1

MENTHOL

CONTENTS SECTION I PRODUCT CHARACTERISTICS AND SPECIFICATION SECTION II PRODUCT APPLICATIONS SECTION III INDIAN MANUFACTURERS SECTION IV IMPORT/EXPORT LEVEL SECTION V PRICE DETAILS SECTION VI INDIAN DEMAND SECTION VII BROAD OUTLINE OF MANUFACTURING PROCESS SECTION VIII RAW MATERIAL REQUIREMENTS, UTILITY

AND AVAILABILITY SECTION IX GLOBAL SCENARIO SECTION X DISCUSSIONS ON ECONOMIC CAPACITY,

PROJECT COST AND PROFITABILITY PROJECTIONS SECTION XI SWOT ANALYSIS

SECTION XII FACTORS INFLUENCING THE POSITION FOR

A NEW INDUSTRY AND RECOMMENDATIONS

2

SECTION - I

PRODUCT CHARACTERISTICS AND SPECIFICATIONS

1.1.General properties Alternate names Hexahydrothymol

1-Menthol, Peppermint Camphor, Leavo Menthol etc.

Occurrence Occurs in nature in the form of 1-Menthol and d-neo Menthol.

Appearance Colourless, acidular or prismatic crystals

Molecular formula C10H20O

Characteristics Menthol is monocyclic, saturated, secondary terpene alcohol.

Odour Penetrating peppermint oil like odour.

Taste Cool sensation in mouth and characteristic mint flavour

Molecular Weight 156.26

Specific Gravity 0.89

Melting point 42 to 43 deg C

Boiling point 212 deg C

Solubility Soluble in alcohol, light petroleum solvents, glacial Acetic acid, fixed or volatile oils and water.

Acidity/ Alkalinity

Neutral to litmus solution

3

1.2. Composition of Menthol oil

MENTHOL OIL

L-MENTHOL DEMENTHOL OIL

LOWER TERPENES 15 to 17%

MENTHONE 40-50%

L-MENTHOL 22-24%

ISOMERS OF L-MENTHOL 7-8%

MENTHYL ACETATE 6%

HIGHER TERPENES 2-3% (Piperaton etc)

MENTYHL ACETATE

MENTHYL VALERATE

MENTHYL SUCCINATE

MENTHYL SALICYLATE MENTHOL

SYNTHETIC PRODUCTS

THYMOL

α-PINENE 20% β-PINENE 15%

LIMONENE 40%

3-OCTANOL 8%

MENTHYL ACETATE 3-CIS-HEXENE-1 OL 0.4-1% (LEAF

5

1.3. Product Specification 1.3.1. Specification as per Global Standards

Analysis

United States

Pharma (USP)

British Pharma

Japanese Pharma

Food Codex (American

Food grade)

Indian Pharma

Melting point

41 deg.C to 44 deg.C

41 deg.C to 44 deg.C

42 deg.C to 44 deg.C

42 deg.C to 44 deg.C

42 deg.C to 44 deg.C

Specific optical rotation

-45 deg. to -50 deg.

-49 deg. to -50 deg.

-49 to -50 deg.

-49 to -50 deg.

-45 deg.to -50 deg.

Non volatile matter (not more than)

0.06% 0.06% 0.06% 0.06% 0.06%

Menthol (not less than)

97.90% Not specified

98.00% Not specified

Not specified

1.3.2. Indian Standard Specification Indian Standard (IS) 3134-1965. The material shall comply with the following requirements:

Characteristics

Grade-1

Grade-2

Melting range Deg C

42 to 44 32.5 to 34.0

Optical rotation (10% w/v solution in Ethyl alcohol 90% by volume)

-49 to -51 -2 to +2

Congealing point Deg C

- 27 to 28 rising on prolonged stirring at 30 to 32

Non-volatile matter, % by wt. max.

0.05 0.05

6

SECTION II

PRODUCT APPLICATIONS 2.1. General details Menthol possesses a distinct peppermint flavour. It also possesses coolness and stimulating action in high degree on the skin and mucous membrane. Its flavours, coolness and stimulating properties are widely exploited in various industries. 2.2. Sectorwise Applications: Flavouring agent

Menthol (minty type) is used as flavouring agent in the manufacture of the following. Candies Chewing gum Cordials Oral preparations

Pharmaceuticals Finds application in the treatment of certain skin conditions like urticaria. Because of its local anaesthetic properties, it also helps in alleviating nausea and gastrodynin. As a means of countering upper respiratory injection, Menthol has found extensive use. Its local anaesthetic property together with its action in stimulating nose receptors, results in a feeling of decreased nasal congestion. Used in preparation for the treatment of acute bronchitus since its inhalation leads to marked lessening of the cough and to decrease in chest congestion. Mixtures of Menthol and Camphor have found wide spread application in medicated dry inhalers. Vapour rubs often contain Menthol. Nasal sprays for relief may contain Menthol, in addition to Camphor and Eucalyptus dissolved in light liquid paraffin.

