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Peppermint Oil Project Report, Business Plan

Introduction to Peppermint Oil Project Report, Manufacturing Business Plan: Peppermint or Mint oil and its derivative menthol are extensively used as a flavoring component for numerous products such as dental cream, toothpaste, confectionery, cough syrups, chewing gums, pan masala, and pain-relieving medications.

Mentha cultivation in India has shown quite worthy to the farmers, especially to small farmers as it merged appropriately with the current cropping system in a mint growing area in the country, Mint cultivators consider mentha as a supplementing crop as it does not affect the growth cultivation of any major Rabi or rainy season crop. Growing mentha is a labor-intensive process and also creates scope for employment for works associated with cultivation, istillation, field processing, especially in rural areas.

There are many species and varieties of mint oil that are grown in many parts of the world. Among these, the below 5 varieties are cultivated on large scale for commercial use

  • Mentha arvensis 
  • Mentha piperita 
  • Mentha spicata 
  • Mentha veridish
  • Mentha citrata

The important mint growing regions in this nation are Punjab and Uttar Pradesh. Uttar Pradesh accounts for almost 90% of the total area under mint cultivation, in specific the districts which are involved in cultivation are Ludhiana, Jalandhar, and Hoshiarpur. 

A guide to Peppermint Oil Project Report, Manufacturing Business Plan

Peppermint Oil
Peppermint Oil (pic credit: pixabay)

Uses of Peppermint Oil: Mentha oil is extracted from the leaves or even entire plants of various mentha varieties. The Japanese mint (Mentha arvensis) is mainly grown in our nation. The oil of Japanese mint is helpful as Dementholised Oil (DMO) and natural menthol. Because of its appealing fragrance and cooling effect, Mints have very extensive applications as a flavoring agent in several pharmaceutical medications.

Business plan for starting Peppermint Oil Manufacturing Unit in India

For setting up commercial production unit of Peppermint Oil, you need to design a perfect business plan by including the following points:

  • Market potential of Peppermint Oil
  • Presumptions and assumptions in Peppermint Oil Business
  • Area or land required for starting Peppermint Oil Manufacturing Business
  • Raw materials required for Peppermint Oil Manufacturing Business
  • List of machinery required for starting Peppermint Oil Manufacturing Business
  • Manufacturing process of Peppermint Oil
  • Project economics of Peppermint Oil Manufacturing Business
  • Profitability in Peppermint Oil Manufacturing Business

Market potential of Peppermint Oil

The mint oil and its derivatives, like menthol and DMO, are now being sold in several areas in North India and even exported. The Japanese mint oil and menthol have an extensive market. India is the second-largest nation in the preparation of mints and its by-products. India is exporting mints and its derivatives across the world and getting Rs. 60 – 70 crores every year.

Basis and presumptions of Peppermint Oil Manufacturing Business

  • The project relies on a single shift basis and 300 working days per year.
  • Expenses on machinery and equipment mentioned in the project refer to a certain make and costs are calculated based on condition and market scenario during the time of preparation of the project report.
  • Expenses on installation, electrification, etc. are considered as 10% of the equipment cost.
  • Depreciation on equipment could be thought of as 10% of the cost of machinery.
  • Margin money will be considered as 30% of the total capital investment.
  • The Break-even point has been measured at the full capacity use.

Implementation schedule of Peppermint Oil Manufacturing Business

The following steps are needed while planning for the project:

  • Selection of site: 1 month
  • Preparation of project report: 1 week
  • Registration of the production unit from D.I./D.I.C: 1 week 
  • NOC: 2 weeks
  • Pollution Control Board (PCB): 1 month
  • Loan application to the bank: 1 month
  • Installation of machinery and electrification of equipment: 2 weeks
  • Recruiting staff: 1 month
  • Raw material availability and packaging: 2 weeks

License, permissions, and registrations required to start Peppermint Oil Manufacturing Business in India

You should check the various essential permits and licenses that must be obtained from the local authority.

  • Register your business with ROC
  • Obtain Trade license
  • Get SSI registration
  • Factory license is essential
  • Food operator license is mandatory
  • BIS certification is a must
  • “NOC” from the pollution control board
  • AGMARK certification
  • Fire license must be acquired
  • IS 3134.
  • FSSAI is mandatory, as Peppermint Oil Manufacturing business is classified under a food processing industry

Area required to start Peppermint Oil Manufacturing Business

The minimum area required to start Peppermint Oil Manufacturing Unit ranges from 300 – 500 sq. mt. This depends on the scalability of your business.

Raw materials required to start Peppermint Oil Manufacturing Business

In case if you miss this: Feed Mill Project Report.

Peppermint/Mentha (image source: pixabay)

The major raw materials required to start a mint oil manufacturing business are mint leaves, from which oil is extracted.

Process of manufacturing Peppermint Oil

The manufacturing of menthol crystals is summarized in the below three steps: 

I. Freezing of the mint oil.

II. Separation of the oil crystals from the residual oil using centrifugation.

III. Drying of the crystals.

After gathering the mint oil from your sources, it should be carefully filtered before cooling as it commonly contains some water and mucilaginous substances, which hinder the ready manufacture of the menthol crystals. For crystallization, some manufacturers use the filter and centrifuge the oil too.

