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MEDICINAL PLANTS

Lekshmi A S

Malavika V K​​

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PROJECT DESCRIPTION

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Production

Processing

Absence of formal medicinal processing with pharmaceutical companies in the state.

Resource allocation

Absence of proper resource allocation in the state even though the state has plenty of aromatic plants

PAIN POINTS

Current practices in the form of small nursery cultivations.

  • Meghalaya has been identified as one of the major states among India where the abundance of medicinal plants is found.
  • Here are various limitations in the state where the production and processing of this medicinal plant matters where the scope of getting business value is more.
  • Designed by Lean launchpad methodology

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WHAT FOR WHAT�

“Leveraging the agricultural potential of rural Meghalaya to provide herbal remedies using essential oil extracted from lemongrass”

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WHY LEMON GRASS

UNIQUENESS OF LEMON GRASS PRODUCTION IN MEGHALAYA

  • Lemongrass cultivation at the farm is done naturally.
  • Soil requirement - Loamy to poor laterite soil, 2-3 weeding required
  • There are no added pesticides to boost plantation
  • Farm Yard manure - 10 ton per Ha
  • Rainfall-200-250 cm
  • Irrigation - Plot should be watered every alternate day of about 4 weeks
  • Meghalaya’s high altitude, climate and rains provides favorable conditions for the growth of this plant.
  • Lemongrass oil with citral content of 75 to 80% is in demand in the market.

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  • High demand -  India produces 500 MT of lemongrass oil per annum, whereas demand for the same is 800 MT per annum.
  • Easier for cultivation than other aromatic plants

Easy to cultivate and pest resistant

Motivation from Government

  • Government schemes like convergence scheme that helps the farmers a lot and the village as a whole and providing awareness and training to the local farmers who are interested in venturing into aromatic plants.
  • "The Rs 18-crore 'Aroma Mission' will ensure that agriculture and allied sectors get due importance and the farmers their benefits," - said by Meghalaya Chief Minister Conrad K Sangma
  • CM also maintained that lemon grass and citronella plant cultivation will be taken up on 50-acre plots in every district of the state. (11 districts)

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PIVOT POINT

INITIAL

USAGE

LEMONGRASS OIL

PROJECT

Started with mosquito repellent​ Spray

  • Lemon grass have a number of usage apart from the mosquito repellent
  • It will restrict the usage

Wide variety of usage and has the demand in the market

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  • Focus on resource allocation problem
  • Bring awareness to the farmers about the usage of lemongrass oil and how they can take advantage of the market.
  • There is a market for lemongrass oil and it brings good revenue along with utilizing the health benefits of lemongrass

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Switched to

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VALUE PROPOSITION

RANKING OF PAIN KILLERS

RANKING OF GAIN CREATORS

COMPETITION

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MVP

WHY WOULD THEY BUY

  • Farmers and Labors - Higher price for the existing products (100 ml – starting from Rs 300 for other brands)
  • Government -Absence of proper resource allocation

Absence of medicinal processing unit

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  • Farmers and labors -100% Herbal – Wide variety of usage, Low cost
  • Encouragement to farmers for the lemongrass production
  • Government
  • Effectively utilize the resources in Meghalaya

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Product: Herbal Essential Oil

Service : Provide herbal Essential oil at low cost to maximum number of peoples and pharmaceuticals who are interested in herbal remedies.

Other herbal and non-herbal companies  ​

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Safe, organic, eco-friendly, low cost, demand

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COMPETITORS

KM MINT CHEMICALS

KELVIN NATURAL MINT PVT LTD

ZIZIRA

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1 Kg= Rs. 1700/-

1 Kg= Rs. 1700/-

1 Kg= Rs. 1600/-

Our Price

For 1 Kg– Rs 1000

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CUSTOMER SEGMENTS

CUSTOMER ARCHETYPE

  • Farmers and laborers in Meghalaya region
  • Pharmaceuticals

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PAINS

Government

  • Struggle to build link between industry and resources

Farmers

  • Health issues of farmers like muscle pain, pest related diseases
  • Environmental problems like soil erosion

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GAINS

Government

  • Increase the lemongrass production
  • There is a market for lemongrass oil and it brings good revenue.

Pharmaceuticals

  • Essential oils are used prominently in several pharmaceutical products because of their healing qualities

Farmers and laborer's

  • Lemongrass finds use as a medicinal herb, as also for its essential oil used widely as an ingredient in aromatherapy to relieve muscle pain, in mosquito repellents
  • More revenue
  • Growing lemongrass prevent soil erosion and revive the land and helps the environment as whole in Meghalaya.

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JOBS TO BE DONE

  • Ensure product quality
  • Provide answers to the queries of customers
  • Provide maximum awareness

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PRODUCTION

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The average yield is about 10-14 tones/acre from which essential oil can be extracted with an average yield of 80 kgs/acres. 

The grass is cut at 10 to 15 cm above the ground level. 

The first harvest is after 8 to 9 months of planting, and thereafter, every 3 to 4 months. 

The slips are prepared for planting by clipping old roots and trimming the leaves.

Lemongrass is propagated from cuttings from mature plants. 

