Lemongrass Oil Manufacturing Project Report

Lemongrass Oil Manufacturing Project Report, Business Plan


Hello friends, we are here today with a new topic called ” Lemongrass Oil Manufacturing Project Report snd Business Plan in India”. Lemongrass oil has a strong lemon-like odor because of the presence of 75-90% citral content. The minimum commercial need is 70% citral content. The chief quality checking parameters are its citral content and the solubility in alcohol. This is an essential component in toiletry goods like toilet soaps, bath salts, etc.

It is also used in artificial lemon flavoring and the preparation of ionenes. Ionenes are very significant to develop perfumes, artificial flavor, and soaps and even used as raw material in vitamin A manufacturing. We are interested to explore how to start a small-scale lemongrass oil manufacturing business in this article.

The oil appears in reddish-yellow to reddish-brown and has a strong, lemon odor. It is also employed in pharmaceutical preparations, for manufacturing pain balm, mosquito repellent creams, disinfectants, etc.

A step-by-step guide to Lemongrass Oil Manufacturing Project Report and Business Plan

Lemongrass Oil Manufacturing Project Report
Lemongrass Oil Manufacturing Project Report

Market potential of Lemongrass Oil Manufacturing Business

Lemongrass oil is a significant essential oil. Because of the demand for aromatic cosmetics, the need for this oil is high in the market. Besides, awareness about the benefits of essential oils is rising among people. At the same time, most people are aware of the damaging effects of the chemical substances used in personal care items and shifted to nature-based cosmetics.

Globally India is one of the chief producers of this oil. Commonly, imports drive the business of this oil in the industrialized states. Some of the major continents are Western Europe and North America. However, Japan is importing about 10% of the total demand. As the need for this oil is increasing, the areas of cultivation of lemongrass are also in demand. Farmers are showing more affinity towards lemongrass cultivation. In this situation, starting a lemongrass oil manufacturing business economically profitable decision for the individuals in India.

Business Plan for starting Lemongrass Oil Plant

First you to craft a perfect business plan for starting any kind of business unit which includes

  • List of licenses, registration
  • Area required
  • Implementation schedule of a project
  • Raw materials required
  • Machinery required
  • Production process
  • Estimated cost and
  • Profit analysis

List of permissions and license required for starting Lemongrass Oil Manufacturing Business

  • This oil has is being widely used in industries as the raw material. So, it is recommended to check your state law before beginning the business. Here we have mentioned a few licenses and permissions that could be essential.
  • The main thing is to identify the form of your business and register as per the company.
  • Obtain Trade License from the local Municipal authority.
  • You can apply for Udyog Aadhaar MSME using the online portal. Even though it is optional, we can get some loans that can be availed by the schemes launched by the Government
  • If you plan to use the oils for food flavoring, then you must attain an FSSAI license.
  • Even the GST is nowadays mandatory for any business so check with that a well.

Short list of licenses required to start the business

  • MSME registration
  • GST registration
  • ROC
  • 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

Area required to start Lemongrass Oil Manufacturing Unit

To set up a Lemongrass Oil manufacturing production unit you need to rent or own space of 800-1000 sq. mts. Because you need to establish and set up a lemongrass oil plant in India. You also need to set a godown for storing the packaged oil and for raw materials also.

Implementation schedule for Lemongrass Oil Manufacturing Unit

  • Purchase of Land – 1 month
  • Completion of Building – 3 months
  • Ordering of Machinery – 4 months
  • Delivery of Machinery – 2 months
  • Term/Wkg Loan Sanction – 3 months
  • Installation of Machinery – 4 months
  • Commissioning of Plant – 1 month
  • RM/Inputs Procurement – 1 month
  • Manpower Appointments – 1 month
  • Commercial Production – 1 month

Manpower requirement for Lemongrass Oil Manufacturing Unit

  • Technical Staff 5
  • Adm. Staff 4
  • Marketing Staff 4
  • Labour 20
  • Total 33

Setting up a Lemongrass Oil Manufacturing Plant Unit

The highly essential segment of this business is that the plant should be arranged nearby the lemongrass plantation field. So that you can obtain the raw material without extra expenses for transportation. For a small-scale unit, 1000 sq. ft covered region is appropriate. However, it is very important to get an electricity connection and water facility along with transportation provision.

