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written by | October 11, 2021

Learn About Starting a Chemical Business in India

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There's a hot buzz of startups in India. The youth is very excited about figuring out how to make money for themselves rather than working on salaries for others. Startups can be of many kinds. Some are just polished ideas from people already engaged in the business, while a few are unique. 

There are great chances of a successful startup in the chemical industry. We use a lot of chemicals every day without even noticing. Toothpaste can be a great example. 

The main process carried out in chemical factories is converting raw materials (air, water, oil, natural gas, metals and minerals) to a great range of products. 

Dow Chemical Company and BASF are generating 50 billion dollars per year, and this stat is enough to reflect the level of demand in the current world.  

Did you know? 

The experts expect the chemical industry to grow at an astonishing speed of 8-9% in the upcoming decade in India. The Indian Chemical Industry comprises around 70,000 chemical manufacturing units, where small-scale chemical industries form most of that number. 

How to Start a Chemical Trading Business?

Understanding the Basics First

Chemicals can be of many types, and each has its kinds, uses, characteristics, etc. Starting a chemical business in India is a huge task, and that's why we can't neglect the importance of research. Let's go through the basics here!

Considering uses, we can categorise the chemical industry into:

  • Consumer products: Most small scale businesses work with consumer products only. These aren't just easier to make, but it is easy to generate day-to-day profit by selling them to general people. You don't need big contracts to develop your business as a consumer products manufacturer or dealer. The product range includes cosmetics, cleaning materials, paints & coatings, automobiles, electronic gadgets, home construction materials, etc.
  • Life sciences: Life sciences generally produce vitamins, pesticides, diagnostics, animal health products, biological substances, pharmaceuticals, etc.
  • Speciality chemicals: It includes coatings, adhesives, sealants, industrial and institutional cleaning chemicals, electronic chemicals, catalysts, industrial gases, etc.

So now, let's move towards designing a plan for a perfect chemical business setup.     

Business Idea

After a business concept has been created, the blueprint must be re-tested. There are a variety of instruments and plans to evaluate the durability of your business idea. After assessing the viability of your business plan, analyse competitors and identify their strengths and weak points. After that, you will need to identify the ideal customer for your company.

Also Read: List of Best Manufacturing Companies in Hyderabad

Create a Plan

There are many types of chemical businesses worth starting. You should know what exactly fits your budget, planning and resources availability. The cost and resource demand will vary if you plan to set up a small-scale manufacturing unit compared to a small retail shop. 

Manufacturing chemical products is a big game, and you need in-depth knowledge in the science field. You'll have to spend high on the salaries of science experts to make your business grow. Machinery can also be expensive. If everything is within your reach, you can certainly proceed. 

Another consideration is the online/offline business factor. You'll need definite space for an offline business to set up your plant or retailing corner and hand out deliveries. While going with the online option, you'll have to think about the storage area you'll need and the online activities that you'll need to perform to generate business. 

Figuring out your business size is the first task before thinking any further. Once you invest money and time in establishing your chemical business, you need a practical approach and dedication to expand it. 

Competition

When you begin your company, you must be aware of your competitors' strategies and marketing plans. Understanding competitors' weaknesses and strengths will help you fill in the gaps in your business strategy. After assessing the competition in markets, you can develop a foolproof strategy and improve your business's performance compared to other businesses.

Market

To be successful in business, it is essential to be part of a vibrant industry or market. To learn more about the market, look for a feasibility study on the market. This report will give you valuable business insight and market trends, consumer demand and the structure of the business. After reading the report, you'll be able to make the best business-related choices. Also, if you’re short on cash, there are many loans available in today’s era to start a business without any financial issues. Read about which Government Loan Schemes in India proves to be best according to your business. 

Veterans

An enterprise in the chemical industry can be an extremely risky business. In the beginning, it can be daunting to handle chemicals without prior expertise or experience. To minimise the danger, seek out an expert in the field. An experienced expert can be contacted to get advice and help when starting a small-scale chemical company. 

Their advice is highly valuable and, therefore, you must follow their advice. To locate a more experienced veteran, look for an experienced consultant. An industrialist with experience will give an impartial opinion without bias.

Licensing

To ensure the safety of your chemical trading business, It is crucial to complete legal formalities for the company. It is necessary to have your company licensed locally. Then, you will need to obtain a permit to operate a chemical company within the local area without any issues.

Also Read: Top Small Trading Business Ideas

Location

Once you've registered the company, it's difficult to locate a company address. When determining the location, you need to ensure that it is near the market, making the flow of goods much easier. Also, it must be verified that your raw material is readily accessible around the location because it could affect the production overall.

There are some crucial steps at the beginning of a chemical business that you must follow. 

Chemical Businesses

Business

Explanation

Agro Chemical Manufacturing

The chemical industry creates and produces pesticides, fertiliser products (e.g., insecticides and herbicides and fungicides), and additional agricultural chemicals (e.g., insect repellents and sheep dips fly sprays as well as flea and tick powders).

 

Agrochemical manufacturing is believed to be one of the most profitable chemical business ideas that can be started with an investment of substantial capital

 

Agarbatti Making

It is possible to start an Agarbatti creating business on a smaller or a large scale. In general, the incense stick is considered good for the home. It's a fantastic product with a lot of market potential.

 

The burning of Agarbatti or incense during social and religious occasions has been a tradition in India from the beginning of time. Agarbatti is an aromatic paste burned in Indian homes to create a fragrant fumigant and is believed to have antiseptic and insecticidal properties.

Air Freshener Production

Air freshener is popular these days. Most people use it at home, at work, and in vehicles. Additionally, it is widely used in public spaces such as lobby areas of hotels, automobile dealers, hospitals, theatre halls, etc.

 

With just a little installation and moderate capital expenditure, you can create a scent collection of fresheners for the air. In addition to selling locally, it's an ideal product to sell online.

Flaps and Auto Tubes

Presently, the market for cars isn't doing well. However, the situation is different in the spare parts and accessories. Every vehicle requires changing the tubes and tires at a certain time. Thus, the demand for change is there.

 

With minimal equipment setup and a modest investment, you can begin manufacturing a unit. The process of manufacturing is easy. It is also possible to sell products first in the local area.

 

Aloe Vera Gel Production

Aloe vera is used as the primary ingredient in cosmetics, drinks, personal care and medical products all over the world. It is possible to start your business modestly and with low capital investment.

Conclusion

The details of this article would have given you a thorough overview of the steps involved in starting a chemical business in India. Many factors need to be considered before you start your chemical manufacturing unit. Get all the necessary permits and licence, start your chemical business, and become the talk of the town!

Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting

FAQs

Q: What are the types of chemical industries that function in India?

Ans:

  There are 3 categories:

  • Consumer products
  • Specialty chemicals
  • Life sciences

Q: Which chemicals have demand in India?

Ans:

  • Alkali – 25.98%
  • Inorganic – 20.92%
  • Organic – 10.4%
  • Insecticides and pesticides – 30.72%
  • Pigments and dyes – 51.06%

Q: How to start a chemical business?

Ans:

  • Prepare a business plan
  • Be wary of the competition
  • Get an expert opinion
  • Choose the route
  • Do primary setup and develop the supply chain

Q: Which chemical business is most profitable in India?

Ans:

Organic chemical manufacturing is among the top profitable chemical business ideas. It has a great demand in the domestic market, and there's a tremendous export potential as well. You need to select the right machinery and product to succeed as an organic chemical manufacturing business.

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.