Profile No.

: 162 NIC Code: 01292

HERBAL EXTRACTION PLANT

1. INTRODUCTION:

There has been a shift in universal trend from synthetic to herbal medicine recently. It is
ancient wisdom that plants have therapeutic value and are used to treat various diseases
since Neanderthal age. All ancient civilizations in the world are known to use plants for
medicinal purposes. Ayurveda and traditional Chinese medicines are well known to the world
for their natural ingredients and multiple benefits. Nature has bestowed our country with an
enormous wealth of medicinal plants; therefore India has often been referred to as the
Medicinal Garden of the world. Today, people around the globe are giving preference to
alternative medicines such as ayurveda, naturopathy, homeopathy and herbal medicine.
Herbal medicine is cost effective and less expensive than the medicines bought from an
allopathic pharmacy. Increasing realization of the side effects of allopathic medicines,
coupled with the growing awareness about the medicinal benefits as well as therapeutic
effect of herbal products is pushing up the demand for herbal extracts, dietary supplement
sand herbal-based beauty aids worldwide. Herbal extraction and processing is very vast field.
Some of the known projects are, rose plantation, cultivation & rose oil extraction plantation,
cultivation of medicinal plant & herbs, Kali mahendi (henna), aloevera gel, aloevera gel &
powder, aromatic plants cultivation & processing, asparagus cultivation & processing,
ayurvedic churan & tablets, ayurvedic raw material from mercury a-singruph (hingula) or
cinnabar (hgs), b-ras sindhoor, ayurvedic/herbal pharmacy, cough syrup, hair dyes (hinna
based), herbal natural essential oil (steam distillation process), herbal shampoo & cream,
herbal concentrate in the mfg. Of herbal drugs & concentrate, herbal extracts, herbal
medicinal plant & processing, herbs cultivation & processing, herbs cultivation & processing,
menthol crystal from menthol oil, patchouli oil, plantation, cultivation of medicinal plant &
herbs, sindur roli bindi & gulal, tobacco based tooth powder, toilet & herbal soap, herbal
capsules, herbal face paste, rajnigandha oil, amla cultivation, plantation, amla hair oil based
on vegetable oil, aloe vera processing, artemisia vulgaris oil, aloevera gel, juice and powder,
ayurvedic hair oil for colouring of hair oil, herbal wine, mehandi cone, hibiscus cultivation,
herbal beer, azadirachtin from neem, neem based pesticide, moringa -miracle tree, etc.

2. PRODUCT & ITS APPLICATION:

There are a number of Herbal extract producers all over India. Important producers include
the following Cosmetics, Food Pharmaceuticals, Creams, Shampoos, Lotions, Talcum powder,
Moisturisers, Food supplement, Sports drinks, Health drinks, Anti-inflammatory
Detoxification, Treatment of several illness.

3. DESIRED QUALIFICATIONS FOR PROMOTER:

Anyone can start this project. Successful running of this project does not require any specific
qualification. Promoter should have knowledge of ingredients, recipe, production process,
packaging etc.

4. INDUSTRY LOOKOUT AND TRENDS

The Indian Medicinal Plant Extract Market is witnessing an astonishing growth, as there has
been a shift in universal trend from synthetic to herbal medicine. India is a virtual treasure
trove of plant species, and has one of the world’s richest medicinal plant heritages. Medicinal
Plants are highly esteemed all over the world as a rich source of therapeutic agents for the
prevention of diseases and ailments. Owing to its wide range of medicinal uses, the Indian
Medicinal Plant Extract market is expected to grow at a CAGR of around 22% during 2017-
2022. As a result, of increased investments as well as significant demand of medicinal
extract in internationals markets, there lies immense opportunity for new and existing
players to tap the fast growing market which would garner huge revenue.

In the latest research study “Indian Medicinal Plant Extract Market Outlook 2022”, RNCOS’
analysts have conducted a segmented research on the Indian Medicinal Plant Extract
industry, and have interpreted the key market trends & developments that clearly highlight
the areas offering promising possibilities for industries to boost their growth. Indian
Medicinal Plant Extract market is rapidly growing over the years owing to factors like shift in
consumers demand towards herbal and natural product, various schemes launched by
government, key investment & expansions being made in the Indian medicinal plant extract
industry, among others.

