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Agarbatti Making Business Plan – Start Your Own Profitable Agarbatti Production Unit

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agarbatti making business india

If you want to start your own Agarbatti making business then you have come to right place. In this post you will learn about Agarbatti making process and raw materials required in Agarbatti manufacturing. You will learn about scope in this business, profit margin, agarbatti machines, etc.

Scope of Agarbatti Manufacturing

Every household in India uses Agarbatti on various occasions whether it is religious occasion or festivals. Scope of this business is very high and every small scale manufacturers are making profit from this business. Small scale manufacturers are supplying raw agarbatti to medium scale manufacturers and they are then adding scent in raw agarbatti for selling them at the higher price in the market.

Agarbatti Making Process – Small Scale Manufacturing

Process of agarbatti making is very simple and it is done in various ways. In villages, people are still making agarbatti with hands without using machines. Today, Chinese and Vietnam agarbatti making machines have taken over the Indian market and now manufacturer have shifted to this method of production from traditional method of agarbatti making by hand.

The process involves mixing of raw materials like Jigat powder, charcoal powder and gum powder. The paste is prepared with the help of these raw materials and then they roll that paste into bamboo sticks.

Agarbatti Making Machines

Various machines are required for agarbatti making such as mixture machines, dryer machines and main production machines. Mixture machine is responsible for making paste of raw materials and then main production machine is used to roll that paste in bamboo sticks.

Bamboo Sticks For Agarbatti Manufacturing

Agarbattis or Incense Sticks are kind of a traditional and monopoly manufacturing for India which is the only country in the world that produces Agarbattis and has the pride of exporting it to more than 90 countries such as Singapore, Canada, Srilanka, United States, and China etc.   But, here the pathetic situation of late is that the major raw material for making incense sticks or agarbattis which is Bamboo sticks has gone dry not because we don’t have the resources of the forests have dried up but because of undue strict statutory regulations and ban imposed by Indian Forest Department as per Government rules that cutting and transportation of Bamboo sticks are restricted and if at all plenty of Red Tapism is involved where manufacturers have to obtain several levels of approvals and permissions.

Raw Material Imports Increases Cost of Agarbattis

Another hurdle in procuring these locally and easily available raw material Bamboo is that it grows in tribal areas and to cut and carry them out of the forests they would have to hire these tribal people as laborers which is restricted as per labor laws of India.  Hence, now manufactures and makers of Agarbattis or incense sticks all over India have shifted from procuring them locally to importing from other countries such as China which works out much cheaper than to cut them from local forests and comply to regulations to transport them for manufacturing incense sticks which has become so complicated and a bit more expensive that importing.  In a way we ourselves are adding up the ‘Balance of Payment’ situation and creating imbalance in Indian economy and making other countries like China richer than us.

Demand for Bamboo Sticks is More Than 3000 Tonnes Each Day

The major and organized producers of Agarbattis in India amount to more than 50% of total production and the rest half are unorganized or cottage industry that thrive at small villages and go the labor intensive way to produce incense sticks.  The major organized players in this industry are ITC, Ambika Agarbattis etc.

The incense stick or Agarbatti industry in India is as big as about 3,500 Crore business market share and which thrived on local raw materials of Bamboo is now having to import more than 65 percentage of their major raw materials that is the Bamboo sticks from either Vietnam or China and even major players such as Ambika Agarbattis who hold BSE size of 4.71% currently among the aroma products makers are among the worst hit.

The whole of Agarbatti industry in India taken together is importing their major raw materials that is Bamboo to the tune of more than 260 truck loads and each load is about 10 tonnes every single day for running the show and that cost them dearly on import duties of about 28% and this in spite of the fact our country is richer in Bamboo stick resources than from where we are having to import them.  And all this because of wrong governmental policies on cutting Bamboos and using them to make Agarbattis and the process if adopted, becomes so much cumbersome that it might cost more than the cost of importing these Bamboos from China and Vitenam and the hassles are too large.

Agarbatti Making is a Labor-Intensive Process

BSS Reddy the Principal Chief Forest Conservator of AP in India says that transporting these Bamboo sticks from forests to their production units is one big hassle for our agarbatti manufacturers as they have to prove the fact about source of obtaining these bamboo sticks to the Forest Departments which becomes quite cumbersome and causes frustrations as well as delays.  Ambika Agarbattis is one of the major players among the makers of Agarbattis in India that has a turnover of more than 1350 crores a year by way of making and exporting Agarbattis has declared that they are having to incur an increase of about 30% more in production cost owing to importing raw materials that is Bamboo Sticks from China.

India’s Bamboo Resources Exceeds Demand

Assam in India is one the major sources of their Bamboo stick raw materials and now the situation have changed for the worse thereby making the whole Agarbatti manufacturing industry totally sluggish.  Ramachandra Rao the Ambika Agarbattis Industry Chief has expressed his anguish over these issues which are in a way killing the Agarbatti making industry all over India and small and unorganized players are forced to close down due to non availability of Bamboo sticks for producing.   VM Rajashekharan the CEO of ITC brands of Agarbattis has stated that this is one of the worst situations that this age old Agarbatti making industry is witnessing where we are having to incur huge manufacturing costs with an increase of more than 25% due to having to import Bamboo sticks.  This trend is eventually going to result in

VM Rajashekharan the CEO of ITC brands of Agarbattis has stated that this is one of the worst situations that this age old Agarbatti making industry is witnessing where we are having to incur huge manufacturing costs with an increase of more than 25% due to having to import Bamboo sticks.  This trend is eventually going to result in rise in prices of Indian made Agarbattis and the story is going to turn quite awkward such that countries like China which has an abundance of cheap labor are going to capture this huge potential business and start manufacturing Agarbattis and going to lead India and snatch the world market share.

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7 Comments

7 Comments

  1. hitu

    October 14, 2017 at 3:08 pm

    Sir agarbatti business me distribution channel kaisa hota hai aur unlogo ko kitna margin dena padta hai.

  2. Munaf Meghani

    October 23, 2017 at 5:55 am

    I am from Pune city in Maharashtra.

    I wish to start Agarbatti Business in Pune. I need to know about any agency which you can recommend who shall complete all the necessary permissions/ licences/ statutory requirements, etc.

    I need a loan to buy automatic Agarbatti making machines. This agency should prepare Project Report, submit to bank and follow up till loan is approved.

    Also where can I sell the Agarbatti? I do not wish to spend on marketing and brand building.

    • Rahul katariya

      November 17, 2017 at 7:05 pm

      Call me 81 28 617941

  3. Sachin

    February 28, 2018 at 12:38 pm

    Hi,

    My name is Sachin., I am also looking to start agarbatti production business at small level

  4. Dhawal Bagri

    March 25, 2018 at 6:22 pm

    I want to know if I can be tge dealer for agarbati

  5. DHANRAJ

    May 25, 2018 at 10:30 am

    Hello sir

    I am from Bihar a district named Madhubani i want to start agarbaati business
    the problem is that from where raw material will procurred and cheaply available?

    next will i have to sell to local market or chain marketing

  6. latha

    June 27, 2018 at 10:45 am

    hi dear sir / madam ,

    my name is latha., I am also looking to start agarbatti production business at small level . how much investment start this business ? how much profit will come.

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