Agarbatti Manufacturing Industry: A Comprehensive Guide

The agarbatti (incense stick) manufacturing industry is one of the most lucrative small-scale businesses in India. This article provides a detailed guide covering raw material availability, costs, machinery requirements, transportation expenditure, space requirements, total expenses, marketing strategies, profitability, and government subsidies regarding agarbatti manufacturing industry. Additionally, we’ll include links to machinery and raw material suppliers and explore the differences between semi-automatic and fully automatic machinery of agarbatti making.

Raw Material Availability and Cost

Essential Raw Materials

1. 1. Bamboo Sticks: The base of the incense stick, typically sourced from Assam, Tripura, or imported from Vietnam and China.

1. 1. Wood Powder: Used for binding, available from sawmills.

1. 1. Charcoal Powder: Ensures even burning, obtained from local markets.

1. 1. Jigat Powder: A binding agent derived from bark.

1. 1. Essential Oils and Fragrances: Includes sandalwood, rose, jasmine, and lavender oils, sourced from fragrance suppliers.

1. 1. Dyes (optional): For colored incense sticks.

1. 1. Packaging Materials: Plastic wraps, cardboard boxes, and branding labels.

Raw Material Costs

Material	Cost (per kg)	Monthly Requirement (Small Unit)	Monthly Cost (INR)
Bamboo Sticks	100-150	100 kg	10,000 – 15,000
Wood Powder	10-15	200 kg	2,000 – 3,000
Charcoal Powder	20-25	100 kg	2,000 – 2,500
Jigat Powder	40-60	50 kg	2,000 – 3,000
Fragrances & Oils	800-1,500	2-5 liters	1,600 – 7,500
Packaging Material	2,000 – 5,000	–	2,000 – 5,000
Total	–	–	19,600 – 36,000

Machinery: Semi-Automatic vs. Fully Automatic

Semi-Automatic Machinery

• • Cost: INR 50,000 – 1,00,000

• • Production Capacity: 5-10 kg/hour

• • Power Requirement: 1-2 kW

• • Advantages: Lower initial investment, easy to operate.

• • Disadvantages: Labor-intensive.

Fully Automatic Machinery

• • Cost: INR 1,50,000 – 3,00,000

• • Production Capacity: 10-25 kg/hour

• • Power Requirement: 3-5 kW

• • Advantages: Higher production capacity, less labor required.

• • Disadvantages: Higher initial investment.

Transportation Expenditure

Transportation costs depend on the location of suppliers and customers. On average:

• • Raw Material Transport: INR 2,000 – 5,000 per month

• • Finished Product Delivery: INR 3,000 – 7,000 per month (local distribution)

Space Requirements

A small manufacturing unit requires approximately 500-1,000 sq. ft. space:

• • Raw Material Storage: 200 sq. ft.

• • Machinery Area: 200 sq. ft.

• • Packaging & Finished Goods: 100-200 sq. ft.

Monthly rent (urban areas): INR 5,000 – 15,000

Total Expenditure (Monthly)

Expense	Cost (INR)
Raw Materials	19,600 – 36,000
Machinery (EMI/lease)	5,000 – 10,000
Labor (5 workers)	40,000 – 50,000
Rent	5,000 – 15,000
Utilities (Electricity)	3,000 – 7,000
Transportation	5,000 – 10,000
Total	77,600 – 1,28,000

Agarbatti Marketing and Selling

Target Customers

1. 1. Retailers and wholesalers

1. 1. Religious organizations and temples

1. 1. Export markets (demand in the USA, Europe, Middle East)

1. 1. E-commerce platforms (Amazon, Flipkart)

Marketing Strategies 

1. 1. Local Distributors: Partner with small shops and regional distributors.

1. 1. Online Presence: List products on platforms like Amazon and Flipkart.

1. 1. Social Media Advertising: Use Facebook and Instagram ads.

1. 1. Exhibitions and Fairs: Participate in trade fairs for exposure.

Profitability in agarbatti manufacturing business:

• • Production: 100 kg/day

• • Selling Price: INR 150/kg

• • Monthly Revenue: INR 4,50,000 (based on 25 working days)

• • Monthly Profit: Revenue – Expenditure = INR 3,22,400 (approx.)

Government Subsidy and Schemes

The Indian government provides support through:

• • MSME Loan Schemes: Low-interest loans under the PMEGP scheme.

• • Capital Subsidy: 15-25% subsidy on machinery.

• • Skill Development Programs: Free training sessions under the Ministry of MSME.

Machinery and Raw Material Suppliers

Machinery Suppliers

1. 1. Indiamart: www.indiamart.com

1. 1. TradeIndia: www.tradeindia.com

Raw Material Suppliers

1. 1. Raw Incense: www.rawincense.com

1. 1. Amazon Business: www.amazon.in/business

This guide provides a comprehensive roadmap for starting an agarbatti manufacturing business, ensuring you have all the necessary details to begin your entrepreneurial journey. With proper planning and execution, this business can yield significant profits and long-term growth.