NATURAL INDIGO CONTENTS SECTION I PRODUCT CHARACTERISTICS AND SPECIFICATION SECTION II PRODUCT APPLICATIONS SECTION III INDIAN MANUFACTURERS SECTION IV IMPORT/EXPORT LEVEL SECTION V PRICE TRENDS 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 1
General details SECTION I PRODUCT CHARACTERISTICS AND SPECIFICATION Family name Occurrence Leaf Indigofera tinctoria As the glucoside indican in the plant indigofera tinctoria Forms 40% of the plant Content of the leaf:- About 0.35% indigo on a weight basis. 2
SECTION II PRODUCT APPLCIATION Indigo is one of the most important and popular natural blue colour dyes. 3
SECTION III INDIAN MANUFACTURERS Natural indigo known in India for 400 years. In 1896-1897 about 16,88,900 acres of land was under indigo cultivation in India and British east India company exported about 19,000 tonnes of indigo from India. The production in India practically ceased in 1920 s A few units in unorganised sector are reported to produce Natural indigo in Tamil Nadu using crude technology 4
SECTION IV IMPORT/EXPORT LEVEL 4.1. Present import level 52975 kg per annum Countrywise imports Natural Indigo Period April 2001 to March 2002 Country Quantity in Kgs China P RP 32000 Hong Kong 20975 4.2. Present export level 12950 kg peer annum Countrywise exports Natural Indigo Period April 2001 to March 2002 Country Quantity in Kgs Indonesia 600 Japan 3750 Turkey 1000 UK 6700 USA 900 5
SECTION V PRICE TRENDS Basic price of Natural indigo Taxes and duties Rs.650 per kg. Extra as applicable 6
SECTION VI INDIAN DEMAND The product is largely produced in crude form by the producers and then supplied to end user industry who refine the product for use The export market can be built up in view of the favourable ecological factors associated with the product. Natural indigo has to compete with synthetic indigo in the market. However, it is generally seen that the price of natural indigo is higher than that of the synthetic indigo. This is a deterrent factor in increasing the demand for Natural indigo in the market. Present estimated Indian demand is around 100 tonnes per annum Estimated growth rate in demand 6 to 7% per annum 7
SECTION VII BROAD OUTLINE OF MANUFACTURING PROCESS The process of extraction of indigo from the indigo plant is of simple character and consist mainly of 3 stages namely. * Steeping of the plants in water (fermentation) * Separation of the aqueous extract and oxidation of the solution with air and * The final treatment of precipitating and separating the colour and preparation of the marketable dye cake or powder When plants are cut, they are immediately brought to the processing centre and processed immediately thereafter. Indigo dye is extracted from freshly harvested plants through fermentaion and oxidation. The actual colouring matter, indigotin, is present in the leaves in the form of a glucoside (Indican), which is hydrolysed due to the action of an enzyme indimulsion in the presence of dilute acids and alkalis. Hydrolysis lead to the formation of indoxyl and glycose. The indoxyl is further oxidised while beating to indigotin. After dye extraction, the left over plant material can be used as green manure. The nutrient quality of the plant material does not change due to fermentation. Yield and cost A minimum of 10 tonnes of fresh green matter can be harvested from an acre. Higher yields are possible with irrigation and more number of cuttings. The cost of constructing an extraction yard is a one time expenditure. The recurring cost per acre would be around rs.10000 including cultivation and extraction. Thus, it is possible to earn a net income of Rs.15000 to Rs.20000 from an acre through indigo cultivation and extraction. To sum up The elements in the successful cultivation and extraction of indigo are the use of good seed; achieving a high leaf to stem ratio; obtaining maximum biomass from unit time and area through good agronomic management and multiple cuttings without lowering the dye content of leaves; efficient fermentation and oxidation for higher dye recovery; reduction of the labour component in the extraction process through selective mechanisation and close linkages between the industry and growers through contract farming. 8
