How to Start a Pencil Making Business for Profit

Introduction to how to start a wooden pencil making business

Wooden pencil or lead pencil is essential thing in every house and used is frequently by teachers, students, artists, etc. Generally, most of the people will be using HB and 2B pencils as they are famously known in the Indian market and have more popularity. Even in this modern and technically developed era of tablets, cell phones, computers, printers, and a whole host of other writing and drawing instruments, pencil usage is growing day by day and hence the demand for pencil making is also increasing.

A step by step guide to star a pencil making business

Certainly, it has become a very competitive industry in the business zone. Many of the entrepreneurs are producing different kinds of pencils by increasing focus on the quality and cost, to gain the trust from customers they must come up with the quality product. In this article, we give you detailed information about the steps to start a wooden pencil making process on a small and medium scale basis.

A pencil is lead material enclosed in wood which is used for drawing or writing. Pencil is an essential thing for all the levels of schools, in all the types of businesses and also government organizations. Pencils are made up of soft wood and lead. As everybody is aware that pencil is the basic thing which is used for learning, writing, sketching and even used in calculating. Based on the type of carbon material used in preparing them, pencils have been categorized into soft and hard medium. Due to it advantages like smooth and easy handling, they are used in a wide range of application which are used in various fields like copying, sketching, writing etc.

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A guide to Pencil making business in india.
A guide to Pencil making business in india.

The colored pencils are also gained much popularity in drawing and paintings especially in children. The main factors for gaining much popularity of the pencils include – considerable life, can be erased after using, smooth in copying, less wear and tear, availability in almost all attractive colours. Pencils have a positive demand over pens, because of its long durability and advantage like erasing along with economic price. Even the papers can also be saved by using the pencils as they can be erased and used again for the writing other things. Looking into the demand in the need and economic use of pencil by the people, manufacturing of graphite lead stick of various grades could use a new horizon to the entrepreneurs.

Wooden pencil manufacturing – Market potential

The demand for wooden pencil is a growing day-by-day in the market because of its usage. You can find major application in schools, colleges, universities, government offices, commercial establishments, NGOs, construction field, artists, and in other miscellaneous activities.

Based on the type of carbon used, pencils are categorised into soft, medium and hard. There is no doubt about the acceptability of the product in the market as the lead pencils still have a great command and a respectful demand in the market. The product has a gained exceptional export potential also.

Depending on the different grades, the different variety of pencils include HB, B, 2B, 3B, 4B, 5B, 6B, 7B, 8B, 9B, and 10B.

The population of the country is ever increasing and requirement of quality products are going high which is the major reason for the growth of this evergreen business from decades. There is plenty of market for the pencil to justify the establishment a wooden pencil business in India.

Registrations and licenses required for wooden pencil business

To start a small scale wooden pencil making business, you need to acquire the following registrations and licenses. It is better to make a check with the specific rules of your state.

  • You have to register your business firm of your interest with the ROC
  • You have to apply for the trade license from municipal authority of your area
  • Apart from these additionally, you have to apply for MSME Udyog Aadhaar Registration for your business
  • You need to apply for the VAT registration
  • You also need to obtain a NOC from Pollution Control Board of your state
  • Get the GST number for your business

Wooden pencil manufacturing machinery and raw materials

You can start wooden pencil making in either of two ways. The first one is by obtaining lead or by making lead at your own place. Generally, wooden pencils can be made by using a fully-automatic machine. The machine is accumulated with a ball mill, filter press, kneading machine, automatic shaping, and grooving machine, gluing machine for slats; end cutting machine, painting machine, embossing machine, dies, tools, cutters and other miscellaneous equipments.

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The required raw materials are wooden slates (6 Ply), improved variety of graphite, ball clay, varnishes, oil, driers, glue, paint, lacquers, binders, pigments, sandpapers, etc. Pencils are basically packed in cardboard boxes. You must obtain the same as packaging consumables.

Wooden pencil manufacturing process

For manufacturing of lead, you have to mix the high-grade graphite powder with ball clay in the proper proportion as per the standards. Then charge it into a ball mill with sufficient quantity of water and then it is subjected to wet grinding. In addition, decant the filtrate and should dry the pressed cake in a baking oven to remove the moisture content.

Then kneading is done for the dried materials in a kneading machine for getting homogenizing. After that, press the kneaded materials into billets. Then you need to feed the need into an extrusion machine for making the lead slip of the required diameter and size. And finally, sort out the lead slips and mark them.
For the manufacturing of pencils, feed the slats into an automatic shaping and grooving machine. Here you can make grooves of required dimensions. Additionally, you can carry on different stages of processing include gluing, painting, cutting, etc. to manufacture the finished product. Finally, pack the finished products in cardboard boxes with 12 pencils per each or 10 based on your plan.

In the wooden pencil making business, the important utilities include electricity, water, and human resource if you are planning for large scale business.

Pencil making business process

  • The method of pencil making is very easy. It involves a very few simple steps and you are ready to produce thousands of pencils within less time.
  • First, put raw pencils in the mold of the machine. The mold can take 4 pencils at a time.
  • Put glue in these pencils.
  • After this, it is inserted in the velvet pencil making machine. This mold can be installed comfortably in this machine.
  • Once it is pasted into the wall of the machine, switch on the machine.
  • After thirty seconds of running the machine, the velvet powder inside the machine sticks well in the glued pencil.In this way, 4 valves are ready to become pencil in 30 seconds.

Pencil packaging process

The packaging depends upon the number of many pencils you want to combine in each separate packet. In order to make attractive pencil packet, you have to paste some funny pictures of cartoons to attract children. Along with this, if possible, you can keep a small rubber at end of the pencil in attractive colours. For better packaging idea, you may contact your local package store where you can find various package size and colors. You can also order your own designed customized packet for your company along with your company logo.

Cost to start a pencil making the business in India

Cost to start a pencil making business.
Cost to start a pencil making business.

You need at least Rs. 2 to 5 lakhs to start a small or medium scale business. This includes all the raw materials and the machines cost. Where the machine cost starts from Rs. 1.5 lakhs and goes up to 16 lakhs based upon the capacity of pencils it produces.

Marketing strategies for the pencil making business

Make sure that you prepare a high quality pencils and never compromise with your product adjust the price lower than the market price. As there is large number of competitors in the market, who are already established and getting very good business, you need to establish your brand. You can directly visit the local stationary or contact with the super market. The best way to sell the product is marketing through students near your house or unit. When your pencil gets required reputation, you may approach the large store to promote your business. In this way, you can increase your business and make a good profit. Hope this article helps you to start the pencil making business.

Conclusion of starting a pencil manufacturing business

With proeper business plan, once can earn decent money from this business. So what are you waitingfor? let’s start a wooden pencil making business. You may also like the Quail Farming Business Plan, License for Profit.


  1. Hi Jag,

    Thank you so much for the well aligned info about starting a pencil manufacturing business. it is so motivating and I have now considered to settle for it.

    I would like to have your mentorship and guidance from now on. Don’t be surprised to be invited to the commissioning of my pencil manufacturing business in the near future.

    Kind regards,



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