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OIL EXTRACTION PROCESS

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Chiller

Condenser

Distillate

Water oil separator

Essential oil

Material

Steam

Steam generator

Essential oil extractor machine

Plant extract

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REVENUE MODEL

REVENUE MODEL

Direct sales- to the customers directly

Indirect sales(resellers)- pharmaceuticals

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Direct sales

Indirect sales

Rs 150/- for 100ml

PRICING MODEL

COST MODEL

100g lemongrass oil = 111.61ml

From 480kg we get 535680 ml = 5357 bottles of lemon grass oil with 100 ml each

FIXED COST

 

Particulars

Investment in Rs

Distillation unit

320000

Installation charge

50000

TOTAL

370000

VARIABLE COST

 

Material and Labour

Investment in Rs

Cost of labor for land preparation

10000

cost for planting

15000

Application of fertilizers and manures

10000

Weed control and other practices

20000

Cost of planting material

100000

Irrigation charges

20000

Labour charge for harvesting

50000

Cost of distillation

90000

TOTAL

315000

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Loss

Profit

Total Variable Costs

Rs 3,15000

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Fixed Costs

Rs 3,70000

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Quantity Sold

Cost

Break Even

Point

4066 units

Break-Even Analysis Curve

TR

TC

FC

TR = TC

FIXED COST for 480kg lemon grass oil production –Rs 370000

VARIABLE COST for 480kg lemon grass oil – Rs 315000

Number of bottles of 100 ml each = 5357

VARIABLE COST per unit – Rs 59

SELLING PRICE per unit – Rs 150

BREAKEVENPOINT – 4066 units 

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  • We get the profit from selling 4067 units
  • For the 1st year
    • Net revenue can be generated per year – Rs 803550
    • Net profit = Rs 193650

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Benefit from lemon grass oil in 1ha production

Net revenue can be generated from 25 acres/10ha lemon grass cultivation from one district of Meghalaya = Rs 8035500

Net revenue can be generated from whole Meghalaya = Rs 8,83,90500

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DISTRIBUTION

Indirect selling

Direct selling

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Consumers

Retail shops

Pharmaceuticals

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Distribution

Possible Distribution

Channel and Channel

Type

  • Direct – To customers
  • Indirect – Pharmaceuticals

Channel Economics

  • Costs of handling
  • Direct selling expenses
  • Freight Cost
  • Costs of distribution employees

Channel selection

criteria

  • Cost
  • Location
  • Facilities

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Customer relationship

Get customers

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  • Provide free samples 
  • Promotion through  social media
  • Awareness programme on the importance of lemon grass oil
  • List our company and product on yellow pages

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Keep customer

  • Provide assurance 
  • Provide reliability
  • Pre order facilities
  • Accept the feedback from our customers at all times

Grow customer

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  • Word of mouth
  • Blog posting and reviews of satisfied customers
  • Provide quality product and customer service
  • Partnership with other business

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Resources

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Physical resources

    • Machinery
    • Manufacturing plant
    • Transportation vehicle
    • Land, water, Fertilizers
    • Electricity

Financial resources

    • Cash
    • Bank deposits

Intellectual resources

    • Proprietary knowledge
    • Method of production

Human resources

    • Farmers
    • Processing employees
    • Sales people
    • Distributors

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Minimum Viable activities

Customer value add of these activities

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PARTNERS

PARTNER

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  • Patanjali
  • Government

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BENEFITS

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Patanjali

  • Made in low cost
  • Demand in the market
  • 100% Herbal

Government

  • Production wise (Encouragement to the Govt’s convergence scheme which motivates herbal production)
  • Revenue wise( profit from selling 4067 units)
  • 18 Crore Aroma vision

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TYPE OF PARTNERSHIP

Strategic alliance

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BENEFITS WE GET FROM PATANJALI

  • More business opportunities
  • Get more customers
  • More product offerings using lemon grass oil

BENEFITS WE GET FROM GOVERNMENT

Incentives to farmers

Production resources

EXPECTATION OF PARTNERS

  • Quality product
  • Consideration
  • Trust & mutual respect

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BUSINESS MODEL CANVAS

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KEY PARTNERS

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KEY ACTIVITIES

KEY RESOURCES

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENT

DISTRIBUTION CHANNEL

COST STRUCTURE

REVENUE STREAM

VALUE PROPOSITION

Patanjali

Government

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  • Demo bottles
  • Awareness program
  • Provide herbal Essential oil at low cost to maximum number of peoples and pharmaceuticals who are interested in herbal remedies.
  • Provide free samples
  • Promotion through social media
  • Awareness program
  • List company and product on yellow pages
  • Pre order facility
  • Word of mouth

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  • Machinery, Manufacturing plant,Transportation vehicle, Land, water, Fertilizers,Electricity
  • Cash,Bank deposits
  • Farmers,Processing employees,Sales people, Distributors

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  • Farmers and laborers in Meghalaya region
  • Pharmaceuticals

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  • Direct – To customers
  • Indirect – To Pharmaceuticals

Direct sales- to the customers directly

Indirect sales(resellers)- pharmaceuticals

Revenue - Rs 803550 from 1ha for 1 year

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Fixed Cost – Rs 3,70000

Variable cost –Rs 3,15000

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REFERENCES

PRIMARY DATA

  • Virtual interaction with on ground team – Mr. Tulenam
  • SVM Mentors
  • From the company – Kelvin Natural Mint pvt ltd

SECONDARY DATA

  • SVM resources
  • Online articles and publications
  • Meghalaya farmer journey blog

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THANK YOU

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