Other sector of application

In the flavouring of cigarattes, snuffs, confectionaries and chewing gums. Very useful for imparting acceptable flavours to tooth pastes and other cosmetic preparations. Pre shave and after shave lotions often contain small amount of Menthol, which enhances the mild astrigency and refreshing coolness of such

7

products. Concentrations of Menthol in this type of cosmetic may range from 0.005% to 0.2%.

SECTION III

INDIAN MANUFACTURERS There are number of manufacturers of Menthol in India in the organised and unorganised sector.(The unorganised sector refers to small-scale operations). The important Indian manufacturers include the following. * Aroma Chemicals Siddhi Sadan, Tubewell Colony Moradabad-244 001 * Bhagat International Pvt. Ltd., 164, Sitaram Poddar Marg, Harlalka Bhavan, 1st Floor, No.10, Mumbai-400 002 * Bhagat Aromatics Ltd.,

Administrative Office: H-2/16, Ansari Road, Daryaganj, New Delhi 110 002 Works: C-33 & 34, Sector-7 Noida 201 301 Uttar Pradesh

* Camphor & Allied Products Ltd. Regd Office:

Plot No.3, GIDC Industrial Estate, Nandesari-391 340 Dist. Vadodara. Factory : Clutterbuckganj, Bareilly-243 502, U.P. Head Office :

Jehangir Building, 133, M.G.Road, Bombay-400 023

8

* Essence Aromatics Essence Natural Products (P) Ltd. 5-4-187/3 & 4, M.G. Road, Secunderabad-500 003, Andhra Pradesh *. Mentha & Allied Products Ltd., Munshi Niketan 1/10, Asaf Ali Road, New Delhi 110 002 * R.S. Consultants & Engineers 24/4834, 5th Floor, Ansari Road, Darya Ganj, Delhi 110 002 * Shanti Chemicals Shanti Vila, Vivek Vihar, Civil Lines, Budaun-243 601

Mumbai Office : Post Office Building 3rd Floor, Near Railway Station,Virar (West) Virar-401 303, Mumbai

* Shail Herbal & Allied Products 44 Kms, Bareilly Rd. P.O. Modipur, Rampur-244 926 * Snowcool Mentha Products Pvt. Ltd., Gupta Inter Chem Pvt. Ltd., 5, Apeejay House, 130 Apollo Street, Fort, Mumbai - 400 023. * Seema International C-478, DSIDC, Narela Indl. Park New Delhi 110 040 *. Shree Balaji Industries Sethi House, L-260, Shastri Nagar Delhi 110 052

9

* Sharp Menthol India Ltd., Export House Regconised by Govt. of India C-15, SMA Coop. Indl. Estate G.T. Kernal Road, Delhi 110 033 * Kaizen Organics Pvt. Ltd.,

G-6, Amber Tower, S.C. Road, Jaipur 302 201 * Advance Hightech Agro Products Pvt. Ltd.,

49/32, Site IV, Industrial Area, Sahibabad 201 010 Ghaziabad, U.P.

* Indian Menthol Ltd.,

C-131, Phase II, Extn. Hosiery Complex, Noida Uttar Pradesh

New projects * Kamaljeet Singh Vamshi Exports P. Ltd. E-127 Mohamadpur Bhikaji Cama Place, New Delhi Location : B-8, Chemical Complex, 1 Area, Jahangirabad Road, Barabanki, Uttar Pradesh Menthol- 240 tonnes

INDIAN INSTALLED CAPACITY FOR MENTHOL OIL

12,000 TONNES PER ANNUM

10

SECTION IV

IMPORT/EXPORTS LEVEL 4.1. Imports Past import trends – Period 1996-97 to 1999-2000

10

43

16 18

05

10

152025

3035

4045

Qua

ntity

in m

etri

c to

nnes

1996-97 1997-98 1998-99 1999-2000

Year

Imports

Present import level 60250 kg per annum Period April 2001 to March 2002 Country Quantity in Kgs China P RP 2500 France 3000 Japan 24000 Singapore 25 Switzerland 25 UK 30700 Sample of individual imports of Menthol Period 2002 Name of the Importers

