patchouli oil business plan

PATCHOULI OIL BUSINESS PLAN-INDONESIA

Presented By :Lena Lailasari Girsang

Patchouli Oil Industry

Indonesia was one of the biggest exporter of essential oil in the world, the output wasmore than 4000 tons per annum (Statistics Indonesia, 2011). Around 85% of patchouli oilworld consumption was coming from Indonesia. World demand of patchouli oil was morethan 1500 tons per annum. Indonesia’s output of patchouli oil was 1000 to 1500 tons perannum. Average export of patchouli oil was 1.057 ton per year (Ministry of Trade, 2012).

The large natural resources was one of the main factor which was supporting essential oilplantation, refinery and trading business. The main area producing patchouli wereSulawesi, Sumatra and Java island. Small type industry on continuous patchouli oilproduction was using a 30 acre field of plantation project. Most famous variety wereTapaktuan, Lhokseumawe, Sidikalang with land productivity and yield were 13.28 tons/acreand 2.83%, 11.09 tons/acre and 3.21%, 10.5 tons/acre and 2.89% (Balittro, 2012)

EXECUTIVE SUMMARY

World Essential Oil Production-2007

Essential Oil Production (MT) Main Derivatives

Orange 51.000 Brazil, China Plural

Cornmint 32.000 India, China Plural

Lemon 9.200 Argentine, Spain Plural

Eucalyptus 4.000 China, India Limited

Peppermint 3.300 USA, India Limited

Citronella 1.800 China, Indonesia Limited

Clove Leaf 1.800 Indonesia, Madagascar Plural

Sassafras 1.800 China Plural

Lime 1.800 Mexico Uneconomical

Lavandin 1.300 Frace, Spain Uneconomical

Patchouli 1.200 Indonesia, China Uneconomical

Brian Lawrence-Perfumer & Flavourist v.34 January 2009

Export Import Data, Indonesia Ministry of Trade

Top Exporters of Essential Oil (HS 3301) in 2010

Sources : ITC/Trademap, 2011

Export of essential oil from Indonesia in 2012

584.5 Million Dollar

1200 ton per annum export of

patchouli oil in 2010

Uses :• Perfume industry• Fragrance• Health care products• Cosmetics

WORLD MAP OF ESSENTIAL OIL CONSUMPTION

Country of Destination USA, Singapore, France, India, Swiss, Spain, Germany, Holland, China, UK, Mexico, EAU, Turkey, Italy, Brazil, Japan, Pakistan, Hongkong, Taiwan, East

PRODUCTIONProduction of dried patchouli leaves would be 5 ton/month/acres. Yield minimum

2%, patchouli oil production would be min 80 kg /acres/month, so it would be 700

kg per month. Distillation unit would be 3 unit.

QUALITY CONTROLPatchouli Alcohol (PA) min 30, acid value max 5. Every shipment

provided with CofA, MSDS, Flow of Processing, Product Specification,

and GC data. Packing with plastic drum consist of 200 kg of oil.

MARKETING

Making the right marketing strategy and then transform it into a right

marketing plan

BUSINESS DESCRIPTION

PLANTATION

Pilot project needs 30 acre of land. Every acre of land could be planted

with patchouli seed around 20.000-22.000 plants.

22132

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29783

0

5000

10000

15000

20000

25000

30000

35000

2008 2009 2010 2011 2012 2013

Patchouli Plantation in Indonesia2008-2013

(Source : Indonesia Statistic)

Luas Areal (Ha)

LOCAL MARKET AND COMPETITIVE LANDSCAPE

Local Market

Recently, there were more than 30 companies of essential oil in Indonesia. The hugecompany were :1. Givaudan2. Aroma3. Van Aroma4. Djasulawangi5. Takasago6. Indesso7. Karimun Kencana Aromatics, etc.

Price was fluctuated, it depends on stock, demand, local price, season and the essentialcompany player. Small distiller sell their product to essential oil companies, and they’recollected it into tons and then export it. Small amount of patchouli oil wouldn’t catchup the minimum quantity needed by the importers. A long marketing chain start fromtraditional distiller-collectors-essential oil companies-traders-buyers. Singapore was oneof the patchouli oil biggest trader.

Year Month Price (IDR) Sources

2013 1 480.000 Takasago, Indesso, Karimun Kencana,

2 500.000 Van Aroma, Djasulawangi, Aroma,

3 450.000 Nusaroma,Pak Yanto, Pak Susilo,

4 450.000 Pak Sukijan

5 480.000

6 500.000

7 550.000

8 550.000

9 525.000

10 500.000

11 450.000

480000500000

450000450000

480000500000

550000550000

525000

500000

450000

0

100000

200000

300000

400000

500000

600000

0 2 4 6 8 10 12

Patchouli Oil Price Fluctuation in 2013

Price Fluctuation of Patchouli Oil

International Market

Around 70% of patchouli oil global market was dominated by Givaudan. The others was playing in a low quantity and volume. Since there’s no other substituent of patchouli oil, fragrance and perfume industry still needs patchouli oil for their product.