5. MARKET POTENTIAL AND MARKETING ISSUES, IF ANY:

The annual turnover of the Indian herbal medicinal industry is about Rs. 7,500 crore as
against the pharmaceutical industry’s turnover of Rs. 14,500 crores with a growth rate of
more than 15 percent. As per study commissioned by the Associated Chamber of Commerce
and Industry (ASSOCHAM), the Indian herbal industry is projected to double to Rs.18,000
crore by 2018, from the current 7,500 core business. India has a vast and rich resource of
herbal raw materials and it can create a niche for itself in the global herbal market if the
domestic industry produced quality products of international standards. The apex chamber
estimates global herbal industry to grow to Rs 90,000 crore by 2018, more than double from
the current level of Rs 30,000 crore. Small-scale players in the sector are likely to witness
brighter times ahead. India could make its presence felt in the world herbal market through
quality products in view of growing bias towards herbal medicines, dietary supplements and
skin and beauty aids because public perception of herbal products is a kin to organic food
products. The Indian market can be divided into two categories. One that covers raw
material needed by the industries and direct consumption for household remedies, while
second category that comprises ready to use finished medicines, health supplements etc.
There is a strong demand for raw stock of amla, isabgol, henna, ashwagandha and aloevera,
and these materials are used in a big way in preparing ayurvedic formulations. The demand
for plant based medicines, health products, pharmaceuticals, food supplement, cosmetics etc
are increasing in both developing and developed countries, due to the growing recognition
that the natural products are non-toxic, have less side effects and easily available at
affordable prices. India has lot of potential for producing world class herbal medicines. For
the Entrepreneurship it is one of the areas of great opportunity & potential.The Indian herbal
Industry is on a roll and poised to grow in the coming years owing to its high demands for
herbal products.
 6. RAW MATERIAL REQUIREMENTS:

Raw material requirements for selected herbal extracts are given below

Amla for Amla oil, Amla Fruit, Aloe Vera Generally, three leaves provide one kg. of Aloe vera
gel. Supply of Aloe Vera Leaves Aloe Vera is extensively cultivated. There is no particular
constraint in expanding the area of cultivation of Aloe Vera to meet the projected increase in
the demand. Therefore, the supply scenario of Aloe Vera Plant material is likely to remain
comfortable. Guggul 700 to 900 Kg are produced per hectare of Guggul gum plantation.
Gum is dried in shade and stored. Guggul is cultivated in Gujarat, Karnataka and Rajasthan.
Vetiver For 1.5 kg of Vetiver oil 100 Kg Vetiver is required.The herbs are grown all over India
in different climatic and seasonal conditions. The raw materials is available as Leaves, Stems,
Barks, roots, Flowers, Seeds, Kernels and Shells. Depending on the physical properties,
including shape and size one has to select the equipments.

7. MANUFACTURING PROCESS:

The manufacturing process for various herbal extracts depend upon the nature of the
individual herbs and the specific process requirements. The various unit operations are used
in the extraction of herbs such as extractors, dryers pulverisers etc. Observance of specific
and stipulated conditions for the production of herbal extracts are necessary to ensure that
there would not be any deterioration in product quality or stability. Take care in Procurement:
Identification a must, before purchasing or growing fresh/dried herbs. Discriminate look a
likes, identical species and adulterated herbs. Cleaning and Drying of plant material; to be
specific to species as well as end products. Freeze drying, Spray drying and Flash drying are
important methods Sun drying is usually the common initial step. Storage in controlled
atmosphere in an aseptic lay out is a must to maintain keeping quality in terms of colour,
actives and fragrance. Temperature, air flow and humidity are closely monitored.
Pulverisation and Grinding media & temperature can play a vital role in quality of final
product. Sifting through various mesh sizes for different end use is strictly followed. This
directly determines the absorption and effectiveness of the herb. Plant materials contain
microbial contamination which resist most of the cleaning techniques. Total Sterilization is
mainly effected through exposure to Ethylene Oxide and Gamma radiation. It is a must to
automate or semi-automate filling. The gauge and material of the packing materials should
prevent ingress of air and moisture. This avoids oxidation, discolouration or deterioration.
Standard analytical methods are used to determine characteristics. Organoleptic tests can
sometimes determine trace component levels. Chromatographic methods are used for
quantitative analysis. Microbiological Examination and Toxicological tests have to be
performed to determine the safety of the herb. Pesticide Residue and Heavy metals are to be
analysed to ensure nil side effects. Clinical trials or post marketing surveillance ensures that
adverse drug interactions are avoided. Distillation * Hydro-distillation. * Steam distillation *
Water-steam distillation * CO2 Supercritical Extraction * Hydro-diffusion * Molecular
Distillation * Spinning Cone Column Distillation.