Quantity in tonnes

Value in Rs. Country Date Port

Bayer (I) Ltd.,

1.980 342266 Germany 22.04.2002 to

Mumbai

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30.04.2002 4.2. Exports Past export trends – Period 1996-97 to 1999-2000

2171

4629

31643480

0500

100015002000250030003500400045005000

Qua

ntity

in m

etri

c to

nnes

1996-97 1997-98 1998-99 1999-2000

Year

Exports

Present export level 4525000 kg per annum Countrywise Exports of Menthol Period April 2001 to March 2002 Country Quantity in Kgs Afghanistan 10000 Argerntina 42080 Astrualia 6100 Bangladesh 13400 Barbados 1000 Belgium 97600 Brazil 145450 Belarus 1000 Cameroon 4000 Canada 5000 Chile 200 Chinese Taipei 43200 China P RP 992106 Colombia 1500 Congo P REP 5 Cyprus 3000 Czech Republic 16500

12

Egypt A RP 1150 France 55230 German F REP 440779 Guatemala 500 Guinea 500 Guyana 154 Honduras 1000 Hong Kong 256300 Hungary 1100 Indonesia 278070 Iran 2850 Israel 1025 Italy 1000 Ivory Coast 9000 Japan 160800 Jordan 20 Kenya 2126 Korea DP RP 17400 Korea RP 16800 Kuwait 4000 Latvia 360 Malaysia 2075 Mali 5001 Mexico 30000 Nepal 5482 Netherland 38390 Nigeria 12200 Pakistan 100 Paraguay 174900 Philippines 31400 Romania 1000 Russia 7500 Saudi Arab 15500 Singapore 587946 South Africa 5200 Spain 39019 Switzerland 5340 Syria 3000 Thailand 26101 Uganda 2311 U Arab Emts 2240 UK 313932 Ukraine 750 USA 561224 Venezuela 100

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Vietnam SOC REP 7000 Unspecified 14400 Menthol Crystal Period April 2001 March 2002 Country Quantity in Kgs Australia 1200 Azerbaijan 3500 Brazil 32270 Bulgaria 250 Cameroon 7000 Canada 18000 Chinese Taipei 109900 China P RP 974100 Colombia 2580 Czech Republic 6550 Egypt A RP 7030 France 47760 German F REP 685495 Ghana 250 Greece 125 Honduras 1000 Hong Kong 72500 Hungary 300 Indonesia 8800 Iran 500 Ireland 3266 Israel 1400 Italy 9000 Japan 500 Jordan 900 Kenya 725 Korea DP RP 2000 Korea RP 15000 Latvia 450 Malaysia 740 Morocco 450 Nepal 7825 Netherland 111650 New Zealand 26 Nigeria 29570 Oman 2120 Pakistan 500

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Peru 2000 Philippines 18500 Singapore 582542 South Africa 600 Spain 20000 Sri Lanka 270 Switzerland 32340 Tanzania REP 29480 Thailand 9500 U Arab Emts 150 UK 149760 Ukraine 20880 USA 425387 Vietnam SOC REP 13700 3470341 Sample of individual exports of Menthol Period 2002 Name of the Exporters Quantity in

tonnes Value in Rs. Country Date Port

Vilco Chemicals & Co. 0.007 4919 Dammam 17.01.2002 to 31.01.2002

Mumbai

Sigma Mediproducts 2.000 989125 Apapa 01.02.2002 to 15.02.2002

Mumbai

Glow Exports Trading 0.025 16975 Ponte Noire 16.03.2002 to 31.03.2002

Mumbai

Mentha & Allied Prods. 8.000 4257835 Kobe 01.04.2002 to 30.04.2002

Mumbai

Vikas Pharmaceutical Labs.

9.000 300852 Colombo 01.06.2002 to 15.06.2002

Mumbai

Bhagat Impex Pvt. Ltd., 0.300 170434 Durban 02.09.2002 to 16.09.2002

Mumbai

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SECTION V

PRICE TRENDS

5.1. Indian price level Rs.440 per kg 5.2.Global price Global price trends for Menthol is predominantly guided by the production trends in India and China, which is largely guided by the weather conditions. China often purchases Menthol from India during the period of poor harvest in the country. In view of the above reasons, global Mint oil market often becomes volatile. Under the circumstances, one can say that international price of Menthol is largely dependent upon the price level and availability in India. In the past, the European trading community has frequently been the dominant force, but the emergence of India as the major producer has brought new elements to the table. With the overall trade seeming to lead more and more towards the lower end of the crop guesstimates, it would be difficult to anticipate the price levels for more than two to three months. Menthol price varies from 20 to 40 US$ depending upon the supply scenario.

