How to start Lemongrass oil making business – Investment, Requirements | StartupYo


How to Start Lemon Grass Oil Making Business




The application of plants being manufactured into oils and aids for medicines was common in the early 19th century when people relied on the naturally grown flora and fauna to help them with any internal or external anomalies they’d faced.


But today, despite of the advent of technology, artificially developed chemicals and medicines , people seem to choose the Ayurvedic and organic plant and flower infused oils and remedies as healers, more than ever


This is what has contributed to rising market share and demand of lemongrass oil, of whose India is the largest producer. There are approximately 55 species of this plant which is a perennial grass thriving in tropical climates, like in India.


Out of these 55, two of its species

  • Cymbopogen Citratus ( West Indian Grass )
  • Cymbopogen flexuosus ( East Indian Grass )


Are used in cultivating a Lemongrass oil, which is extracted from these fresh and partly dried lemongrass stems and grass through steam distillation.


This oil extraction has opened a market to many niches of consumers and here’s every reason why you should get your hands on this business.


Market potential and uses


The market for lemongrass has been widening ever since the awareness about its healing and curing properties for skin, hair, health, digestion have been spreading among the consumers.


The potential for lemongrass oil is not limited to cater to the domestic Indian demand but has instilled a global demand indeed. India, because of its soil properties and a suitable tropical climate produces fresh and vibrantly lemony lemongrass yielding a very fruitful extraction to produce essential oils.


This capability of Indian has caused many nations to hoard on their imports of lemongrass to take advantage of that freshness and efficiency of lemongrass oil. The major importers being nations from Western Europe and North America.


The primary reason behind this demand for lemongrass oil can be explained through its



Used for skin

  • For curing acne
  • As an oil controlling toner
  • As a gentle face scrub
  • Used for hair
  • In shampoos and conditioner
  •  As an anti-dandruff hair rinse
  • Lemongrass hair oil


Used for health benefits

  • Reduce fever
  • Release headache
  • Soothe digestion
  • Ease muscle pain


Used as a repellent

  • Used as a mosquito spray
  • Insect repellent diffuser blend
  • Flea killing carpet powder


Used in essential oils

  • Relaxing blend
  • Claiming blend
  • Refreshing blend
  • Clean breathing blend


Licenses required


The licenses required to run a lemongrass oil making business:

  • Factory licence
  • Trade license
  • Udyog Aadhar MSME registration
  • GST Registration
  • NOC by the state pollution control board


Investment required

The investment required to set up a lemongrass oils making business would be between ₹5 lakhs – ₹10 lakhs


Profit made

The profits made from a lemongrass oil making business would be ₹ 40000-₹50000 per month


Target consumers

The consumer market for a lemongrass oil making business is huge depending on the utility it is likely to provide to the end consumer because of its numerous applications


Spas and massage centers : They make use of lemongrass oil as essential oil for the purpose of aromatherapy for g their body and also makes use of it for customers with needs like hair spa and facials to give them a rejuvenating experience with the refreshing and hydrating benefits of lemon grass after


Pharmaceutical and Ayurvedic industry: They make use of lemon grass oil to be infused in modern medicines because of its healing properties like soothes digestion, releases tension in muscle pain, reduces headaches etc


Tea industries : The tea making industries also make use of lemongrass oil in their tea bags for the purposes of proving variety to the organic green tea drinkers and also to ensure calm and relaxed blend


Meditative and retreat centers : They make use of lemongrass oil as a prerequisite in meditative massages because of the calming, relaxing, refreshing and clean breathing properties of lemongrass oil


Cleaning industry: They make use of lemongrass oil in disinfectants, mosquitoes repellent and flea repellents as a cleaning adhesive for carpet cleaning and sanitizing are houses, offices, hospitals etc


Food and beverage industry: Make use of lemon grass oil infusion in their beverages like smoothies and salad dressing to benefit from the diverting consumption patterns to health conscious diet.


Fragrance industry: The use of lemon grass oil in perfumes, scented candles, mists, moisturizers and also in incense sticks have been common


Area required


The area required to set up a lemongrass oil making business would be 1000 sq ft


Raw material required


The raw material required to star a lemongrass oil making business :

  • Lemon grass ( 90%-98% ) citral
  • Oil ( 1%-2% )
  • Water
  • Bottles and caps
  • Chemicals


Machinery required


The machinery required to run a lemongrass oil making business:

  • Evaporator vessel
  • Florentine flask
  • Steam boiler
  • Cooling tower
  • Condenser


Manpower required


The manpower required to run a lemongrass oil making business would be:

  • 1-production manager
  • 1-accountant
  • 2-skilled workers
  • 3-unskilled workers

Moreover proper training to these workers in terms of machinery usage, equipment handling, safety and precautions measures etc must also be provided with


Business model and growth


The business model for a lemongrass oil making business can be defined using 4 variants


Value proposition: The unique selling point (USP) and the value which a lemongrass oil making business is likely to bring to you is :

  • Diverting consumption patterns of consumers to organic and herbal products for their body is likely to keep the demand for lemongrass oil up
  • The low cost of production because of lemongrass being a home grown products


Target consumers : The targets consumers to your lemongrass oil making business are:

  • Spas and facial spaces
  • Meditative and retreat centres
  • Cleaning and sanitising industry
  • Pharmaceutical and Ayurvedic industry
  • Food and beverage industry


Competitor review: The main competitors to your lemongrass oil making business would be:

  • The good scents company
  • Plant therapy essential oils
  • Aura Cacia essential oils
  • Katyani exports
  • Edens gardens essential oils


Marketing strategy: The marketing strategy to make most of the lemongrass oil making business to be adapted:

  • Highlighting the manufacturing and extracting process through blogs to attract the retailers: pharmas and spas
  • Highlighting the cost efficiency, benefits and clinical proves in the social media ads and health blogs to attract the consumers who are skin conscious




The lemongrass oil making business has the potential and has witnessed the growth prospects which as follows

  • The global market for lemongrass oil is expected to reach to the value of $232 million throughout ( 2019-2025) at a CAGR of 8.4%
  • The demand for lemongrass oil has been plush on a global scale as well, of which India is the largest producer having said that 10% of the lemongrass oil comes from Japan, one of the largest consumer markets


Profit margin


One is likely to yield a profit margin of 10% From a lemongrass oil making business


Also read :




Why don’t you relax yourself with some scalp massage using that lemongrass oil while we help you make a decision

  • Firstly, The shifting consumption patterns to rely on natural remedies than modern medicines among the Gen Z consumers especially is likely to keep up the demand for lemongrass oil
  • Secondly, the cost of production is minimal with abundance of lemongrass in nation, easy supply chain management and lower investment
  • Thirdly, the in-discovery applications of lemongrass oil had opened a a market to global and local consumers who use them in candles, perfumes etc

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