Patchouli Oil Project Report, Business Plan

Patchouli Oil Project Report, and Manufacturing Business Plan


Patchouli oil belongs to a species of plant, having genus Pogostemon and the oil is obtained by the extraction process. This bushy herb with rigid stems, having 2- or 3- feet height and bears small, pale beautiful pink flowers. Though this plant is native to tropical regions of Asia but now extensively grown in other countries such as India, China, Indonesia, Mauritius, Malaysia, the Philippines, Thailand, Taiwan, and Vietnam.

Patchouli oil is extracted from a large evergreen plant that originates from the Labiatae family, and a considered a close relative plant to lavender, mint, and sage. Patchouli oil can be inhaled, or like a perfume filled in a vaporizer, or can be topically used on the skin. Once inhaled it will transfer some signals to a brain portion known as a limbic system that is involved to control emotions and impact the nervous system. However, it is recommended to use this oil in specific quantities because bountiful amounts can be giving out overwhelming odor and strong.

Uses and applications of Patchouli Oil

Patchouli oil has been used for many years for fragrance, in recent years used in incense, insect repellents, and alternative medicines. It’s usually used for skincare as it has the property to aid alleviate skin issues, and it can treat acne, eczema, inflammation, and chapped skin diseases. Patchouli oil with its cell-rejuvenating capability used for anti-aging skincare; so truly has the property to reduce the look of scars or marks on the skin.

Patchouli oil is used extensively in the following:

  • Antidepressant
  • Prevents infections
  • Astringent property
  • Speeds up healing

A Guide to Patchouli Oil Project Report, and Manufacturing Business Plan

Patchouli Oil Project Report, Manufacturing Business Plan
Patchouli Oil

Market potential of Patchouli Oil

There has been a wide use of herbal products in the present times due to the increased awareness among individuals about the advantages of patchouli oil, which drives the global patchouli oil market for its high requirement. But because of the musky, woody, smoky and spicy odor of the patchouli oil, there is some hindrance in the market growth. Despite that because of the use of patchouli oil in medicine, perfumery, and flavorings has created a high potential for exploring this business.

The global patchouli oil market is classified based on application, type, and geography. Based on its type, it is categorized into dark and light patchouli oil. The usage is evident in the industries associated with perfumery, flavorings, medicine, and others such as incense, therapeutics, and household. Geographically, Europe, Middle–East, North America, Asia-Pacific, etc. have been using this oil extensively.

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Business plan for starting Patchouli Oil Manufacturing Plant in India

For starting a small-scale Patchouli Oil Manufacturing Business in India, you need to craft a perfect business plan by viewing the following points:

  • Basis and presumptions of the project
  • Implementation schedule
  • List of approvals required for starting the business
  • Raw materials required
  • List of machinery and equipment for extracting Patchouli Oil
  • The manufacturing process of Patchouli Oil
  • Project economics of Patchouli Oil Manufacturing Business

Basis and presumptions of Patchouli Oil Manufacturing Business

a. The Patchouli Oil plant can be operated in three shifts. About 8 hours daily day and 300 working days for a year.

b. The interest rate for the business will be 12% per annum on the investment borrowed. 

c. The expenses regarding acquiring licenses, raw materials, packing materials, machinery and considered based on the scalability of the project profile that differs from place to place.

d. The rental expenses of the production shed and land are considered as per the prevailing rates and may differ from place to place.

e. The unit capacity utilization could be around 70% since the unit is operated continuously.

f. Recovery of oil from the corn seeds is around 13 – 15% as per the process involved.

Implementation schedule of Patchouli Oil Manufacturing Business

The project execution will need around nine to ten months. The estimated break-up of

activities and the duration for each activity are stated below:

  • Project preparation and permissions: 0 – 2nd month
  • Registration under MSME Act 2006 and loan sanction: 2nd – 4th month
  • Machinery and equipment purchase and installation: 4 th – 5 th month
  • PFA License: 5 th – 7 th month
  • Power connection setup: 5 th – 7 th month
  • Machinery installation: 7 th – 8 th month
  • Recruiting staff and test run: 8 th – 9 th month
  • Commercial production can be presumed to begin: 10th month

List of approvals required to start Patchouli Oil Manufacturing Business in India

First step is to acquire the below list of licenses, permissions and registrations for starting Patchouli Oil Manufacturing Business in India-

  • 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

Raw materials required for starting Patchouli Oil Manufacturing Business

The major raw materials used for extracting oil is tons of young patchouli leaves.

Machinery and equipment required to start Patchouli Oil Manufacturing Business

The equipment necessary for the Patchouli oil extraction process are stated below;

  • Steam Generator or Boiler
  • Heat Exchanger
  • Receiver
  • Electric boiler and separator
  • Gantry or Lifting Equipment
  • Distillation
  • Coolers
  • Condenser
  • Dry cooler, etc.

Manufacturing process of Patchouli Oil

You may also check this: Patchouli Farming.

The manufacturing process of Patchouli Oil
The Manufacturing process of Patchouli Oil

Patchouli oil is extracted using the young leaves that must be dried and fermented before they are sent for a steam distillation process that will produce 2 to 3%. This Patchouli oil enhances with age and provides a better-rounded odor.