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SECTION - VI

INDIAN DEMAND

The demand for Menthol in India has been steadily increasing in tune with overall economic and GDP growth in the country. Indian demand level for Menthol crystal : 1000 tonnes per annum Sectorwise Indian demand

400 400

200

0

50

100

150

200

250

300

350

400

Qua

ntity

in m

etri

c to

nnes

Pharmaceutical Sector Confectionery Sector Cosmetic Sector

Category

Demand level

17

Growth rate in Demand The growth rate in Indian demand is likely to be in tune with the economic and GDP growth pattern of the country The global growth rate in demand is likely to follow the past pattern The likely growth rate in demand Indian market

6 to 7% per annum

Export market 9 to 10% per annum

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SECTION VII

BROAD OUTLINE OF MANUFACTURING PROCESS

4.1. General details Menthol is generally obtained by chilling Mint oil and subsequent centrifuging to separate out the Menthol crystals. Step I Menthol flakes are produced by chilling

Mint oil . The total recovery of Menthol in the first step is around 70%. The time cycle for first step is around 6 to 7 days.

Step II Menthol flake is mixed with certain proportion of Mint oil which is kept under temperature control. The mother liquor (conc.Mint Oil) is a byproduct and can be used again till decolourisation of oil occurs.

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4.2. Broad Outline of Process Menthol crystals are manufactured from Mint oil, which is produced from Mentha leaves.

Crude Mint Oil

Refining

Crystallisation

Centrifuging

Mint oil is obtained by steam distillation of mentha leaves in a distillation still. On distillation, the vapours, a mixture of water and mint oil, is condensed and separated to get crude Mint oil.

Packing and despatch

Crude mint oil is refined by vacuum filteration

The refined product is chilled in refrigerated chambers to temperatures ranging from 15 deg C to 30 deg C to crystallise out Menthol

The mint oil is kept in the refrigeration unit for 90 to 120 hours

The chilled pieces are taken out and chipped into smaller bits and filled in a synthetic fibre bag and put into the centrifuge.

The liquor from the centrifuge is recycled to the chilling unit and the same process is repeated three times. Average yields of 15 to 20% are obtained by the first chilling. The second and third chillings yield 10 to 14% and 5.50 to 10% respectively depending upon the quality of the mint oil initially used. Since chilling takes time and the operation is repeated a number of times, the refrigeration unit must be of adequate capacity to provide space for an adequate amount of oil required for an uninterrupted operation of the plant.

The average yield of 30% to 40% depending upon the quality of the mint is obtained, by repeated chilling at varying temperatures and by centrifuging.

The spent oil is commonly known as dementholised oil

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Composition of Dementholised oil

Free Menthol 30 to 35% Menthyl acetate 30 to 32%

Menthones 15% Terpenes 18 to 25%

Dementholised oil

The dementholised oil thus obtained is subjected to chemical treatment for extracting the Menthol further. This is accomplished by saponification with Caustic soda and subsequent esterification by Boric acid. The white crystalline borate esters are formed, which are separated and decomposed by steam after washing. A mixture of various isomers of Menthol separates out by decomposition with steam. The Menthol is recovered by subsequent chilling and centrifuging. The residual oil is subjected to fractional distillation under reduced pressure in a fractionating column packed with Raschig rings. The Menthol recovered by distillation is recycled to refrigeration unit for chilling and for subsequent centrifuging. The residual oil after fractionating, contains some amount of Menthol, but it is not economical to isolate it further. However, this oil has a good resale value and is easily marketed. An additional yield of 10% to 20% Menthol can be obtained by this additional processing. Thus the total yield of the process ranges between 40 to 45%.

