Tea Tree Oil Project Report, Business Plan

Introduction to Tea Tree Oil Project Report, Manufacturing Business Plan: Tea tree oil is extracted using the leaves of the tea tree. The tea tree was coined by 18th-century sailors, who made tea which got the fragrance from the leaves of the tree growing on the marshy southeast Australian coast. Tea tree oil finds its origins in the leaves of Melaleuca alternifolia. Tea tree oil has been used by Aborigines as a medication for years. These local Australians used tea tree leaves to get the oil, which is then inhaled for colds or applied to the skin for wound healing or any other illness.

A guide to Tea Tree Oil Project Report, and Manufacturing Business Plan

Tea Tree Oil Manufacturing Business Plan
Tea Tree Oil Manufacturing Business Plan

Uses and application of Tea Tree Oil:

  • Tea tree oil is added to sanitizers and hand washes for its antimicrobial properties that can kill bacteria and viruses which are responsible for sickness, illness, and infections, etc.
  • Tea tree oil is considered an ideal natural substitute for the available deodorants in the market. Natural deodorants and scents are indeed used in tree oil that helps the body to maintain proper odor.
  • Tea tree oil is the capacity to repel mosquitoes and thus finds its application in industrial insect repellents.
  • It can aid in healing wounds and decrease inflammation.
  • Tea tree oil can also be used to treat acne on the skin so seen as an active ingredient in gels and lotions available online or in local retailers.
  • It has been an effective bad breath controller and also helps to fight germs that cause tooth decay. Thus, if an individual is looking for a chemical-free mouth wash, then tree oil is ideal for this purpose.
  • Tea tree oil is extensively used for hair care and is seen in hair wash, conditioners, shampoos, and hair serums.

Consumption of Tea Tree Oil

Consumers can buy tea tree oil from e-commerce or local supermarkets or retailers. We can see various brands that have started online such as khadi natural, soul flower, aroma magic, rey naturals, etc. 

It is seen that using tea tree oil is harmless overall but as the essential oils are concentrated, they cannot be consumed directly. It will cause health complications. If this oil is used the first time, then it is obligatory to follow patch tests on the skin. People with sensitive skin or with hypersensitive may develop rashes and irritation in the applied focus. It is suggested to use diluted oil by blending with various oils such as olive oil, almond oil, or coconut oil. Also, using tea tree oil for animals or pets, kids, and pregnant women is not preferred unless and until they have proper consultation by health professionals.

Business plan for starting Tea Tree Oil Manufacturing Business

Farmers are willing to cultivate more for supporting the oil extraction from the tea tree. This interest in a way encouraged entrepreneurs to plunge into this venture for manufacturing tea tree oil. As this oil has great scope one must effectively plan his business. Before starting, this business a thorough analysis and market research mandates. It is easy to conduct an inquiry in the local stores, health care divisions. A proper exploration in this line will aid with establishing the business and operate efficiently. Prepare a proper business plan with this information that includes the expenses related to the raw material sourcing, machinery procurement, marketing strategies, staff salaries, and other important aspects like total investment needed and expected ROI duration.

The business plan for the Tea Tree Oil Manufacturing Business will finally aid you in the following aspects:

  • Detailed project report of Tea Tree Oil Manufacturing Business
  • Basis and presumptions for Tea Tree Oil Manufacturing Project
  • Implementation Schedule of Tea Tree Oil Manufacturing Business
  • List of approvals, licenses, and other permissions required for the business
  • Raw materials required for starting Tea Tree Oil Manufacturing Business
  • List of machinery required for starting Tea Tree Oil Manufacturing Business
  • The manufacturing process of Tea Tree Oil
  • Economics of Tea Tree Oil Manufacturing Business

Basis and presumption for starting Tea Tree Oil Manufacturing Business

  • Number of Working Days in a year: 300 Days
  • Number of Shifts in a day: 1
  • Hours in a Shift: 8 hours
  • Plant Capacity: Consider on Average production capacities of the plant.
  • Raw Material Availability
  • Depreciation: Straight Line Method
  • Manpower: According to project Requirement
  • Rent estimate: On the basis of the current market price of the area.
  • A potential area of Marketing the products: Local market and households.
  • If the project is funded, the term loan would be: 60 – 80% of the Total investment
  • Moratorium Period:  6 – 12 months
  • Repayment Period: 5 – 7 years

Implementation Schedule for Tea Tree Oil Manufacturing Business

Implementation schedule for Tea Tree Oil Manufacturing Project Report can commence production within 1 – 2 months after the approval and first release of term loan.

Below is the list of a license, permissions, and registrations required for starting a Tea Tree Oil Manufacturing Business-

  • MSME registration
  • GST registration
  • ROC
  • PAN Card
  • Aadhar registration
  • Registration of firm
  • Shop Act License
  • FSSAI License
  • IEC Code
  • Export License
  • Fire and Safety
  • ESI
  • PF
  • No Objection Certificate (NOC) from pollution board
  • Trade license from the local municipal authority

List of machinery required for starting Tea Tree Oil Manufacturing Business

We have a few essential types of machinery that are used to perform the steam distillation process. This machinery must be installed at the unit location where the oil will be extracted and manufactured. The list of important machinery is stated here:

  • A Evaporate vessel
  • A Pump for cooling water
  • A Condenser
  • A Pump for condensation
  • A flask

Manufacturing process of Tea Tree oil

The manufacturing process of Tea Tree oil
The manufacturing process of Tea Tree oil

