Orange Oil Project Report, Business Plan

Introduction to Orange Oil Project Report, Extraction Process of Orange essential oil, and Manufacturing Business Plan: Orange oil is most commonly popularly known as Sweet Orange essential oil. It is obtained from the fruits of the Citrus sinensis botanical. The actual origin of Citrus sinensis does not confirm, as it does not grow wild in any part of the world. The botanists think it to be a natural hybrid form of the Pummelo c-maxima and the Mandarin c-reticulata botanicals and that it began in between the mid-South-West of China and our Himalayas. Orange trees are evergreen having grayish-brown barks and can gain a height of 13ft – 25 ft. With age, they may even become 50 ft. They get slender, angular branches with dull spines in their leaf axils. The branches usually grow rounded and the tree often takes the shape of a hemisphere. The glossy, dark green leaves of the orange tree have an oval shape and grow till 2-4 inches. Orange flowers are small white-colored, and fragrant, growing themselves or in clusters of about 2-6.

The nutrition value of Orange Oil: One regular spoon of orange oil includes 70 calories, 1 gram of protein, 0 grams of fat, 15 grams of carbohydrate (approximately13 g naturally occurring sugars), and about 3 grams of fiber. It also has 100% of your daily requirement of vitamin C with 235 mg of potassium. Oranges are also the proper source of Vitamins like – thiamin (B1) and folate (folic acid or B9). Thiamin is essential for the growth, development, and functioning of all cells in our body. Folic acid, is the essential component for RBC formation, cell growth, and function.

Uses of Orange Oil: The important benefits of using orange essential oil are mentioned below:

  • Anti-aging exfoliate
  • Treats skin disorders
  • Helps to relieve Stress
  • Aid to prevents infections

Orange Oil Project Report, Extraction Process, and Manufacturing Business Plan

The business can be initiated and operated easily if one has a well-designed business plan. The business plan should have the day-to-day operations, charges, administration tasks expenses, advertising policies, etc. But before initiating an orange oil manufacturing business one has to perform a thorough survey in nearby shops, pharmacies, and grocery shops.

Business plan of Orange Oil Manufacturing Business

Orange Essential Oil
Orange Oil (Pic credit: pixabay)

To start with Orange Oil Manufacturing Business, you need to consider the below points-

  • Basis and presumptions of Orange Oil
  • List of approvals required for starting Orange Oil manufacturing business
  • Area required to start Orange Oil Manufacturing Business
  • Raw materials required
  • List of machinery and equipment for extracting Orange Oil
  • Manufacturing process of Orange Oil
  • Project economics of Orange Oil Manufacturing Business
  • Profitability in Orange Oil Manufacturing Business

Basis and presumptions of Orange Oil Manufacturing Business

  • Plant Operation: 8 hrs. /shift, 8 runs/day, 2 shifts/day; 25 days/month, 300 days/year.
  • Plant Capacity: 389 litres/month.
  • Cost of Land: 200 sq. m. at 250.00/Sq. m. = 50,000.00
  • 100 sq. m. at 1500.00/ s. m. = 150,000.00
  • Office Supplies: P1,000 monthly
  • Permits and Licenses: P500 monthly
  • Insurance: 2% of Insurable Assets.
  • Realty Tax: 2% of Land and Building expenses
  • Working Capital: 3 months working.
  • Computation of depreciation cost: Straight line process
  • Repair and maintenance: 25% of Depreciation Cost
  • Firewood cost: P0.15/kgs.
  • Amount of firewood required/run: 130 kg
  • Citronella leaves required/run: 250 kgs.
  • Diesel Consumption: 70 litres/month
  • Average No. of trips/month: 8 trips/o.
  • Distance traveled: 60 km/trip
  • Contingency: 5% of total fixed assets without land
  • Sales Tax: No sales tax as the company will get registered with the BOI.
  • Collection: 30 days after-sale

List of approvals and permits required to start Orange Oil Manufacturing Business

To start Orange Oil Manufacturing Business, you need to acquire the below list of licenses, permissions, and registrations –

  • Register your business firm
  • 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

Area required to set up Orange Oil Manufacturing Unit
The location of the business is one of the main factors for extracting orange oil. Selection of the area for the business will be another crucial aspect for the success of your business. If one will be going into orange oil extraction, they should plan the extraction plant close to orange farms. This will reduce transportation charges, which could be an upsurge in case the unit is established far away from the orange estates.

Raw materials required for starting an Orange Oil Manufacturing Business

Before manufacturing orange oil, the only thing that must be focused on is quality. The quality of the oil is a crucial aspect for any business and the orange oil extraction business is not any exception. The choice and evaluation process will play a key role along with the proper suppliers, who will be identified by their reputation and how many years they are in this business. This will aid to concentrate on regional suppliers and sustainability. Thus, it is really important to choose and treat the raw material properly for preserving the essential oils that are accountable for the flavor and fragrance of the end product- the orange essential oil.

The manufacturing process of Orange Oil

Oranges contain a high percentage of limonene in glands near the surface of their peels, and they release it if rubbed, heated, or even when stimulated. The commercial manufacturers of orange oil use the leftover outer skin from juice corners for a cold extraction procedure such as machine abrasion or by cold pressing machine as they’re easily available. Most commercial oil operations cross-utilize each section of plant tissue, by steam distillation process, hydro diffusion, and solvent extraction, to extract the oil contained in the stems, leaves, and flowers. The extraction process of orange oil from peels includes mainly separating the rinds from the Oranges, then chopping, grinding, or puncturing them before they are complete. The liquid that originated from this pressing process contains orange juice and orange essential oil, which later will be separated from each other, and finally, the required essential orange oil is obtained.

