PROJECT REPORT

ON
MANUFACTURE OF RAW AGARABATTIS

LOCATION
SY NO 445-2, MUKKOLU VILLAGE,
KIRLAMPUDI MANDAL,
EAST GODAVARI DIST

INDEX
 1. PROJECT AT GLANCE
2. INTRODUCTION
3. SCOPE OF THE PROJECT
4. CONSTITUTION AND SECTOR
5. PROJECT OF THE GLORY
6. PROCESS/MANUFACTURER
7. PROCESS FLOW CHART
8. QUANTITY CONTROL AND STANDARDS
9. RAW MATERIAL
10. MARKET POTENTIAL
11. LICENSE
12. INCENTIVES
13. LOCATION AND ADVANCES
14. PROJECT COST AND MEANS OF FINANCE
15. DETAILED NOTES OF PROJECT COST
16. DETAILED NOTES ON MEANS FINANCE
17. UTILITIES AND SERVICES
18. IMPLEMENTATION SCHEDULE
19. SWOT ANALYSIS
20. ASSUMPTION FOR FINANCIAL STATEMENTS

1. PROJECT AT A GLANCE
Name of the KASINADH ENTERPRISES

Firm

Location #Sy No 445-2, Mukkolu Village, Kirlampudi Mandal, East

Godavari Dist.

Particulars of Manufacture of Raw Agarabattis with an Installed Capacity of

7,20,000 Kgs / annum.
Proposed

Project

Firm Profile The Firm M/s KASINADH ENTERPRISES envisages the

establishment of a unit for the Manufacturing of RAW

AGARABATTIS with an annual capacity of 7,20,000 Kgs /

annum
 Name of the Promoter:

 Smt Pasupuleti Venkata Lakshmi

Project Cost /  The Total Project cost for the proposed unit is estimated

Means of and works out to Rs. 60.61 Lakh

 The project is proposed to be funded through term loan
Finance
from bank to an extent of Rs. 37.97 Lakh and Equity of Rs.

22.64 Lakh
 The Debt Equity Ratio of the project works out to 1.68:1

PA R T I C U L A R S AMOUNT PA R T I C U L A R S AMOUNT

LAND Lease C A P I TA L 22.64

BUILDINGS 29.00 TERM LOAN 37.97

(19.14+18.83)

PLANT & 21.61

M A C H I N E RY

ELECTRICALS 3.50

WORKING 6.50
C A P I TA L M a r g i n

TO TA L 60.61 TO TA L 60.61

Means of Finance:

Capital : 22.64

Limits Required
Term Loan : 37.97

Working Capital : 19.50

Total : 57.47 Lacs

Promoters Contribution : 37.35 %

Debt / Equity : 1.68:1
Manufacturing The Firm proposed to Manufacture Raw Agarabattis by a simple

Process & and proven technology.

Technology

Raw Materials & The Raw Material required for Manufacturing of

Raw Agarabattis a r e S a w D u s t , C h a r c o a l P o w d e r,
Consumables
Jiggets and Sticks are available in and around
Andhra Pradesh etc., .This being the first Firm
w i t h a n a n n u a l c a p a c i t y o f 7,20,000 Kgs / annum.

Hence the Firm does not anticipate any problem in

procuring the required raw materials for this Firm .
The partner already made necessary arrangements
to procure the raw materials from the relevant and
reputated suppliers in and around Andhra Pradesh,
Te l a n g a n a , Ta m i l N a d u a n d K a r n a t a k a .

Utilities Power: The total connected load to the plant is 30 HP.

Water: Water is required for domestic 1 KLD purpose. There is

one bore well present and no scarcity in water.

Pollution Control: The technology adopted by the Firm is eco

friendly.

Market The Firm is in the process of having tie-ups with the clients.

Arrangements
The main and one of the objective of the firm is already have an

MoU with Tata AF for purchase of 30,000 Kgs per month ie., 50%
 of the production per month by the firm.

