PROJECT PROFILE

ON SANDALWOOD
POWDER
Table of Contents
INTRODUCTION 3
PRODUCTS AND ITS APPLICATION 3
DESIRED QUALIFICATION FOR PROMOTER 3
INDUSTRY OUTLOOK/TREND 3
MARKET POTENTIAL AND MARKETING ISSUES, IF ANY 4
RAW MATERIAL REQUIREMENTS (per month) 4
PRESUMPTIONS 4
MANUFACTURING PROCESS 4
MANPOWER REQUIREMENT (PER MONTH) 7
LAND 7
MACHINERY SPECIFICATIONS 7
UTILITIES & CONTINGENCIES (per month) 7
WORKING CAPITAL ASSESSMENT (per month) 8
CAPITAL INVESTMENT 8
IMPLEMENTATION SCHEDULE 8
SALES REVENUE 8
PROFITABILITY CALCULATION 9
BREAK EVEN POINT ANALYSIS 10
Reference: 10
MANUFACTURES/ SUPPLIERS OF MACHINERY 10
REQUIREMENT: 10
DISCLAIMER: 10
DISCLAIMER: 10
INTRODUCTION
Sandalwood is an aromatic evergreen tree of the genus Santalum with a hefty, yellow and fine-grained wood,
which was an integral part of perfumes, fragrances, colognes for times immemorial. Sandalwood oil and
powder are used extensively for its impressive beauty and health incentives. It is second costliest wood in the
world after African Blackwood and its unique scent is highly prized in ancient medicines for its innumerable
therapeutic properties.
Sandalwood is very expensive and it is used for making various articles. The Indian sandalwood is perhaps the
planet’s most expensive wood because of its cosmetic and therapeutic value. There is huge international
demand for it with its highly priced fragrant heartwood. This tree grows very well in South Indian soil
especially in Karnataka, Tamil Nadu and Andhra Pradesh. There was no cultivation on private agricultural
land in the rest of the country. But a policy change in Karnataka and Tamil Nadu in 2001 and 2002
respectively allowed people to grow sandalwood. This inspired other states. Since past decade, large
agricultural land came under sandalwood cultivation in Andhra Pradesh, Madhya Pradesh, Gujarat,
Maharashtra and Uttarakhand apart from Karnataka and Tamil Nadu. The sandalwood plantation area is ever
increasing, according to an estimate by the Institute of Wood Science and Technology (IWST), Bengaluru, a
pioneering institute for sandalwood research. This will help revive the country’s lost glory in the sandalwood
trade. Now, Australia is the highest producer of Sandalwood.

PRODUCTS AND ITS APPLICATION

Sandalwood is used for various purposes – powder making, sandalwood oil, beauty products, Ayurvedic
medicine, etc. Sandalwood powder is aromatic powder of sandalwood. It is mainly used for religious purposes
like puja. It is applied as tilak on forehead in puja and religious rituals. When applied as paste on skin, it helps
cures facial outbreaks, acne, blackheads and rashes. The paste also makes skin glow and moisturize the skin.
The powder also used as cooling & healing, fragrant freshness and baby care. Sandalwood powder is the main
ingredient for sandalwood oil, soap, agarbatti, perfume, etc.

DESIRED QUALIFICATION FOR PROMOTER

The promoter does not require any specific skills.

INDUSTRY OUTLOOK/TREND
Sandalwood powder is exported to various parts of the world from India. Some of the prominent importers
of Indian sandalwood powders are USA, Nepal, Bangladesh, Indonesia, UAE, France and Philippines. India
exported around Rs. 59,401.54 lakhs of sandalwood powder during 2020-21. The export growth is around
6.57 percent.
HS Code: 33049990
Year Exports Value in Rs. Lakhs
2021-22 (April-June) 22,076.44
2020-21 59,401.54
2019-20 55,738.30
2018-19 53,358.74
Source: Ministry of Commerce & Industries, Govt. of India

MARKET POTENTIAL AND MARKETING ISSUES, IF ANY

Sandalwood is very expensive and it is used for making various stuffs. India slips from export status to import
of sandalwood oil. Kannauj is the place for Sandalwood Oil and Attar. Due to high demand for sandalwood
oil for making attar, Kannauj became the hub for distilling it even though most of the wood actually grew in
the southern states of Karnataka and Tamil Nadu. After the policy change of private plantation, and several
other government initiatives, sandalwood farming has been increasing in India. This will pave the way for raw
material requirement for the entrepreneurs. The perfume industry and beauty products industries in the world
is growing at a significant rate. The demand for Indian sandalwood is always high in the world. There are no
marketing issues related to sandalwood powder.