21

4.3. PROCESS FLOW SHEET

Menthol crystal Distilled Mint oil

Chilling Filling in trays Chipping Centrifuging

Caustic soda Iye

Saponification

3% boric acid solution

Esterification Steam decomposition

Menthol Menthol flakes D.M.O

Centrifuging Packing and despatch Packing & despatch

Menthol crystal

Packing & despatch

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4.4. The process adopted by National Research Development Corpn., India National Research Development Corpn., (NRDC) is a Govt. of India owned organisation, with chain of Research and Development Laboratories under its command. The process technology for the manufacture of Menthol is offered by NRDC for commercial exploitation. The features of the technology offered by NRDC is described below. Menthol is generally obtained by chilling Mint oil and subsequent centrifuging. This yields Menthol which is about 40% by weight of Mint oil. This process helps to recover Menthol from dementholised oil too, which still contains free Menthol to the extent of 35% by weight. The dementholised oil is subjected to saponification with Sodium hydroxide and then to esterification by Boric acid. The white crystalline borate ester is thus obtained, which is washed and decomposed by steam and a mixture of Menthol isomers separates out. This mixture,when subjected to successive chilling and centrifuging yields crystalline and liquid Menthols. The oil left out after separation of crystalline borate still has some recoverable Menthol. This is isolated by dissolving the oil in Menthol saturated with Ammonia gas in ice salt bath. This mass is distilled to give a colourless material which on chilling and centrifuging gives 1-Menthol. The residual oil finally obtained contains only non-crystallisable Menthols.

23

4.6. Technology developments 4.6.1. High yielding Menthol Mint varieties in India Central Institute of Medicinal and Aromatic Plants (CIMAP) has developed early maturing and disease and pest-resistant high oil-yielding Mint varieties. A recent breakthrough in research on the production of quality Mint oil has benefited thousands of farmers in the Indo-Gangetic plains spanning regions in India such as Punjab, Haryana, Bihar and UttarPradesh, according to scientists of the Central Institute of Medicinal and Aromatic Plants(CIMAP). The Institute has developed two varieties-Himalaya and Kosi of the Menthol mint plant (Mentha arvensis) and is now laying emphasis on evolving superior genotypes on a sustainable basis. The Institute had also received the Council for Scientific and Industrial Research (CSIR) technology prize-1999 for developing these varieties. While the Himalaya variety had been patented in the US, International patent for Kosi had also been filed. Kosi that matures 90 days after sprouting has a high productivity potential of 90 kg of oil per acre. It gives one kg of oil per day, as against the 200 to 300 gm given by the Shivalik variety. Moreover, the cultivation of Himalaya and Kosi varieties do not overlap with the cultivation of the major staple food crops. A large number of farmers cultivated these varieties in the Indo-Gangetic plains, since they could be fitted into the rice-potato-mint, rice-bengalgram-mint and rice-wheat- mint. The two varieties were developed over a period of time after extensive clonal selection of 222 open pollinated seed progenies of Shivalik, The major limitation for rapidly increasing the production of the oil is that the plant could grow only in semi temperate areas of the country. The Terai region comprising parts of Uttar Pradesh and Himachal Pradesh is the most ideal spots for its cultivation. Further, the foothills of the Himalayas, Haryana, Bihar and Punjab is suitable for growing the cash crop. Another significant hurdle is that the region also is the main breadbasket area of the country, traditionally used for rice, wheat and potato farming. CIMAP addressed both these problems and had worked out a viable option for farmers.. CIMAP have developed new varieties and relevant agro technologies to grow the mint crop profitably. Secondly, the mint crop has been promoted as suitable in the patterns of rice wheat mint;rice potato mint; in short, without cutting into the foodgrain crops.