Method 1: Steam distillation of Patchouli Oil

Patchouli is a farmer-friendly crop as it is easy to handle when compared to other aromatic plants. Moreover, the leaves after they are dried and properly stored can be used for distillation when needed. The essential oil can be extracted from all parts of the Patchouli crop even the root, but research has analyzed that the top leaves and tender twigs will give a high yield.

Generally, dry leaves which have been 4 – 6 months provide more oil with a high-grade aroma. Steam distillation is the general process used for extracting oil from plants. Even though we have other extraction methods like hydrodistillation, supercritical fluid extraction, microwave distillation, ultrasound extraction but when considering consumer interest, steam distillation is the appropriate method for the extraction of essential oils using the plant.

The steam distillation method demands a boiler, condenser, distillation still, and receiver. The distillation still is made by mild steel having a perforated bottom to support loaded herb for distillation. The herb must be uniformly or tightly packed inside the still or else, stream channels may develop during the distillation lead to a poor yield of essential oils. The water level in the boiler should be sustained by careful checking.

Maintenance of high and low pressures, around 1.4 to 3.5 Kg/m2 generates better quality as more cell walls will be disintegrated by this step. The duration of the distillation differs from 6 – 8 hours. The condenser will gather the vapors generated from the distillation still. It contains many tubes formed by using copper or stainless steel and integrated inside a jacket. The condenser is having an inlet and outlet for cooling water circulation. The hot vapors containing water and patchouli essential oil vapors will get cooled in the condenser tubes and the condensate flows out into the container. The patchouli essential oil vapor and spent steam that arrives from the distillation still will be condensed again to the liquid phase using a water-cooled condenser and the condensate will be gathered in the receiver vessel.

The steam distillation method will give two separate products they are the liquid distillate which consists of the volatile, water-soluble parts of the Patchouli plant materials referred to as “hydrosol” and the volatile non-water-soluble segment of the plant constituents called the “essential oil”. The condensate in the receiver container must be placed for an appropriate time so that the Patchouli oil will get separated from the water layer. After the proper separation in the receiver tank, the Patchouli essential oil will be completely separated from the water phase with a separating funnel. As the Patchouli oil is lighter than water and being insoluble floats on the top in the vessel and only water will be drained out. The oil will be still turbid and small quantities of moisture should be removed from the oil by using anhydrous sodium sulfate (20-30 g/L) and keeping the distillate mixture for 4 to 5 hours, later oil is filtered using a Whatman filter paper to obtain the clear essential oil. Moisture can promote polymerization of Patchouli oil that will affect its quality.

The Patchouli essential oil here obtained has to be stored using air-tight aluminum containers or color glass bottles that are placed in a cool dry place, far from light. Overall, 60 kg of essential oil/hm2 is generated in a year.

Method 2: Microwave hydro-distillation

Patchouli plant leaves (around 40 g) were added in a 1L flask having deionized water (about 400 mL). The flask was around in a microwave oven arrangement and a condenser is placed on the top or outside the oven to gather the extracted essential oils.

The microwave oven should have different power levels of 264, 400, and 600 W for around 2 hours. This time is appropriate to extract all the essential oils from the raw material. The essential oils are separated with a separating funnel. To separate water by separating funnel, the extracted oils will be dried over anhydrous sodium sulfate, and then stored in amber vials about 4°C temperature until they are used for analysis.

Packaging and storing of Patchouli Oil

When the oil is kept in cool, dark conditions in full containers Patchouli oil could be kept safe for several decades with the enhanced flavor because the Patchouli oil improves with age. The Patchouli essential oil extracted must be stored using air-tight aluminum containers or color glass bottles and placed in a cool dry place and not near any light source.

Patchouli Oil Manufacturing Project Report/ Economics of Patchouli Oil Manufacturing in India

Patchouli Oil Project Report – Fixed Capital

  • Land and site development: Rs. 1,00,000
  • Building and civil works: Rs. 5,00,000
  • Plant and machinery:  Rs. 15,27,000
  • Misc. Fixed Assets: Rs. 1,98,000
  • Preliminary and pre-operative expenses: Rs. 2,23,000
  • Contingencies and escalation @ 5%: Rs. 1,16,000
  • Working capital: Rs. 1,15,000
  • Total: Rs. 27,79,000

Patchouli Oil Project Report – Working Capital

  • Raw Materials: Rs. 88,000
  • Power and Utility: Rs. 10,000
  • Salaries: Rs. 74,000
  • Finished Goods: Rs. 1,34,000
  • Receivables: Rs. 1,49,000
  • Total: Rs. 4,58,000

Patchouli Oil Project Report – Total cost of Patchouli Oil Manufacturing Business 

Fixed Capital + Working capital = Rs. 27,79,000 + Rs. 4,58,000 = Rs. 32,37,000

Patchouli Oil Project Report – Income per annum in Patchouli Oil Manufacturing Business 

Total income per annum: Rs. 36,25,000

Patchouli Oil Project Report – Profitability in Patchouli Oil Production Unit

Profit = Total Cost – Total Income = Rs. 36,25,000 – Rs. 32,37,000 = Rs. 3,88,000.


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