8. MANPOWER REQUIREMENT :

The enterprise requires 19 employees as detailed below:

Sr. No. Designation SALARY Salary ₹ Number Number Number Number Number

Working Staff PER

Year-1 Year-2 Year-3 Year-4 Year-5
ANNUM

1 Production Manager 18000 36000 2 2 2 2 2

2 Operators 12000 60000 5 5 5 5 5

3 Helpers 10000 60000 6 6 6 6 6

156000 13 13 13 13 13

1 Fixed Staff:

2 Admin Manager 15000 30000 2 2 2 2 2

Accounts/Stores 2 2 2 2 2
3 12500 25000
Assistant

Office Boy 9000 18000 2 2 2 2 2

Sub-Total 73000 6 6 6 6 6

Total 229000 19 19 19 19 19
9. IMPLEMENTATION SCHEDULE:

Sr. No. Activity Time Required

(in months)
1 Acquisition of premises 2.00
2 Construction (if applicable) 2.50
3 Procurement & installation of Plant & Machinery 2.50
4 Arrangement of Finance 1.00
5 Recruitment of required manpower 1.00
Total time required (some activities shall run concurrently) 4.00

10. COST OF PROJECT:

Sr. No. Particulars ₹ in Lacs

1 Land 10.00
2 Building 15.00
3 Plant & Machinery 35.00
4 Furniture, other Misc Equipments 3.00
5 Other Assets including Preliminary / Pre-operative 3.50
6 Margin for Working Capital
expenses 67.50
Total 134.00

11. MEANS OF FINANCE:

Sr. No. Particulars ₹ in Lacs

1 Promoter's contribution 33.50

2 Bank Finance 100.50
Total 134.00
 12. WORKING CAPITAL CALCULATION:

Sr. No. Particulars Gross Amt Margin % Margin Amt Bank Finance

1 Inventories 33.75 0.25 8.44 25.31

2 Receivables 16.88 0.25 4.22 12.66
3 Overheads 16.88 100% 16.88 0.00
4 Creditors - 0.00 0.00
Total 67.50 29.53 37.97

13. LIST OF MACHINERY REQUIRED:

The major machineries required are, Water Extractor * Falling Film Evaporator * Filler
Decanter * Tray Drier * Grinder * Solvent Extractor with Stripping Condenser and Rectifier *
Mixing Tanks For Size reduction from the following. ∑ Jaw crusher ∑ Hammer Mill ∑
Magnetic Separator ∑ Belt Conveyor ∑ Dust Collection Equipment can be selected. Extraction
equipment and for Filtration Nutch filter,or Enclosed filter press, for Evaporation/Distillation,
Solvent Recovery, for Drying of extracts,Tray dryer, Vacuum dryer, Spray dryer are required.
for Utilities, Equipments are Boiler, Coal fired boiler, Light diesel/Furnace oil fired baby boiler,
Packaged boiler, Cooling Tower, Spray ponds,. Natural draft cooling tower, Forced/Induced
draft cooling tower, Refrigeration Plant and Air Compressor are major.

Value
Sr. No. Particulars UOM Qtty Rate (₹)
(₹ in Lacs)
Plant & Machinery / Equipments
a) Main Machinery
1 Extraction Unit NOS 1 12.00 8.00
2 Crushing Unit NOS 1 4.00 4.00
3 Skin PeelingUnit
Distillation Machine NOS 1 5.00 9.00
4 Pulp Division
Drying, Testing, Packing L.S. 1 3.00 5.00
5 Utility Equipments L.S. 1 2.00 5.00
Installation, Taxes And Transportation L.S. 4.00 4.00
Sub-Total 35.00
 Sr. No. Particulars UOM Qtty Rate (₹) Value
Furniture / Electrical Installations
a) Office Furniture LS 1 100000 1.00
b) Stores Cupboard LS 1 100,000 1.00
c) Computer & Printer LS 1 100000 1.00
Sub Total 3.00
Other Assets
a) Preliminary And Preoperative 350
Sub-Total Other Assets 3.50
Total 41.50