So, the rest 50% is going to hit the open market as well as the

partners are having discussions with other Brands already

playing a key role in the Agarabatti business

Approvals M/s KASINADH ENTERPRISES has to be obtained approvals

for, Consent order for establishment from AP Pollution Board,

Electricity Feasibility certificate from The APEPDCL, Consent

from Factories department, Consent for establishment from

Panchayat.
 INTRODUCTION

Raw Agarabattis
Incense is aromatic biotic material which releases fragrant smoke when burned. The
term refers to the material itself, rather than to the aroma that it produces. Incense is
used for aesthetic reasons, and in therapy, meditation, and ceremony. It may also be
used as a simple deodorant or insectifuge.
Incense is composed of aromatic plant materials, often combined with essential
oils. The forms taken by incense differ with the underlying culture, and have changed
with advances in technology and increasing diversity in the reasons for burning
it. Incense can generally be separated into two main types: "indirect-burning" and
"direct-burning". Indirect-burning incense (or "non-combustible incense") is not capable
of burning on its own, and requires a separate heat source. Direct-burning incense (or
"combustible incense") is lit directly by a flame and then fanned or blown out, leaving a
glowing ember that smoulders and releases fragrance. Direct-burning incense is either
a paste formed around a bamboo stick, or a paste that is extruded into a stick or cone
shape.
History
The word incense comes from Latin for incendere meaning "to burn".
Combustible bouquets were used by the ancient Egyptians, who employed incense
within both pragmatic and mystical capacities. Incense was burnt to counteract or
obscure malodorous products of human habitation, but was widely perceived to also
deter malevolent demons and appease the gods with its pleasant aroma. Resin balls
were found in many prehistoric Egyptian tombs in El Mahasna, furnishing tangible
archaeological substantiation to the prominence of incense and related compounds
within Egyptian antiquity. One of the oldest extant incense burners originates from
the 5th dynasty. The Temple of Deir-el-Bahari in Egypt contains a series of carvings that
depict an expedition for incense.
The Babylonians used incense while offering prayers to divining oracles. Incense
spread from there to Greece and Rome.
Incense burners have been found in the Indus Civilization (3300–1300 BCE). Evidence
suggests oils were used mainly for their aroma. India also adopted techniques from
East Asia, adapting the inherited formulation to encompass aromatic roots and other
indigenous flora. This comprised the initial usage of subterranean plant parts within the
fabrication of incense. New herbs like Sarsaparilla seeds, frankincense,
and cypress were used by Indians for incense.
At around 2000 BCE, Ancient China began the use of incense in the religious sense,
namely for worship. Incense was used by Chinese cultures from Neolithic times and
became more widespread in the Xia, Shang, and Zhou dynasties. The earliest
documented instance of incense utilization comes from the ancient Chinese, who
employed incense composed of herbs and plant products (such
as cassia, cinnamon, styrax, sandalwood, amongst others) as a component of
numerous formalized ceremonial rites. Incense usage reached its peak during the Song
Dynasty with numerous buildings erected specifically for incense ceremonies.
Brought to Japan in the 6th century by Korean Buddhist monks, who used the mystical
aromas in their purification rites, the delicate scents of Koh (high-quality Japanese
incense) became a source of amusement and entertainment with nobles in the Imperial
Court during the Heian Era 200 years later. During the 14th century Shogunate,
a samurai warrior might perfume his helmet and armor with incense to achieve an aura
of invincibility (as well as to make a noble gesture to whomever might take his head in
battle). It wasn't until the Muromachi Era during the 15th and 16th century that incense
appreciation (kōdō) spread to the upper and middle classes of Japanese society.
Composition
A variety of materials have been used in making incense. Historically there has been a
preference for using locally available ingredients. For example, sage and cedar were
used by the indigenous peoples of North America. Trading in incense materials
comprised a major part of commerce along the Silk Road and other trade routes, one
notably called the Incense Route.
Local knowledge and tools were extremely influential on the style, but methods were
also influenced by migrations of foreigners, among them clergy and physicians who
were both familiar with incense arts.
Combustible base

A Räucherkerzchen - A charcoal-based incense cone

The combustible base of a direct burning incense mixture not only binds the fragrant
material together but also allows the produced incense to burn with a self-sustained
ember, which propagates slowly and evenly through an entire piece of incense with
such regularity that it can be used to mark time. The base is chosen such that it does
not produce a perceptible smell. Commercially, two types of incense base predominate:

 Fuel and oxidizer mixtures: Charcoal or wood powder forms the fuel for the
combustion. Gums such as Gum Arabic or Gum Tragacanth are used to bind the
mixture together while an oxidizer such as sodium nitrate or potassium
nitrate sustains the burning of the incense. Fragrant materials are combined into the
base prior to formation as in the case of powdered incense materials or after
formation as in the case of essential oils. The formula for the charcoal-based
incense is superficially similar to black powder, though it lacks the sulfur.
 Natural plant-based binders: Mucilaginous material, which can be derived from
many botanical sources, is mixed with fragrant materials and water.
The mucilage from the wet binding powder holds the fragrant material together while
the cellulose in the powder combusts to form a stable ember when lit. The dry
binding powder usually comprises about 10% of the dry weight in the finished
incense. This includes:
 Makko (incense powder): made from the bark of various trees from
the Persea such as Persea thunbergii)
 Xiangnan pi (made from the bark of Phoebe genus trees such as Phoebe
nanmu, Persea zuihoensis.
 Jigit: a resin based binder used in India
 Laha or Dar: bark based powders used in Nepal, Tibet, and other East
Asian countries.
Types
Incense materials are available in various forms and degrees of processing. They can
generally be separated into "direct-burning" and "indirect-burning" types depending on
use. Preference for one form or another varies with culture, tradition, and personal
taste. Although the production of direct- and indirect-burning incense are both blended
to produce a pleasant smell when burned, the two differ in their composition due to the
former's requirement for even, stable, and sustained burning.
Indirect-burning
Indirect-burning incense, also called "non-combustible incense",is a combination of
aromatic ingredients that are not prepared in any particular way or encouraged into any
particular form, leaving it mostly unsuitable for direct combustion. The use of this class
of incense requires a separate heat source since it does not generally kindle a fire
capable of burning itself and may not ignite at all under normal conditions. This incense
can vary in the duration of its burning with the texture of the material. Finer ingredients
tend to burn more rapidly, while coarsely ground or whole chunks may be consumed
very gradually as they have less total surface area. The heat is traditionally provided
by charcoal or glowing embers.
In the West, the best known incense materials of this type are frankincense and myrrh,
likely due to their numerous mentions in the Christian Bible. In fact, the word for
"frankincense" in many European languages also alludes to any form of incense.