PRODUCT AND SERVICES

• Dark Patchouli Oil PA 30

• Light Patchouli Oil PA 30



• Patchouli Alcohol Crystal

Services

• Decreasing the level of acid

• Decreasing the level of iron

• Increasing the PA grade

• Colorless

• Purifying

SALES, MARKETING AND PROMOTION

• Define the customer target, local and international market also the sales target

• Creating a good relation and partnership with the previous essential oil companies

• Collecting the sources of any potential oils could be delivered to the customer through an essential oil distiller data and sources of plantation-a trading option and product diversity

Marketing Strategy

Marketing Action Plan

• Creating an informative website, making a video product and upload it into Youtube, making a Facebook page, Twitter and another social media

• Making accounts in marketplace e.g. Alibaba, Linkedin, Toboc, local marketplace like Indotrading and Agromaret

• Creating a blogspot or wordpress consist of articles and tips in essential oil, latest prices and trends

• Making monthly or weekly email and newsletter. Creating a regular schedule of visiting potential customers.

• Making a complete documents of products e.g. Certificate of Analysis (CofA) in every shipment, Material Safety Data Sheet (MSDS) for exports, Flow of Processing and Product Specification. Some of them could also displayed in website

• Joined a specific fragrance, flavor, beauty exhibition at least once in a year

• Joined groups and important meeting of Dewan Atsiri Indonesia (DAI)

Local

Europe

US

• Video of guess visiting the

factory• Video of customer testimony of satisfaction• Video of production process

• Make in English, France and Spain language• Video of Europe customer visiting le office

• In English

• Video of supplier and farmers joined with the cooperation

Audience prefer to see

video of the company

process and products

Using google search

engine and youtube

search before decided to buy

Love to watch video with

real reports and real

people rather than too

much editing and photoshop

72% 81.3% 87.6%

AUDIENCE

VIDEO MARKETING & VIRAL DISTRIBUTIONHow does it work ?

Asia

MANAGEMENT

Making a management system was one of things must be applied in the company.

Plantation

Using a cooperation system to farmers. Company gave the patchouli seed, farmers plant them and harvest should be sold to the company.

Production

Patchouli oil distillation includes a wide range of plantation area, distribution and transportation. Supervisory management would be an important key of success. Every dry leaves distribution, warehouse movement, production, funding in central processing unit must be reported in forms.

Products and Quality Control

Making every product worthy and qualified was on of the focus. Quality control set a serial examination process before and after the production process. Packaging of bulk and retail sales.

Marketing

At first, use the most efficient cost for marketing. Once it’s growing up, the marketing action plan could be done.

From Upstream To Downstream

A FEASIBILITY PRODUT ON THE PROJECT

APPENDICES

1. Statistics Indonesia, 2013. The Annual Report of Forestry and Plantation. Jakarta

2. Ministry of Trade, 2012. The Export Import Annual Report of 2011. Jakarta

3. Balai Penelitian Tanaman Obat dan Rempah Indonesia (Balittro), 2012. The Press Release of High Quality Essential Oil Seeds in Indonesia.

4. Brian Lawrence-Perfumer & Flavourist version 34. January 2009.

5. Indonesia Ministry of Trade , 2004. Export and Import Data. www.kemendag.go.id

6. ITC Trademap, 2011. Top Exporters of Various Products.

7. Arianto Muyadi, 2013. Market Workshop of Essential Oil. A presentation at

National Conference of Essential Oils (KNMA DAI), Padang, West Sumatra.

8. Yanuardi Taher, 2013. Quality of Essential Oild Needed By Market. A presentation

at National Conference of Essential Oils (KNMA DAI), Padang, West Sumatra.

Of the customers were local market, some of them were

essential oils company in Indonesia. The rest of it was several country e.g. Australia, Japan, France and UK.

61%

Of the customers like Natural Dark Patchouli Oil PA 30 better than other products.83%

Of the customers were fragrance industry, cosmetics factory and personal health care products.90%

The average quantity of purchase every customer. 800 kg

Until $56 per kg, price of Patchouli Oil FOB mother vessel Indonesia. $48

SALES OVERVIEW

We provide natural essential oil withquality, quantity and delivery time that youcan trust.

OUR PHILOSOPHY

Be your best partner on finding naturalessential oil right from the plantation withthe competitive price with our mostreliable quality.

OUR MISSION

Fractionation units and quality controlsupervised by expert from Gadjah Madauniversity. Every shipment was valuablefor us, so it’s

OUR TECHNOLOGY

• Patchouli oil• Clove leaf oil• Citronella oil• Clove bud oil• Nutmeg oil• Ginger oil• Eucalyptus urophylla oil• Services in increasing quality of essential oils

OUR PRODUCTS

ABOUT US

Ph : +62-8122-7072492+62-274-4396147

THANK YOU!FOR YOUR ATTENTION

Another business plan available :• Clove Oil Business Plan-Indonesia• Butcher Shop Business Plan• Coconut Palm Sugar Business Plan-Indonesia• Organic Products Business Plan• etc.

Email : [email protected]@malya.co.id

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