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MICROCRYSTALLINE WAX

CONTENTS

SECTION I PRODUCT CHARACTERISTICS AND SPECIFICATION SECTION II PRODUCT APPLICATIONS SECTION III INDIAN MANUFACTURERS SECTION IV IMPORT/EXPORT TRENDS 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

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SECTION I

PRODUCT CHARACTERISTICS AND SPECIFICATIONS

Molecular weight Microstyalline wax is a mixture of

hydrocarbons of 35 to 50 carbons and 500 to 700 molecular weight

Characteristics, compared to Paraffin Wax

Crystals are smaller, as its name implies Melting point is higher Higher viscosity in the molten state than Paraffin wax Softer, although its melting point is high Good adhesiveness Oil retaining tendency

Colour Varies from colourless to yellow Form Oily and amorphous mass whose

consistency varies with temp. Acidity No red colour to 0.1 ml of methyl orange

indicator. Alkalinity No pink colour to one drop of

phenophthalein Solubility Insoluble in water. Soluble in chloroform,

ether, carbon disulphide, benzene and oils Specific gravity 0.815 to 0.880 Melting point 38 to 60 deg.C Grades For technical purpose, two grades of Microcrystalline waxes are known: 1. The low melting flexible type with adhesive properties. 2. High melting hard and brittle type. The flexible type, which is generally called residual Microcrystalline wax, is by far, the most commonly utilised.

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Product Specifications Specification of Microcrystalline wax produced by Nippon Seiro Co Ltd., Japan Item

Grade Himic 1080

Melting point (ASTMD 127) 83.9 deg.C (183) deg.F Penetration @ 25 deg C 13

(ASTMD-1321) 21 Viscosity cst @ 100 deg.C (ASTMD-445) 15.1 Colour (ASTMD-1500) L 0.5 Flash point (ASTMD 92) 310 Volume resistivity, cm at 100 deg.C 6 x 1014

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SECTION II

PRODUCT APPLICATIONS

Indian usage trends Flexible type: The major demand in the country is for the flexible type of Microcrystalline Waxes, which are widely used for lamination, packaging, cosmetics, petroleum jelly, sealing compound and rust preventives etc. Hard type: Hard Microcrystalline waxes are mostly used for carbon paper, printing inks, polishes and paper coating. High melting type: The high melting Microcrystalline Waxes, prepared from tank bottoms, can be substituted for imported Ozokerite and Carnauba wax to fill the long standing need for a low cost, hard, inert and high melting waxes. Specially oxidised high melting Microcrystalline Waxes are extensively used as emulsifiable waxes by polish manufacturers, as a replacement or as extender for imported Carnauba and other Vegetable waxes. In applications where glossiness and hardening are the main objects, tank bottom waxes are the best. Sector of applications * Wire and cable * Insulation of electrical equipments * Lubricant * Metal casting * Rust preventives * Rubber anti oxidants * Paper coating * Textile water proofing * Heating processing * Printing inks * Cosmetics * Phonograph records

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SECTION III

INDIAN MANUFACTURERS

The Indian suppliers include the following * Eastern Petroleum Pvt.Ltd., 235-239, Jawahar Ind. Estate, Kamothe, Panvel, Dist. Raigad Maharashtra-410 209 * Haryana Petrochemicals Ltd., 55-59, HUDA Indl. Area, Delhi-Rewari Road, Rewari-123 401 * Indian Oil Corporation Ltd. (Refinery Division) Haldia Refinery, P.O. Haldia Oil Refinery-721 606 * Golechha Chemicals Wax Division 10, Himalaya Complex, Supela, Bhilai-490 023 * Savita Chemicals Limited 17/17A, Thane-Belapur Road, P.O. Turbhe, Thane-400 613 * Subray Catal Chem Pvt. Ltd., G-42, `D' Wing, Dewan Apts, No.2, Vasai Road (E), Dist. Thane-401 202. * Sitaco Pharma Chem. Pvt. Ltd., Behind Dist. Court, Mill Para, Durg (M.P.) * Shri Tirupati Chemicals 190, Arya Nagar, Durg, Madhya Pradesh * Unicorn Petroleum Industries Pvt.Ltd., 10, Vaibhav Industrial Estate, Deonar, Sion Trombay Road, Mumbai-400 088.

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SECTION IV

IMPORT/EXPORT TRENDS 4.1. Present import level : Around 5000 tonnes per annum Individual Imports of Microcrystalline Wax Period 2002 Name of the Importers Quantity in

