Business Opportunity in Turmeric Processing

Business Opportunity in Turmeric Processing

Turmeric (botanical name-Curcuma Longa), one of the most important spice crops in India, is used to colour and flavour the food products.The yellow pigmented fraction of Turmeric (Curcumin,)is used as a colourant in food products and also as an anti-inflammatory agent in medicinal formulations.

India is the largest Turmeric producer in the world, with an annual production of nearly 10 lakh tonnes, accounting for nearly 80 per cent of world’s production. In India, Telangana is one of the largest producers of Turmeric, followed by Andhra Pradesh, Tamilnadu and Maharashtra (see picture 1).

In FY 17, India produced 10.51 Lakh tonnes[1] of Turmeric, of which nearly 1.1 lakh tonnes valued at Rs. 1200 crores was exported. Additionally, India exported Turmeric based oleo resins and Turmeric oil, valued at around Rs. 400 crores.

 

 

Turmeric processing technology

Turmeric can be processed into two products Turmeric powder and Turmeric extracts including oleo resins and Turmeric oils.Turmeric oleo resins/oils are extracted through solvent extraction of turmeric powder. The solvent extraction plant can process a variety of spices including Capsicum, Pepper, Amla, Marigold etc. A plant of a capacity of 500 kg per day requires land of 20,000 square ft. and power load of 60 HP.

Since the extracts (oleo resins) are used in food preparation/pharmaceuticals and largely cater to exports, the oleo resin extraction operations have to be compliant with the USFDA, and European food safety guidelines. The companies that manufacture extracts usually obtain certifications such as HCAAP, Kosher, and Halal.

Key Players

Turmeric powder

The Turmeric power manufacturing is mostly done by micro enterprises and there are a number of players in each region. Additionally, most large spice powder manufacturers such as MDH spices, Everest Spices, Aachi Masala also sell turmeric powder.

Turmeric oleoresins and oils

This segment has a number of large players as well as SMEs.  The large companies extract oils from a number of spices and their products are targeted at export market. (See table 1). These are mostly based in Kerala, due to easy availability of spices. In addition to these large players, there are a number of SMEs that are spread across spice growing states such as Tamilnadu, Andhra Pradesh, Karnataka, Gujarat etc.

Table 1: Spice Extract manufacturers in Kerala
S. No.Company NameProduct RangeLocation
1.SynthiteValue added spice extracts and natural spice powderKolenchery, Kerala
2.Universal OleoresinsSpice Oils, Spice Oleoresins, natural coloursKochi, Kerala
3.Arjuna Natural ExtractsFormulations based on spice extractsAluva, Kerala
4.VD flavoursEssential oils from spicesKochi, Kerala
5.Plant LipidsSpice oils and oleoresinsKochi, Kerala
6.Kancor IngredientsOleo Resins, Essential Oils & Isolates, Mint, Menthol & Isolates, Floral Extracts, Speciality Ingredients, Organic Ingredients.Ernakulam, Kerala,
7.Plant Lipids.Spices and other Essential Oils.Kochi, Kerala
Source : FineTrain research

Key consumers of oleoresins in the domestic market include FMCG companies such as Hindustan Lever, Godrej, Colgate Pamolive, herbal products manufacturers such as Ayur Herbals, Dabur, Himalayan Drug Company, cosmetics product manufacturers such as Garnier Laboratories and pharmaceutical companies such as Dr. Reddys, Cipla etc.

Profitability and return on investment

The capital investment required for a Turmeric powder unit would be under Rs. 50 lakhs for a capacity of up to 2 tonnes per day. Since there is limited value addition in the powder manufacturing process and the manufacturer has to pay large commissions to distributors and retailers, the operating margins of such manufacturers would be thin and profitability would depend on their ability to sell large volumes.

