PROJECT PROFILE
ON
HERBAL EXTRACTS
MONTH & YEAR
JULY 2011
PREPARED BY
TANSTIA – FNF SERVICE CENTRE
B – 22, INDUSTRIAL ESTATE,
GUINDY, CHENNAI – 600 032
This publication is supported by
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HERBAL EXTRACTS
PRODUCT CHARACTERISTICS
General details
Different parts of the herbal plants are used for extractions ranging from
roots, stem, leaves, and flowers to fruits.
The extracted products are either in the form of powder or mixture of oil
and oleoresins.
Standards
The Bureau of Indian Standards has formulated following specifications
for herbal products
IS 326-1986 Methods of sampling and test for natural and
synthetic perfumery materials.
IS 6774:1972 Classifications of essential oil bearing aromatic plants.
Specifications of Selected Herbal Extracts
Amla
Ingredients Amla
Colour Creamish
Flavour and Taste Characteristics of amla
Total soluble solids 100 to 120 brix
Acidity%(as Citric acid) 2.5 + 1.0
PH 3.6 + 0.4
Mesh Ratings 1.5 mm
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Aloe Vera gel
Appearance Translucent
Odour Slight vegetable like odour
Taste Slick/Tangy
Specific 1.006+ 0.006
gravity
PH 3.8 To 4.8
Solids 0.5%
Calcium 99 Mg/L
Magnesium 26 Mg/L
Heavy Metals Less Than 0.001%
Storage Store in sealed, light resistant containers at cool,
dark, dry place
Guggul
Total Guggulsterone 2.5%, 5 % & 10 %
content
Alcohol soluble Min: 50 %
extractives
Others Lipid contents min 20%
Loss on drying Max 5 % (2hrs@ 105 C)
Extract ratio 7:1
Particle size 100 % through 80 mesh
Solubility Soluble in alcohol
Shelf life 24 months unopened
Storage In cool dry place, away from
heat and direct light.
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Vetiver
Type I Type II
Colour and Light to reddish Light to reddish
appearance brown, sometime brown, sometime
greenish viscous liquid greenish viscous liquid
Odour Characteristic & Characteristic &
persistent aroma with persistent aroma with
pleasant woody pleasant woody
character character
Specific gravity 30/30 0.992 to 1.015 0.990 to 1.032
deg.C
Opt.rotation 10 to 25 deg -50 to 130 deg.
Refrative index 30 1.516 to 1.530 1.512 to 1.523
deg.C
Acid value 35 max 40 max
Ester value 25 to 50 25 to 80
Carbonyl value 55 min 24 min
Total alcohol 55 min 70 min
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PRODUCT APPLICATIONS
Application Sector
Food
Cosmetics Pharmaceuticals
* Creams * Anti-inflammatory
* Shampoos * Food supplement * Detoxification
* Lotions * Treatment of
* Talcum powder * Sports drinks several illnesses
* Moisturisers
* Health drinks
MARKET POTENTIAL
Increasing realization of the side effects of allopathic medicines, coupled
with the growing awareness about the medicinal benefits as well as
therapeutic effect of herbal products is pushing up the demand for
herbal extracts, dietary supplements and herbal-based beauty aids
worldwide.
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The Associated Chambers of Commerce and Industry of India
(ASSOCHAM) has projected that the market size of herbal industry which
is currently estimated at Rs. 7,500 crores (Rs. 75 billion) will double to
levels at Rs. 15,000 crore by 2015 since this industry would be growing
at a compounded annual growth rate of over 20% henceforth.
In a study brought out by ASSOCHAM on Herbal Industry and Global
Market 2015, it is pointed out that India’s rich resource of
medicinal plants and traditional treasure of knowledge in this area, its
share at present is considered very meager. A quick estimate of the
potential reveals that India can generate raw stock of around Rs. 300
billion and easily achieve around Rs.150 billion value added products.
Thus, India is hardly able to exploit less than 50% of its potential.
Interestingly both raw materials (herbs) and herbal products have ready
market globally.
