Aloe vera is an important medicinal plant. In India, aloe vera grows widely throughout the country. From aloe vera, you can produce several value-added items that have huge market potential. The list includes aloe vera juice, gel, powder, etc. Here in this article, we intend to explore how to start an aloe vera gel manufacturing business on a small-scale basis.
Aloe vera gel is the most important product you can produce from aloe vera leaves. The item has both consumer and industrial demand. Basically, you can sell the product in two ways. One is concentrated aloe vera gel for the end consumers. And the other is to the herbal companies that produce aloe vera-based products.
In this business, location plays an important role. If you live in an aloe vera growing area, then only you can start this business. You can’t afford to get the raw materials (aloe leaves) from a far distance. Because it will enhance your production cost.
Aloe Vera Gel Market Potential
Actually, aloe vera belongs to the Liliaceae family and has thick green leaves which contain gel and latex. The gel consists primarily of water and the rest includes various vitamins, amino acids, enzymes, hormones, minerals, and sugars, most of which are found in the human body.
Aloe Vera gel is widely used in the food industry, cosmetic and toiletries industry, and pharmaceutical industry. According to industry experts, the global aloe vera gel market was worth US$ 465 Million in 2016, growing at a CAGR of around 11% during 2009-2016. The market is growing steadily over the last decade driven by varied and increasing usage of Aloe Vera gel in the food, health care, and cosmetic industries.
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Factors such as the increasing trend of consumers towards a healthy lifestyle, coupled with increased usage of aloe vera extract as an ingredient by food, pharmaceutical, and cosmetics industries are fuelling market growth across the globe. Currently, the major trends witnessed in the global aloe vera extracts market are the usage of aloe vera in zero-sugar drinks, as well as exploring the usage of new aloe vera species.
Composition of Aloe Vera Gel
There are as many as 200 different types of molecules in aloe vera (Davis 1997). The aloe vera leaf gel contains about 98% water (Bozzi et al. 2007). The total solid content of aloe vera gel is 0.66% and soluble solids are 0.56% with some seasonal fluctuation.
On a dry matter basis, aloe gel consists of polysaccharides (55%), sugars (17%), minerals (16%), proteins (7%), lipids (4%), and phenolic compounds (1%) (Fig. 1). The aloe vera gel contains many vitamins including the important antioxidant vitamins A, C and E. Vitamin B1 (thiamine), niacin, Vitamin B2 (riboflavin), choline and folic acid are also present.
8 Steps to Start Aloe Vera Gel Manufacturing Business
1. Know the Market
Before starting any business, it is extremely important to do market research and collect more information about the demand for the product, competitors, and target customers. This information will help you in exploiting the gaps in the market and plan accordingly.
2. Create a Business Plan
The next step is to write a business plan document for your aloe vera gel manufacturing business. Some of the basic topics your business plan must address are as follows:
- Executive Summary
- Company Description
- Market Analysis
- Product Details
- Marketing Strategies
- Financial Projections
3. Registration & Licensing for Aloe Vera Gel Manufacturing
In starting aloe vera gel production, you have to obtain several registrations and licenses from the Govt, authorities. Generally, it depends on the specific location of your plant. Additionally, if you want to produce value-added items such as cosmetics products then you need to apply for other specific licenses. Here, we have listed some of the basic requirements for the processing of concentrated aloe vera gel from aloe leaves.
- First of all, you have to register your business. According to the management pattern, select the right form of business.
- Additionally, apply for the Trade License and Professional Tax Registration
- Obtain Pan Card.
- Open a current bank account
- Apply online for MSME Udyog Aadhaar registration
- Apply for a Factory License from the state authority.
- In addition to that, apply for ‘NOC’ from Pollution Control Board.
- Finally, check the tax liabilities and yearly compliance liabilities.
- Apply for GST Registration.
4. Aloe Vera Gel Processing Plant Setup & Machinery
In establishing the plant, the primary requirement is the factory space. However, the area requirement hugely depends on the desired production output and business size. Generally, you can start a small-scale processing plant with a covered area of 1000 Sq Ft. In addition to this, you have to ensure commercial electric connection, water supply, labor, and transport availability.
Basically, you can establish the processing plant in two ways. Either on a semi-automatic basis or a fully automatic basis. However, for a small-scale operation, it is advisable to start the operation on a semi-automatic basis. Additionally, a semi-automatic operation allows you to add additional product lines easily. From the same unit, you can produce aloe vera juice or powder also. And these products have also great industry potential.
Some of the major requirements of machines are:
- Cooling van for getting the aloe leaf from the farm
- Aloe leaf washing unit and extractor
- Aloe vera gel-making unit
- Filling machine
- Testing equipment
- Weighing Scale
- DG set for uninterrupted electric supply
5. Aloe Vera Gel Manufacturing Process
After transport to the factory, you have to wash and disinfect the plants. There are two basic methods of processing. First, the processing of the entire leaf including the shell containing aloin (1- whole leaf method) and separating the leaf from the gel before processing (2- separation method).
In the separation method, the bottom of the leaf is cut off and the leaves are left to “bleed”. This leads to the aloin leaking out of the leaves. This is part of the plant known for its bitter taste and its laxative effect. For a quality product, it is important that the aloin is kept out of the final gel.
After you remove the gel from the plants, you need to filter it. And finally, homogenize, pasteurize, and stabilize it. The last step is then to concentrate the gel. The process from – cutting the leaves and the final Aloe extract – you need to complete it within a maximum of 2 days. however, quality loss in the process can occur in a number of ways. The most important reasons are the poor quality of leaves and poor or slow processing.
Now you can sell the concentrated aloe vera gel to the end consumers or to the industries that produce herbal products with aloe vera gel.
6. Cost of Starting Aloe Vera Manufacturing Business
The cost and investment will depend on a wide range of factors. Some of the major cost components are location. legal fees, and machinery. On average, the total cost of starting a small-scale Aloe Vera manufacturing business will be in the range of Rs. 10 Lacs to Rs. 30 Lacs.
7. Arrange Funds
If you are looking for funding, it is essential to secure funds from banks or other financial lenders. There are also various government schemes that you can avail of. Also, do not forget to apply for a credit card to meet small business expenses.
8. Have a Marketing Plan
Unless you have a well-planned sales and marketing plan, you will fail to achieve the desired success. Have a website and create an online presence. Also, develop an effective distribution network of distributors, dealers, and retailers so the products reach your target customers
Editorial Staff at NextWhatBusiness is a team of Business Consultants having years of experience in small and medium scale businesses.