Capital investment in Turmeric extraction capacity of 500 kg per day could be up to Rs. 2 crores. The profitability would depend on the spread between the oleo resin and Turmeric price and the yield of the extraction process.  A tonne of turmeric can yield anywhere 4-5% of extracts. Assuming that a tonne of turmeric yields 40 kgs of Curcumin (95%) and 30 litres of oil, the gross margin calculation is as under

Table 2. Turmeric Oleoresin Processing: Profitability
kgsPrice (Rs/kg)Value (Rs.)
Turmeric10009393,000
Solvents46,500
Total Raw material cost1,39,500
Oleo Resin4044981,79,920
Oil301003,000
Total revenue1,82,920
Spread (Oleoresin-Turmeric)43,420
Spread (%)24

Note: The prices of Turmeric and its Oleo resin are based on export data of 2017 provided by DGFT

The overall profitability and return on investment would depend on the producer’s ability to secure regular orders. Further, any value addition to the products by developing formulations based on the extracts can improve revenues as well as profitability.

Why Turmeric processing may be an attractive opportunity

Demand for Turmeric extracts is growing rapidly in foreign and domestic market. For example, India’s Turmeric extract exports have tripled over the past three years from Rs. 150 crores in FY 15 to Rs. 500 crores[2] in FY 18.

The infrastructure availability (cold storage, common infrastructure for grading and sorting of agri products) for food processing industry is improving as government is providing incentives for development of food parks/spice parks etc.  Further, food processing units are also being given incentives in the form of capital subsidies to set up and expand their businesses.

[1] Source: report on state wise/spice wise production by Spice Board Of India

[2]  DGFT data base: http://commerce-app.gov.in/eidb/ecomq.asp

How we can help

We can help you start a “Turmeric Processing Unit” through a number services including business viability assessment, market landscaping, technical consultation and project execution support.

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Write to us:bchhatre@finetrain.com, admin@finetrain.com

Call us: 800 888 4932

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Business Opportunity: Organic Fertilizers

Organic fertilizer is a mixture of decayed organic matter. It is usually made by gathering plant material such as leaves, grass clippings, and vegetable peels and animal waste into a pile or bin and letting it decompose with the help of earthworms, fungi or bacteria. Organic compost contains essential macro and micro nutrients for plants, often absent in synthetic fertilizers. Compost releases nutrients slowly over the cultivation period, which helps plants soak those nutrients better and make a healthy food in our plates.

The demand for organic fertilizers is rising in India as well as internationally due to increasing awareness of organic farming and sustainable agricultural practices. The market size for organic fertilizers in India stands at 2547 lakh metric tonnes as of FY 2015-16.[1]

The major consumers of organic fertilizers are horticulture farmers, farmers of export oriented crops, farmers of crops such as ginger and turmeric and urban households that use compost for their home gardens.

What are different types of organic Fertilizers?

As per the Fertiliser Control order, 1985, the organic fertilisers can be divided into three categories:

Vermin compost: Most popular form of organic fertiliser, made by decomposing the organic material with the help of Vermi, FCO has specified guideline in terms of nutrient percentage, moisture levels etc

City compost: The compost made from city waste, including household waste, municipal waste etc.

Organic manure: Compost made from animal and plant waste (including the vermi and city compost). Manure typically has higher organic content vis a vis other organic fertilisers.

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What is the market?

The market has two segments:

Horticulture farmers: Farmers growing fruits and vegetable crops use compost to reduce chemicals residue from their crops. Further, these crops are relatively more profitable vis a vis traditional field crops such as paddy, cotton and hence can afford to purchase organic compost. This segment is dominated by large fertiliser companies who have the dealer network and sales force required to reach the farmers. Below are the large players in Andhra Pradesh and Telangana.

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Nurseries: This segment has a lot of small and medium enterprises. Here the product packaging is important. Some of the players in this segment also sell only through online network.

How to get started with manufacturing of organic compost?

One needs to have a detailed understanding of the processes involved in manufacturing, marketing and selling the compost.

It’s not a very capital intensive business and hence capital requirements are not very large. One does not need many plants and equipment’s except for pits /wilgrows to dump the waste, shredder and a palletising machine. The main cost of establishing will be land and labour. A unit of capacity to process 20-30 tonnes of waste per day can be set up within a budget of INR 50 Lakhs.