 Whole: The incense material is burned directly in its raw unprocessed form on
top of coal embers.
 Powdered or granulated: The incense material is broken down into finer bits.
This incense burns quickly and provides a short period of intense smells.
 Paste: The powdered or granulated incense material is mixed with a sticky and
incombustible binder, such as dried fruit, honey, or a soft resin and then formed to
balls or small pastilles. These may then be allowed to mature in a controlled
environment where the fragrances can commingle and unite. Much Arabian incense,
also called "Bukhoor" or "Bakhoor", is of this type (Bakhoor actually refers to
frankincense in Arabic) and Japan has a history of kneaded incense, called nerikō
or awasekō, using this method.[18] Within the Eastern Orthodox Christian tradition,
raw frankincense is ground into a fine powder and then mixed with various sweet-
smelling essential oils.

Direct-burning
Direct-burning incense also called "combustible incense",is lit directly by a flame. The
glowing ember on the incense will continue to smoulder and burn away the rest of the
incense without continued application of heat or flame from an outside source. Direct-
burning incense is either extruded, pressed into forms, or coated onto a supporting
material. This class of incense is made from a moldable substrate of fragrant finely
ground (or liquid) incense materials and odourless binder. The composition must be
adjusted to provide fragrance in the proper concentration and to ensure even burning.
The following types of direct-burning incense are commonly encountered, though the
material itself can take virtually any form, according to expediency or whimsy:

 Coil: Extruded and shaped into a coil without a core. This type of incense is able
to burn for an extended period, from hours to days, and is commonly produced and
used by Chinese culture.

 Cone: Incense in this form burns relatively fast. Incense cones were invented in
Japan in the 1800s.
 Cored stick: This form of stick incense has a supporting core of bamboo. Higher
quality varieties of this form have fragrant sandalwood cores. The core is coated by
a thick layer of incense material that burns away with the core. This type of incense
is commonly produced in India and China. When used for worship in Chinese folk
religion, cored incensed sticks are sometimes known as "joss sticks".
 Solid stick: This stick incense has no supporting core and is completely made of
incense material. Easily broken into pieces, it allows one to determine the specific
amount of incense they wish to burn. This is the most commonly produced form of
incense in Japan and Tibet.
 Powder: The loose incense powder used for making indirect burning incense is
sometimes burned without further processing. They are typically packed into long
trails on top of wood ash using a stencil and burned in special censers or incense
clocks.
 Paper: Paper infused with incense, folded accordion style, lit and blown out.
Examples are Carta d'Armenia and Papier d'Arménie.
 Rope: The incense powder is rolled into paper sheets, which are then rolled into
ropes, twisted tightly, then doubled over and twisted again, yielding a two-strand
rope. The larger end is the bight, and may be stood vertically, in a shallow dish of
sand or pebbles. The smaller (pointed) end is lit. This type of incense is highly
transportable and stays fresh for extremely long periods. It has been used for
centuries in Tibet and Nepal.

The disks of powdered mugwort called 'moxa' sold in Chinese shops and herbalists are
used in Traditional Chinese medicine for moxibustion treatment. Moxa tablets are not
incenses; the treatment relies on heat rather than fragrance.
Raw Agarabattis may be termed joss sticks, especially in parts of East Asia, South
Asia and Southeast Asia. Among ethnic Chinese and Chinese-influenced communities
they are traditionally burned before the threshold of a home or business, before an
image of a Chinese popular religion divinity or spirit of place, or in small and humble or
large and elaborate shrine found at the main entrance to each and every village. Here
the earth god is propitiated in the hope of bringing wealth and health to the village. They
can also be burned in front of a door, or open window as an offering to heaven, or
the devas. The word "joss" is derived from the Latin deus (god) via the
Portuguese deos through the Javanese dejos, through Chinese pidgin English. They
are also burned at temples across many parts of East, South and Southeast Asia.

SCOPE OF THE PROJECT

This article identifies Raw Agarabattis are for Cultural and accumulative preperations.

The project envisages setting up Raw Agarabattis unit. The installed capacity of the unit
is 7,20,000 Kgs / annum in working days. The operating capacity is 60%, 70%&80%
in 1st, 2nd& 3rd year on works. The unit is eligible or all incentives as per latest industrial
policies

CONSTITUTIONS AND SECTORS

CONSTITUTION:

The Firm by name and style “KASINADH ENTERPRISES ”. The

line of activity is to Manufacture of Raw Agarabattis. The Firm
i s p r o p o s e d t o s e t u p a t Sy No 445-2, Mukkolu Village, Kirlampudi Mandal, East
Godavari Dist. .. T h e F i r m is a Proprietrix concern

SECTOR:

The Firm comes under medium Scale Sector and also under

P r i o ri t y Se c t o r. T h e F i r m has already applied for Registration

Certificate from the District Industries Centre, Kakinada.