Releasing the study, ASSOCHAM Secretary General, D.S.Rawat said that
ideally, the niche market that India can focus on include Ayurvedic
Medicines and Dietary Supplements (including health drinks), extracts,
Oils and other derivatives , skin care and beauty aids.
According to the study, the Indian domestic market can be broadly
segmented into two categories. The first one will cover raw materials
required by the industrial units and direct consumption for household
remedies, whereas the second category will cover ready to use finished
medicines, health supplements, etc.
There is a strong demand for raw stock which mainly comprises Amla,
Isabgol, Senna, Henna, Ashwagandha, Aloe-vera and Myrobalans
(Hartaki), which accounts for over 75 % of the raw materials used in
Ayurvedic preparations. In terms of volume, it is estimated that current
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consumption of the key raw ingredients (as mentioned above) totals
approximately 400,000 – 500,000 MT.
With value addition, the market for herbal based products is around Rs.
7,500 crores, which is roughly the current size of the Indian market.
ASSOCHAM expect this market to grow rapidly in the coming years and
by 2015, it is expected that the size of the domestic market will rise to
Rs. 15,000 crores, reflecting a compound growth rate of over 20 %.
Globally, dependence on herbal medicines, dietary supplements and skin
and beauty aids will continue to gain greater share in view of the
awareness and comfort level which is akin to the use of organic food
products. A quick/indicative estimate of the market potential globally
reveals the following breakdown.
Present Demand Projected Demand (for 2015)
Europe US$ 35 Billion US$ 70 Billion
North America US$ 6.5 Billion US$ 25 Billion
China US$ 4.0 Billion US$ 12 Billion
India US$ 1.5 Billion US$ 3 Billion
Others US$ 13 Billion US$ 30 Billion
Total US$ 60 Billion US$ 140 Billion
INDICATIVE BREAK UP OF PRESENT GLOBAL DEMAND
The study has recommended that India’s thrust in the export market
needs to be focused to achieve the targeted growth and market share.
While the ethnic Indian population outside India is utilizing Indian
herbal products in a significant way, there is a compelling need to
generate awareness among the locals in foreign countries with regard to
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Indian products, besides meeting the quality standards in the advanced
countries.
INDIAN DEMAND
The Indian demand for Herbal extract is registering steady growth,
particularly in pharmaceutical and cosmetic applications.
A few of the herbal extracts are exported from the country, showing an
increasing trend in export.
Most of the drugs of established therapeutic value used in the
pharmacopoeias of different countries grow in the great abundance and
often in a state of nature in many parts of India.
As per an estimate, India has about 4000 species of herbal plants. Over
9% of them are available in wild state. Only 20% of these industrially
useful herbs have so far been under commercial cultivation.
In recent times, Indian System of Medicine came to limelight due to its
limited side effects and easy accessibility, India is a repository of large
number of medicinal plants which needed exploration and
experimentation for their sustainable use.
Some of the Indian units operating in the Herbal sector such as
Vaidyanath, Dabur, Zandu, Hamdard, Himalaya Drug are reported to
have produced 500 to 700 numbers of different herbal medicines, tonics
and lotions etc. with extensive business to the tune of Rs.100 to Rs.150
crores per annum by each.
There are at present more than 7000 pharmacies in Indian system of
medicine in the country, out of which about 600 are on loan licence and
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the remaining are having manufacturing facilities. In addition, there are
over 3 lakh Ayurved, 30000 Unani and 12000 Sidha registered
practitioners in the country
The present market of Indian System of Medicines (ISM) including
Ayruvedic drugs is estimated at around Rs.4300 crores. This includes
16 categories of classical ayurvedic medicines and a large number of
patent and proprietary ayurvedic medicines. This include oils, pastes,
tablets, pills, capsules and liquids
Market for Indian System of Medicines in India
Market size (Million
Rs.)
Ayurveda 41125
Siddha 282
Unani 1645
Total 43052
ISM System Number of
products
Ayurveda >600 products
Siddha > 100 products
Unani > 30 products
Driving factors for demand
Important use in medicinal applications due to absence of side effects
Eco-friendly nature of the product
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Herbal extracts are used extensively in the production of above Indian
Systems of Medicines.
