Herbal Oil Project Report, Making Process

Introduction on herbal oil project report, manufacturing business plan: Ayurvedic Herbal oil is gaining high popularity currently. It is showcasing its versatile benefits such as reducing headaches and cause a soothing effect. This herbal oil commonly includes vegetable oils as a base that is mixed with some colors and fragrance components.

The ingredients majorly added to the herbal oils are extracts of bahera, amla, hartago, lawanga, Chandan, kewara, jatamansi, and the pudinasattaKapur, and til oil. The advantages of herbal oils such as banphool oil are getting popularity because of their ayurvedic characteristics. The demand for the product is crossing its availability.

A guide to Herbal oil project report, manufacturing process, and business plan

Manufacturing Process of Herbal Oil
Herbal Oil (Image source: pixabay)

Some essential and ayurvedic oils concentrate on hair growth and prevent hair loss. Exclusively used base oils are coconut, castor, and sesame oils. Usually, herbal oil contains a single or a combination of two or three oils as stated earlier. A few of the most famous are Brahmi-Amla Hair Oil, Almond hair oil, Amla Hair oil, etc. Furthermore, you can start with less investment too. In this article, we are trying to describe the basics of how to start a small herbal hair oil manufacturing plant.

Business plan for starting Herbal oil

After you get some practical knowledge about the important aspects of making herbal oils, sit aside and plan to craft a business plan for your herbal oil business. For any manufacturing business, a perfect business plan is significant. Many free business plan templates can be downloaded from the internet that can be modified according to your business. Kindly check the article to obtain some significant points that could be added to this business plan. To start the profitable venture of Herbal Oil Manufacturing Business, you need to design a perfect business plan to lay a successful path:

  • Market demand of Herbal Oil Manufacturing Business
  • Implementation schedule of Herbal Oil Manufacturing Business
  • List of approvals required for starting Herbal Oil Manufacturing Business
  • Area required to start Herbal Oil Manufacturing Business
  • Raw materials required for starting Herbal Oil Manufacturing Business
  • List of machinery required to start Herbal Oil Manufacturing Business
  • Manufacturing process of Herbal Oil
  • Project economics of Herbal Oil Manufacturing Business
  • Profitability in Herbal Oil Manufacturing Business

Market potential for Herbal oil production in India

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Market Potential for Herbal Oil
Market Potential for Herbal Oil (pic source: pixabay)

It is a so general personal care product among men, women, and kids as well. Demand is growing rapidly. Due to the growing awareness related to hair care, promotions strategies through satellite TV channels, and various sources, the market is expanding. Also, the augmented purchasing power of the people is fueling the market.

Not only in India, but herbal oil has also gained importance in places like Yemen, Malaysia, Singapore, Australia, the USA, and Japan so that one can tap these potential importers for herbal oil for their business.

Market research before starting Herbal oil business 

Before starting with the actual business, it is extremely important to get information about the demand for herbal oil in a location near you. You can check out that around three categories of oilsuch as light herbal oil, and cooling oils are already present in the market.

When you plan for beginning a new one with low savings, it is suggested to target one category of oil at the initial phase and do not compete with top-notch companies such as L’Oreal, Unilever PLC, which have various oils in all categories.

Perform thorough market research for your proposed target and choose the best herbal oil type you are desire to manufacture and promote your brand.

Implementation schedule of Herbal Oil manufacturing business

  • Market analysis and demand, applying for loan 0 – 1 month
  • Preparation of business plan 1 – 2 months
  • Financial support or investment 2– 4 months
  • Selection of location and establishment of unit 3 – 4 months
  • Power and water connection facility: 4 – 5 months
  • Building construction and shed development 5 – 6 months
  • Machinery and equipment purchase 6 – 7 months
  • Procuring raw materials and recruiting of manpower 8 – 9 months
  • Trial operations 10th month

List of approvals and permits required to start Herbal oil manufacturing business in India

The next step to start Herbal Oil Manufacturing Business in India is acquiring the below list of licenses, permissions and registrations:

  • Register your business identity
  • MSME registration
  • GST registration
  • ROC
  • Get the PAN Card
  • Registration of firm
  • Shop Act License
  • FSSAI License
  • IEC Code
  • Export License
  • Fire and Safety
  • ESI
  • PF
  • No Objection Certificate from pollution board
  • Trade license from local municipal authority

Raw materials required for manufacturing Herbal oil business

The basic raw material required here is coconut oil, castor oil, other herbal oils, colors, and other perfumes. Even one must get the packaging materials for packing the obtained herbal oil.