(I) Crystallization

The purified oil is gradually and gently cooled to less temperature causing the formation of menthol crystals. The freezing process includes three steps 

(I) Cooling at 14°C (II) 10°C and (III) –5°C for hours. Sometimes, the actual method needs 48 hours and cooling till -20°C temperature. Some manufacturers take the help of large refrigerators compartments.

The large plants have regular freezing rooms. The gradual and slow cooling allows the formation of large and more uniform crystals.

(II) Separation of Menthol Crystals from the Dementholised Oil

This is done by decanting the remaining liquid oil from the crystal first and then centrifuging the crystals in large capacity centrifuges that have 1200 RPM as rotating speeds. Some manufacturers even plan to wash the crystals using less quantity of water during the centrifuge process.

(III) Drying of the Menthol Crystals

The centrifuged crystals are placed upon the trays in large cabinets or special room dried for around 36 hours in a steady flow of air at a temperature of approximately 26ºC. This task must be carefully performed. Now the crystal is ready for packing and selling to the market.

Peppermint Oil Project Report/ economics of Peppermint Oil Manufacturing Business in India

A. Fixed Capital

(i) Land and Building

Land 300sq. mt. @ 600 sq mt. Rs. 1,80,000

Covered area 200 sq. mt. @ Rs. 3,500 and boundary wall Rs. 7,00,000

Total 8,80,000.

(ii) Plant and machinery

1. Chilling plant cap. 492 liter, temp. (50ºC ) chart type: Rs. 1,89,000

2. Centrifuge heavy-duty R.P.M. 1200: Rs. 80,000

3. S.S. reaction vessel with stirrer cap. 200kg: Rs. 1,80,000

4. Dryer capacity 100 kg 12 trays. with Thermostat temperature control: Rs. 1,80,000

5. Vacuum filter: Rs. 40,000

6. S.S Tray for storage: Rs. 60,000

7. Laboratory equipment: Rs. 50,000

8. Transportation and installation charge @ 10% of the cost of plant and machinery: Rs. 77,900

B. Working Capital

(i) Staff and Labour (per month)

1 Chemist/Manager: Rs. 10,000

2 Technical Assistant: Rs. 20,000

3 Skilled Worker: Rs. 24,000

4 Typist /Clerk: Rs. 4,000

5 Watchman: Rs. 12,000

Total: Rs. 70,000

Perquisites @ 15%: Rs. 10,500

Total: Rs. 80,500.

(ii) Raw Materials and Packing Materials (per month)

1. Mint oil: 11,250 kg, where it costs Rs. 300 per kg: Rs. 33,75,000

2. Chemicals: Rs. 10,000

3. Packing materials: Rs. 20,000

Total: Rs. 34,05,000

(iii) Utilities (per month)

Power 1250 unit @ Rs.4: Rs. 5,000

Fuel: Rs. 5,000

Total: Rs. 10,000.

(iv) Other Contingent Expenses

1. Postage/Stationery: Rs. 1,000

2. Telephone: Rs. 500

3. Repair/maintenance: Rs. 5,000

4. Transportation: Rs. 10,000

5. Advertisement/publicity: Rs. 5,000

6. Miscellaneous expenses: Rs. 2,000

Total: Rs. 23,500.

(v) Total Working Capital (per month)

= Rs. 80,500 + 34,05,000 + 10,000 + 23,500

= Rs. 35,19,000.

Total Capital Investment

Fixed capital: Rs. 17.36,900

Working capital (3months): Rs. 1,05,57,000

Total: Rs. 1,22,93,900.

Cost of Production (per annum)

Total recurring expenditure: Rs. 4,22,28,000

Depreciation on building @ 5%: Rs. 35,000

Depreciation on plant and m/c @ 10%: Rs. 85,690

Interest on total capital investment @ 14%: Rs. 17,21,146

Total: Rs. 4,40,69,836

Or Say: Rs. 4,40,69,850.

(2) Turn Over (per annum)

By sale of:

(I) Flakes 85050 kg @ 500 kg: Rs. 4,25,25,000

(II) De-mentholised 36450 kg @ Rs. 160/kg: Rs. 5,83,2000

Total: Rs. 4,83,57,000.

Profitability (per annum) in Peppermint Oil Manufacturing Business

Profit = Rs. 4,83,57,000 – Rs. 4,40,69,850 = Rs. 42,87,150.

Rate of Return

= Profit × 100 / Total capital investment

= 42,87,150 × 100 / 1,22,93,900

= 35.0%.

(5) Net Profit Ratio

= Profit × 100 / Sale

= 42,87,150 × 100 / 4,83,57,000

= 8.86%.

Break Even Point

= Fixed cost × 100 / Fixed cost + profit

= 2241036 × 100 / 23,41,036 + 42,87,150

= 2241036 × 100 / 6528186

= 34.3%.


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