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

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 SECTION I

PRODUCT CHARACTERISTICS AND SPECIFICATION

General details

Family name Indigofera tinctoria

Occurrence As the glucoside indican in the plant indigofera

tinctoria

Leaf Forms 40% of the plant

Content of the leaf:-

About 0.35% indigo on a weight basis.

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 SECTION II

PRODUCT APPLCIATION

Indigo is one of the most important and popular natural blue colour dyes.

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 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 1920s

A few units in unorganised sector are reported to produce Natural indigo in Tamil Nadu using
crude technology

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 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

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 SECTION V

PRICE TRENDS

Basic price of Natural indigo Rs.650 per kg.

Taxes and duties Extra as applicable

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 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

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 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.

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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 Adam Fabriwerk Pvt. Ltd.

203, Rajguru Apartments
New Nagardas Road
Andheri (E), Mumbai-400 069

Steam boiler Energy Machine

C1, B/423 GIDC IV Phase,
Vithal Udyognagar-388 121
Dist. Anand, Gujarat

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 SECTION VIII

RAW MATERIAL REQUIREMENTS, UTILITY AND AVAILABILITY

Raw material requirement

Basis: one tonne of Natural Indigo

Indigo leaves 300 tonnes

Utility

Power: 2580 units

Fuel Oil: 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

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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 Four months between sowing and harvesting.

Soil Indigo can be grown in red, black, alluvial and latteritic soils;
the most suitable area is red soils.

Rainfall Places receiving 800 to 1600 mm rainfall are ideal for kharif
cultivation.

Other conditions 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.

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 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

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 SECTION X

DISCUSSIONS ON ECONOMIC CAPACITY , PROJECT COST AND

PROFITABILITY PROJECTIONS

Economic capacity 30 tonnes per annum

Project cost 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 0.28
compound wall

Subtotal 3.03

2. Building

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

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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 Rs.33 lakhs

Term loan from financing institutions Rs.50 lakhs
Total project cost Rs.83 lakhs

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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%

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 SECTION XI

SWOT ANALYSIS

Strength Availability of indigo plant and favourable

tropical conditions for growth of indigo plant.

Weakness Inadequate technology practices for process

extraction unit

Opportunity Export market

Threat The present price of Natural indigo are

considered high.

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 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

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