In addition Herbal extracts are also used considerably in cosmetic
products
Likely Growth rate in demand for Herbal Extracts 9 to 10% per
annum
BROAD OUTLINE OF MANUFACTURING PROCESS
General details
The manufacturing process for various herbal extracts depend upon the
nature of the individual herbs and the specific process requirements.
The various unit operations are used in the extraction of herbs such as
extractors, dryers pulverisers etc.
Observance of specific and stipulated conditions for the production of
herbal extracts are necessary to ensure that there would not be any
deterioration in product quality or stability.
Technology Practices in Herbal extract Processing
Procurement:
Identification a must, before purchasing or growing fresh/dried herbs.
Discriminate look alikes, identical species and adulterated herbs.
Post Harvest:
Cleaning and Drying of plant material; to be specific to species as well as
end products.
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Freeze drying, Spray drying and Flash drying are important methods
Sun drying is usually the common initial step.
Storage:
Storage in controlled atmosphere in an aseptic lay out is a must to
maintain keeping quality in terms of colour, actives and fragrance.
Temperature, air flow and humidity are closely monitored.
Pulverisation:
Grinding media & temperature can play a vital role in quality of final
product.
Sifting:
Sifting through various mesh sizes for different end use is strictly
followed. This directly determines the absorption and effectiveness of the
herb.
Sterilization:
Plant materials contain microbial contamination which resist most of the
cleaning techniques. Total Sterilization is mainly effected through
exposure to Ethylene Oxide and Gamma radiation.
Filling:
It is a must to automate or semi-automate filling. The guage and material
of the packing materials should prevent ingress of air and moisture. This
avoids oxidation, discolouration or deterioration.
Tests:
Standard analytical methods are used to determine characteristics.
Organoleptic tests can sometimes determine trace component levels.
Chromatographic methods are used for quantitative analysis.
Microbiological Examination and Toxicological tests have to be performed
to determine the safety of the herb.
Pesticide Residue and Heavy metals are to be analysed to ensure nil side
effects.
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Clinical trials or post marketing surveillance ensures that adverse drug
interactions are avoided.
Standardisation
Standardisation and purification are ongoing debates especially in the
developed countries.
There are two very strong camps influencing the market scenario.
The leading Herbal player Sabinsa for instance takes the middle ground.
They offer both Standardised extracts as well as whole product and
leaves the decision to the customer.
It is too premature to conclude on the merits of any single method. The
Herbal sector has still some way to go before stabilizing.
Distillation
* Hydro-distillation.
* Steam distillation
* Water-steam distillation
* CO2 Supercritical Extraction
* Hydro-diffusion
* Molecular Distillation
* Spinning Cone Column Distillation
Factors determining the Production and Quality
Selection:
Geographical origin, Organ to Extract and distill, Botanical variety,
Harvest time, Biochemical specificity, Contamination and Organoleptics
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Comminution :
Heat induced deterioration must be prevented during size reduction.
It must also be closely followed by soaking and extraction.
Quality is ensured through:
Physical tests, Chemical tests, GC analysis and Sensory analysis
FCC guidelines for Specific Gravity, Refractive index, Optical rotation and
Colour have to be followed.
GC-MS profiling gives accurate chemical information of the constituents.
It can be used to determine: Origin, adulteration, degradation and the
complete list of components.
Pesticides residue and Heavy metal analysis yield information on safety.
Sensory analysis and Head space analysis are the final word on colour,
flavour and odour.
Extraction:
Generally, water is the main media through which extraction is effected.
The separation of components are in the order of their solubility in water
and not their Boiling Point.
Steam Distillation uses high pressure and heated steam optimised so as
to keep the spice surface on the false bottom always wet but not
saturated, i.e. the moisture content suits the absorptive capacity of the
herb material.
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Hydro-distillation is slow and ineffective except that it is portable.
Water-Steam Distillation is a blend of the above two processes.
