Blog How to start an oxygen plant in India? – Investment Profit Details – MoneyPluck

How to start an oxygen plant in India? – Investment Profit Details – MoneyPluck

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Hi, welcome to everyone today what we are going to see is a business idea that is suitable in this extreme time… We all suffering from the covid spread and this business is very essential for society and if you start this business it will be a great service for the public and also it will be profitable for you too. Therefore, we are going to discuss the oxygen manufacturing business.

If you take India this business has been started only by a few people… But the necessity of this oxygen plant by the Indian government is very very huge…

And therefore the government is increasing to start this business.

Investment and Cost details of Oxygen Plant Business

First, let us see the investment details to start this Oxygen Plant business…

Investment costs around a minimum of 33 lakh to a maximum of 45crores. So the cost of this machine starting from 33 lakhs. If you want to start a big plant, you might need 450000000 rupees to start that.

Oxygen plant with a production rate of 80 Nm3/hour

You may ask, can we start this business with 10 lakh or 15 lakh rupees… if you start this business with an investment of 15 lakh or 10 lakh Rupees, then the profit margin will be very low for you to run this business.

Only if you have 10 tons of oxygen production daily, you will be eligible for the government subsidy to start this business. In that case, you will require at least 33 lakh rupees to start a basic oxygen plant model.

License and Procedures to start this Oxygen Plant Business

Next, let us see about land requirements to start and run this business.
The minimum land requirement to run this business may be starting from 1000 square feet and the maximum land requirement will be like 2 acres of land. It varies according to your investment in the oxygen plant.

  • Village NOC from GAON Panchayat.
  • Trade license from the local authority.
  • Consent to establish the state pollution control board.
  • Factory license approach to chief inspection of factories (state government),
  • Power load approach to Power Distribution Company.
  • Aadhar Card.

The government has more need for this business and therefore it is giving many benefits for those who start this business…

Tamilnadu Government is providing 30% of the capital subsidy.
And the subsidy is given in two installments within 5 years.
You have to start this business within August 2021 to avail of this government subsidy not only the government is ready to provide the location to start this business, for example, SIDCO and SIPCOT.
As I said earlier, one should produce at least 10 tons of oxygen per day to avail of these benefits from the government. And loan will be provided immediately by the government, the interest rate for the loan will be 6 percentage only

Material requirements to start and run this business:

  • Electricity cost.
  • Water supply.
  • Packaging material cost.
  • Cylinder cost.
  • Employee expenses and salary.
  • Repair and maintenance costs.

Management Expenses:

  • You have to spend money for the sales team and you have to spend money on promotion and transportation.
  • You have to appoint a recruiting person and an accountant for this business.
  • Other miscellaneous expenses

There are different methods of Oxygen gas production

1.Cryogenic distillation process:

The cryogenic air separation achieves high purity oxygen more than 99.5 the high purity O2 is stored as a liquid or gas form in cylinders.

You can roughly have an idea of how oxygen is produced in the plant using the below flow chart…

This oxygen is used for industrial purposes.

2.Pressure swing adsorption, PSA:

The separation of Nitrogen and Argon is separated from this machine.
In this method.
The PSA method is used for producing oxygen in hospitals and it cost around 30 lakh rupees to start this business. It can take it directly from here so low operational cost and easy installation the maintenance.

If you start this business with the minimum investment of 30 lakh oxygen plant then you will be having a 15 % of profit margin in this business. This business has a huge demand all over the world due to the covid-19 spread. The oxygen produced can be used in hospitals and also it is used in industries.

The raw material is plane air and that’s why there are no raw materials required to produce oxygen.

The competition is also very low for this business… There are very high-end innovative machines available in the market so that you can make the production very easily Hindi. You can also be satisfied with saving another life and doing a good thing for mankind.

Challenges of this oxygen plant business:

The main disadvantage to start this business is a huge investment, you cannot simply start this business with 10 or 15 lakh rupees and run this business.
Your minimum required 40 to 50 lacs of rupees to start a small oxygen plant.

Not only that there is also a risk in the production of oxygen and it is difficult to transport these oxygen cylinders in trucks because if there is a small leakage or if there is a small accident then it would be a disaster.

Power consumption also high to produce these oxygen cylinders… The process of producing oxygen takes a long time.