All the machines and equipments are available from local manufacturers. The entrepreneur
needs to ensure proper selection of product mix and proper type of machines and tooling to
have modern and flexible designs. It may be worthwhile to look at reconditioned imported
machines, dies and tooling. Some of the machinery and dies and tooling suppliers are listed
here below:

1. Fry-Tech Food Equipments Private Limited

S. No. 4, Raviraj Industrial Estate,
Bhikhubhai Mukhi Ka Kuwa Bharwadvash,
Ramol, Ahmedabad - 380024,
Gujarat, India

2. Hindustan Vibrotech Pvt. Ltd.

Office No. 2, Ground Floor,
Vrindavan Building, Vile Parle East,
Mumbai – 400057,
Maharashtra, India

3. Electrons cooling systems Pvt. Ltd.

S-27, SIDCO Industrial Estate
Kakkalur Industrial Estate
Tiruvallur – 602003,
 Tamil Nadu, India

4. Springboard Enterprises India Ltd.

1st, 2nd & 3rd Floor,
Plot No. 7, 8 & 9,
Garg Shopping Mall,
Service Centre, Rohini Sector 2
New Delhi – 110085

5. Flour Tech Engineers Private Limited

Plot No. 182, Sector 24,
Faridabad - 121005,
Haryana, India

6. P Square Technologies
3, Swami Mahal,
Gurunanak Nagar,
Off. Shankarsheth Road Bhavani Peth,
Pune - 411002,
Maharashtra, India

7. Ricon Engineers
10 To 13, Bhagwati Estate,
Near Amraiwadi Torrent Power,
Behind Uttam Dairy,
Rakhial, Ahmedabad - 380023,
Gujarat, India
 14. PROFITABILITY CALCULATIONS:

Sr. No. Particulars UOM Year-1 Year-2 Year-3 Year-4 Year-5

1 Capacity Utilization % 60% 70% 80% 90% 100%

2 Sales ₹. In Lacs 153.00 178.50 204.00 229.50 255.00

Raw Materials & Other

3 ₹. In Lacs 117.55 137.14 156.73 176.32 195.91
direct inputs
4 Gross Margin ₹. In Lacs 35.45 41.36 47.27 53.18 59.09

Overheads except
5 ₹. In Lacs 15.47 16.44 18.37 18.95 19.34
interest
6 Interest @ 10 % ₹. In Lacs 10.16 10.16 6.78 5.08 4.07

7 Depreciation @ 30 % ₹. In Lacs 9.00 6.30 4.59 3.60 2.70

8 Net Profit before tax ₹. In Lacs 0.82 8.46 17.53 25.55 32.98

The basis of profitability calculation:

This unit will have capacity of 30 Ton/Annum. The growth of selling capacity will be
increased 10% per year. (This is assumed by various analysis and study, it can be increased
according to the selling strategy.)

Energy Costs are considered at Rs 7 per Kwh and fuel cost is considered at Rs. 65 per litre.
The depreciation of plant is taken at 10-12 % and Interest costs are taken at 14 -15 %
depending on type of industry.

15. BREAKEVEN ANALYSIS:

The project shall reach cash break-even at 39.61 % of projected capacity as detailed below:
Sr. No. Particulars UOM Value
1 Sales at full capacity ₹. In Lacs 255.00

2 Variable costs ₹. In Lacs 195.91

3 Fixed costs incl. interest ₹. In Lacs 23.41

4 BEP = FC/(SR-VC) x 100 = % of capacity 39.61%

16. STATUTORY / GOVERNMENT APPROVALS

The Ministry of Food Processing Industries has been operating several plan schemes for the
development of processed food sector in the country during the 10th Plan. One of the
schemes relates to the Technology Up-gradation/ Establishment/ Modernization of food
processing industries.