Source of technology * Central Institute of Medicinal and Aromatic Plants, (Council of Scientific & Industrial Research) Kukrail Picnic Spot Road P.O. CIMAP, Lucknow 226 015 Plant and machinery equipment suppliers Reactor/extractor Steam boiler Adam Fabriwerk Pvt. Ltd. 203, Rajguru Apartments New Nagardas Road Andheri (E), Mumbai-400 069 Energy Machine C1, B/423 GIDC IV Phase, Vithal Udyognagar-388 121 Dist. Anand, Gujarat 9
SECTION VIII RAW MATERIAL REQUIREMENTS, UTILITY AND AVAILABILITY Raw material requirement Basis: one tonne of Natural Indigo Indigo leaves 300 tonnes Utility Power: Fuel Oil: 2580 units 160 litres Raw material is indigo plant Indigo plant is grown in several regions in Tamil Nadu particularly Kanyakumari Dist. The plant material is readily available. INDIGO CULTIVATION Indigo is grown as the main crop during Kharif or as a green manure crop in summer after paddy. Before independence, Indigo was grown in Bihar, Uttar Pradesh, Gujarat, Madhya Pradesh, Andhra Pradesh and Tamil Nadu, but is now confined to a few pockets of the last two states. The crop takes about four months between sowing and harvesting. The leaf, which forms 40% of the plant, is the most useful part from which dyes is extracted. It contains about 0.35% indigo on a weight basis. The maximum indigo is extracted during the flowering to little pod stage While indigo can be grown in red, black, alluvial and latteritic soils, the most suitable are red soils. Places receiving 800 to 1600 mm rainfall are ideal for kharif cultivation. While temperatures and elevation are not critical, it can be grown in all plains. If grown after paddy, it can be grown in any season. Normal tillage operations at the beginning of the monsoon are sufficient for raising an indigo crop. In areas with a high weed problem, summer tillage helps. Indigo seeds are sown directly on flat beds with a spacing of 30 cm x 10 cm. The seed rate is one kilo per acre. It germinates and establishes well in 10 days 10
The seeds, which should be collected from dry areas, do not need treatment. One weeding after 30 days is sufficient and can be done through inter cultivation. While the crop is not normally irrigated in high rainfall areas or in areas with 700 to 1000 mm rainfall, irrigation during dry periods promotes higher biomass production increasing the overall profitability. There has been no serious threat to the indigo crop from pests and disease, necessitating their control and management. The crop is harvested by cutting the plants 15 cm above ground level at the flowering or the little pod stage. A crop sown in June/July and raised in rain fed conditions can be harvested in October. If the crop is irrigated, two cuttings can be taken; the first in October and the second in December. The harvested crop (stem and leaves) should be transported to an extraction yard within two/three hours as the dye content goes down with delay. In view of this, it is necessary to have the extraction yard within a reasonable distance Duration Soil Rainfall Other conditions Four months between sowing and harvesting. Indigo can be grown in red, black, alluvial and latteritic soils; the most suitable area is red soils. Places receiving 800 to 1600 mm rainfall are ideal for kharif cultivation. Temperatures and elevation are not critical, it can be grown in all plains. If grown after paddy, it can be grown in any season. If the crop is irrigated, two cuttings can be taken; the first in October and the second in December. The harvested crop (stem and leaves) should be transported to an extraction yard within two/three hours as the dye content goes down with delay. In view of this, it is necessary to have the extraction yard within a reasonable distance. 11
SECTION IX GLOBAL SCENARIO Global demand for synthetic indigo 17000 tonnes per annum BASF of Germany, is the largest producer of synthetic indigo dyestuff with capacity of 7000 tonnes per annum. Global producers of Synthetic indigo BASF, Germany Taixing General Chemical Plant, China Buffalo Color Corporation, USA Sabinsa Corpn., USA Spectrum Bulk Chemicals, USA Amresco, USA Pylam Products Co. Inc., USA Global demand for Natural indigo is gradually increasing due to ecological advantages that it offers,over the synthetic indigo 12
