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Indian Perfumery Industry and SAP Solution

1. Perfumery industry Overview in India and challenges

The perfumery Industry in India is estimated to be USD 2000 Million (Rs. 10000 Crores) which is about 10% of the world’s market. Indian population is 17.8% of the globe which indicated the potential growth of Indian Perfumery Industry. India is home to perfumery but as the government of India considered it a Luxury industry, it has loaded perfumery industry with huge taxes and duties. But due to rapid industrialization after 1991 there was complete diversification from this point of view and the industry progressed well.

The cost of fragrance ingredients has increased drastically like Geraniol, PTA, Sandal Oil and Lemon Grass are very costly today compared to 2 decades, the only way to reduce cost is to go for coop agriculture or invent high yielding variety in India .Also there many exotic plants with New odours which have not been studied systematically. Some of them are:

1. Sona Champa :flower of Paradise

2. Parijat :Wish of grand Tree

3. Mitti :The fragrance of the earth.

4. Bakul : Indian garland flower.

5. Keora: Indian Flower King

6. Mogra: moon light of the ground

7. Hina : India’s Mystery perfume

8. Lotus: essence of Perfection

9. Gulhina:Fragrance of Paradise

These are very popular odours in addition to Sandalwood, Patchouli, Chameli, Nagarmotha,Valerian, Marigold etc.

These odours are novel and unique and perhaps new to the world. We should analyse these oils, identify active odour molecule and synthesise.It would be unique Indian speciality.

2.  Various Business Process involved in perfumery industry:

Natural ingredients—flowers, grasses, spices, fruit, wood, roots, resins, balsams, leaves, gums, and animal secretions—as well as resources like alcohol, petrochemicals, coal, and coal tars are used in the manufacture of perfumes. Some plants, such as lily of the valley, do not produce oils naturally. In fact, only about 2,000 of the 250,000 known flowering plant species contain these essential oils. Therefore, synthetic chemicals must be used to re-create the smells of non-oily substances. Synthetics also create original scents not found in nature.


(1) Collection- In short the first step would be to get the natural ingredients—flowers, grasses, spices, fruit, wood, roots, resins, balsams, leaves, gums, and animal secretions, to the manufacturing center. Grasse, a region of southern France where many flowering plant varieties grow, is the leading producer of perfumes.

(2) Extraction- Oils are then extracted from the plant substances by several methods: steam distillation, solvent extraction, effleurage, maceration, and expression.

• In steam distillation, steam is passed through plant material held in a still, whereby the essential oil turns to gas. This gas is then passed through tubes, cooled, and liquified. Oils can also be extracted by boiling plant substances like flower petals in water instead of steaming them.

• Under solvent extraction, flowers are put into large rotating tanks or drums and benzene or a petroleum ether is poured over the flowers, extracting the essential oils. The flower parts dissolve in the solvents and leave a waxy material that contains the oil, which is then placed in ethyl alcohol. The oil dissolves in the alcohol and rises. Heat is used to evaporate the alcohol, which once fully burned off, leaves a higher concentration of the perfume oil on the bottom.

• During enfleurage, flowers are spread on glass sheets coated with grease. The glass sheets are placed between wooden frames in tiers. Then the flowers are removed by hand and changed until the grease has absorbed their fragrance.

• Maceration is similar to enfleurage except that warmed fats are used to soak up the flower smell. As in solvent extraction, the grease and fats are dissolved in alcohol to obtain the essential oils.

• Expression is the oldest and least complex method of extraction. By this process, now used in obtaining citrus oils from the rind, the fruit or plant is manually or mechanically pressed until all the oil is squeezed out.

(3) Blending: Once the perfume oils are collected, they are ready to be blended together according to a formula determined by a master in the field, known as a “nose.” It may take as many as 800 different ingredients and several years to develop the special formula for a perfume.

(4) Aging:  Fine perfume is often aged for several months or even years after it is blended. Following this, a “nose” will once again test the perfume to ensure that the correct scent has been achieved. Each essential oil and perfume has three notes: “Notes de tete,” or top notes, “notes de coeur,” central or heart notes, and “notes de fond,” base notes. Top notes have tangy or citrus-like smells; central notes (aromatic flowers like rose and jasmine) provide body, and base notes (woody fragrances) provide an enduring fragrance. More “notes,” of various smells, may be further blended.

3.  SAP Perfumery Solution

SAP Industry Business processes can have implementation challenges across all SAP Modules like SD, FI and CO, HR, MM, Production Planning, Quality Management, Plant Maintenance and EHS.

The following business scenarios are mapped to SAP perfumery solution:

Module Functions/Concerns
Sales & Distribution •       With or without Contract, Scheduling Agreements
•       Standard sales process
•       Samples sales process
•       Consignment sales process
•       Export Sale Orders involving multiple currencies &  sales revenues accounted in local currencies
•       Foreign Trade
•       MWST/VAT according to Local taxes as per country and laws
•       Pricing
•       Billing
Material Management •      Raw materials, Semi finished materials and Finished goods
•      Integration with SAP EHS
•      Vendor Management
•      Handling Licensing/Government regulations, foreign trade
Production Planning •       Batch Production
•       Usage of Batch Management with Batch Characteristics
•       Make-to-Order , Make-to-Stock
•       Planning
•       Subcontracting Cycle, Import Purchase, Scrap Disposal
•       MRP generate the PR or Production orders or Subcontract Requests
•       High transportation cost
Shipping and Transportation Planning •       Road, Sea, Air, Rail transport could be EHS(Environment Health and Safety) risk
•       Plan transportation, track orders, calculate shipment cost
SAP GTS •       Legal Trade
•      Exports, Foreign Trade compliance check
Master Data •      Material Master and BOM (multiple levels)
•      Customer Master and CMIR (If any)
•      Pricing Condition Records
•      Output Condition Records
•       Vendor Master
Quality Management •       Qualitative and Quantitative inspections
•       Quality Certificates, Shelf Life
Plant Maintenance •       Preventive and breakdown maintenance for all Equipment’s
•       Industrial Hygiene and Safety component
Environment and Health Safety •       Creating risk assessments, recording and processing accidents/minor injuries
•       Handling Standard Operating Procedures and Accident Reports
•      Dangerous goods check
•      Alcohal Content
Warehouse Management/Inventory Management •       Bonded or unbonded warehouses
•       Inventory Control

4. Conclusion

India’s future is highly fragrant and vibrant.

We should use our strengths in R&D.

We need to follow International norms to offer safe and standardised F&F to our traditional products.

We will be then able to expand and export our “Heritage” fragrances.

5.   References › Volume 2

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      Author's profile photo Rahul Prakash
      Rahul Prakash

      Hi Deepak,

      Nice Article on Perfumery industry and SAP application.



      Author's profile photo Arvind Pereira
      Arvind Pereira

      Hi Deepak,

      Could you tell us if any configuration differences exist in this industry.



      Author's profile photo Former Member
      Former Member

      OK document