24

A high yielding variety named Himalaya developed by CIMAP was demonstrated in the fields in Lucknow, Sitapur and Udham Singh Nagar districts of Uttar Pradesh. The variety is resistant to rust, blight and leaf spot diseases, which are at present eating heavily into the yields of Mint. Similarly, CIMAP has also evolved a standard package of practices for farmers. Implementation of this package can help the farmer to get yields of around 250 kg per hectare of essential oil from mint crop. 4.6.2. High yielding Menthol mint Indian Agricultural Research Institute(IARI), New Delhi A high yielding Menthol mint variety has been released by Indian Agricultural Research Institute(IARI), New Delhi. The variety gives improved oil yields, ranging between 24% and 112%, over all existing varieties. The new variety, which matures 10 to 12 days earlier than the others, is found to be resistant to diseases such as leaf rust and powdery mildew that affect mint produce. 4.6.3. Efforts of Indian Institute of Petroleum, Dehradun The fine chemicals group at Indian Institute of Petroleum, Dehradun has worked on the route of utilising the dementholised peppermint oil, from which (-) Menthol has been removed by crystallisation and which still contains 40 to 50% free Menthol. The fairly large quantity of Menthone contained in the oil (30 to 50%) was hydrogenated using a suitable indigenously developed catalyst. A mixture of diastereomers of Menthol was obtained containing ca 66 wt% Menthol (racemic mixture). The undesired stereo-isomeric Menthols were separated by using high efficiency distillation technique. The product was then epimerised to an equilibrium mixture of racemic Menthol, Isomenthol and Neomenthol in the 6:3:1 ratio. To obtain optically pure (-) Menthol, a resolution step is required, as the racemic Menthol does not crystallise readily and it does not have much market value. Attempts were also made by Indian Institute of Petroleum ,Dehradun to overcome this problem of separation of the isomers of Menthol. The racemic mixture of Menthol was esterified using an optically inactive acid and then inoculating the ester obtained with pure l-menthyl ester of that acid. The ester after hydrolysis was found to contain about 66% of the l-menthol isomer. Further studies are required to carry out the resolution step in order to meet the standard specifications. Therefore, it would not be an exaggeration to state that converting the unrecovered Menthol from dementholised oil into its ester derivatives can further increase the profitability of the industry. The esters of Menthol with aryl alkanoic acids are widely used for making skin care products and pharmaceutical rubs. These derivatives are used in small amount in the formulations of various products.

25

• Menthyl succinate is used in dentrifice compositions providing breath freshness, • Menthyl salicylate finds its application in the treatment of particular and muscular pains

and in the preparation of sunscreen creams and lotions. • Menthyl anthranillate is used as cyclo oxygenase inhibitors due to their analgesic and

cooling effect. • Menthyl acetate is used in making cigarette filters. Keeping in view the various uses of Menthol and its derivatives, the profitability of the Menthol industry can be further increased by hydrogenating Menthone to Menthol followed by isomerisation. The product obtained after this can further be utilised by making its ester derivatives, which are widely used in the pharmaceutical industry. In this way, most of the Menthol components of Peppermint oil are utilised and the wastage is minimised. Source of technology * Central Institute of Medicinal and Aromatic Plants, (Council of Scientific and Industrial Research) Kukrail Picnic Spot Road, P O CIMAP,Lucknow - 226015 Tel :342683(O) 389609,321987(R) Tlx :0535-2298 CIMAP IN Fax :91 522 342 666 Cable: MEDPLANTS;Email:root@cimap.sirnetd.ernet.in * Regional Research Laboratory (RRL), (Council of Scientific and Industrial Research) 3, Canal Road,Jammu Tawi - 180 001. Tel : (0191) 546368 Telex: 377-231 RRLIN. Fax : 191-548607, 546383 E-mail : rrlj@nde.vsnl.net.in

26

Major plant & machinery and suppliers Name of the equipment Name of the suppliers

Distillation column Hydrabad Met Chem. Pvt. Ltd.,

34, C.I.E., Phase II, Gandhinagar, Opp. IDPL Colony Hyderabad-500 037 Richard Engineering (Bombay) Pvt. Ltd. 42, IIF, Veerabadran Street Near Valluvar Kottam Nungambakkam, Chennai-600 034

Filter Air Filter Industries Mercantile Building 2nd Floor, G.P.O. Box 886 9A, Lal Bazar Street Calcutta-700 001 Divya International 23A, Netaji Subhas Road, 8th Floor, Room No.28, Calcutta-700 001

Refrigeration Karna Industries Ltd. 10/67, Industrial Area Kirti Nagar, New Delhi-110 015 Neptune Refrigeration Co. Ltd., 153, Mount Road, Chennai-600 002

Crystalliser Excel Industrial Services White House, D-111/8,Ist Main Road, Anna Nagar (East) Chennai-600 102 Richard Engineering (Bombay) Pvt. Ltd. 42, IIF, Veerabadran Street Near Valluvar Kottam Nungambakkam, Chennai-600 034

Centrifuge Hydrabad Met Chem. Pvt. Ltd., 34, C.I.E., Phase II, Gandhinagar, Opp. IDPL Colony

27

Hyderabad-500 037 Spark Engineers Pvt. Ltd., 5/332, State Bank Colony II Salem-636 004

Boiler Cethar Vessels Ltd., No.4, Dindigul High Road, Trichy Firetech Boilers Pvt. Ltd. No.211, 2nd Cross, 38th Main, B.T.M. Layout 2nd Stage, Bangalore-68

28

SECTION VIII

RAW MATERIAL REQUIREMENTS, UTILITY AND AVAILABILITY 8.1. Raw material requirements: Basis

