This project is for extraction of oil from various oil bearing plants and grasses such as: Eucalyptus, cinnamon ginger, lemons neto etc. Essential oil is highly volatile and is essentially carried away by steam without undergoing decomposition. Essential oils are produced for use in medicine and perfume manufacture, and for other industrial purposes.

The project requires an estimated fixed capital of US$ 28,700 and operating costs of US$ 288,803 generating TR of US$ 505,440 in the first year of operation.

Production Process and Capacity

The leaves are stacked in the extractor and the boiler pressure is maintained at 40 pai and distilling may vary from 3hrs to 18 hours depending on the species being distilled. The leaves are subjected to the steam and oil is extracted as it goes up in the steam. Water is separated through fractional distillation. If eucalyptus leaves are used, 80kgs of oil would be expected to be generated from one hectare. Oil yield may vary from plant to plant or from stuff used such as lemons.

Capital Investment Requirements in US$

Capital Investment Item Units Qty @ total
Fractional Distillation with Condenser No 1 5,000 5,000
Steam generating tank No 1 12,000 12,000
Truck (3-tone) No 1 8,000 8,000
Laboratory equipment No 1 2,500 2,500
Other tools No 200
Furniture & Fittings No 1,000
Total 28,700

Production and Operating Costs in US$ (a)Direct materials, Supplies and Costs

Cost Item Units @ Qty/ day Pdn Cost/ day Pdn Cost/ mth Pdn Cost/yr
Direct Costs
Fresh Leaves and twigs Tones 650 1 650 16,900 202,800
Water Ltrs 0.004 3,000 12 312 3,744
Packaging materials Pcs 1.5 64 96 2,496 29,952
Sub-total 3,065 758 19,708 236,496

General Costs (Overheads)

Rent 500 6,000
Labour 2,050 24,600
Selling and Distribution 369 4,428
Cleaning and Toiletries 63 756
Utilities 529 6,348
Miscellaneous 250 3,000
Depreciation 598 7,175
Sub-total 4,359 52,307
Total Operating Costs 24,067 288,803
  1. Production costs assumed 312 days per year with daily capacity of producing 600 litres of essential oil.
  2. Depreciation (fixed asset write off) assumes 4-years life of assets written off at 25% per year for all assets.
  3. Direct costs include: materials, supplies and other costs that directly go into production of the product.
  4. Total monthly days assumed are 26-days.
  5. The valuation currency used is United States Dollars.

Market Analysis

Essential oil is a vital item in pharmaceutical and perfume manufacture; as well as other industrial uses. The industrial development in the country is a healthy atmosphere for this project as it guarantees the market. There is great potential for export to the highly industrialized world.

Project Product costs and Price Structure

Item Qty/ day Qty/yr @ Pdn Cost/ yr UPx Total Rve
Essential Oil 600 187,200 1.5 288,803 2.7 505,440

Profitability Analysis Table in US$

Profitability Item Per day Per Mnth Per year
Revenue 1,620 42,120 505,440
Less: Production and Operating Costs 925.7 24,067 288,803
Profit 694 18,053 216,637

Government Facilities and Incentives

There are no taxes imposed on exports and any VAT input is claimed and reimbursed by the tax body as a way of encouraging and facilitating exporters.


John Doe
John Doe

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Hi, jenny Loral
Hi, jenny Loral

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