Are you planning to establish a cosmetic manufacturing facility in India? As India is witnessing consistent growth in the cosmetic industry. Thus, given the current scenario, setting up a cosmetic manufacturing company is likely to be profitable. The unit can be a micro, small, or medium capacity manufacturing plant. When you establish a cosmetics manufacturing company, specific things must be completed according to the Drugs and Cosmetics Act 1940.
In this article, we will outline every step you need to take to establish your cosmetics manufacturing company and what you need to consider in full detail, preparing for your manufacturing and sales.
What Is A Cosmetics Manufacturing Unit?
Cosmetics manufacturing units can be described as black-box factories where beauty products are formulated, manufactured, or in some cases tested before they can enter the market. They create raw materials needed for personal care and fully finished, phased cosmetic products.
Step-by-Step Set Up A Cosmetic Manufacturing Unit?
Setting up a cosmetic manufacturing unit involves various steps as given:
1) Conduct Market Research
2) Create a Business Plan
3) Choose the Right Location
4) Company Registration and Licensing
5) Set Up Infrastructure & Facility Design
6) Purchase Equipment and Machinery
7) Hire Qualified Staff
8) Develop Formulations and Testing
9) Labeling and Packaging Compliance
10) Obtain Quality Certifications (Optional but Recommended)
11) Launch and Marketing Strategy
For your better understanding, each step is elaborated below,
1) Conduct Market Research
Before entering the beauty industry, it is essential to conduct market research on your cosmetics product. This includes identifying who your target audience is, analyzing your competitors, and evaluating your product offering.Â
2) Create A Business Plan
Generate a full proof plan, which will help to guide you in setting goals and funding that you require. Planning involves deciding the type of cosmetics to be manufactured, the required capital, operational costs, and the regulatory or legal roadmap.
3) Choose The Right Location
After creating a business plan, choose the location where you want to establish your manufacturing unit. Selecting the location should be based on various factors such as, availability of raw material, closeness to supplier, & adequate place for production.
4) Company Registration And Licensing
To set up a cosmetic manufacturing unit, businesses must register & obtain the cosmetic manufacturing license. In India, you have to apply to the CDSCO under Form 32 of the Drugs and Cosmetics Act, 1940.
5) Set Up Infrastructure & Facility Design
Setting up a proper manufacturing facility means that it must comply with Good Manufacturing Practices (GMP). Basic infrastructure includes storage for raw materials, production area, quality control lab, warehouse & staff facilities.
6) Purchase Equipment And Machinery
Buy the necessary machines based on the type of cosmetics you plan to manufacture. Common equipment includes mixers, blenders, filling machines, and labeling machines. Choose machines that meet hygiene and GMP standards.
7) Hire Qualified Staff
Recruit skilled professionals like production chemists, quality control officers, and machine operators. At least one technical person must have a degree in pharmacy or chemistry with relevant experience, as required by law.
8) Develop Formulations And Testing
Work with chemists to create safe and effective products. All products must be assessed for stability and safety to show quality and compliance with the Indian standards for cosmetics.
9) Labelling and Packaging compliance
The name of the product is set out in the Drugs and Cosmetics Act, which includes a statement of ingredients‎, a batch number, an expiry date, particulars of the manufacturer, and particulars of the type of license number for the manufacturer. Use only a clean, severely tamper-evident sealed container.
10) Get Certifications of Quality (Optional but Useful)
This will not be a requirement such as ISO 22716, Good Manufacturing Practices or the BIS, but can give the buyer some comfort about the quality, especially if looking to export products or products are sold to retailers.
11) Launch And Marketing Strategy
Plan how to introduce your products to the market. Create a brand, build a website, and use social media, influencers, and retail channels to promote your cosmetics. A strong marketing plan is key to success.
What Are The Requirements To Set Up A Cosmetic Manufacturing Company In India?
Basic requirements for setting up your own manufacturing company are as follows:
- Location & Premises: The production unit should be in a green building with enough area, ventilation, and drainage. It should have space for storage of raw materials, production, packaging, finished goods, and quality assurance.Â
- Machinery & Equipment: You will have to get machines that you will need, depending on what your product is, i.e., for mixing, you will need mixers (s), filling machines, labelling machines, storage tanks, as well as water treatment if you are using water as an ingredient.Â
- Utilities: You must also ensure that the unit has a constant water and electricity supply, appropriate waste disposal is taken care of, and you may also require a separate Effluent Treatment Plant (ETP) to treat chemical waste.
- Technical Personnel: You should employ an appropriately qualified technical person (i.e., a person with a B.Pharm or a B.Sc (Chemistry) with practical experience), who must control production and everything.
- Documentation: You will be given multiple documents, including, but not limited to, the site layout, equipment list, and SOPs, for hygiene and safety documentation, for the product and the workers.
- Licences: You will be required to obtain a Cosmetic Manufacturing Licence from the State Drug Authority and may, or may not, apply to obtain any applicable Factory Licences, Pollution Board Clearances, and Fire Safety NOC, depending on which State you will be located in.
Estimated Cost to Set Up a Small-Scale Cosmetic Manufacturing Unit in India
To give you an estimate for the costs of setting up a small-scale cosmetic manufacturing unit in India:
| Item | Estimated Cost (INR) |
|---|---|
| Company Registration | ₹20,000 – ₹50,000 |
| Manufacturing License | ₹5,000 – ₹25,000 |
| Factory Setup | ₹3 – ₹6 Lakhs |
| Machinery & Equipment | ₹4 – ₹8 Lakhs |
| Raw & Packaging Materials | ₹1.5 – ₹4 Lakhs |
| Staff (Initial Hiring) | ₹50,000 – ₹1 Lakh/month |
| Product Testing | ₹50,000 – ₹1 Lakh |
| Marketing & Branding | ₹50,000 – ₹2 Lakhs |
| Miscellaneous | ₹50,000 – ₹1 Lakh |
How ELT Corporate Can Help In Setting Manufacturing Unit?
ELT Corporate can assist you with all of the professional services required to ensure a successful launch of your cosmetic manufacturing business. We can assist with company registration, obtaining license approvals, plant set-up, hiring staff, product testing, labeling requirements, marketing support, etc. By utilizing our all-inclusive services, you can concentrate on developing your brand versus the legal and technical challenges that would take your focus away.
Start your cosmetic business confident in knowing you are experiencing all of the benefits of working with ELT Corporate. We are with you every step of the way!
FAQs
What Licenses Do You Need To Start Cosmetics Manufacturing In India?
You will need a Cosmetic Unit Manufacturing License from the State Drug Authority. Also, you may need Factory and Pollution Control licenses.Â
What Is The Estimated Investment In A Small Cosmetics Manufacturing Unit?
The estimate will vary considerably; it usually is in the range of ₹10 – 24 lakhs, depending on your level of formulation and the machinery being used.Â
What Qualifications Should My Technical Team Have?
At a minimum, one technical person should have a pharmacy or chemistry degree and relevant experience.Â
What Labelling Do I Have To Provide On The Cosmetics?
Under the law in India, your labels must state the product name, formulation, batch number, expiry date, your name and address as the manufacturer, and your license number.
