How to Start Tea Processing Business – Plan, License

Introduction on how to start a Tea processing business in India

Are you planning to start a tea processing business with low investment? Check out a comprehensive tea processing business plan for your convenience.

Tea production and processing plant are a financially very worthy business for the businessmen. Also, the business opens up great possibilities for growth. However, you must initiate the unit in a tea-growing area. Simply, there should be several tea gardens to acquire the raw tea leaf to your unit for further processing.

A step by step guide to start a Tea processing business

Generally, a tea processing unit acquires the raw tea leaves, process the tea to provide a consumable item and sell the tea after packaging. From a tea production unit, you can get six different types of tea. These are green tea, white tea, yellow tea, black tea, oolong tea, and post-fermented tea.

Market potential for tea processing business in India

The global tea market is growing at a fast pace. Tea sales have increased by 165% over 10-15 years. Besides, it is the most desired beverage next to the water, available easily. The tea market has experienced diversified trends across various regions including North America, Asia-Pacific, Europe, etc. Geographically, in 2013, the Asia Pacific region had the largest market share. The industry experts are projecting the continuation of its dominance throughout the next decade as well. However, some of the major markets are China, the U.K., India, Germany, the U.S., and Brazil. These countries among others are estimated to see robust demand for tea in the future. Therefore, tea production is a profitable business for new businessmen.

Health benefits of Tea

Tea is rich in antioxidants. Hence, it is an essential component in the treatment of cancer. Also, it aid to prevent arthritis improves bone density, controls blood pressure, and lowers the risk of heart disease.

It defends against cardiovascular and degenerative diseases among others. Green tea consumption aids to protect against developing any kind of esophageal and stomach cancer. Moreover, black tea consumption aids to boost the immunity power of the body, which is important to fight against any disease.

Step by step guide to start tea processing business unit

Guide to start tea processing business unit.
Guide to start tea processing business unit.
Area required for starting a tea processing business

The location plays the most significant role in the success of any tea production plant. If you own a tea garden, then obviously you can start a processing unit. However, if you are not having your own tea growing farm, then verify the demand for a tea processing unit in that specific location. Because according to the capacity of the plant, you must take care of the supply of the tea leaves to the unit.

Business plan for starting a tea processing unit

Developing a tea processing business plan is the primary step in beginning the business. According to your investment resources, create an elaborate business plan. Determine, what type of processed tea you will prefer. What distribution methodologies you will choose. How you will overcome the tough competition with already established other brands in the market. Apart from distribution, whether you will market the product differently or not. These are some of the essential aspects, you need to include in the business plan. Also, make a financial plan as well. Determine the fixed cost and working capital cost for beginning the unit. Besides that, craft a projected balance sheet with projected ROI and break-even time. Generally, a business comprises many such considerations. These are executive summary, mission, objective, vision, key to success, startup summary with financial estimations.

Registration, license and permissions required to start a tea processing business

According to the investment pattern, you must select the right form of business. However, it mainly depends on the location where you are beginning the business. It is recommended to register your business as per the federal guidelines.

Besides, approach a local small business professional. As you are beginning a business in the agro-processing industry, you should acquire the appropriate licenses and permissions. Furthermore, verify the yearly tax liabilities and compliance obligations.

Machinery required for establishing a tea processing unit

According to the tea quality you are willing to obtain, you must acquire the machinery. Besides, it depends on the planned production output. Some of the basic machines are listed below:

  • SS Rotorvane 8″
  • CTC Machine (3CUT) 3 Pair 8” Roller (8-10-8 TPI)
  • DF Furnace
  • Drier (Conventional)
  • Humidifier
  • Mydellton Sorter
  • Fibre Extractor.
  • Vibro Sorter
  • Tea Production Process

Process to start a tea processing unit in India

Withering

First of all, you should obtain raw tea leaves. Then lay out the fresh tea leaves in thin layers on tats stacked one above another and dry them in the open air for about 20 hours. However, there is another way in which you can place layout the leaves in layers of around 20 cm thick on a mesh. Then, place the meshes in a tunnel; through which warm air mixed with fresh air is blown. This significantly reduces the entire withering time. Around 60-62% residual moisture is appropriate for tea processing of the withered green leaves.

Rolling

A circular table which is fixed at the center with a cone, and having a surface with slats, which is popularly known as battens. A jacket, or bottomless circular box with a pressure cap, stands at a top of the table. The table and jacket are run in opposite directions in an eccentric manner, whereas the leaf placed in the jacket is twisted and rolled over the cone that battens in a pattern similar to land rolling.

Fermentation

During fermentation, the oxidation process which had started during rolling is continued. Fermentation takes place in different fermentation rooms. However, you have to keep it properly and maintain it clean to prevent bacterial infection of the tea. Keep the tea leaves in 3.5 – 7.5 cm. Layers on aluminum trays. The thickness of the layers is based on room temperature. As soon as the tea has achieved a copper-red color, it marks the absolute degree of fermentation, and the process should be halted and then proceed for drying.

Drying

You can perform the drying process using a Conventional drier. Blow the hot air up to 90° C against the leaves. And the drying is completed once the temperature reaches 80° C. When the drying is complete, the polyphenol oxidizes enzyme is properly inactivated. The moisture content must be reduced to 3.5% whereby the aroma is established and the leaves take on their typical black coloration.

Dried Tea Leaves.
Dried Tea Leaves.

Investment required to start tea processing business

A tea processing unit requires substantial startup capital investment. Generally, there are two kinds of costs are associated with this. They are fixed capital and working capital.

The fixed capital investment comprises the cost of land, plant establishment, building, machinery, and initial licensing and registration charges. On the other hand, working capital investment comprises raw material expenses, manpower expenses, transportation costs, distribution, administrative expenses, and a few other miscellaneous expenses. If you are availing of a loan or looking for finance from investors, then you should be careful about the repayment schedule and the associated interests.

Profits in tea processing business

You can earn 15-20% of profits initially based on quality. Later the quality promotes your product and your profit margin increases from 20-25% and the percentage goes on. You need to plan to produce quality products with different flavors if you can.

You may also check this: How To Start An Olive Oil Production.

Marketing strategies for promoting the tea powder product

Mainly it is essential to determine the marketing strategy for your business. The marketing strategy should have two things: first, to attract potential customers and make sure they are aware of brands and the second one is to educate potential customers about your tea product features like how it is so healthy and tasty. Additionally, you can opt for advertisements using banners, advertisements in local magazines, and reviews by food critics.

You must set-up a well-penetrated distribution channel. Generally, many big e-Commerce companies and supermarkets are possible options for domestic selling. Not only the domestic market, but you can also even explore the international market for expansion.

How to sell your product?

You can sell your product by registering it online on B2B websites and B2C websites. You can even spread some samples in the nearby hotels, restaurants, supermarkets, or in the wholesale markets where your product gets well purchased. Try with new ideas in the starting and just concentrate on promoting your business. Later your business will be raised depending upon the quality you provide to the customers.

In case if you are interested in this: Tea Seed Germination, Growing Conditions.

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