Orange Oil Project Report/Economics of Orange Essential Oil Manufacturing Business in India

In case if you miss this: Clove Oil Project Report.

Economics of Orange Essential Oil
Economics of Orange Essential Oil (pic credit: pixabay)

A. Fixed Capital

i) Land 20000 sq. ft. Value Rs. 1,50,000

  • Land Development Rs. 25,000
  • Sub Total Rs. 1,75,000

 Built-up Area and other Civil Works

  • Production building: Rs. 5,40,000
  • Store space: Rs. 1,35,000
  • Shed construction: Rs. 2,25,000
  • Disposal pits: Rs. 10,000
  • Water storage tank: Rs. 30,000
  • Boundary wall etc.: Rs. 35,000

Sub total: Rs. 9,75,000

Total costs for land and building construction: Rs. 11,50,000

ii) Machinery and Equipments: Rs. 5,83,600

(iii) Preliminary and Pre-operative Expenses: Rs. 30,000

(iv) Other Fixed Expenses: Rs. 1,50,000

Total Fixed Capital (i + ii + iii + iv): Rs. 19,13,600.

B. Working Capital (per month)

(i) Personnel

  • Manager: Rs. 4,000
  • Supervisor: Rs. 2,000
  • Operator: Rs. 1,800
  • Fitter: Rs. 1,600
  • Accountant-cum-clerk: Rs. 1,600
  • Skilled worker (Stockman): Rs. 1,300
  • Unskilled workers: Rs. 6,000
  • Watchman-cum-peon: Rs. 1,000
  • Perquisites @ 15%: Rs. 2,895

Total: Rs. 22,195

Say: Rs. 22,000.

ii) Raw materials and packaging materials: Rs. 1,06,000

iii) Utilities

  • Power 3000 KWH units: Rs. 2.5: Rs. 7,500
  • Water 400 K.Lt.: Rs. 3: Rs. 1,200
  • Fuel like Diesel K/oil etc. LS: Rs. 1,850

Total: Rs. 10,550.

iv) Other Contingent Expenses

  • Postage and Stationery: Rs. 1,000
  • Telephone: Rs. 500
  • Stores: Rs. 1,000
  • Repairs and maintenance: Rs. 1,000
  • Transport charges: Rs. 5,000
  • Advertisement and publicity: Rs. 5,000
  • Insurance: Rs. 650
  • Taxes: Rs. 500
  • Sales expenses: Rs. 2,000
  • Misc. expenditure: Rs. 8,000

Total: Rs. 24650.

v) Total Recurring Expenditure (i + ii + iii + iv): Rs. 1,63,200

vi) Working Capital

Recurring expenditure (for one month): Rs. 1,63,200

C. Total Capital Investment

Fixed Capital: Rs. 19,13,600

Working Capital (For 1 month): Rs. 1,63,200

Total: Rs. 20,76,800.

Cost of Production (per year)

  • Total recurring expenditure: Rs. 19,58,400
  • Depreciation on building and other Civil Construction @ 5%: Rs. 48,750
  • Depreciation on machinery and equipments @ 10%: Rs. 50,000
  • Depreciation on hand tools and miscellaneous equipments @ 25%: Rs. 7,000
  • Depreciation on office equipments and furniture @ 20%: Rs. 4,000
  • Interest on Total capital @ 15%: Rs. 3,12,000

Total: Rs. 23,80,150

Say: Rs. 23,80,000

Sales price per year: Rs. 28,72,500.

Profit in Orange Oil Manufacturing Business;

Net Profit (per year) (before Income Tax): Rs. 28,72,500 (Sales price per year) – Rs. 23,80,000 (Cost of production per year) Rs. 4,92,500

Net Profit Ratio: 17%

Rate of Return: 24%.

Break-Even Point

Fixed Cost

  • Depreciation on machinery and equipment: Rs. 50,000
  • Depreciation on hand tools: Rs. 7,000
  • Depreciation on office equipment and furniture: Rs. 4,000
  • Depreciation on building and other civil works: Rs. 48,750
  • Interest on Total investment: Rs. 3,12,000
  • Insurance: Rs. 7,800
  • 40% of salary and wages: Rs. 1,05,600
  • 40% of other contingent expenses: Rs. 1,15,200

Total: Rs. 6,50,350

Net Profit (per year): Rs. 4,92,500.

B.E.P. = Fixed cost × 100 / Fixed cost + profit = 6,50,350 × 100 / 11,42,850 = 57%.

Marketing strategies of Orange Oil

Orange Oil
Orange Oil (Image source: pixabay)

There is an established market for orange essential oil. There are numerous popular brands already dwelling in the market. If a brand is created for the product then it will cause some expenses for the advertising and promotion. The advertising can be performed through social media platforms. This can reach a great population and your brand will have an extensive audience which will trigger many clients. So, it is essential to advertise by various methods based on the budget constraints for making your brand popular.

Conclusion of Manufacturing of Orange Oil

Orange oil is also considered one of the healthiest oils in India. It won’t damage while using for medicinal purposes on skin hair, etc. Thus, it is appropriate to do this orange oil extraction business and gain huge revenue. To minimize input expenses and maximize your profits, you can even think about commercial Orange Farming as well.


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