SECTION X DISCUSSIONS ON ECONOMIC CAPACITY, PROJECT COST AND PROFITABILITY PROJECTIONS Economic capacity Project cost 30 tonnes per annum Rs.83 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 2. Building Subtotal 3.03 S.No. Description Cost Rs.in lakhs 2.1 Factory building of area 120 sq.m. at Rs.3200/sq.m. 3.84 2.2 Non-factory building of area 50 sq.m.at Rs.4500/sq.m. 2.25 Subtotal 6.09 3. Cost of Plant & Machinery S.No. Description Cost Rs.in lakhs 3.1 Cost of basic plant and machinery 25.00 3.2 Instrumentation and control 1.88 3.3 Pipelines and valves 1.25 3.4 Structurals for erection 1.50 Subtotal 30.63 3.5 Octroi, excise duty, sales tax, etc.at 12% 3.68 3.6 Packaging and insurance charges (2%) 0.61 3.7 Transportation charges (2%) 0.61 3.8 Machinery stores and spares (2%) 0.61 3.9 Foundation charges (2%) 0.61 3.10 Installation charges (2%) 0.61 Total cost of plant and Machinery 37.36 13
4. Technical know-how fees Rs.1.5 lakhs 5. Miscellaneous fixed assets S.No. Description Cost Rs.in lakhs 5.1. Electrification 1.50 5.2. Steam boiler and auxillaries 0.50 5.3. Water storage tank, borewell etc. 2.50 5.4. Fuel storage tank 1.00 5.5. Laboratory equipment 1.50 5.6. Office machinery & equipment 0.50 5.7. Material handling equipment, packaging machinery, 0.50 weigh balance, etc. 5.8. Diesel generator 4.40 5.9. Effluent treatment 0.50 Total 11.90 6. Preliminary & Pre-operative expenses: S.No. Description Cost Rs.in lakhs 6.1. Preliminary expenses 0.80 6.2. Pre-operative expenses:- 6.2.1 Establishment 0.80 6.2.2 Rent rates and taxes 0.60 6.2.3 Travelling expenses 0.60 6.2.4 Interest and commitment charges on borrowings 1.00 6.2.5 Insurance during construction period 1.00 6.2.6 Other preoperative expenses and deposits - 6.2.7 Interest on deferred payment - Total 4.80 7. Provision for contingency Rs. 4.17 lakhs 8. Working capital margin Rs. 13.83 lakhs 9. Total project cost Rs.83 lakhs 10. Means of Finance Promoter's contribution Term loan from financing institutions Total project cost Rs.33 lakhs Rs.50 lakhs Rs.83 lakhs 14
11. Financial statements A Variable cost Rs. in lakhs Raw material and utilities 78.79 Spares and maintenance 2.24 Selling expenses 9.75 Total variable cost (A) 90.78 B Fixed cost Salaries and wages 9.00 Interest on term loan and working capital loan 16.4 Depreciation 5.04 Administrative expenses 5.85 Total fixed cost (B) 36.29 C. Total cost of production (A+B) 127.07 D. Selling price per kg. (in Rupees) 650 E. Annual sales turnover 195 F. Net profit before tax (E-C) 67.93 G. Breakeven point in % 35% 15
SECTION XI SWOT ANALYSIS Strength Weakness Opportunity Threat Availability of indigo plant and favourable tropical conditions for growth of indigo plant. Inadequate technology practices for process extraction unit Export market The present price of Natural indigo are considered high. 16
SECTION XII FACTORS INFLUENCING THE POSITION FOR A NEW INDUSTRY AND RECOMMENDATION Due to recent concerns over use of synthetic dyestuffs causing environmental hazards, there is a revival of interest in natural dyes. In recent years, natural indigo dye has become one of the most important colourants world over for colouring jeans. Traditionally, extraction of Natural indigo used to involve a labour oriented process, making it uneconomical. But with the mechanisation of the extraction process, the prices of the natural dye have become comedown and it is likely to find favour in the denim manufacturing industry in the coming years. Such recent developments have opened opportunities for India, the cultivation of Natural indigo can be widely practised in India. The developments have necessitated the scientific cultivation of indigo. The time has come to grow the indigo crop on commercial lines in the country. Biological indigo would probably be more environmentally friendly. But industry is unlikely to use it in a large way, until it would also be comparatively cost effective 17