RAW MATERIAL REQUIREMENTS (per month)

Sl. No. Particulars Value
1 Chips of Heartwood and sapwoods of sandalwoods 8,00,000
2 Packaging materials 50,000
Total 8,50,000

PRESUMPTIONS
● Plants are operating 300 days in a year. It will work 8 hours shift
● Machine can crush 5 kg chips per hour
● Pre-operative expense include registration, project DPR, loan sanctioning cost, etc.
● Capacity utilization of the plant is 70%, 80%, 90% in 1st year, 2nd year and 3rd year respectively.

MANUFACTURING PROCESS
Sandal wood trees are harvested at the age of 30-60 years. Sandal is considered to be a slow growing tree. It
grows at the rate of 5 cm. of girth or more per year under favorable soil and moisture conditions. The heartwood
formation starts around ten years of age. The soft wood is first removed; the hard wood is chipped and then
converted into powder in a mill or machine. Later it is pulverized to get the grind materials. Those powders
are packed in different pack size and label those packs.
The general process flow chart for Sandalwood Powder is given below:

Sandalwood collection

Removal & Softwood

Hardwood extraction

Chipping of hardwood

Placed in a grinding machine

Pulverization (Crushing/Grinding)

Packaging

Labelling
MANPOWER REQUIREMENT (PER MONTH)

Type Number Cost (Rs.)

Wages of Labour
Manager cum owner 1 30,000
Machine operator 1 12,000
Helper cum sweeper 1 8,000
Sub-total per month 50,000
Sub-total per year (in Rs. Lakh) 6.00
Salary of staffs
Marketing personal 1 15,000
Sub-total per month 15,000
Sub-total per year (in Rs. Lakh) 1.80

LAND
Particulars Units Total Area Rate per month Total Cost per year
(INR) (INR Lakh)
Land (own/lease) Sq. Ft. 700 30.00
Covered area Sq. Ft. 500 2000 10.00

MACHINERY SPECIFICATIONS
The Sandalwood logs of small size are placed on the circular shaped grinding stone. Crush the chips using a
mortar pestle - the motor rotates the grinding stone over the sandalwood log, a small quantity of water gets
added with the result that a smooth Sandalwood paste is formed. Total cost of the machineries is INR 40,000.

Particulars Capacity Unit Cost (INR)

Cost of furniture & fixtures Lumpsum 20,000
Tricycle Mounted Sprayer Capacity 5kg/hour 40,000
Total 60,000

UTILITIES & CONTINGENCIES (per month)

Sl. No Particulars Cost (Rs.)
1 Electricity 2,000
2 Contingencies 3,000
2.1 Postage and stationery 2,000
2.2 Advertisement & publicity 5,000
2.3 Repair & maintenance 1,000
2.4 Storage 3,000
2.5 Transportation 5,000
2.6 Insurance, taxes, and telephone bills 2,000
2.7 Unforeseen expense 2,000
Total 25,000

WORKING CAPITAL ASSESSMENT (per month)

Particulars Value (in INR)
Manpower 65,000
Electricity 2,000
Contingencies 3,000
Raw materials 8,50,000
Total Recurring expenditure per month 9,20,000
Total for 3 months 27,60,000

CAPITAL INVESTMENT
Sl. No Particulars Cost (Rs. Lakh)
1 Land 40.00
2 Plant & Machinery and Furniture 0.60
3 Preoperative Expenses 0.50
Total Fixed Capital 4.20
4 Working Capital (for 3 months) 27.60
Total 72.90

IMPLEMENTATION SCHEDULE
Project Stages Months……
1 2 3 4
Acquisition of Land
Ordering of Machinery
Delivery of Machinery
Term/Working Loan Sanction
Installation of Machinery
Commissioning of Plant
RM/Inputs Procurement
Manpower Appointments
Commercial Production