It is suitable for most herbs and is also portable.
Hydro-diffusion is carried out with the flow top-down.
The condensation is at the bottom. Used for seed materials processed in
bulk.
Supercritical extraction is an effective method for high value extracts.
SCE uses gases such as CO2 to diffuse into plant material and extract
the soluble components. It can be optimised to yield pure oil.
Post-Treatment and Storage of the extracted oil is vital.
All the methods except SCE yield moisture containing extract.
Sodium sulphate or Chloride are used to remove moisture.
Nitrogen is purged into the extract and maturation for a few days is
allowed.
Storage is usually in clean stainless steel drums.
Control of Microbial Load
Option:
Ethylene oxide (EO) and Propylene oxide (PO) fumigation
Disadvantage: Harmful residues (ethylene
chlorohydrin/bromohydrin, ethylene glocol.) & Worker Exposure to toxic
gases.
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Reported to be banned in a few developed countries
Microwave treatment
Disadvantage: Dry commodities unsuitable.
Ultraviolet irradiation
Disadvantage: Dry commodities unsuitable.
Steam or dry heating
Disadvantage: Heat destroys flavour, aroma and micronutrients.
Methyl bromide
Disadvantage: Ozone depleting chemical. To be phased out by 2005
in advanced countries and 2015 in developing countries.
Radiation processing
Disadvantage: None of the above hazards but cumbersome and
expensive.
Radiation Processing
Advantages
It is a cold treatment.
Its penetrating nature permits its use in :
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Raw materials, finished products and pre-shipment containers.
Products irradiated are safe and free from residual radiation
Permitted radiation:
Cobalt-60, Cesium-137, X-rays (sub 5 MeV), Electron (sub 10 MeV)
Spices, Herbs and dry vegetable seasoning are largely irradiated.
10 % of the Herbs and Spices are irradiated to enhance shelf life.
Source of technology
* National Research Development Corporation,
(A Government of India Enterprise),
Anusandhan Vikas, 20-22, Zamroodpur Community Centre,
Zamrudpur, Kailash Colony Extn., New Delhi- 110 048.
* Central Institute of Medicinal and Aromatic Plants,
(Council of Scientific and Industrial Research)
Kukrail Picnic Spot Road,
P O CIMAP,Lucknow - 226015
* Central Drug Research Institute,
(Council of Scientific & Industrial Research)
Chattar Manzil Palace,
Mahatma Gandhi Marg,
Post Box No. 173,Lucknow-226 001.
Plant and machinery equipment and suppliers
* Water Extractor
* Falling Film Evaporator
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* Filler Decanter
* Tray Drier
* Grinder
* Solvent Extractor with Stripping Condenser and Rectifier
* Mixing Tanks
Size reduction
The raw materials is available as Leaves, Stems, Barks, roots, Flowers,
Seeds, Kernels and Shells. Depending on the physical properties,
including shape and size one has to select the equipments from the
following.
Jaw crusher
Hammer Mill
Magnetic Separator
Belt Conveyor
Dust Collection Equipment
2. Extraction equipment
3. Filtration Nutch filter
Enclosed filter press
4. Evaporation/Distillation
5. Solvent Recovery
6. Drying of extracts
Tray dryer
Vacuum dryer
Spray dryer
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Utilities Equipment
Boiler
Coal fired boiler
Light diesel/Furnace oil fired baby boiler
Packaged boiler
Cooling Tower
Spray ponds
Natural draft cooling tower
Forced/Induced draft cooling tower
Refrigeration Plant
Air Compressor
Supplier of plant and machinery
Boiler Cethar Vessels Ltd.,
No.4, Dindigul High Road,
Trichy
Refrigeration plant Voltas Ltd.,
Chennai
Air compressor ELGI Equipments Ltd.,
Elgi Industrial Complex III,
Trichy Road,
Singanallur, Coimbatore-641 005
Jaw crusher K.G. Khosla Compressors Ltd.,
19.8 KMS, Delhi-Mathura Road,
Faridabad-121 003, Haryana
Dryer Richard Engineering (Bombay) Pvt.