The Indian food processing industry is regulated by several laws which govern the aspects of
sanitation, licensing and other necessary permits that are required to start up and run a food
business. The legislation that dealt with food safety in India was the Prevention of Food
Adulteration Act, 1954 (hereinafter referred to as "PFA"). The PFA had been in place for
over five decades and there was a need for change due to varied reasons which include the
changing requirements of our food industry. The act brought into force in place of the PFA is
the Food Safety and Standards Act, 2006 (hereinafter referred to as "FSSA") that overrides
all other food related laws.

FSSA initiates harmonization of India's food regulations as per international standards. It

establishes a new national regulatory body, the Food Safety and Standards Authority of India
(hereinafter referred to as "FSSAI"), to develop science based standards for food and to
regulate and monitor the manufacture, processing, storage, distribution, sale and import of
food so as to ensure the availability of safe and wholesome food for human consumption.
Entrepreneur may contact State Pollution Control Board where ever it is applicable.
All food imports will therefore be subject to the provisions of the FSSA and rules and regulations
which as notified by the Government on 5th of August 2011 will be applicable.

Key Regulations of FSSA

A. Packaging and Labelling

B. Signage and Customer Notices
C. Licensing Registration and Health and Sanitary Permits
17. BACKWARD AND FORWARD INTEGRATIONS

The objective of the scheme is to provide effective and seamless backward and forward
integration for processed food industry by plugging the gaps in supply chain in terms of
availability of raw material and linkages with the market. Under the scheme, financial
assistance is provided for setting up of primary processing centres/ collection centres at farm
gate and modern retail outlets at the front end along with connectivity through insulated/
refrigerated transport.

The Scheme is applicable to perishable horticulture and non-horticulture produce such as,
fruits, vegetables, dairy products, meat, poultry, fish, Ready to Cook Food Products, Honey,
Coconut, Spices, Mushroom, Retails Shops for Perishable Food Products etc. The Scheme
would enable linking of farmers to processors and the market for ensuring remunerative
prices for agri produce.

The scheme is implemented by agencies/ organizations such as Govt./ PSUs/ Joint Ventures/
NGOs/ Cooperatives/ SHGs / FPOs / Private Sector / individuals etc.

Backward Linkage:
 Integrated Pack-house(s) (with mechanized sorting & grading line/ packing line/
waxing line/ staging cold rooms/cold storage, etc.)
 Pre Cooling Unit(s)/ Chillers
 Reefer boats
 Machinery & equipment for minimal processing and/or value addition such as cutting,
dicing, slicing, pickling, drying, pulping, canning, waxing, etc.
 Machinery & equipment for packing/ packaging.

Forward Linkage:
 Retail chain of outlets including facilities such as frozen storage/ deep freezers/
refrigerated display cabinets/cold room/ chillers/ packing/ packaging, etc.
 Distribution centre associated with the retail chain of outlets with facilities like cold
room/ cold storage/ ripening chamber.
18. TRAINING CENTERS AND COURSES

There are few specialised Institutes provide degree certification in Food Technology, few
most famous and authenticate Institutions are as follows:

1. Indian Institute of Food Science & Technology,

Plot No.1, Near Maa-Baap ki Dargah,Opp to Nath Seeds,
Paithan Road Aurangabad
Aurangabad - 431005
Maharashtra, India

2. MIT College of Food Technology, Pune

Gate.No.140, Raj Baugh Educational Complex,
Pune Solapur Highway,
Loni Kalbhor, Pune – 412201
Maharashtra, India

3. CSIR - Central Food Technological Research Institute (CFTRI)

Cheluvamba Mansion, Opp. Railway Museum,
Devaraja Mohalla, CFTRI Campus, Kajjihundi, Mysuru
Karnataka – 570020

Udyamimitra portal ( link : www.udyamimitra.in ) can also be accessed for handholding

services viz. application filling / project report preparation, EDP, financial Training, Skill
Development, mentoring etc.

Entrepreneurship program helps to run business successfully is also available from Institutes
like Entrepreneurship Development Institute of India (EDII) and its affiliates all over India.

Disclaimer:
Only few machine manufacturers are mentioned in the profile, although many machine
manufacturers are available in the market. The addresses given for machinery manufacturers
have been taken from reliable sources, to the best of knowledge and contacts. However, no
responsibility is admitted, in case any inadvertent error or incorrectness is noticed
therein. Further the same have been given by way of information only and do not carry any
recommendation.