SALES REVENUE
Computation of sale
Particulars 1st year 2nd year 3rd year 4th year 5th year
Op Stock (MT) 0.70 0.96 1.10 1.20
Production (MT) 7.04 9.60 10.8 10.8 10.8
Less: Closing Stock (MT) 0.70 0.96 1.10 1.20 1.21
Net Sale 6.34 9.34 10.66 10.7 10.79
sale price per KG 1600 1700 1800 1900 2000
Sales (in Lacs) 95.10 149.44 181.22 192.60 205.01

PROFITABILITY CALCULATION
Sl. Particulars 1st year 2nd year 3rd year 4th year 5th year
No
Capacity Utilization (%) 60 80 90 90 90
A Gross Sales (INR Lakh)
95.10 149.44 181.22 192.60 205.01
Cost of Sales
B1 Raw Materials (INR Lakh)
72.00 100.80 118.80 124.20 129.60
B2 Electricity (INR Lakh) 0.24 0.24 0.24 0.24 0.24
B3 Contingencies (INR Lakh) 0.36 0.36 0.36 0.36 0.36
B4 Wages (INR Lakh) 4.00 6.00 6.60 7.20 7.90
B5 Packaging cost & overheads (INR 4.00 6.00 6.60 7.20 7.90
Lakh)
B Cost of Production (INR Lakh)
80.60 113.40 132.60 139.20 146.00
Add opening stock (INR Lakh)
0.00 13.30 19.20 23.10 26.40
Less closing stock (INR Lakh)
12.60 18.24 22.00 25.20 26.62
B Cost of sales (per year) (INR Lakh)
68.00 108.46 129.80 137.10 145.78
C Gross Profit (INR Lakh)
27.10 40.98 51.42 55.50 59.23
D Interest on Capital Investment
(INR Lakh) @10%
6.79 6.79 6.79 6.79 6.79
E Salary
1.20 1.80 1.98 2.18 2.40
F Marketing & Admin Expense
1.20 1.80 1.80 1.80 1.80
G Depreciation of machineries
@10%
0.06 0.06 0.05 0.05 0.05
H Depreciation of building @10%
1.0 0.90 0.81 0.73 0.66
Total (D+E+F+G+H)
10.25 11.35 11.43 11.55 11.7
H Net Profit
16.85 29.63 39.99 43.95 47.53
I Tax @30%
5.06 8.89 12.00 13.19 14.26
J Profit after taxation
11.80 20.74 27.99 30.77 33.27
BREAK EVEN POINT ANALYSIS
Sl. No Particulars Cost (Rs. Lakh)
1 Depreciation on machineries @ 10% 0.06
2 Depreciation on building @ 10% 1.00
3 Interest on capital investment @10% 6.79
4 40% of salary and wages 2.08
5 40% of the utilities and contingent expense 1.20
6 Insurance 0.12
7 Total Fixed Cost 11.25
Net profit 1st year 11.80
BE Point: Net profit X100/Net Profit + Fixed Cost 51.19%

Reference:
- 10th National Grassroots Innovation and Outstanding Traditional Knowledge Awards –
2019, https://nif.org.in/dwn_files/10th-award-book-2019.pdf
- Video link-
Sandalwood Powder Making: https://www.youtube.com/watch?v=-JBCk46pMu4

MANUFACTURES/ SUPPLIERS OF MACHINERY

● INVENTO PROCESSING TOOLS PVT. LTD., Mr Swapnil Jagtap-,623, Station Road, Near
station road, At post - Shendurni, Ta - Jamner, Jalgaon, Maharashtra, 424204, India
● Shri Krishna Pulverisers, Rishabh Rai Khare (Managing Director) Shri Krishna Pulverisers, 30,
Kalpi Road Industrial Estate, Shastri Nagar, Kanpur - 208012, Uttar Pradesh, India
● Shree Hari Enterprise, No. 40, Jimmy Towers, Opposite Swaminarayan Gurukul Gondal
Road, Bhakti Nagar, Rajkot-360002, Gujarat, India

REQUIREMENT:
MSME & GST registration, IEC Code for Export of end products and local authority clearance may
be required for Shops and Establishment, for Fire and Safety requirement and registration for ESI, PF
and Labour laws may be required if applicable.
DISCLAIMER:
This is an indicative illustration of project profile; the above calculation can vary with the locations.
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.

DISCLAIMER:
"The document users/third parties shall verify the facts and figures at their end and shall be solely
responsible for any action taken by it based on this document. BRIEF & SIDBI, its directors,
employees or any office shall not be liable for loss of whatsoever nature arising by using the content
of this document."