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Patchouli Oil Business Plan

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Patchouli Oil Business Plan

  1. 1. PATCHOULI OIL BUSINESS PLANINDONESIA Presented By : Lena Lailasari Girsang
  2. 2. EXECUTIVE SUMMARY Patchouli Oil Industry Indonesia was one of the biggest exporter of essential oil in the world, the output was more than 4000 tons per annum (Statistics Indonesia, 2011). Around 85% of patchouli oil world consumption was coming from Indonesia. World demand of patchouli oil was more than 1500 tons per annum. Indonesia’s output of patchouli oil was 1000 to 1500 tons per annum. 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 oil plantation, refinery and trading business. The main area producing patchouli were Sulawesi, Sumatra and Java island. Small type industry on continuous patchouli oil production was using a 30 acre field of plantation project. Most famous variety were Tapaktuan, Lhokseumawe, Sidikalang with land productivity and yield were 13.28 tons/acre and 2.83%, 11.09 tons/acre and 3.21%, 10.5 tons/acre and 2.89% (Balittro, 2012)
  3. 3. 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
  4. 4. Export Import Data, Indonesia Ministry of Trade
  5. 5. Top Exporters of Essential Oil (HS 3301) in 2010 Sources : ITC/Trademap, 2011
  6. 6. WORLD MAP OF ESSENTIAL OIL CONSUMPTION Uses : • Perfume industry • Fragrance • Health care products • Cosmetics 584.5 Million Dollar Export of essential oil from Indonesia in 2012 1200 ton per annum export of patchouli oil in 2010 Country of Destination USA, Singapore, France, India, Swiss, Spain, Ge rmany, Holland, China, UK, Mexico, EAU, Turkey , Italy, Brazil, Japan, Pakistan, Hongkong, Taiwa n, East
  7. 7. 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. PRODUCTION Production 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 CONTROL Patchouli 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
  8. 8. Patchouli Plantation in Indonesia 2008-2013 (Source : Indonesia Statistic) 35000 30000 29783 28008 25000 29381 24472 24535 20000 22132 Luas Areal (Ha) 15000 10000 5000 0 2008 2009 2010 2011 2012 2013
  9. 9. LOCAL MARKET AND COMPETITIVE LANDSCAPE Local Market Recently, there were more than 30 companies of essential oil in Indonesia. The huge company were : 1. Givaudan 2. Aroma 3. Van Aroma 4. Djasulawangi 5. Takasago 6. Indesso 7. Karimun Kencana Aromatics, etc. Price was fluctuated, it depends on stock, demand, local price, season and the essential company player. Small distiller sell their product to essential oil companies, and they’re collected it into tons and then export it. Small amount of patchouli oil wouldn’t catch up the minimum quantity needed by the importers. A long marketing chain start from traditional distiller-collectors-essential oil companies-traders-buyers. Singapore was one of the patchouli oil biggest trader.
  10. 10. Price Fluctuation of Patchouli Oil Year Month Price (IDR) Sources Patchouli Oil Price Fluctuation in 2013 600000 2013 1 2 480.000 500.000 Takasago, Indesso, Karimun Kencana, Van Aroma, Djasulawangi, Aroma, 500000 55000050000 5 525000 500000 500000 480000 400000 3 450.000 Nusaroma,Pak Yanto, Pak Susilo, 4 450.000 Pak Sukijan 5 500.000 7 550.000 9 525.000 10 500.000 11 450.000 450000 550.000 8 45000050000 4 480.000 6 500000 480000 300000 200000 100000 0 0 2 4 6 8 10 12
  11. 11. 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.
  12. 12. PRODUCT AND SERVICES • Dark Patchouli Oil PA 30 • Light Patchouli Oil PA 30 • Light Patchouli Oil PA 35 • Light Patchouli Oil PA 40 • Patchouli Alcohol Crystal Services • Decreasing the level of acid • Decreasing the level of iron • Increasing the PA grade • Colorless • Purifying
  13. 13. SALES, MARKETING AND PROMOTION Marketing Strategy • • • 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 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)
  14. 14. VIDEO MARKETING & VIRAL DISTRIBUTION How does it work ? Local AUDIENCE • Video of guess visiting the factory • Video of customer testimony of satisfaction • Video of production process Europe • Make in English, France and Spain language • Video of Europe customer visiting le office • In English US • Video of supplier and farmers joined with the cooperation Asia 72% 81.3% 87.6% 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
  15. 15. MANAGEMENT From Upstream To Downstream 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.
  17. 17. APPENDICES 1. 2. 3. 4. 5. 6. 7. 8. Statistics Indonesia, 2013. The Annual Report of Forestry and Plantation. Jakarta Ministry of Trade, 2012. The Export Import Annual Report of 2011. Jakarta Balai Penelitian Tanaman Obat dan Rempah Indonesia (Balittro), 2012. The Press Release of High Quality Essential Oil Seeds in Indonesia. Brian Lawrence-Perfumer & Flavourist version 34. January 2009. Indonesia Ministry of Trade , 2004. Export and Import Data. www.kemendag.go.id ITC Trademap, 2011. Top Exporters of Various Products. Arianto Muyadi, 2013. Market Workshop of Essential Oil. A presentation at National Conference of Essential Oils (KNMA DAI), Padang, West Sumatra. Yanuardi Taher, 2013. Quality of Essential Oild Needed By Market. A presentation at National Conference of Essential Oils (KNMA DAI), Padang, West Sumatra.
  18. 18. SALES OVERVIEW 61% 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. 83% Of the customers like Natural Dark Patchouli Oil PA 30 better than other products. 90% Of the customers were fragrance industry, cosmetics factory and personal health care products. 800 kg $48 The average quantity of purchase every customer. Until $56 per kg, price of Patchouli Oil FOB mother vessel Indonesia.
  19. 19. ABOUT US OUR PHILOSOPHY We provide natural essential oil with quality, quantity and delivery time that you can trust. OUR TECHNOLOGY Fractionation units and quality control supervised by expert from Gadjah Mada university. Every shipment was valuable for us, so it’s OUR MISSION Be your best partner on finding natural essential oil right from the plantation with the competitive price with our most reliable quality. OUR PRODUCTS • Patchouli oil • Clove leaf oil • Citronella oil • Clove bud oil • Nutmeg oil • Ginger oil • Eucalyptus urophylla oil • Services in increasing quality of essential oils
  20. 20. 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. Ph : +62-8122-7072492 +62-274-4396147 Email : lena.lailasari@gmail.com lena@malya.co.id www.madamlena83.blog spot.com www.malya.co.id