The compost is also made as a by-product of a biogas plant. The biogas plant converts the organic waste into bio gas through anaerobic digestion and produces a slurry, which can be dried and used as compost.

Government incentives

There are a number of incentives available to manufacturers and farmers. It can broadly be categorized as incentives for farmers and incentives for entrepreneurs as given below.

Farmers are offered organic fertilizers at a subsidized cost

Entrepreneurs are offered incentives to set up compost manufacturing facility. For example, under National Program for organic farming, manufacturers of compost from vegetable waste are offered a subsidy of 33% of the cost of project.

Challenges
  • The market is still in its formative stage and awareness of the benefits of organic compost has just begun to spread across farmers and farmer groups.
  • Reliable Data on organic input market is not present.
  • Organic system of farming is far more expensive than doing farming using chemical fertilisers
  • The economics depend on the waste procurement cost, so those have to be tightly controlled

How can we help?

We can help you set up a compost manufacturing unit through a number of services including

  • Market viability assessment
  • Technical consultation and
  • Project execution support.

[1] Source: National Centre for Organic Farming

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Business Opportunity: PET Sheets

PET sheets provide a convenient way of packaging product across a number of industries – consumer products, pharmaceuticals, food & beverages, etc. PET sheets are increasingly getting popular as a preferred option for packaging of food and pharma products, due to their visual appeal, their ability to keep the product safe from moisture and easy thermoform-ability.

The table below depicts various types and forms of packaging made out of PET sheets:

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Types of PET Sheets

Various PET sheets, based on their properties, are used in different applications. For example, CPET which has a very high working heat resistance (can withstand a temperature of up to 220 degree Celsius for more than 25 minutes) is used for microwaveable containers. The table below depicts the application of various types of PET Sheets.

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Market

PET sheet market is currently small, comprising just 1.5% of PET resin consumption in India. However, this market is rapidly growing and the resin consumed by PET sheet industry has nearly doubled from 6,400 tonnes/year in FY-14 to 11,150 tonnes/ year[1] in the FY 17.

Presently most of the PET sheet is manufactured by companies that make different kinds of packaging material. Two of the Hyderabad based players include Nirmala Pet A Pack Pvt Ltd and Spear Pet Pvt Ltd.

Process &Technology

Process
The process of PET sheet making broadly involves: Raw material pre-treatment, Extrusion and Drying & Winding/ Cutting the finished sheet

Fig1: Process flow

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Sometimes, the final product requires one more layer of PET or coatings, in such cases a co extruder will be required.

Single Versus Double Screw Extrusion

Screw is the most important part of any extruder. The screw is divided into three equal zones; feeding, transition, and metering. The primary functions of the three zones are:

  • Feed – taking in the resins and feeding it forward in the screw
  • Transition – compressing and melting the resin
  • Metering/ Pumping– homogenizing/ blending the melted resins and pumping out through the extruder at a constant rate.

There are mainly two types of extruders; Single screw and Twin screw.The single screw extruders typically cost less than twin screw, however they offer less operational flexibility.

Budget

The overall budget for starting a PET sheet extrusion unit with a minimum viable capacity i.e. 300 KG/hr would be Rs. 5 Crores. The machinery cost of twin screw and single screw alone would approximately be Rs. 3 Crores and Rs. 2 Crores respectively[2].

How Can We Help You?

If you are interested in setting up a PET sheet manufacturing unit, we can assist you in starting a processing unit. Our services include

  1. Market & Financial viability assessment
  2. Technical consultancy
  3. Detailed project report preparation
  4. Support in project execution

Reach Us

Call us @ 800 888 4932,

Write to us- bchhatre@finetrain.com

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[1]Source: PRESENTATION OF RELIANCE INDUSTRIES LTD. – March1,2016

 

[2] Source: Based on discussion with extrusion machinery suppliers

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E-WASTE RE-CYCLING – BUSINESS OPPORTUNITIES

E-waste typically includes discarded computers and components, cathode ray tubes (CRTs), printed circuit boards (PCB), mobile phones, headphones, wires & cables, and white household goods such as liquid crystal display (LCD), plasma TVs, ACs, refrigerators etc.As per Industry body ASSOCHAM, India’s e-waste generation is likely to increase by nearly three times, from the existing 18 lakh MT per annum to 52 lakh MT per annum by 2020 at a compound annual growth rate (CAGR) of about 30%[1].