 BACKGROUND OF THE PROMOTER
S m t P Ve n k a t a L a k s h m i : S ol e P r o p r i e t r i x :

S m t P Ve n k a t a L a k s h m i W / o S r i P C h a n d r a S e k h a r , a g e d a b o u t 4 7

years, residing at 1 9 - 7 - 6 2 , M a n t r i p r a g a d a Va r i S t , N e a r K u s u m a

Nursing Home, Kakinada, East Godavari hailing from respectable

f a m i l y. S h e i s a G r a d u a t e . S h e i s h a v i n g s o m e s o r t o f e x p e r i e n c e i n

Accountablitiy etc. She is the Sole proprietrix of the Firm and She

i s a n I n c o m e Ta x a s s e s s e . B e s i d e s , h e r s o n M r . P Sai Manish will

manage the day to day schedule of the proposed firm. He is a

Graduate and he is a technocrat and he posses some hands on

e x p e r i e n c e i n t h e s a m e l i n e o f a c t i v i t y.

NAME Smt P Venkata Lakshmi

HUSBANDS Sri P Chandra Sekhar

NAME

ADDRESS 19-7-62, Mantripragada

Va r i St, Near Kusuma
Nursing Home, Kakinada,
East Godavari

PAN CARD ALYPP5419M

AADHAR CARD 8300 9866 6716

CELL NO +91-84989 58123

EMAIL manish.pasupuleti@gmail.com
 PRODUCT AND ITS APPLICATIONS

The burning of Raw Agarabattis in religious and social functions has been practised in
India and many other countries in the world. Incense ( Latin : incendere, "to burn") is
composed of aromatic biotic materials, which release fragrant smoke when burnt. The
term incense refers to the substance itself, rather than to the odor it produces. Many
religious ceremonies and spiritual purificatory rites employ incense, a practice that
persists to this day. The use of incense dates back to biblical times. The Babylonians
used incense extensively while offering prayers to divining oracles . In India , some
2000 BC, various writings mention ' perfumers ' and 'incense sellers'. Evidence
suggests that such oils were used mainly for their aroma.

Agarbatti industry in India is a labour intensive cottage industry. Karnataka State is the
leading producer with Mysore and Bangalore cities being the focal centres. Nearly 1000
units reportedly exist in the State of Karnataka . Moreover, it is an export-oriented
industry.

The Raw Agarabattis industry in India has promoted social entrepreneurship in the
rural and semi urban areas as more people are coming forward to start their
enterprises. Some reputed Indian corporate have also taken the lead in promoting this
trend by training rural women in bamboo cutting, incense rolling, raw incense sorting,
perfuming and packaging of Raw Agarabattis . The entry of corporate has helped in
mechanization at each step of the manufacturing process.

Agarbattis are available in different colours and aromas. The burning time of an
agarbatti varies from 15 minutes to 3 hours depending upon the quality and size. Some
of the popular fragrances that have captured the imagination of consumers both in India
and abroad include Mogra, Dhoop, Saffron, Sandal, Kasturi, Rose, Nag Champa ,
Jasmine, Lavender , Champa , Lily, Cherry, Lemon, Orange, Spices. It is also available
in 3-in-1 and 5-in-1 packs giving the consumer a choice of multiple fragrances in a
single pack. These agarbattis are available in innovative 'Fragrance-Locked' packaging.
 INCENSE IN INDIA

India is the world's main incense producing country, and is a healthy exporter to other
countries (though export sales have been troubled by increasing costs of the raw
materials, and by other factors, such as Western countries buying unperfumed sticks,
and by Indian companies producing fakes or imitations). Incense burning has taken
place in India for thousands of years, and India exported the idea to China and Japan,
and other Asian countries.
The main method of burning incense in India is the Raw Agarabattis or agarbathi. The
basic ingredients of an Raw Agarabattis are bamboo sticks, paste (generally made of
charcoal dust or sawdust and joss/jiggit/gum/tabu powder – an adhesive made from the
bark of litsea glutinosa and other trees), and the perfume ingredients – which
traditionally would be a masala (powder of ground ingredients), though more commonly
is a solvent of perfumes and/or essential oils. After the base paste has been applied to
the bamboo stick, it is either, in the traditional method, while still moist, immediately
rolled into the masala, or, more commonly, left for several days to dry, and then dipped
into the scented solvent. Various resins, such as amber, myrrh, frankincense, and
halmaddi are used in traditional masala incense, usually as a fragrant binding
ingredient, and these will add their distinctive fragrance to the finished incense. Some
resins, such as gum Arabic, may be used where it is desirable for the binding agent to
have no fragrance of its own. Halmaddi has a particular interest to Western
consumers, possibly through its association with the popular Satya Nag Champa. It is
an earth coloured liquid resin drawn from the Ailanthus triphysa tree; as with other
resins, it is a viscous semi-liquid when fresh, it hardens to a brittle solid as it evaporates
and ages. Some incense makers mix it with honey in order to keep it pliable. Due to
crude extraction methods which resulted in trees dying, by the 1990s the Forest
Department in India had banned resin extraction; this forced up the price of halmaddi,
so its usage in incense making declined. In 2011, extraction was allowed under leasing
agreements, which increased in 2013, though production is still sufficiently limited for
the resin to sometimes be stolen via improper extraction to be sold on the black market.
The bamboo method of incense making originated in India, and is distinct from the
Nepal/Tibet and Japanese methods of stick making in which a bamboo stick is not
used. Though the method is also used in the west, particularly in America, it is strongly
associated with India. Other main forms of incense are cones and logs and Benzoin
resin ( In Sanskrit Saambraani), which are incense paste formed into pyramid shapes or
log shapes, and then dried.
A uniform and codified system of incense-making first began in India.
Although Vedic texts mention the use of incense for masking odors and creating a
pleasurable smell, the modern system of organized incense-making was likely created
by the medicinal priests of the time. Thus, modern, organized incense-making is
intrinsically linked to the Ayurvedic medical system in which it is rooted.
 PROCESS

