine (Ball Mill Machine) 1 50,000/-
5 Edge Runner Machine 1 1,50,000/-
6 Pulverizer 1 1,00,000/-
7 10,000/-
Oil Storage Tanks 10
8 25,000/-
Laboratory Equipments LS
9 30,000/-
Installation of plant & machinery @ 10%
10 10,000/-
Preoperative expenses
4,50,000/-
Total:

Total Fixed Capital Requirement:

1. Land & Building (On Rent basis) -


2. Plant & Machinery 4,50,000/-
Total: 4,50,000/-

(B) Working Capital (Per Month):


i) Staff and Labour ( per month)

Sl. Designation No. Rate Amount


No. (Rs.) (Rs.)
1 9,000/-
Purchase Manager 1 9000/-
2 Accountant / Store Keeper 1 7000/- 7,000/-
3 10,000/-
Skilled Workers 2 5000/-
4 6,000/-
Sales Man 1 6000/-
5 4,000/-
Watchman 1 4000/-
6 8,000/-
Helper 2 4000/-
Total 44,000/-
Perquisites @ 15% of salary 6,600/-
Total 50,600/-
MSME-DI, KANPUR.
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ii) Raw Material:


Sl. No. Particulars Quantity Rate Value (Rs.)
Kg (Rs)
1 Guggal 30 Kg 200/Kg 6,000/-
2 Sandal Wood Powder 30 Kg 125/Kg 3,750/-
3. Dhoop Wood 300 Kg 25/Kg 7,500/-
4. Cascalia Powder 30 Kg 130/Kg 3,900/-
5. Charcoal Powder 150 Kg 30/Kg 4,500/-
6. Groundnut shell 750 Kg 6/Kg 4,500/-
7. Wood Dust/leaves of eucalyptus, tej 1500 Kg 3/Kg 4,500/-
patta etc.
8. DEP 300 Ltrs. 100/Ltr 30,000/-
9. Jigat Powder 90 Kg 25/Kg 2,250/-
10. Compound of Perfumes 60 Kg 500/Kg 30,000/-
11. Plasticizer 30 Kg 30/Kg 900/-
12. Preservative 3 Kg 150/Kg 450/-
13. Packaging Box 75000 Nos. 0.65 /Pc 48,750/-
14. Corrugated Box 600 Nos. 25/Pc 15,000/-
Total 1,61,190/-

iii) Utilities:

Sl. No. Particulars Quantity Rate Value (Rs.)


1 Electricity & Power 1000 units Rs. 7.00/unit 7,000/-
2 Fuel (Diesel) LS 3,000/-
Total 10,000/-

iv) Other Contingent Expenses:

Sl. No. Description Amount in Rs.


1. Rent : 15,000/-
2. Telephone and stationery : 1,000/-
3. Travelling & Transport : 10,000/-
4. Repair & Maintenance : 2,000/-
5. Insurance : 10,000/-
6. Other expenditure : 5,000/-
Total : 43,000/-
MSME-DI, KANPUR.
6

v) Total Recurring Expenses (per month)


a. Salary & Wages : 50,600/-
b. Raw material : 161,190/-
c. Utilities : 10,000/-
d. Other contingent expenses : 43,000/-
Total: : 2,64,790/-
Total Working Capital for 3 months = 2,64,790/- X 3 = : Rs.7,94,370/-
Say = Rs. 7,95,000/-
7. Total Capital Investment:

a) Fixed Capital 4,50,000/-


b) Working Capital for 3 months 7,95,900/-
Total: 12,45,000/-
Means of Finance:

i) Promoter’s share 25% 3,11,250/-


ii) Loan from Financial Institution 75% 9,33750/-
Total: 12,45,000/-

8. Financial Analysis:
(A) Cost of production (Recurring Expenses) ( per annum )

S. No. Particulars Amount (Rs.)


1. Total Recurring Expenditure 31,77,480/-
2. Depreciation on Machinery & Equipments @ 10% 40,000/-
(Except Electrification & Installation, Trial run)
3. Interest on 75% on loan @ 14% p.a. 1,30,725/-
Total : 33,48,205/-
Say: 33,48,000/-

(B) Turnover (per annum)


Sales proceeds as shown below:

Sl. Name of items Quantity (Nos.) Rate (Rs.) Value (Rs.)


No.
1. Dhoopbatti – 20 gms 5,00,000 Rs. 2.60/Pkt 13,00,000/-
2. Dhoopbatti – 50 gms 3,00,000 Rs. 5.60/Pkt 16,80,000/-
3. Dhoopbatti – 100 gms 1,00,000 Rs. 7.50/Pkt 7,50,000/-
4. Dhoopbatti 3500 Kgs 40/Kg 1,40,000/-
TOTAL: 38,70,000/-
MSME-DI, KANPUR.
7

(C) Net Profit (Per Annum):

Turn Over (-) Cost of Production


Rs. 5,22,000/-
38,70,000/- (-) 33,48,000/-

(D) Net Profit Ratio (Per Annum):

Profit/annum X 100 5,22,000/-X 100


= 13.48%
Sales Per Annum 38,70,000/-

(E) Rate of Return:

Profit/Annum X 100 5,22,000/-X 100


= 41.92%
Total Capital Investment 12,45,000/-

(F) BREAK EVEN POINT:

Fixed Cost (Per Annum):

1. Depreciation on Plant & Machinery @ 10% p.a. 40,000/-


2. Interest on loan @ 14% p.a. 1,30,725/-
3. 40% salary and wages 2,42,880/-
4. 40% of Utilities 48,000/-
5. 40% of other expenses 2,06,000/-
Total Fixed Cost: 6,67,605/-

Break Even Point:


Fixed Cost X 100 6,67,605/- X 100
= 56.11%
Fixed Cost + Profit 6,67,605/- + 5,22,000/-

9. Names and Addresses of Plant & Machinery and Raw material Suppliers:

1. M/s Piyush Traders,


45/60, GayaPrasad Lane,
Kanpur-208001. Ph. 0512 – 2365322.
2. M/s United Chemicals,
45/39, Gaya Prasad Lane,
Kanpur-208001.
MSME-DI, KANPUR.
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3. M/s B. S. Machines,
44, B. S. Market, Latouche Road,
Kanpur-208001. Ph. 0512 – 2368776

4. M/s Kanpur Iron & Steel Corporation,


31, Bhagat Singh Market, Latouche road,
Kanpur – 208001. Ph. 0512 – 6451683

5. M/s Sri Kamta Nath Traders,


Nayaganj, Kanpur – 2028001.
Mob. 09415222918.

*******

*PSB*AUG*2012*

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