Essential Oil Extraction Business – Plan

Essential Oil Extraction Business, plan, ideas to earn huge profits in India

Introduction

Essential oils have an unlimited market globally. Additionally, the demand is growing very fast. Essential oils guarantee lucrative margins. Therefore, opening an essential oil extraction business is a profitable venture for the businesspersons. Here in this blog, we brief a list of chosen 10 essential oil extraction business ideas for your feasibility.

A step-by-step guide, plan to start an Essential Oil Extraction Business in India for profit

Essential Oils
Essential Oils (Image credit: pixabay)

Market potential of Essential Oil Extraction Business

According to the market professionals, the essential oils market is about to attain USD 13.94 billion by 2024. Consumer interest is rising very rapidly. And there are several factors behind it. Increasing awareness and inclination to purchase organic and natural products are major factors contributing to the growth of the essential oils industry. Additionally, the changing of focus from synthetic to natural products is even driving the market growth.

Uses of Essential Oils

Apart from the domestic requirements, the products get a great industrial demand also. Cosmetics, food and beverages industries, pharmaceuticals, etc. are the major clients of different essential oils. Numerous other gainful product characteristics such as antiseptic, anti-inflammatory, aphrodisiac, diuretic, antidepressant, antispasmodic, and tonic are expected to lift essential oil need in industrial, medicinal, and domestic uses.

Business plan for starting an Essential Oil Extraction Business

  • Commercial essential oils extraction needs a strategic economic and marketing plan. You must focus on production, marketing, distribution, and sales promotion.
  • Secondly, it is important to do market analysis at the beginning. Identify the local requirement for the specific essential oils. Also, recognize the basis of raw materials.
  • Essential oils extraction is a capital-intensive business. So, it is recommended to start the business by availing loan from bank or lending money other financial institutions.
  • Check your state’s legal guidelines carefully. Obtain the mandatory licenses and permissions from the concerned authority. Moreover, detect the upcoming tax liabilities.
  • Begin the essential oils manufacturing plant judiciously. If you have an extra area, you can begin the business from home.
  • Prudently select the machinery. Procure the appropriate machinery according to the required production output and standard.
  • Investment, transportation, and labor concerns (cost and availability) drive the essential oils production industry. Therefore, properly calculate the break-even and predicted ROI.
  • Finally, get the manufacturing technology from reliable places. Generally, Government Research centers provide manufacturing technology in return for some costs.

License, permission, and registration required for Essential Oil Extraction Business

For starting a essential oil production unit, you should get several license and registration approvals from different government organizations.

  • Primarily, you must define the management design of your organization. And then as per the design, register your business.
  • Firstly, apply for MSME Udyog Aadhaar which is available as online registration.
  • Then, the important trade license from the local municipality should be applied.
  • The business comes under the food Industry category and requests consent from FSSAI which is also done online.
  • Nowadays it is a must to apply for GST registration.
  • Try to create a current account in any of the nearby banks.
  • Then it is important to apply for the BIS certification. The product must also conform to the PFA Act, guidelines
  • Moreover, it is essential to check the tax liabilities as well for this business.
  • AGMARK certification
  • Fire license
  • Mandi Act
  • Labor Laws such as the following: ESIC, EPFO, etc.  
  • CLU – for land
  • Electricity Bills
  • FSSAI: The Food Standards and Safety Rules, 2011, and rules made under IS 544: 1968 permit the inclusion of antioxidants in essential oil for an increased shelf life of the oil. However, under the scheme of labeling of environment-friendly products, the occurrence of antioxidants in a prescribed limit is a need as per notification of the Ministry of Environment and Forests. These are the basic license and certification requisites. Check out the same with your local DIC authority about any other needful formalities.

List of profitable Essential Oil Extraction Business Ideas

1. Basil (Ocimum basilicum)

Basil is found to be a very high-value essential oil. This is having huge demand from the beginning. Also, the demand is growing. Generally, people use the oil for several purposes such as it relieves the sore muscles and joints, helps with clear breathing, and acts as a cooling agent for the skin.

Moreover, it encourages mental alertness and reduces anxious feelings. Basil oil has high economic value due to the presence of specific constituents such as estragol, linalool, lineol, limonene, eugenol, methyl cinamato, and geraniol.

2. Chamomile (Matricaria chamomilla)

The chamomile oil is produced from the flowers of the Camomile plant. It is very prevalent as a flowering plant. Commonly, chamomile oils are having several advantages in skin care and personal care. The oil is perfect for acne and eczema. Moreover, it makes the skin young, conditioned, and blemish-free.

Also, the oil is recommended for hair care as well. Therefore, oil has a growing demand in the beauty and personal care sectors.

3. Clove (Eugenia caryophyllata)

You can produce clove oil using flowers, flower stalks, and third leaf. The most economical segment is an extract of the leaves. The main constituent of clove oil are terpenes and their derivatives.

This is a significant component in industrial materials such as perfumes, pharmaceuticals, flavors, paints, plastics, etc. Commonly, the distillation process is done to get clove oil.

