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 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
2453524472
2800829381
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
• 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
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
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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