Figure 1: E waste across cities and categories

Despite increasing number of registered recyclers/dismantlers in the country and large volume of E-waste generated, only about 5% of it is processed through formal sector. The remaining is either donated or goes to Kabadiwallas.For example, although Hyderabad generates about 32 000 metric tonnes of E-waste annually[2] the formal sector recyclers whose combined capacity is only around 20,000 tonnes do not get adequate waste.

[1]Source: The Hindu – article dated at June, 2016
[1]Source: ASSOCHAM-Frost & Sullivan study, April, 2016

The biggest e-waste recycling market in India is Delhi and approximately 30% to 40% of the e-waste in India lands there.

Process:

E waste recycling process can be divided into two parts; separation and size reduction of metals (aluminium/copper/steel) & plastics andextraction of precious metals. Majority of Indian E waste companies do not have refinery/precious metal recovery facility, due to high capital cost (over INR 8 crores for refinery of 1 tonne per day) and lack of adequate waste availability.

Figure 2: E Waste Dismantling Process

The quality of e waste also plays a big role in deciding the nature of recycling facilities. For example PCB (Printed Circuit Board) around which the business of E waste recycling revolves can be divided into various grades depending on the gold content. As per Umicore, a precious metal refinery in Belgium, the PCBs can be divided into four grades (Table1)

Table 1: Grades of Printed Circuit Boards
PCB  GradesAvailable in
low value (Gold content of 50 PPM or lessTV-boards, monitor boards, printer boards, cordless phones, calculators, shredded bulk material after Al-/Fe-separation  etc
medium value ( gold content of minimum 100 ppm)PC-boards, laptop-and handheld-computer circuit boards, etc.
high value (gold content of 200 ppm ore more)Circuit boards from mainframes, mobile phones, ICs, MLCCs
Source: www.umicore.com

Whilerefining is useful for high grade PCBs, for low/medium grade PCBS manual dismantling coupled with extraction of copper is a more viable option.

Current Players:

The total number of registered E-waste recyclers in India is 178[3]., whereas Hyderabad has 5[4].  Some of the large players are as under

[3]Source: List of Registered E-Waste Dismantlers/Recyclers in the country (as on 29-12-2016)
[4]Source: Telangana State Pollution Control Board

Table 2: National E-Waste Recyclers – India
NameHead QuarterActivitiesCapacity (MT/Yr.)Date of Est.
Auctus E-recycling solutions P Ltd.NoidaDismantling, Metal-Nonmetal separations, Plastic recycling218002011
E- IncarnationMumbaiData security, Refurbishing, Metal- Nonmetal recovery and disposal30002010
E-ParisaraaPvt. Ltd.BangaloreData destruction, Dismantling, & Precious metal extraction8820September, 2005
Earth SenseHyderabadDismantling, Segregation & Disposal> 40002000
Eco Centric Management P. LtdMumbaiE-waste management, CSR initiatives -donations, refurbishment.2500January, 2011
Eco Recycling Ltd. (ECORECO)ThaneE-waste recycling, EPR implementation72001994, Formerly InfotrekSyscom
Greenspace Eco ManagementDelhiDismantling, Refurbishing, Take back programs, etc.600002007
Ramky ewaste recyclingHyderabadCollection, Dismantling, Metal- Nonmetal recovery and Disposal10000
TES AMM IndiaKancheepuramE Waste Recycling, Takeback program300002005

 Capital Expenditure (CAPEX) for various options:

E waste recycling chain begins with a collection centre, which can be set up for Rs. 10 lakhs. However,standalone collection centres are not encouraged to register, unless they are being set up by a recycler/refurbished or an electronic product manufacturer.  A collection centre combined with a dismantling unit can be set up for around Rs. 45 lakhs.  In India, recycling is restricted to separation of Metal and Non-metal and granulation, as the technology for extraction of precious metal is not economical.