Factors considered for assessing raw material/utility requirements. The Mentha leaves of CIMAS-MAS-I strain is considered The oil content of the strain 0.77% Menthol content of the oil 83% Overall process efficiency for the recovery of Menthol

80%

Raw material required-

Raw material Quantity in tonnes

Mint Oil 1.60 Caustic Soda 0.17 Boric Acid 0.17 Methanol 0.2 Ammonia 0.04 Utilities requirement Fuel 160 litres Power 1550 units. Water 45 m3

Menthol Crystal 1000 kg Dementholised peppermint oil (5% Menthol content) 500 kg

29

Status of Mentha leaves production in India Menthol crystals from natural sources is produced from Mentha leaves. The plant for the production of Mentha leaves (known as Japanese mint) was originally introduced in India in 1954, in Jammu by the former Drug Research laboratory (now known as Regional Research Lab.) when a few stolons were introduced from Japan. The crop of Mentha leaves has been cultivated in India for the last 30 years. However, in the earlier period, production was stagnant and the Indian producers could not export the oil, mainly because of very poor yield and high cost of production. This had happened because the original plant introduced in India has low oil and Menthol content and growing of this variety for 15 years without any genetic improvement had caused considerable genetic deterioration. The genetic deterioration was so much that by 1978, a large number of Indian producers could hardly obtain any Menthol from the Indian oil by chilling, because of low Menthol and high Menthone content in the oil. In the circumstances, a programme for genetic improvement of the Menthol yielding plants was taken up by Central Institute of Medicinal and Aromatic Plants (CIMAP) in 1978. World-wide collection of germplasm was made and finally a budsport from a Thal strain was selected and further developed.. It was released to the farmers in 1983 as CIMAP MAS-1, This variety gives 50% more yield of oil compared to the existing with 80 to 85% Menthol, 65% of which can be isolated by chilling. The release of this superMenthol strain has revolutionised the Mint oil and Menthol production in India. As a result of further work, a better variety designated as CIMAP Hybrid-77 was released in 1985. This new variety is hardy and vigorous, resistant to diseases and gives 25 to 30% higher yield of oil as compared to MASI. This variety also gives higher yield of planting material as compared to the variety released earlier. This has further reduced the cost of production. Considerable improvement of agronomic practices has also been made by the Institute as well as other laboratories. India then become an exporter of Menthol and Dementholised oil instead of being an importer of oil of Mint and Menthol a few years earlier. Yield of oil and Menthol content of different varieties of Japanese mint. Variety/Strain Oil yield kg per

ha Oil content % Menthol content %

CIMAP Hybrid-77 428 0.88 81 CIMAP Mas-1 316 0.77 83 MA-2 (check) 183 0.55 66 Growth region

30

The Menthol leaves plant has grown mainly in the Tarai area of Uttar Pradesh and Punjab in India. Menthol yield and percentage of 300 to 400 kg per hectare and 81 to 83% respectively has been activated.

SECTION IX

GLOBAL SCENARIO Global demand for Menthol Crystals 13000 to 14000 tonne sper annum Global supply Natural Menthol Around 12000 tonnes per annum Synthetic Menthol Around 2000 tonnes per annum Global Supply Capability India Around 12000 tonnes per annum of Crude Menthol Oil China Around 6000 tonnes per annum of Crude Menthol Oil Brazil Around 3000 to 4000 tonnes per annum Of Crude Menthol Oil Global Supply Scenario Major players of Menthol in the world are India, China and Brazil. Until 1995, India has been the net importer of Menthol oil and China had been the dominant player. However, with the introduction of improved seed, India's production of Menthol Oil have gone up substantially in recent years making India as major global player in the Menthol Oil. In recent times, the supply of Menthol Oil from the global market, from China and Brazil have gone down substantially and both the countries have become net importers of Menthol Oil. This has resulted in a situation where the international price trends and supply scenario for Menthol Oil are largely influenced by the Indian production and availability level of the product.

31

Major US Manufacturers of Menthol ��Colgate Palmolive ��Wreglies ��Proctor and Gamble(Proposal to set up a project in China)

• BBA Philippines Bush Boake Allen Philippines Inc., is formerly a 50-50 joint venture with Dharmala Philippines Inc., BBA Philippines was originally established in 1983 as a joint venture with Wise Sr Co. Inc., which was later acquired by the Dharmala/DMT Group, an Indonesian organisation engaged in financial services, agribusiness and trading.

