Raw Agarbatti Business Module (Incense Industry)

Raw Agarbatti Business Module (Incense Industry) , MSME project

1. Presentation By: Sanjay Kumbhar : Roll No 107 Athira Nair : Roll No 079 Joseph Phillip : Roll No 001 Rachita Patel : Roll No 067 Vinod Bopche : Roll No 109

2. *** Flow of Presentation *** Unique Business Proposition Introduction, Executive Summary. Perceived Advantage & Social Benefits Production & Sales Strategy Pricing Strategy. Material Projections & Costing Cost of P&M and Rent SCOT Analysis Mitigation Strategy for Challenges Cash Flow Financial Ratios Conclusion

3. *** UNIQUE BUSINESS PROPOSITION *** Creation of a mechanised facility for bulk manufacture of Agarbatties or Sandal Sticks for supplying to established market players. Transformation from unorganized household industry to Organized Micro Enterprise (with investment in equipment does not exceed Rs. 10 lakhs 2 and investment in plant & machinery not exceeding Rs. 25 lakhs 1 ) Venture to be located in suburban area or Micro Small & Medium (MSME) industrial estates in the outskirts of Dombivli . Supply of finished goods to major markets including Gujarat and Karnataka in addition to Mumbai for retail packaging & branding. Source: 1. MSMED Act 2006 (RBI website); 2. Ministry of Small Scale Industries notification  No.S.O.1722(E) dated October 5, 2006

4. Agarbatti making : Manual to mechanised

5. *** Introduction ***

6. *** Introduction *** Introduction: Incense Invention by Chinese monks around 200 CE. Earlier reference in Vedas- the   Atharva-veda   &   Rigveda -Incense- burning was used both to create pleasing aromas & as medicinal tool. It is widely used by most religions, casts, across the universe Vision: Create sustainable Micro Sector Enterprise in the niche market. Mission: Uplift lifestyle of urban & rural residents and create employment with Women empowerment.

7. Perceived Advantages / Social Benefits Low initial investment & start-up costs. Limited space requirements Assured demand for bulk supply of raw agarbatties Scope of MSME loan from MIDC, banks and District Industries Promotion Council(DIPC) under priority sector. Skill up-gradation & minimum level of training required. Lesser expenses on marketing and promotion warranted. Generation of employment in USK & SSK sector laborers. Gainful income generation opportunities for urban poor. Non-polluting and environment friendly production. Uplift of Rural & Urban living & women empowerment.

8. *** SCOT Analysis *** Strength Strategically located Ease availability of Manpower Eco-friendly Product Lean cost base Less Skill Manpower Minimum Initial Investment Challenges Enhance people’s efficiency with training Scarcity of resources while seasonal employment. Disorganized Unstructured workforce –attrition Highly labour oriented Brand Creation Opportunities High Potential/Demand Demography of urban & Rural High social exposure for urban & Rural Threats Imports by Multinational Players Dependency on supply of Bamboo Competition can mushroom very fast

9. *** Production Strategy *** Initial business module- for 10 No. of semi-automatic machines The machine capacity- 10Kg/Hour, depends on skillset of manpower The production efficiency depends on skill of manpower & enhance with experience, hence assumed 5% incremental every year. The wastage on finished goods- 1% & raw materials- 3 %

10. *** Sales Strategy *** Huge Potential- INR 5475Cr Turnover Industry (125e7/1000*365*600/1e7/5)

11. *** Raw Material Pricing *** India- Price Sensitive Country Item consumption rate amount Bamboo sticks 0.309 Rs 65/kg 20.09 jiggat 0.252 Rs 30/kg 7.56 charcoal 0.324 Rs 4.0/kg 1.30 Saw dust 0.144 Rs 4.0/kg 0.58 TOTAL 37.25

12. *** Raw Materials- Bamboo Sticks *** M/C No Year 1 Year 2 Year 3 Year 4 Year 5 Quantity in Kg/Annum Amount in Lac/Annum Quantity in Kg/Annum Amount in Lac/Annum Quantity in Kg/Annum Amount in Lac/Annum Quantity in Kg/Annum Amount in Lac/Annum Quantity in Kg/Annum Amount in Lac/Annum 0.309 65 0.309 71.5 0.309 78.65 0.309 86.515 0.309 95.1665                         37599 24.44 39479 28.23 41453 32.60 43526 37.66 45702 43.49

13. *** Raw Materials- Jiggat ***

14. *** Raw Materials- Charcoal ***

15. *** Raw Materials- Saw Dust ***

16. *** Cost of Plant & Machineries ***

17. *** P&M Depreciation & Rental Property Cost ***

18. *** Cost of Manpower ***

19. *** Cost of Power, Water, Telephone ***

20. *** Mitigation Stategy for Challenges *** Challenges Description Mitigation Overproduction Manual production in unorganised sector & household industries Assurance of uniform quality in mechanised production Dumping Large-scale cheaper imports from China Diversify into new fragrances and cheaper production Competition Organised sector players such as ITC, Mysore Agarbatties , Gujarat factories etc. Bulk supply of sandal sticks to organised players Technologic Obsolescence New electronic dispensers & chemical fragrance generators may capture the market Traditional values associated with devotional products Fire Hazard Chances of fire during production & operation Fire protection measures / insurance to be provided

21. *** Cashflow Statement ***

22. *** Cost of Capital ***

23. *** Ratios ***

24. *** References *** http:// en.wikipedia.org/wiki/Incense_of_India http :// iii.gov.in/images/stories/RTP2012/4_Industry_Innovation_Cluster.pdf http:// articles.economictimes.indiatimes.com/2013-08-17/news/41420898_1_bamboo-labour-shortage-raw-material http://www.tribac.in/images/Publication/Agarbatti%20Jenner%20selim%20Article.pdf