List of machinery required to start Lemongrass Oil Manufacturing Unit

  • Evaporator vessel
  • Florentine flask
  • Pump (condensate)
  • Condenser
  • Steam boiler
  • Cooling tower
  • Pump (cooling water)

Raw materials required to start Lemongrass Oil Manufacturing Business

You may also check this: How To Make Money From Organic Compost.

Lemongrass (pic source: pixabay)

Lemongrass is the main raw material for oil. The grass plants prefer sandy and even dry soils give more oil and even oil citral content is higher when compared to the plants grown in fertile soils. A lemongrass plantation has around 6 to 8 years of the life cycle. The oil yield is high during the third or fourth year and its annual average value varies within 15 and 20 Kg/ha with three crops annually. The ratio of oil to leaves is about 0.348%. Hence, you must obtain about 288 Kg of lemongrass to get about 1 Kg of essential lemongrass oil.

Manufacturing procedure of Lemongrass Oil

Step 1: Steam distillation is the recommended method for commercial-scale lemongrass oil production. Primarily, you have to arrange steam in a boiler. Then introduce the steam into the container which includes the leaves and water.

Step 2: Then place the leaves on a grid that is located a bit high above the water surface that is present in the vessel. The water gets vaporized by steam flowing in a pipe coil attached to the water.

Step 3: The water vapor and the distilled oil that has been evaporated using the steam get recovered in different water-cooled condensers. Then the mixture of oil and water is segregated using a Florentine flask.

Step 4: The lemongrass oil will float on top. Here it gets separated easily. However, the distilled water must be sent again to the evaporator to remove some soluble parts of the oil in it.

Now, let us get into the details of Lemongrass Oil Manufacturing Project Report and Economics.

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Lemongrass Oil Manufacturing Project Report/ Economics of Lemongrass Manufacturing Business

1. Land and Building with covered area of 200 Sq. mtrs. On rent

2. Plant and Machinery

(a) One Disintegrator/Burster with 15 HP motor and other accessories: Rs. 1,56,000

(b) One Decorticator with 30 HP Motor and other accessories: Rs. 2,76,000

(c) One Turbo cleaner with 15 HP Motor and other accessories: Rs. 1,62,000

(d) One Screener with 2 HP Motor and other accessories: Rs. 42,000

(e) One Baling Press with 5 HP Motor and other accessories: Rs. 1,38,000

(f) Two Retting Tanks: 2.5 M x 1.M x1.5M: Rs. 18,000

Total: Rs. 7,92,000.

3. Miscellaneous Fixed Assets

(a) Electrification: Rs. 1,65,000

(b) Water Installations: Rs. 44,000

(c) Miscellaneous others: Rs. 55,000

Total: Rs. 2,64,000.

4. Provision for contingencies: Rs. 49,500

5. Preliminary and Pre-operative expenses: Rs. 60,500

Lemongrass Oil Manufacturing Project Report – Total fixed Costs: Rs. 12,00,000.

6. Lemongrass Oil Manufacturing Project Report – Working Capital:

(a) One month’s Raw Materials: Rs. 1,89,292

(b) One month Power cost: Rs. 17,585

(c) One month Wages and Salaries: Rs. 35,750

(d) One month other expenses: Rs. 54,450

Lemongrass Oil Manufacturing Project Report- Total Working Capital: Rs. 2,97,077

Lemongrass Oil Manufacturing Project Report – Total project cost: Rs.14,97,077.

(Say Rs.14,97,000)

Profitability in Lemongrass Oil Making Business

Annual Sales Realization: Rs. 20,00,000.

Profit = Sales – Project Cost = Rs. 20,00,000 – Rs. 14,97,000

Lemongrass Oil Manufacturing Project Report – Profit per annum = Rs. 5,03,000.


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