tonnes Value in Rs. Country Date Port

MRF Ltd. 1.000 43372 Spain 01.01.2002 to 10.01.2002

Chennai

MRF Ltd. 5.625 243209 Belgium 01.02.2002 to 11.02.2002

Mumbai

BC Components India 1.002 147619 U.S. 24.03.2002 to 31.03.2002

Mumbai

Organic Coatings Ltd. 0.800 110631 U.S. 01.04.2002 to 05.04.2002

Mumbai

Apollo Tyres Ltd. 22.897 903835 China 01.05.2002 to 07.05.2002

Mumbai

Apollo Tyres Ltd. 23.750 938473 China 11.06.2002 to 17.06.2002

Mumbai

Apollo Tyres Ltd. 23.750 937518 China 17.07.2002 to 27.07.2002

Mumbai

Apollo Tyres Ltd. 23.750 937518 China 08.08.2002 to 14.08.2002

Mumbai

Unicom Petroleum Inds. 5.400 338653 Holland 17.09.2002 to 24.09.2002

Mumbai

4.2. Exports Negligible

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SECTION V

PRICE TRENDS Basic Price Rs.58 per kg Taxes and Duties Extra as applicable

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SECTION VI

INDIAN DEMAND

Present Indian Demand Around 15,000 tonnes per annum Growth rate in demand 7 to 8% per annum Sectorwise demand pattern Sectorwise Pattern of demand

In percentage Tyre sector 16% Cosmetic 14% Pharmaceutical sector 5% Printing ink/coatings 3% Rubber and non tyre sector 6% White petroleum jelly 14% Lubricant 9% Adhesives/Lamination 21% Candle 10% Miscellaneous including electronics 2% Indian requirements are partly met by imports.

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SECTION VII

BROAD OUTLINE OF MANUFACTURING PROCESS

Melting The black wax (slack wax) from heavy distillate is poured in a jacketed reactor made of Mild Steel, when the wax is subjected to melting. Steam is passed through the jacket of a jacketed reactor to maintain the temp. well above the filtering temperature. Filtering The heated wax in liquid state is filtered to remove all particle materials, which can be discarded. Clay treatment The filtered slack wax is again poured into a jacketed vessel fitted with the agitator for heating as well as clay treatment. Here the product is decolourised with activated clay and a small amount of lime. An intensive treatment leads to a white product. Any colour change from the original dark brown to white can be obtained depending upon the extent of treatment for decolourisation. Refiltering The clay treated wax is now passed through a filter where all the impurities in the form of cake are thrown off and filtered material is collected. Dissolving in hot solvent The filtrate is taken back to the jacketed vessel where it is mixed with the solvent. Sufficient steam is passed to maintain the temperature. Chilling The content is subjected to cooling and crystallisation to precipitate the product as microcrystalline wax. Filtration After the precipitation of wax, complete material is filtered and wax is separated and put

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into the trays for chilling. The filtrate is taken for reprocessing. Evaporation The filtrate from the above process is now evaporated and the solvent Methyl Ethyl Ketone is recovered which is pumped to the storage tank for its reuse. Source of technology * Indian Institute of Petroleum

Dehradun Major plant & machinery and suppliers Main storage tank The Anup Engineering Ltd.,

P.B. No.1158, Ahmedabad-380 002 Aristo Engineers J-3, Vikas Udyog Nagar, Behind Kasturi Tiwer Phatak-Goddeo Road, Bhayander (E), Thane-401 105 Abhinav Polymers A/2, 3909, GIDC Estate, Phase - IV, Vatva Ahmedabad-382 445 Gujarat

Reactor Chemitherm Plants & Systems P. Ltd., 30, Anandha Street Alwarpet, Chennai-600 018 Texel Fabricators Pvt. Ltd., 335, Sidco Industrial Estate, Ambattur, Chennai-600 098, Tamil Nadu

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Filters 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

Compressor ELGI Equipments Ltd., Elgi Industrial Complex III, Trichy Road, Singanallur, Coimbatore-641 005 K.G. Khosla Compressors Ltd., 19.8 KMS, Delhi-Mathura Road, Faridabad-121 003, Haryana

Thermic fluid heater Aero Therm Systems Pvt. Ltd., Plot No,1517, Phase – III GIDC, Vatwa, Ahmedabad – 382 445 Energy Machine C1, B/423, GIDC, IV- Phase, Vithal Udyognagar, Dist.Anand, Gujarat

Chilling plant Voltas, Chennai

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SECTION VIII

RAW MATERIAL REQUIREMENTS AND AVAILABILITY Basis : One tonne of Microcrystalline wax. Raw material Slack wax 0.70 tonne Polyethylene wax (Low density) 0.20 tonne Low density Polyethylene 0.095 tonne Stabiliser 0.005 tonne Utility Fuel 240 litres Water 10,000 litres Raw material availability Slack wax Chennai Petroleum Corpn., Chennai

Haldia Refineries, West Bengal Indian Oil Corporation

HDPE/LDPE

Reliance Industries Limited/ Indian Petrochemicals Corporation Ltd. (IPCL) Haldia Petrochemicals, West Bengal Gas Authority of India Ltd., U.P.

Activated earth

Bleachaid Minerals Ashapura Volclay Ltd.