The raw materials are powdered and then mixed together with a binder to form a paste,
which, for direct burning incense, are then cut and dried into pellets. Incense of
the Athonite Orthodox Christian tradition are made by powdering frankincense
or fir resin, mixing it with essential oils. Floral fragrances are the most common, but
citrus such as lemon is not uncommon. The incense mixture is then rolled out into a
slab approximately 1 cm thick and left until the slab has Firmed. It is then cut into small
cubes, coated with clay powder to prevent adhesion, and allowed to fully harden and
dry. This rolled incense resin is called 'Moskolibano', and generally comes in either a
pink or green colour denoting the fragrance, with pink being rose and green being
jasmine.

In order to obtain desired combustion qualities, attention has to be paid to certain

proportions in direct burning incense mixtures:

 Oil content: Resinous materials such as myrrh and frankincense must not
exceed the amount of dry materials in the mixture to such a degree that the incense
will not smolder and burn. The higher the oil content relative to the dry mass, the
less likely the mixture is to burn effectively. Typically the resinous or oily substances
are balanced with "dry" materials such as wood, bark and leaf powders.
 Oxidizer quantity: The amount of chemical oxidizer in gum-bound incense must
be carefully proportioned. If too little, the incense will not ignite, and if too much, the
incense will burn too quickly and not produce fragrant smoke.
 Mixture density: Incense mixtures made with natural binders must not be
combined with too much water in mixing, or over-compressed while being formed,
which would result in either uneven air distribution or undesirable density in the
mixture, causing the incense to burn unevenly, too slowly, or too quickly.
 Particulate size: The incense mixture has to be well pulverized with similarly
sized particulates. Uneven and large particulates result in uneven burning and
inconsistent aroma production when burned.
 Binder: Water-soluble binders such as "makko" have to be used in the right
proportion to ensure that the incense mixture does not crumble when dry but also
that the binder does not take up too much of the mixture.

Some kinds of direct-burning incense are created from "incense blanks" made of
unscented combustible dust immersed into any suitable kind of essential or fragrance
oil. These are often sold in America by flea-market and sidewalk vendors who have
developed their own styles. Such items are often known as "dipped" or "hand-dipped"
incense. This form of incense requires the least skill and equipment to manufacture,
since the blanks are pre-formed in China or South East Asia, then simply scented with
essential oils.
Incense mixtures can be extruded or pressed into shapes. Small quantities of water are
combined with the fragrance and incense base mixture and kneaded into a hard dough.
The incense dough is then pressed into shaped forms to create cone and
smaller coiled incense, or forced through a hydraulic press for solid stick incense. The
formed incense is then trimmed and slowly dried. Incense produced in this fashion has
a tendency to warp or become misshapen when improperly dried, and as such must be
placed in climate-controlled rooms and rotated several times through the drying
process.
Traditionally, the bamboo core of cored stick incense is prepared by hand
from Phyllostachys heterocycla cv. pubescens since this species produces thick wood
and easily burns to ashes in the Raw Agarabattis . Through this process, known as
"splitting the foot of the Raw Agarabattis ", the bamboo is trimmed to length, soaked,
peeled, and then continuously split in halves until thin sticks of bamboo with square
cross sections of less than 3mm This process has been largely been replaced by
machines in modern incense production.
In the case of cored incensed sticks, several methods are employed to coat the sticks
cores with incense mixture:

 Paste rolling: A wet, malleable paste of incense mixture is first rolled into a long,
thin coil, using a paddle. Then, a thin stick is put next to the coil and the stick and
paste are rolled together until the stick is centered in the mixture and the desired
thickness is achieved. The stick is then cut to the desired length and dried.
 Powder-coating: Powder-coating is used mainly to produce cored incense of
either larger coil (up to 1 meter in diameter) or cored stick forms. A bundle of the
supporting material (typically thin bamboo or sandalwood slivers) is soaked in water
or a thin water/glue mixture for a short time. The thin sticks are then evenly
separated, then dipped into a tray of incense powder, consisting of fragrance
materials and occasionally a plant-based binder. The dry incense powder is then
tossed and piled over the stick while they are spread apart. The sticks are then
gently rolled and packed to maintain roundness while more incense powder is
repeatedly tossed onto the sticks. Three to four layers of powder are coated onto
the sticks, forming a 2 mm thick layer of incense material on the stick. The coated
incense is then allowed to dry in open air. Additional coatings of incense mixture can
be applied after each period of successive drying. Raw Agarabattis that are burned
in temples of Chinese folk religion produced in this fashion can have a thickness
between 2 and 4 millimeters.
 Compression: A damp powder is mechanically formed around a cored stick by
compression, similar to the way uncored sticks are formed. This form is becoming
more commonly found due to the higher labor cost of producing powder-coated or
paste-rolled sticks.
Burning incense
For indirect-burning incense, pieces of the incense are burned by placing them directly
on top of a heat source or on a hot metal plate in a censer or thurible.
In Japan a similar censer called a egōro ( 柄 香 炉 ) is used by several Buddhist sects.
The egōro is usually made of brass with a long handle and no chain. Instead of
charcoal, makkō powder is poured into a depression made in a bed of ash. The makkō
is lit and the incense mixture is burned on top. This method is known as sonae-
kō (religious burning).
For direct-burning incense, the tip or end of the incense is ignited with a flame or other
heat source until the incense begins to turn into ash at the burning end. Flames on the
incense are then fanned or blown out, with the incense continuing to burn without a
flame on its own.
 QUANTITY CONTROLS AND STANDARDS

