How this Odisha man clocks Rs 2 crore turnover by extracting oils from medicinal plants

After post-graduation in mathematics, running a cement business and a cashew processing unit, Aswini Nayak finally found a highly profitable business that also supported farmers – extracting essential oils from aromatic and medicinal plants.

Aswini works with 220 farmers, including tribal people, in Odisha to procure roots, leaves and seeds of over 15 medicinal plants for essential oil extraction. These include turmeric, cinnamon, clove, basil, ginger, curry leaves, malkangani (tree of life), bakuchi (Psoralea corylifolia) and others.

His enterprise, Nilachal Aromas in Kashinagar in Odisha's Gajapati district, produces 20 to 25 tonnes of essential oils annually, empowering farmers with consistent income opportunities. Its turnover stood at Rs 2 crore last fiscal.

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The rising demand for essential oils

“Odisha is a storehouse of traditional knowledge around medicinal and aromatic plants. The climate here is also favourable for cultivating herbs and medicinal plants,” Aswini tells 30Stades.

“Given the growing global demand for India’s natural products, I decided to shut down my cement business and focus full-time on essential oil extraction,” says Aswini.

Indian essential oils market was valued at 484.8 million dollars in 2024 and is expected to reach 1,123.5 million dollars by 2033, according to Grand View Research. The oils are increasingly used by pharmaceutical, nutraceutical, and personal care industries.

CIMAP’s senior principal scientist Dr Prashant Kumar Rout says, “Malkangani oil, also called Jyotishmati oil, helps alleviate joint pain, muscle soreness, rheumatism and sciatica problems. Similarly, bakuchi (also babchi) oil is used in traditional medicines for skin healing treatment. Their demand is growing.”   

Aswini, the son of former army man Krushna Chandra Nayak, did not know much about aromatic and medicinal plants earlier. A chance meeting with two childhood friends, who were working in Pune, inspired him to learn more about the business of essential oils. 

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Setting up the business of essential oil extraction

He went to Pune to get basic knowledge about oil extraction for pharmaceutical and perfume manufacturing units. Aswini then approached the Flavour & Fragrance Development Centre (FFDC) in Berhampur (the district headquarters of adjoining Ganjam district) and Lucknow-based Central Institute of Aromatic and Medicinal Plants (CIMAP) for technical support.

With their guidance, he set up a small unit, Chakadola, in 2014 with an investment of Rs 20 lakh using a bank loan. The state government provided 35 percent of the invested amount as a subsidy. Chakadola extracted 3 to 5 tons of oil annually only from lemongrass, palmarosa and eucalyptus, clocking an annual turnover of Rs 30 lakh.  

With growing demand and production, Aswini expanded to set up Nilachal Aromas in 2018. It is a state-of-the-art CO2 supercritical extraction unit, which uses supercritical carbon dioxide to extract compounds from plants. 

Extraction and purification of essential oil using the supercritical CO2 process prevents loss of aroma and degradation of actives. It results in high-quality extracts with minimal residue.

“We provided technical support to Aswini that included quality parameters and the process of value addition needed to make various by-products,” says Dr VV Rama Rao, the head of FFDC.

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Empowering farmers to grow business

For Nilachal, the state government provided 40 percent of the project cost as a subsidy under the state government's Commercial Agri Enterprise (now Mukhyamantri Krishi Udyog Yojana) facilitated by Agricultural Promotion and Investment Corporation of Odisha Ltd.

Before launching Nilachal Aromas, Aswini assisted 20 farmers, including 10 tribal people, to start cultivation of lemongrass, turmeric and basil (of Soumya variety) over 40 acres of land. Aswini also established linkages with another 200 farmers.

Adia Raito, a tribal farmer in Ragidisingh village, says, “I grow lemongrass in one acre. I use cow dung and vermicompost. Pesticides are not needed, as pests never attack the crop.”

He sells the lemongrass to Aswini, who pays him Rs950 to Rs1200 per kg for the lemongrass oil extracted from his crop. The price varies according to market demand, Adia says.

Aswini procures ginger of Suprabha variety and black paper of Panniyur1 variety from Koraput district. He also sources turmeric varieties like Duggirala, Megha and Lakadong from Gajapati along with GI-tagged turmeric from the neighbouring Kandhamal district (known as Kandhamal Haldi).

“I grow turmeric on two acres and sell it raw to Nilachal at Rs 80 to 100 per kg,” says farmer Bodala Ganesh in Kashinagar.  

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Aswini purchases ginger at about Rs 25 to Rs 40 per kilogram and tulsi at Rs 1500 per kg. He collects minor forest produce (MRF) bakuchi seeds from tribals residing along the Odisha-Chhattishgarh border at Rs 150 per kg and malkangani seeds, another MRF, from Rayagada district at Rs 200 per kg. 

Tribals also collect bhersunga from the wild, and Aswini pays them Rs 3,500 per kg of oil. He procures cinnamon from Pune and Mumbai at Rs 550 per kilogram. He also purchases many herbal seeds, plants and leaves from local markets in Odisha. 

The selling price fluctuates according to demand. Currently, the CO2 cinnamon extract is selling for Rs 1400 per kg, the bakuchi extract at Rs 6500 per kg and malkangini oil at Rs 2000 per kg.

Nilachal Aromas processes nearly 60,000 kg of turmeric annually. Around 100 kg of fresh turmeric yields six kg of oil. The processing cost of 100 kg of turmeric is nearly Rs 7000. 

Nilachal uses waste after aromatic oil extraction as cattle feed or for making compost. Aswini sells the waste from ginger and cinnamon at Rs 10 and Rs 50 per kg, respectively. Similarly, bakuchi waste sells for Rs 10 per kg and is used as compost. Lemongrass waste is used as fuel in Nilachal Aromas. However, Aswini does not include earnings from the waste in his annual turnover.      

Expansion to value-added products

Now Nilachal Aromas is set to launch four value-added products -- massage oil No-Ortho, hair oil Shria, pain reliever Roll-Onn and stomach-disorder alleviator No-Gas. While No-Ortho is a mix of turmeric, clove, mint and eucalyptus oils, Shria is a mix of hibiscus, onion, fenugreek and nagarmotha (nut grass) oils. 

Similarly, Roll-Onn is made using eucalyptus, mint, clove and geranium oils, while No-Gas is a blend of jeera (cumin), pan madhduri (fennel seed), ajwain (carom seeds) and black pepper CO2 extracts, according to Aswini.

“We have applied to the Union AYUSH Ministry for requisite licenses,” he adds.

“We are conducting tests to collect and collate the data about the by-products of Nilachal Aromas, which is mandatory for license procurement,” says Dr Prashant. 

(Niroj Ranjan Misra is a Cuttack-based freelance writer. He writes on rural and tribal life, social issues, art and culture, and sports)

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