PROJECT PROFILE - Agarbathi Sticks

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 fumigant and is reputed to possess insecticidal and antiseptic properties. Agarbati also known, as Udubattis 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.

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 customer’s requirements.

LAND AND BUILDING

         Covered area if 250 sq.meters with electricity and water arrangements - Rs.1,500 PM

MACHINERY AND EQUIPMENTS

SI.No.
Description
No.
Values
1.
Wooden planks for rolling size 2’ x 1’ x 1’
50 No.
3,000/-
2.
Weighing balance 10 kg. cap
2 No.
1,600/-
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. capacity
20 No.
600/-
6.
Aluminium trays for dipping
2 No.
1,600/-
7.
Delivery van cycle
 
8,000/-
8.
Plastic buckets, mugs, misc. equipments
 
4,000/-
9.
Office furniture, equipments fire extinguisher etc.
 
10,000/-
10.
Freights, Installation, electrification
 
3,000/-
 
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 basis @ Rs. 60 per day)
50 No.
20,000/-
 
Total
 
37,600/-
 
Fringe benefits @ 15% approx.
 
5,650/-
 
Grand Total
 
43,250/-

RAW MATERIALS (PER MONTH)

SI. No.
Name
Qty.
Values (Rs.)
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
For Three months
13,27,050
Say
13,27,050

TOTAL CAPITAL INVESTMENT

Machinery and equipment
38,800
Working Capital
13,27,000
 
13,65,800

COST OF PRODUCTION (PER ANNUM)

Recurring expenditure per annum
53,08,200
Depreciation on machinery and equipment @ 20% per annum
4,250
Interest on total investment @ 15% per annum
2,04,900
 
55,17,350

TOTAL SALE (PER ANNUM)

Receipts by sale of 27,00,000 packets of agarbattis @ Rs.2.20
62,10,000

PROFITABILITY (PER ANNUM)

         Rs. 62,10,000 -- Rs. 59,17,3500 = 4,22,650

         Net Profit per year 4,22,650

         Net Profit Ratio    = Net profit x 100 / Turn over              = 4,22,650x 100 / 62,10,000     = 7.11%

         Rate of Return      = Net profit x 100 / Total Investment    = 4,22,650x 100 / 13,65,800     = 30.94%

         Break Even Point = Fixed Cost x 100 / Fixed Cost + Profit

FIXED COST

         Depreciation of Machinery            4,250/-
         Interest on total investment       1,63,900/-
         Rent                                           30,000/-
         40% on salary and wages        2,07,600/-
         40% of Other expenditure          38,400/-
                                                       4,44,150/-

BREAK EVEN POINT = 4,44,150 x 100 / 8,66,800 = 51.24%

ADDRESSES OF RAW MATERIALS SUPPLIERS:

         1.          M/s Ravi Flour Mills & Industries, 339 Bapujinagar, Mysore Road, Bangalore – 26
         2.          M/s H.P. Nanjudiah Setty & Sons, 62, Gundopath Street, Bangalore – 53
         3.          M/s Ramachandra Pulverisers & Industries, IV Main Road, New Tharagpupet, Bagalore-2
         4.          M/s Mahalakshmi Flour Mills, T-64 Gundopanth St., Bangalore – 53
         5.          M/s Shakti Flour Mills, Swantantra Building, R.K. Puram, Bangalore – 9
         6.          Shri Venkateswara & Co., No.11, Thulasi Thota Road, Bangalore –53
         7.          Lakshmi Grinding Mills, Mysore Road, Bangalore – 26
         8.          Mastan Khan & Sons, 14 Pension on Mohalla, I Cross Mysore Road, Bangalore – 18
         9.          G. Anand Rama Setty & Sons, 242 Sulthanpet, Bangalore.

PERFUMES :

         1.          Pushpa Perfumery Products, 138 Akkipet Main Road, Bangalore – 2
         2.          Lala Banara Dass, Khattri, Kannauj (UP)
         3.          Saibaba Sugandh Bhandar, 53, Sultapet, Bangalore – 53
         4.          Goodwill Agencies, Keshav Nivas, 24 I Main Road, P.B. No. 9715 Gandhinagar, Bangalore – 560 009
         5.          Naresh Trading Co., 36 K.V. Temple Street, Bangalore – 53
         6.          The Easter Essence Emporium, 204, Nagarthpet, Bangalore – 2
         7.          Aromatic Agencies, 36 K.V. Temple Street, Bangalore.
         8.          G.M. Ahuja & Co., 15-Old Kasai Road, Behind Raja Market, Bangalore – 2
         9.          M/s Bharani Agencies, P.B. 9506, Gandh Nagar, Bangalore – 9
         10.          Mascheijer Aromatics (India) Pvt. Ltd., I Floor, Haji Market, OK Road, Bangalore – 2
         11.          Aromatic (India) Pvt. Ltd., 38 Link road, Bangalore – 3

BAMBOO STICKS:

         1.         R. Ramaiah Arumugamgalli Kalasipalayam, New Extn., Bangalore – 2

PACKING (PAPER, POLYTHENE COVERS, POLYTHENE PRINTING AND LITHO PRINTING)

         1.          M/s Lakshmi Paper Industries, 33-Town Rly.Station Road, Salem – 1, Tamilnadu.
         2.          The Paper Products Limited, 60 Chinthamani Street, Madras – 1
         3.          R.K. Paper Industries, C-18 Ambattur Industrial Estate, Madras – 58
         4.          The National Litho Press, P.B. No. 30 Railway Feeder Road, Sivakasi (India)
         5.          The Orient Litho Press, P.B. No. 17 Shivakasi.