Bureau of Indian Standards has formulated a Standard Specification for Raw

Agarabattis is
IS - 13582 for Agrarabattis standard in India
 RAW MATERIALS

The raw materials required for manufacture of Agarabattis are:

1. Saw Dust

2. Charcoal Powder

3. Jigget

4. Sticks

Saw Dust: Sawdust is flammable and accumulations

provide a ready source of fuel. Airborne sawdust can be
ignited by sparks or even heat accumulation and result in
explosions.This is used as one of the Raw material for
Raw Agarabattis .

Charcoal Powder: Activated charcoal is used for the

medicinal uses. It can binds the poison and prevents its
absorption. Its used as one of the raw material in Raw
Agarabattis for the good respiratory uses.

Jigget: Jigget Powder or Gaur Gum Powder for binding

of Saw dust and Charcoal to used in Raw Agarabattis .
 MARKET POTENTIAL

India has a leadership position in agarbatti production and fulfils more than half of the
world's Raw Agarabattis requirements. India exports Agarbatti to nearly 90 countries.
Export earnings have crossed Rs. 400 crore mark while the domestic market is
expected to be nearly 2000 crore. Every year more than 1000 billion sticks are
produced and the market is growing at a rate of 7% per year. Further value addition
occurs when incense paste is hand-rolled on to the sticks to make “raw” Raw
Agarabattis , which are later perfumed to obtain finished Raw Agarabattis .
The Raw Agarabattis market faces a sudden upsurge in demand during the festive
season. Demand from both domestic and international sectors peaks up during festivals
like Dussehra and Diwali. The market for Raw Agarabattis is very vast and the demand
for these Raw Agarabattis is high even in the far-flung rural areas. The incense industry
is driven by factors other than commerce like tradition, superstition and religion.

There are about 5,000 incense companies in India which take raw un-perfumed sticks
hand-rolled by approximately 200,000 women working part-time at home, apply their
own brand of perfume, and package the sticks for sale. An experienced home-worker
can produce 4,000 raw sticks a day. There are about 25 main companies, who together
account for up to 30% of the market, and around 500 of the companies, including a
significant number of the main companies, are based in Bangalore.
The state of Karnataka, referred to as the Capital of Agarbathi (Raw Agarabattis ), is the
leading producer of the agarbathi in India, with Mysore and Bangalore being the main
manufacturing centres. The Mysore region is recognised as a pioneer in the activity of
agarbathi manufacturing and this is one of the main cluster activities that exist in the
city. In recent years, growth in the production of agarbathi (Raw Agarabattis ), Dhoop-
Deep has been seen in every part of India. There are plenty of manufacturers in
Maharashtra and Gujrat and the western India agarbatti market is totally dominated by
them.

India is largest Raw Agarabattis maker and currently the export market for the sector is
about Rs 450 crore.

The export sector is growing at 15-20% as demand is growing in a few Latin American
countries, officials said adding the domestic demand is expanding at the rate of 3-4%.

The Raw Agarabattis industry size is pegged at Rs 5,000 crore of which organised
players account for about 50%.
 LICENSE

The following licenses will be required for the Starting up the Industry:

1. Udyog Aadhar
2. Panchayati
3. Inspector of Factories
4. Pollution
5. Electricity
6. GST
7. Town & Country Planning
8. Fire Safety Measures
 INCENTIVES / SUBSIDIES

The following incentives are available for Micro and Small Enterprises (MSE’s):