Figure 3: Capex required for Setting up aE waste processing unit

Regulatory requirements:

The industry is governed by e waste rules which specify the approvals and infrastructure requirements. The approvals need to be obtained from State pollution control body.

Table 3: APPROVALS
List of Approvals RequiredAuthorising BodyRemarks
CTO – Consent to OperateTelangana State – Pollution Control BodyThese are considered as pre-operations & establishment approvals.
CTE – Consent to Establish
One time authorisationSuch approvals also often have a validity period.
Certificate of registration & Proof of installed capacityDistrict Industries Centre.This is a common certificate of registration under any industry and serves as pre-requisite for approvals mentioned above.
Table 4: A GLANCE AT E-WASTE MANAGEMENT RULES (2016)
ParticularsCollection centresDismantling unitsRe-cyclersRefurbishers
Who can establishProducers/Refurbishers/Dismantlers/Recycler, standalone collection centre are not allowedAny Individual, Company, Society, they must have agreement with e waste generators/producers to procure e waste
ParticularsDismantling unitsRe-cyclersRefurbishers
Restrictions on certain operationsDismantling units are not allowed Shredding or Leaching of; Circuit Boards, Lamps, Cathode ray tubes CRTs, LCDs and Plasma TVs.None provided necessary infrastructure is in place. Not defined
Area required (per tonne of capacity)300 Sq. Metres.500 Sq. Metres150 Sq. Metres

Profitability:

The profitability of e waste recycling company depends on its access to waste and cost of waste. Cost of waste accounts for around 75-85 per cent of total cost of operations. The revenue depends on the quality of waste collected by the company. For simple dismantling operations, the estimated cost of waste and recovery per tonne is as under:

Table 5: Unit Economics of Dismantling 1 Tonne assorted E-waste
Sl.No.Material% Composition (by weight) Price INR/KGValue (INR)
1Mild Steel0.23153,450
2Stainless Steel0.08151,200
3Glass0.275.001,350
4Plastics0.2710.002,700
5Copper wire0.032006,000
6Aluminium0.03902,700
7Other material including precious material0.081008,000
8Hazardous Material0.01
 Overall value (INR)25,400
 Cost of waste (INR)20,000
 Gross Profit (INR)5,400
Source: Paper on Sustainable Electronic Waste Management and Recycling Process by S. Chatterjee, Department of Information Technology, Published in American Journal of Environmental Engineering, 2012

Other than the raw material cost, which has been discussed above, rentis another significant cost,Assuming a dismantling capacity of 5 tonnes per day, the area requirement @ 300 square meter per tonne of waste is 1500 square meters and rent can be up  to INR  3-5 lakhs per annum. Further, there are other fixed overheads such as labour and interest.   As such,one needs to process at least 3-5 tonnes per day, just to recover the costs.

Opportunities for a new enterprise

The e waste sector has grown at a slow pace over the last five years, largely due to lack of awareness about e waste rules,  absence of strict guidelines for disposal of e waste and challenges from the informal sector recyclers who are able to offer a better price for the waste. However, the regulations around e waste are expected to tighten and would bring unorganised sector into mainstream.

While opportunities for e waste recycling are only expected to increase in future, profitability would depend on the value addition done by the enterprise.  Therefore, aspiring e waste companies would also need to build skill sets in e waste segregation and in identifying reusable waste. We believe that

  1. Dismantling can be a profitable option if you are able to establish a network of waste collection centres and develop skill sets to identify reusable waste
  2. Setting up a refurbishing centre, where salvaged computers/phones can be repaired using new or old components should also be attractive.
  3. Recyclers would need a large network of collection centres or need to import waste to ensure capacity utilisation

How we can help you?

We can help you set up E waste recycling unit through a number of services including

  • Market viability assessment
  • Technical consultation and
  • Detailed project report preparation

Reach Us

Write to us: bchhatre@finetrain.comadmin@finetrain.com

Call us: 800 888 4932 /9032398367

Visit us: www.finetrain.com

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