Polyethylene wax

To be imported

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SECTION IX

GLOBAL SCENARIO

Global manufacturers * Akrochem Corpn. 255 Fountain Road, Akron, H 44304-1991 AlliedSignal Inc., Specialty wax & Additives 1425, Oakbrook Drive, Suite 600, Norcross, GA 30093. * The British Wax Fefining Co. Ltd., 29 St. John's Road, Redhill surrey, RH1 6DT * Moore & Munger Marketing, Inc. Two Corporate Drive Suite 550, Shelton,Connecticut 06484 * The International Group, Inc (IGI), P.O. Box 384, Old Eagle School Road, Wayne, PA 19087. * International Wax Refining Co. Inc. P.O. Box 4085, 22, Halladay St., Jersey City, NJ 07304,USA * Michelman, Inc., 9080, Shell Road, Cincinnati, OH 45236-1299,USA. * Shamrock Technologies Inc., Foot of Pacific Street, Newark, NJ 07114, USA. * Stevenson Cooper Inc. P.O. Box 46345, 1039 W. Venango St., Phila, PA 19160. * Wallnut Hill Enterprises Inc. Green Lane & Wilson Avenue, P.O. Box 599, Bristol, PA 19007, USA * Witco Corporation, (CK Witco Corporation) Oleochemicals and Derivates Group, One American Lane, Greenwich, CT 06831-2559

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SECTION X

DISCUSSIONS ON ECONOMIC CAPACITY, INDICATION OF PROJECT COST, INDICATION OF PROFITABILITY

Economic capacity 1500 tonnes per annumn Project cost Rs.300 lakhs Assessment of project cost 1. Land S.No. Description Cost

Rs.in lakhs

1.1 Cost of land of 3.6 acre at Rs.5.5 lakh per acre 19.8 1.2 Cost of levelling, laying internal roads/fencing and

compound wall

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Subtotal 21.8 2. Building S.No. Description Cost

Rs.in lakhs

2.1 Factory building of area 500 sq.m. at Rs.3200/sq.m. 16 2.2 Non-factory building of area 180 sq.m.at Rs.4500/sq.m. 8.1 Subtotal 24.1

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3. Cost of Plant & Machinery S.No. Description Cost

Rs.in lakhs

3.1 Cost of basic plant and machinery 46 3.2 Instrumentation and control 3.45 3.3 Pipelines and valves 4.6 3.4 Structurals for erection 2.3 Subtotal 56.35 3.5 Octroi, excise duty, sales tax, etc.at 12%� 6.76 3.6 Packaging and insurance charges (2%) 1.13 3.7 Transportation charges (2%) 1.13 3.8 Machinery stores and spares (2%) 1.13 3.9 Foundation charges (2%) 1.13 3.10 Installation charges (2%) 1.13 Total cost of plant and Machinery 68.76 4. Technical know-how fees Rs.2.5 lakhs 5. Miscellaneous fixed assets S.No. Description Cost

Rs.in lakhs

5.1. Electrification 4 5.2. Steam boiler and auxillaries 8 5.3. Water storage tank, borewell etc. 4 5.4. Fuel storage tank 3 5.5. Laboratory equipment 4 5.6. Office machinery & equipment 5 5.7. Material handling equipment, packaging machinery,

weigh balance, etc. 5

5.8. Diesel generator 9 5.9. Effluent treatment 3 Total 45

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6. Preliminary & Pre-operative expenses: S.No. Description Cost

Rs.in lakhs

6.1. Preliminary expenses 1.5 6.2. Pre-operative expenses:- 0 6.2.1 Establishment 2 6.2.2 Rent rates and taxes 2 6.2.3 Travelling expenses 1.5 6.2.4 Interest and commitment charges on borrowings 9 6.2.5 Insurance during construction period 3 6.2.6 Other preoperative expenses and deposits 0 6.2.7 Interest on deferred payment 0 Total 19 7. Provision for contingency Rs.10.12 8. Working capital margin Rs. 108.20 9. Total project cost Rs. 299.48

Say Rs. 300 lakhs

10. Means of finance Promoter's contribution Rs 120 Term loan from financing institutions Rs 180 Total project cost Rs 300

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11. Financial statements (Rs. in lakhs) Cost of production Variable Cost

Rs.in lakhs

Raw material and utilities 2727.96 Spares and maintenance 4.2 Selling expenses 177.25 Total variable cost

2909.41

B Fixed cost

Salaries and wages 24 Interest on term loan and working capital loan 134.78 Depreciation 10.97 Administrative expenses 106.35 Total fixed cost

276.1

C. Total cost of production A + B

3185.51

D. Selling price per kg. (in Rupees)

58

E. Annual sales turnover (Rs.in lakhs)

3545

F. Net profit before tax (Rs.in lakhs)(E-C))

359.49

G. Breakeven point in %

43%

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SECTION XI

SWOT ANALYSIS

Strength High level of demand for the product

Weakness Small capacity plants and therefore lack of competitiveness

Opportunity Firm tie up arrangement with refineries and setting up of the project as ancilliary units to refineries

Threat Import

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SECTION XII

FACTORS INFLUENCING THE POSTION FOR A NEW INDUSTRY AND RECOMMENDATIONS

Microcrystalline wax finds applications in diversified sector, which are growth oriented. The demand for the products are likely to go up steadily in the coming years. Substantial quantity of Microcrystalline wax is presently imported in the country. The import level is steadily going up over the last few years.