4. Eucalyptus (Eucalyptus globulus)

Eucalyptus oils are clear liquids with aromas exclusive of the particular species from which they are obtained. Like other essential oils, they are mixtures of organic compounds (particularly terpenes).

Generally, the composition of the oil is because of genetic aspects rather than environmental factors. You can begin this business with moderate investment.

5. Lavender (Lavandula angustifolia)

Distillation is the best method to produce lavender essential oil. Lavender is a small, aromatic shrub used for fragrance, particularly in food, and alternative medicine factories. More than 30 diverse lavender oils and blends are traded in the world. For producing lavender oil commercially, you must perform a steam distillation process.

6. Lemon Oil (Citrus limon)

Lemongrass oil is a significant essential oil. As the demand for aromatic cosmetics is growing, the need for this oil is also raising. Lemongrass oil has a strong lemon-like scent due to its high citral content of approximately 75-90%. The minimum commercial requirement of citric acid is about 70%.

The major quality checking step is to know the citral content and its solubility in alcohol. This is an essential component in toiletry merchandises such as toilet soaps, bath salts, etc.

7. Orange Oil

Orange oil emerged as the major item and accounted for 29.4% of total market volume during 2015. It is also anticipated to observe the highest growth rate over the coming years. Increasing orange oil demand in food & beverages, personal care, and cleaning agents is expected to foster the segment growth. You can extract orange oil from cells within the orange rind.

8. Peppermint (Mentha piperita)

Generally, you can produce mint oil by chilling mint oil and next performing centrifugation to separate the menthol crystals. The process may be separated into two stages.

Firstly, you have to produce menthol flakes by chilling mint oil. And next, you must mix the menthol flakes using mint oil again chilled to get bold crystals of menthol. The food, cosmetic, and pharmaceutical businesses are the top clients of this product.

9. Rosemary (Rosmarinus officinalis)

Rosemary has a woody, evergreen smell and is classified under the mint family. Generally, this oil boosts memory, soothes digestive uses, and releases muscle aches and pains. The world consumption and thus the requirement of rosemary essential oils and perfumes are growing rapidly. However, the production technology is an essential component to develop the overall yield and standard of essential oil.

10. Sandalwood (Santalum album)

Water or hydro-distillation is the old-style for extracting sandalwood essential oil. Instead of steam passing through the powdered wood, here, the powdered wood is submerged in water to soak.

India stood as one of the largest sandalwood oil producers in the world previously. Even China and Australia were in close competition for producing sandalwood oil globally. The cosmetics and perfumery industries are the major clients of sandalwood essential oil.

Investment required to start an Essential Oil Extraction Business

To initiate the Essential Oil Extraction business, you need to arrange the finance from Rs. 2 lakhs to Rs. 5 lakhs.

The Essential Oil Extraction machine price ranges from Rs. 80,000 to Rs. 2,00,000 depending upon the capacity.

The raw materials cost is Rs. 1 lakh.

So, the total amount required to start Essential Oil is Rs. 2 lakhs if you plan it on a smaller scale.

Profit in Essential Oil Extraction Business in India

You can earn good profits in Essential Oil making business. You can make 35 to 40% of profits in Essential Oil Extraction business, after deducting the total expenses from the capital amount. Then the leftover amount will be your profit, so you need to minimize the expenses incurred accordingly. You can also plan for used machines so that it will reduce your fixed capital investment.

How to sell your Essential Oils

In case if you miss this: How To Start Frozen Food Busienss In India.

Marketing Essential Oils
Marketing Essential Oils (pic source: pixabay)

You can sell your Essential Oil in local markets or you can even sell in the online stores. You can also register in B2B websites and B2C websites in online markets to promote Essential Oil products.

You can also sell your products in supermarkets, small stores in shopping malls, etc. Advertise about your product through social media to get a huge number of clients in this way you can increase and promote your business. There are very limited Essential Oil manufacturers in India, but the demand for encouraging the new product is also high because of its medicinal properties. So, you need not worry about the market. You can sell your product based on the Essential Oil wholesale price in India.

Conclusion of starting an Essential Oil Extraction Business in India

Essential oils have a perfectly soothing and calming effect on the nervous system and are also advantageous in blood circulation stimulation. Asia Pacific essential oil market is anticipated to grow at a projected CAGR of 9.0% from 2016 to 2024 to appear as the fastest developing regional market.

7 COMMENTS

  1. Dear experts, we are interested to establish a project plant to process cotton cooking oil from the cotton seeds available here in Tanzania.
    I am interested and excited by your technology and experience in the different project world wide.
    Please am looking for the following:
    1. Technology and business plan.
    2. Source of Investment capital that can help us to establish the business.

  2. I am planning to start essentail oils Business. Planning to sell oil on small bottles by 10 ML, 2O ML and more. Kindly help me how to start it.

  3. verry needful information ..thank you.. I m from sri lanka . Looking for start my own essential oil business .. Cinnamon . black Pepar . Lemon . Or orange

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