Location required for starting Herbal oil business in India

Identifying the location appropriate for your plant is another essential aspect of a successful herbal oil manufacturing business. One must be cautious while choosing the place as it should not be far away from your potential market area which will incur high costs while transporting your final product for selling which indirectly reduces the profits and thereby returns.

Herbal oil manufacturing process

Generally, the manufacturing procedure includes the following steps:


Primarily, you have to mix all the components such as herbal extract/oils, perfumes, base oil, and colors in the appropriate proportions. Then use the mixing tank and use the speed stirrer for 15-20 minutes. Next, leave it aside to settle down for about 2-3 hours.


Then it is filtered using the filter press.


After filtration, it is sent to the laboratory for quality testing.

Bottling and labeling

After the mandatory inspection is accomplished, oil is then transferred to clean and fully dried bottles as per the measurements. Bottles are then labeled and closed.


For packaging corrugated boxes are used and the final product is now ready for marketing.

Herbal oil project report /Economics of Herbal oil manufacturing business

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Economics of  herbal oil project report
Economics of herbal oil project report (pic source: pixabay)

Land and building construction on rental basis: Rs. 3,00,000

Cost of Machinery: Rs. 2,39,500

Pre-operative expenditure: Rs. 29,500

Fixed capital investment:

  • Machinery: Rs. 2,39,500
  • Pre-operative expenses: Rs. 29,500
  • Total: Rs. 2,69,000

Working capital analysis:

  • A mix of Herbal leaves, roots, flowers, etc.: Rs. 1,20,000
  • A Scented Herbal seed oil 500 lit. @ 60/lit.: Rs. 30,000
  • Packing materials (plastic containers, cartons, etc.): Rs. 20,000
  • Total: Rs. 1,70,000


  • Wood 30 quintals @ Rs. 120/qtl.: Rs. 3,600
  • Electricity 300 KWH @ Rs. 3.00: Rs. 900
  • Total: Rs. 4,500

Staff and Labour:

  • Skilled labour: Rs. 10,000
  • Unskilled labour: Rs. 7,500
  • Salesman: Rs. 3,000
  • Accountant: Rs. 2,500
  • Peon: Rs. 2,000
  • Total: Rs. 25,000

Other expenses:

  • Rent: Rs. 2,500
  • Transport and travel: Rs. 2,000
  • Telephone: Rs. 400
  • Stationery: Rs. 100
  • Publicity: Rs. 1,000
  • Sale tips: Rs. 1,000
  • Other miscellaneous expenses: Rs. 2,000
  • Taxes and levies: Rs. 500
  • Total: Rs. 9,500

Total working capital per month = 1,70,000 + 4500 + 25,000 + 9,500 = Rs. 2,09,000.

Total capital Investment:

  • Fixed capital: Rs. 2,69,000
  • Working capital: Rs. 2,09,000
  • Total: Rs. 4,78,000

Cost of production (per annum):

  • Depreciation on machinery and equipment @ 10%: Rs. 22,950
  • Depreciation on furniture @ 20%: Rs. 2,000
  • Recurring expenditure (per annum): Rs. 25,08,000
  • Interest on total cap. Investment @ 14%: Rs. 66,920
  • Total: Rs. 25,99,870

Turnover of Herbal Oil Manufacturing Business

Herbal seed oil turnover 92.4 MT @ Rs. 30,500/ton: Rs. 28,18,200 (Say Rs. 28,20,000).

Profitability in Herbal Oil production

Profit = Rs. 28,20,000 – Rs. 25,99,870 = Rs. 2,20,130

Net profit ratio = Profit x 100/Turnover = 7.8%.


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