Incense unit, a potential Business

This Bhutanese incense manufacturer is one of the leading and best incense manufacturers in Bhutan. It has been doing well since its establishment. The promoter has the experience of 30 years although it has been commercialized in early 1990s. The unit produces in the form of sticks as well as powder. 80% of the product is in the form of sticks and 20% as powder. At present the firm is not able to meet the domestic demand and there is potential for export market as well. Knowing the ever-increasing demand, many petty incense manufacturers have started to come up in the country. Through an export mission conducted in Nov.2005 by the Government, it is found that there is a potential international Market for Bhutanese incense.
The customers for this incense unit include people from all walks of life. Incense products are a daily consumable for nearly all-Bhutanese households. They are used for making offerings in the morning and evening and throughout the day during religious ceremonies. Religious institutions use incense in large quantities. Bhutanese buy incense when visiting temples, attending religious congregations, in receiving religious leaders, and for religious and social activities. The domestic demand for incense products is high and will remain steady.
Incense from this unit is increasingly sold in India, Nepal, France, the United States, Great Britain, Taiwan, Malaysia, Singapore and other countries where there are Buddhist institutions and Buddhist practitioners. However, the Bhutanese product arrives at these destinations through carry-on exports and not from direct marketing. So, after expansion the promoter wishes to go into direct export from the unit.
The incense is popular both within and outside the country mainly because of its superior quality. It is natural, hand made and organic. It is produced using more than 40 natural ingredients, which are imported as well as supplied by the local suppliers. No chemical substances are used in this product. Moreover, theses incenses are manufactured with strict adherence to Buddhist prescription.

At present, the domestic demands are met through a show room at the unit. This incense unit generally sends his incense consignments to retailing outlets himself, quite often responding to orders by telephone from retailers. He uses public transport to dispatch the orders but also use friends and relatives to carry the product.
As for international market, instead of the direct marketing, links are maintained by monks, tourists and some business people who possibly have direct contact with retail outlets in the countries they visit. He also sends small consignments abroad by post.
With the expansion of the unit, the unit will be opening showrooms in another district. In different places of historic and cultural importance, retailers will be encouraged giving higher retailing commission. A company car will be used to dispatch the orders from retailers and others.
In case of the foreign buyers, the unit will be making direct contact with the importers. The unit has already have linkages made with some of the potential buyers in Hong Kong and Taiwan.
Although many more incense units are appearing in the scene, they are not a threat to this particular incense unit mainly because of its high brand image in the market. Imported whole incense from India holds a substantial share of the Bhutanese market; There are also imports from Tibet China. Imported product tends to be visually more appealing, have more pieces per pack, and is much cheaper. The share of import is decreasing. It will be unrealistic to state that this import can be 100% substituted by such a small incense unit. The cost of production is incomparable with country like China and India where the labour charges are very cheap. On the other hand, being a specialized incense maker, we can compete in terms of its packages, designs and the number of sticks with the new expansion proposal. Moreover, the advantage of this product over the imported product is in terms of the natural ingredients used and the method of production.
The unit is willing to contribute some part of the amount, which will be taken from the profit made in the year 2004-2005

This incense unit has made difference to over 50 people since its establishment.
With the expansion of this unit, it will generate employment and income opportunity to many more people. The process involved is extremely labour intensive. The unit at present employs fifteen workers with just three workers in 1991, when the unit was first commercialized. With the expansion plan, five more people can be employed in first two years. The workers employed are the ones who are uneducated. This group of people is the one who do not get employed easily. The workers do not need to posses skills and knowledge to work for this unit. Infact, the workers are trained on the job and in the process acquire knowledge and skills. Two former employee of this unit have started their own units.
The indirect impact of this unit is quite impressive. At present, local people from community supply most of the raw materials used in this incense unit. With the expansion of the unit, the opportunity to these local people will be increased as more of theses raw materials will be used. This will encourage them to cultivate some of this plants and natural ingredient. This in turn will increase the living standard of these people.
It will also not generate any sort of solid/liquid/gaseous wastes that might be deemed harmful to the people in the vicinity in particular and surrounding environment in general. The impact of the unit on the environment is very minimal. Juniper is the main raw material and comprises the major bulk of the incense. The juniper used is the ones that are old and fallen. And for every tree felled, we are being asked to plant another two juniper saplings by the law of the country. So there is no way that the unit is going to have so much of negative impact on the environment.
Looking at the increasing demand for incense products, the unit seeks in future a sister unit that will be manufacturing incense related accessories like incense stand, burners and containers.