Incense sticks or Agarbatti making business is very profitable small scale business in India which you can start with very little investment. The procedure of agarbatti making is very simple and can be done using machines. If you dont want to invest in purchasing machines then you can go for manual handmade agarbatti production unit but machines makes it easier and produces high quality agarbatti in short time.
In this article I will share information on how to start agarbatti manufacturing unit and how you can make profit out of this simple business. Below is a business plan sample which you can follow to start your own manufacturing unit.
In this article I will focus mainly on agarbatti manufacturing with the help of machines because gone are the days of manual handmade agarbatti. Handmade agarbatti will take time and you cannot make good profit out of it. Handmade agarbatti production is still going on in small scale in villages and small towns. They work with buy back agreement.
Steps Involved in Agarbatti Making
- Get agarbatti making machines
- Get raw materials
- Select a proper location and install machinery
- Staff hiring and training
- Preparation of Mixture or Masala
- Load mixture and bamboo sticks into machine
- Collect raw agarbatti
- Dry in sunlight or use Dryer machine
- Add scent
- Packaging and supply
I want to add one important point here – If you want to make profit in this business then you have to start with 6 machines minimum. With the help of 6 machines you can easily make Rs 1 lakh a month. I will describe all above important points in detail and I want you to follow exact same procedure.
Let’s get started..
1. Agarbatti Making Machines
This is very crucial part because machines are the backbone of your business. Many companies are there who sell these machines but you have to select one reliable company who provides service in case of break down. These machines will work smoothly for a week or a month but after that it requires maintenance and servicing. Most of the agarbatti machine supplier are from Gujrat so you have to ask them whether they provide service in your area or not? If they do not provide repairing service in your area then do not buy that machine.
Big companies have setup their dealership in every state of India to provide service in case of break down. You will buy machines from dealer in your city and that dealer will provide service in case of emergency. Before purchasing machines, make sure that the dealer of that particular company is present in your town or nearby city.
Cost of agarbatti making machine depends on its speed and total production capacity. Generally, a good machine will cost you around Rs 1,20,000 – Rs 1,50,000. These machines will produce approximately 100kg raw agarbatti in 12 hrs.
2. Raw Materials
Raw materials used in the making of agarbatti are coal powder, Gum powder, Bamboo sticks, Jikit powder, perfumes, etc. You will easily get raw material supplier in your city and for that you have to search and visit any agarbatti making unit in your locality. Bamboo sticks which is used in agarbatti making come from China and Vietnam and it will cost your around Rs 120/kg. Raw materials are easily available in any part of India.
3. Select Location for Machine Installation
I am assuming that you will buy machines from dealer in your city or nearby city. That dealer will send a technician who will install machine at your location. You have to bear all expenses of that technician. He will also charge extra amount as installation fees. He will also give you extra training about how to operate machines and how to make agarbatti. He will stay at your place for maximum 2 days and then you have to operate the machinery by your own. At the time of emergency or break down of machine you have to contact the same person/dealer again.
You can easily install 6 machines in 400 sqft or even more than that. Machines are not that bulky, it is light weight and easy to operate. You will need one dedicated staff in every machine for smooth production of agarbatti.
4. Staff Hiring & Training
One dedicated staff is needed for every machine. If you have five machines then five staffs with special training will be needed to operate that machine. You have to learn and train your staff about machine. Apart from 5 staff for 5 machines, you will require 3 more additional staff for mixture making, agarbatti drying and packaging.
At the beginning, you will not be able to produce 100kg agarbatti from 1 machine because staffs are new and they require some time to learn and settle. After a week or 15 days you will be able to produce 100kg raw agarbatti from 1 machine. Do not panic about it, let your staff take time in learning.
5. Preparation of Mixture or Masala
This is very important part because if your mixture is not accurate then your agarbatti will not burn till the end. You have to learn the process of making mixture from agarbatti machine technician or dealer. If your produced agarbatti is not good then it is waste of money and no one will buy your agarbatti. You have to learn the process accurately. You need to have one dedicated staff for making mixture.
6. Loading Mixture
After the preparation of mixture, load them into machine with bamboo sticks and make raw agarbatti. You can produce 10kg of raw agarbatti in one hour from 1 machine but initially it will be 5 – 6kg.
7. Collect Agarbatti
One dedicated staff is needed to collect the raw agarbatti produced. He/she will then keep that agarbattis in sunlight for drying up.
8. Dryer Machine
If your manufacturing unit roof does not get direct sunlight then you should buy a dryer machine. The cost of dryer machine is around Rs 35,000. Dryer machine is also beneficial for rainy reason.
9. Adding Perfumes –
This is separate branch in this business. Many raw agarbatti manufacturers do not add perfumes by their own. They only sell raw agarbatti to the company who adds perfumes. You can directly sell your raw agarbatti to those companies easily with good profit margin. If you want to add your own perfume and to build your own brand then go ahead and research some new fragnance. With the help of proper marketing you can create your own brand in short time.
10. Packaging and Supply –
For raw agarbatti packing you will need jute bags(40kg each). For packing of your own scented agarbatti you will need high quality packing with your brand name mentioned on it.
Profit Margin in Agarbatti Business
Agarbatti making is very profitable business and you can easily make Rs 500 – 700 as profit from 1 machine everyday. But 1 machine wont give your good income at the end of the month, you have to start with 3 or 4 machines minimum to see some good returns.
Raw agarbatti will give your profit of Rs10/kg. On the other hand, scented agarbatti will give you more profit i.e Rs 25 – 30 per kg approx. It depends on your branding and marketing strategy. Cost of making 1 kg agarbatti will come around 40 rupees.
Start Agarbatti Business with Buy Back Agreement
Many dealers are offering buy back agreement offer and you don’t have to find buyers for your produced agarbatti. They generally pay less from the market price but you will not find difficulties in selling. Agarbatti business is the best small scale business with buy back agreement.
If you want to start this business then go ahead and start it now. Visit nearest manufacturing unit and take information about it. This business requires you to have good staff management skills, you do not have to pay your staff on monthly basis or daily basis. You will pay then on the basis of agarbatti they produced in Kg.