1. 100% reimbursement of Stamp duty and transfer duty paid by the industry on
purchase of land meant for industrial use.
2. 100% reimbursement of Stamp duty for Lease of Land/Shed/Buildings and also
mortgages and hypothecations.
3. 25% rebate in land cost limited to Rs. 10.00 Lakhs in Industrial Estates/ Industrial
Parks.
4. 25% Land conversion charges for industrial use limited to Rs. 10.00 lakhs.
5. Fixed power cost reimbursement @ Rs.0.75 per unit (upper ceiling) on the
proposed revised rate for 5 years from the date of commencement of
commercial production. Incase decrease in Power Tariff; the reimbursement will
be reduced proportionately.
6. 15% investment subsidy on fixed capital investment subject to a maximum of Rs.
20.00 Lakhs.
7. Reimbursement of 100% SGST/IGST/CGST for a period of 5 years from the date
of commencement of commercial production to Micro Enterprises.
8. Reimbursement of 50% SGST/IGST/CGST for a period of 5 years from the date
of commencement of commercial production to Small Enterprises.
9. Interest subsidy under PavalaVaddi Scheme on the term loan taken on the fixed
capital investment by New Micro and Small enterprises in excess of 3% per
annum subject to a maximum reimbursement of 9% per annum for a period 5
years from the date of commencement of commercial production.
10. Seed capital assistance to First Generation entrepreneurs to set-up Micro
Enterprises @ 10% of the Machinery cost , which will be deducted from the
eligible investment subsidy
11. 50% reimbursement of cost involved in skill up gradation and training the local
man power limited to Rs.2000 per person.
12. 50% subsidy on the expenses incurred for quality certification / patent
registration limited to Rs. 2.00 Lakhs for MSE’s
13. 25% subsidy on specific cleaner production measures limited to Rs. 5.00 lakhs.
14. To extend investment subsidy to the identified service activities related to
industries setup in all Municipal Corporation limits in the state as per the list
appended as Annexure-II

LOCATION AND ITS ADVANTAGES

 LAND: The proposed location of the Unit is situated Sy No 445-2, Mukkolu Village,
Kirlampudi Mandal, East Godavari Dist. . The location of the industry has
considerable influence on the techno-economical facility of the project. There are
various factors contributing to the functioning of an industry and following are the
primary factors taken into consideration.

REASONS FOR THE SELECTION OF THE SITE:

1. Availability of labor at economically rate.

2. Adequate supply of electricity power.
3. Adequate supply of water throughout the year.
4. The site is well connected with road facility.
5. Banking facilities and Government supports.
1. Adequate Transport facilities for economical transportation of finished product
and Spare parts.
7. Nearness to the Market.
8. As the area is developed area, the setting up of a unit in this will help the
people to progress both socially and economically.
 PROJECT COST & MEANS OF FINANCE

(Rs. in Lakhs)

PA R T I C U L A R S AMOUNT PA R T I C U L A R S AMOUNT

LAND Lease C A P I TA L 22.64

BUILDINGS 29.00 TERM LOAN 37.97

(19.14+18.83)

PLANT & 21.61

M A C H I N E RY

ELECTRICALS 3.50

WORKING 6.50
C A P I TA L M a r g i n

TO TA L 60.61 TO TA L 60.61

Means of Finance:

Capital : 22.64

Limits Required
Term Loan : 37.97

Working Capital : 19.50

Total : 57.47 Lacs

Promoters Contribution : 37.35 %

Debt / Equity : 1.68:1

NOTES ON PROJECT COST

Land & Buildings:

The site located at # Sy No 445-2, Mukkolu Village, Kirlampudi Mandal, East Godavari
Dist. which is very viable for the proposed unit. The promoter is looking up to lease the
above said land.

Buildings:

The Firm will proposed to Construct the premises with area of

4000 Sq. ft with all necessary amenities at cost of Rs. 29.00

Lacs.

sl Description Extent Amount

Main Shed 4000 SFT 24,00,000.00

1.

2 Sanitation 2,00,000.00

3 Overhead Tanks 1,50,000.00

4 Borewells 1,00,000.00

5 Pipelines 50,00,000.00
TOTAL 29,00,000.00

Electricals and Electrification:

The following electrical works worth of Rs. 3.50 Lacs are required to run the firm, The
promoters had already approached reputed suppliers:

Plant &Machinery:

The following machinery worth of Rs 21.61 lacs are required to

run the Firm . The promoter had already approached reputed
suppliers, and obtained quotations and enclosed the same for
your reference.

Description Quantity Image

Fully Automatic Agarabathi high speed
Machine with water coolant & pendulum 10
auto feeder with CNC control.

Powder mixing machine (50 Kg. Capacity) 2

Powder Filtering machine 2

Agarbathi Dyer Machine 200 Kg. Capacity 5

Batti Counter Meter 10

LIST OF THE MACHINERY

Machinery Qty Unit Price

Fully Automatic Agarabathi high speed Machine with water

coolant & pendulum auto feeder with CNC control. 10 13,50,000.00
Powder mixing machine Grinder 2 70,000.00
Incense Powder Filtering Machine 2 70,000.00
Agarbathi Dyer Machine 1000 Kg. Capacity 5 1,75,000.00
Batti Counting Meter 10 50,000.00
Wooden Packing Cost 66,500.00
Installation , Training QC Testing and Molding 50,000.00
Taxes GST 18% 3,29,670.00
TOTAL 21,61,170.00

Working Capital Margin:-

An amount of Rs 6.50 lacs provided towards margin for working capital for availing
working capital facility of Rs. 19.50 lacs to run the unit in smooth levels. The detailed
working requirement placed as annexure
 NOTES ON MEANS OF FINANCE

1. CAPITAL:
The promoter’s capital was fixed at Rs. 22.64 Lacs which is works 37.35 %of the
project cost of Rs. 60.61 lacs.