Melaleuca alternifolia oil, or the Tea Tree oil is extracted through the steam distillation of leaves procured from the thin leaf tea tree plant. This tree is remarkable for its fundamental oil, which is almost frequently used while curing parasitic diseases and various illnesses. Obtain tea tree leaves from the dealer you have approached earlier and while purchasing tea tree leaves, make sure they are dry which marks the presence in the leaves. Glass and tempered steel are recommended for the stills. Ensure that the level surface is near to an outlet, at the same time keep it safe where pets can’t access it. Place the required quantity of leaves in the upper partition of the refining set. Make sure you don’t cut the leaves as this might reduce the oil yield. The leaves must be placed with appropriate gaps and not gets packed to allow sufficient space for steam to pass. Begin a low water stream that passes into your condenser. This will allow the oil to stream into the passage. Switch on the hot plate, which will initiate the steam refining process. Allow the plate to get heated and the water to pass through the leaves. They will start to contract in the vessel. Keep the warmth for around 3 hours. Most of the oil that is to be extracted gets evacuated and circulated to the passage at the opposite end during the first 30 minutes. Switch off the hot plate after distilling is complete. Isolated the oil from water that floats on the top. They should isolate simply because of density difference. The resultant tea tree oil is stored using a dim-tinted dropper bottle.

In case if you miss this: Coconut Oil Manufacturing Project Report.

Project Report of Tea Tree Oil Manufacturing Business / Economics of Tea Tree Oil Manufacturing in India

Land and building construction on rental basis: Rs. 3,00,000.

Cost of Machinery: Rs. 2,39,500 .

Pre-operative expenditure:

  • Wooden table four nos.: Rs. 2,000
  • Project profile: Rs. 200
  • Travel: Rs. 2,000
  • Regn. with Sales tax: Rs. 2,000
  • Packing advance for plastic containers, cartons: Rs. 15,000
  • Stationery: Rs. 300
  • Telephone connection: Rs. 3,000
  • Other misc. exp.: Rs. 5,000
  • Total: Rs. 29,500

Fixed capital investment:

  • Machinery: Rs. 2,39,500
  • Pre-operative expr.: Rs. 29,500
  • Total: Rs. 2,69,000/-

Working capital analysis:

  • Tea tree leaves 60 tons @ Rs. 2000/Ton: Rs. 1,20,000
  • Scented Tea Tree oil 500 lit. @ 60/lit.: Rs. 30,000
  • Packing materials (plastic containers, cartons, etc.): Rs. 20,000
  • Total: Rs. 1,70,000


  • Wood 30 quintals @ Rs.120/qtl.: Rs. 3600
  • Electricity 300 KWH @ Rs.3.00: Rs. 900
  • Total: Rs. 4,500

Staff and Labour:

  • Skilled labour: Rs. 10,000
  • Unskilled labour: Rs. 7,500
  • Salesman: Rs. 3,000
  • Accountant: Rs. 2,500
  • Peon: Rs. 2,000
  • Total: Rs. 25,000

Other expenses

  • Rent: Rs. 2,500
  • Transport and travel: Rs. 2,000
  • Telephone: Rs. 400
  • Stationery: Rs. 100
  • Publicity: Rs. 1,000
  • Sale tips: Rs. 1,000
  • Other miscellaneous expenses: Rs. 2,000
  • Taxes and levies: Rs. 500
  • Total: Rs. 9,500

Total working capital per month = 1,70,000 + 4500 + 25,000 + 9,500 = Rs.2,09,000.

Total capital Investment:

  • Fixed capital: Rs. 2,69,000
  • Working capital: Rs. 2,09,000
  • Total: Rs. 4,78,000

Cost of production (Per annum):

  • Depreciation on machinery and equipments @ 10%: Rs. 22,950
  • Depreciation on furniture @ 20%: Rs. 2,000
  • Recurring expenditure (per annum): Rs. 25,08,000
  • Interest on total cap. Investment @ 14%: Rs. 66,920
  • Total: Rs. 25,99,870

Turnover of Tea Tree Oil production

Tea Tree Oil turnover 92.4 MT @ Rs. 30,500/ton: Rs. 28,18,200 (Say Rs. 28,20,000)

Profit in Tea Tree oil production business in India

Profit = Rs. 28,20,000 – Rs. 25,99,870 = Rs. 2,20,130

Net profit ratio = Profit x 100 / Turnover = 7.8%.

Break even analysis:

Fixed cost (Per annum):

Total depreciation: Rs. 24,950

Interest @ 14%: Rs. 66,920

40% salary: Rs. 1,20,000

40% other exp. Except rent: Rs. 33,600

Rent: Rs. 30,000

Total: Rs. 2,75,470

B.E.P. = FC x 100 / FC + profit = 55%.

Marketing strategies to promote your Tea Tree Oil Product

Promoting a tea tree is crucial to get the benefit. When the market is established, the requirement or desire for the product can start advertising to related stores and supermarkets at first contact. One can even advertise tea tree oil by keeping nearby characterized ads, an organization website, or even go to local markets. The brand can be promoted well if the quality of the oil is maintained in a superior grade. Customers only could advertise with mouth talk if the oil has proved very useful for them. Online networking by social media will also advance oil in various ways. The conversions can be closed if the showcasing strategies are properly negotiated. As this oil is having application as a beautifying agent it must be prepared safely and appropriately. A bad review could lead to a drastic impact affecting the brand and in worst cases, you might shut down too.

You may also check this: Tea Powder Making Process.

Conclusion Tea Tree Oil Manufacturing Business

Tea tree oil is less costly and chemical-free for applying to skin, hair, and for personal care products. Many keep this oil everywhere and use it frequently as it is considered a magic cure for all the issues. 

This demand developed an opportunity for businessmen to initiate the tea tree oil extraction venture.


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