32

SECTION X

DISCUSSIONS ON ECONOMIC CAPACITY , PROJECT COST AND PROFITABILITY PROJECTIONS

Economic capacity : 120 tonnes per annum Project cost : Rs.167 lakhs Assessment of project cost 1. Land S.No. Description Cost

Rs.in lakhs 1.1 Cost of land of 0.5 acre at Rs.5.5 lakh per acre 2.75 1.2 Cost of levelling, laying internal roads/fencing and

compound wall

0.28

Subtotal 3.03 2. Building S.No. Description Cost

Rs.in lakhs 2.1 Factory building of area 420 sq.m. at Rs.3200/sq.m. 13.44 2.2 Non-factory building of area 60 sq.m.at Rs.4500/sq.m. 2.7 Subtotal 16.14 3. Cost of Plant & Machinery S.No. Description Cost

Rs.in lakhs 3.1 Cost of basic plant and machinery 51 3.2 Instrumentation and control 3.83 3.3 Pipelines and valves 5.1 3.4 Structurals for erection 2.55 Subtotal 62.48 3.5 Octroi, excise duty, sales tax, etc.at 12%� 7.5 3.6 Packaging and insurance charges (2%) 1.25 3.7 Transportation charges (2%) 1.25 3.8 Machinery stores and spares (2%) 1.25 3.9 Foundation charges (2%) 1.25 3.10 Installation charges (2%) 1.25 Total cost of plant and Machinery 76.23 4. Technical know-how fees Rs.2 lakhs

33

5. Miscellaneous fixed assets S.No. Description Cost

Rs.in lakhs 5.1. Electrification 2.75 5.2. Steam boiler and auxillaries 0.76 5.3. Water storage tank, borewell etc. 1.14 5.4. Fuel storage tank 0.76 5.5. Laboratory equipment 1.32 5.6. Office machinery & equipment 1.32 5.7. Material handling equipment, packaging machinery,

weigh balance, etc. 1.43

5.8. Diesel generator 4.43 5.9. Effluent treatment 1.15 Total 15.06 6. Preliminary & Pre-operative expenses: S.No. Description Cost

Rs.in lakhs 6.1. Preliminary expenses 0.36 6.2. Pre-operative expenses:- 6.2.1 Establishment 0.36 6.2.2 Rent rates and taxes 0.43 6.2.3 Travelling expenses 0.55 6.2.4 Interest and commitment charges on borrowings 5.83 6.2.5 Insurance during construction period 1.14 6.2.6 Other preoperative expenses and deposits - 6.2.7 Interest on deferred payment - Total 8.67 7. Provision for contingency Rs.7.65 lakhs 8. Working capital margin Rs.38.05 lakhs 9. Total project cost Rs.166.83 lakhs Say Rs.167 lakhs 10. Means of Finance Promoter's contribution Rs.67 lakhs Term loan from financing institutions Rs.100 lakhs Total project cost Rs.167 lakhs 11. Financial statements

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A Variable cost

Rs. in lakhs

Raw material and utilities 241.98 Spares and maintenance 4.57 Selling expenses 26.4 Total variable cost (A)

272.95

B Fixed cost

Salaries and wages 15 Interest on term loan and working capital loan 38.55 Depreciation 9.94 Administrative expenses 15.84 Total fixed cost (B)

79.33

C. Total cost of production (A+B)

352.28

D. Selling price per kg. (in Rupees)

440

E. Annual sales turnover

528

F. Net profit before tax (E-C)

175.72

G. Breakeven point in %

31%

35

SECTION XI

SWOT ANALYSIS Strength India is major producer for Menthol plantation

in the world

Weakness Low indigenous demand

Opportunity Export market and possibility of producing value added products

Threat New countries focussing on the plantation and product

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SECTION XII

FACTORS INFLUENCING THE POSITION FOR A NEW INDUSTRY AND RECOMMENDATION

Globally demand for Menthol has been steadily going up during the last several years. This global trend is likely to continue. India has emerged as a major player for Menthol in the world due to the advantages of the suitable weather conditions and some initiatives shown by the agriculturalists in the country. With Brazil and China gradually emerging as net importers of Menthol, India is likely to play a dominant role in the coming years. There is strong case for countries like India to focus on further expanding the cultivation of Menthol plantation, as the climatic conditions are favourable. The investment in the Menthol Industry has to be necessarily focussed on the agricultural cultivation of Menthol, as the basic requirement. Given this requirement, Menthol industry has a promising future.