2. TERM LOAN:
The unit desires to avail a Term Loan of Rs 37.97 Lacs from Bank/Financial Institute
to meet part cost of the project cost, which works out to 62.65 % of the total project
cost of Rs. 60.61 lacs. The amount would be repayable in 28 quarterly installments
of Rs 1.36 lacs each with a moratorium of six months from the date of
commencement of Commercial Production. However, the interest on the term loan
would be payable as and when it is applied on the account. The detail of the
repayment programmed is placed in this report.
3.WORKING CAPITAL:
The unit desires to avail Working capital of Rs. 19.50 Lacs from Bank/ Financial
Institute to run the unit smoothly.
 UTILITIES AND SERVICES

POWER:

The Firm requires 30 H.P. of power supply under L.T. Limits. No problems are
anticipated with regard to obtaining of power supply.

WATER:

The Firm requires 500 K Liters of water per day, for domestic purpose. A provision is
made for bore well and overhead tank in the scheme under the head Civil Works.

EFFLUENTS:

There are no harmful effluents generated in the process. Pollution free industry. No
approval is required.

TRANSPORTATION:

The proposed Firm is located at Sy No 445-2, Mukkolu Village, Kirlampudi Mandal,

East Godavari Dist. from the proposed location. There is no problem for transportation
of raw material and finished goods.

MANPOWER REQUIREMENTS:

The Firm will be employing 15 No of workers besides 3 No of administrative staff. All

the above persons can be recruited locally without any difficulties.
.
IMPLEMENTATION SCHEDULE

The schedule of implementation of the project is as under:

S.N Particulars Month Month

o Start Completio
n
01. Acquisition of Land Lease Lease
02. Civil Constructions Aug 2018 Oct 2018

03. Plant & Machinery Indigenous Aug 2018 Aug 2018

Placement of Order
04. Arrangement for Power Aug 2018 Aug 2018

05. Arrangement for Water Aug 2018 Aug 2018

06. Erection of Equipment Oct 2018 Nov 2018

07. Initial Procurement of Raw Nov 2018 Dec 2018

Material and Chemical.
08. Tr a i n i n g o f P e r s o n n e l Jan 2019 Feb 2018

09. Tr i a l R u n Feb 2019 Feb 2019

10. Commercial Production Feb 2019 Mar 2019

 SWOT ANALYSIS

STRENGTH:

The unit is located at Door No Sy No 445-2, Mukkolu Village, Kirlampudi Mandal,

East Godavari Dist. The unit is eligible for other Govt. concessions. The promoters are
having vast experience in the same line of activity

WEAKNESS:

The unit has competition from the existing units as the proposed unit is having
latest technology and by the government encouragements to start new industry the
units can competent with the old industries.
ASSUMPTIONS UNDERLYING PROJECTIONS FOR COST OF PRODUCTION AND
PROFITABILITY STATEMENT

Installed Capacity per machine: 15 Kgs / Hr

Total No. of machines : 10 No’s i.e., 10x15=150 Kgs/ Hr

No. of Hrs per shift : 8 Hrs

No. of Shifts per day: 2 shifts i.e., 2x8=16 Hrs

Installed Capacity : 16x150=2400 Kgs / day

No of working in year : 300 days

Total Installed Capacity : 2400x300= 7,20,000 Kgs / annum

Operating capacity is assumed as under:

1st Year 2nd Year 3rd Year

Capacity Utilization 60% 70% 80%

Agarabatti In Kgs 4,32,000 5,04,000 5,76,000

Raw material: ( For 2019-20)

The total raw material cost per kg is Rs. 44.27/-

Required Raw Material per annum @ 2% wastage = 440640 Kgs

Total Amount for Raw materials per annum = 440640 X44.27= Rs. 195,05,168.00

or say Rs. 195.05 Lacs

WAGES: ( For 2019-20)

Skilled Workers : 10 x 6000 x 12 = 7,20,000.00

Unskilled Workers : 8 x 5000x 12 = 3,60,000.00

10,80,000.00

Or say Rs.10.80 lacs

POWER CHARGES: ( For 2019-20)

30x16x300x.746x.60x.80x6.50= Rs. 3,35,162.88

Repairs & Maintenance, Manufacturing Expenses: ( For 2019-20)

Repairs & Maintenance of Plant & Machinery and Buildings are estimated as 5% on
value or Rs.3.00 lacs as it is considered reasonable keeping in view of the similar
industries. Manufacturing Expenses are estimated as Rs. 0.60 Lacs

Rates, Taxes & Insurance ( For 2019-20)

An amount of Rs.2.40 lacs has been provided for Rent, Rates and Taxes per annum
which is considered reasonable.

Other Administrative Expenses: ( For 2019-20)

A lump sum Rs.4.75 Lacs has been estimated per annum.

Selling Expenses: ( For 2019-20)

Selling expenses are estimated of Rs. 4.75 lacs

Sales : ( For 2019-20)

RAW AGARABATTIS 4,32,000 Kgs X Rs. 55/ Kg = Rs.

237,60,000.00 or say Rs. 237.60 Lacs

Depreciation:-
Depreciation was been calculated on written down value method

Building 10%
Plant & machinery 25%
Interest:-

Interest has been calculated as per effective rate

Term Loan : 12.50 % & Working Capital : 12.75