Ltd.
42, IIF, Veerabadran Street
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Near Valluvar Kottam
Nungambakkam, Chennai-600 034
Ganson Ltd.
645, Anna Salai,
Chennai-600 006
Filter Fluid Control Equipments
77/574, Mount Road, Chennai-600
006
Sri Ranga Industries
SF, 739, Ramraj Nagar,
Goldwins, Coimbatore-641 014
RAW MATERIAL REQUIREMENTS, UTILITY AND AVAILABILITY
Amla
Basis : one tonne of Amla oil
Amla Fruit 9.16 tonnes
Utility
Total Installed power 50 HP
Fuel oil 80 litres
Aloe Vera
Generally, three leaves provide one kg. Of Aloe vera gel.
Supply of Aloe Vera Leaves
Aloe Vera is extensively cultivated in Tamil Nadu and other states in the
country.
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There is no particular constraint in expanding the area of cultivation of
Aloe Vera to meet the projected increase in the demand. Therefore, the
supply scenario of Aloe Vera Plant material is likely to remain
comfortable.
Guggul
700 to 900 Kg are produced per hectare of Guggul gum plantation. Gum
is dried in shade and stored.
Guggul is cultivated in Gujarat, Karnataka and Rajasthan.
Vetiver
For 1.5 kg of Vetiver oil 100 Kg Vetiver
Raw material availability
The herbs are grown all over India in different climatic and seasonal
conditions. In the present case vetriver root extraction (herbal extraction
is taken as the product. The annual requirement of the material is
estimated as follows:
Calculation of Raw Materials Unit Qty Rate-Rs Rs.lakhs
Vetiver roots 66.66 MTs 299.97 65000 194.98
194.99
The extraction percentage is 6.75% from the raw material.
INSTALLED CAPACITY:
Economic Capacity 30 tonnes per annum
1. Land
Description Cost Rs.in Lakhs
Cost of land of 1.0 acre 15.00
Sub total 15.00
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2. Building
Description Cost Rs.in Lakhs
Factory building - 2000 sqft @ Rs.800 16.00
per Sq ft
Sub total 16.00
3. Cost of Plant and Machinery
Description Cost Rs. In lakhs
Cost of basic plant and machinery 25.00
Instrumentation and control 2.00
Pipelines and valves 2.00
Structurals for erection 1.00
Subtotal 30.00
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FINANCIAL ASPECTS
1. COST OF PROJECT
[Rs.lakhs]
Land 15.00
Building 16.00
Plant & Machinery 30.00
Other Misc. assets 2.00
Pre-Operative expenses 5.00
Margin for WC 6.12
------
74.12
------
2. MEANS OF FINANCE
Capital 28.37
Term Loan 45.75
------
74.12
------
3. COST OF PRODUCTION & PROFITABILITY STATEMENTS
Years 1 2 3
Installed Capacity MTs per annum 4.50 4.50 4.50
Utilisation 60% 70% 80%
Production/Sales Mts per annum 3 3 4
Selling Price Rs.7,000,000 MT
Sales Value 210.00 210.00 280.00
Sales Value 210.00 210.00 280.00
Raw Materials 117.14 136.67 156.19
Power 1.79 2.09 2.38
Wages &
Salaries 10.37 10.89 11.43
Repairs & Maintenance 1.20 1.26 1.32
Depreciation 6.96 6.01 5.20
Cost of Production 137.45 156.92 176.52
Admin, & General
expenses 12.00 12.60 13.23
Interest on Term Loan 6.41 5.60 4.00
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Interest on Working
Capital 3.83 3.83 3.83
Total 159.69 178.95 197.58
Profit Before
Tax 50.31 31.05 82.42
Provision for
tax 17.10 10.56 28.02
Profit After Tax 33.21 20.49 54.40
Add: Depreciation 6.96 6.01 5.20
Cash Accruals 40.16 26.50 59.60
4. WORKING CAPITAL:
Months Values % Margin Bank
Consumptions Amount Finance
Raw Materials 1.00 9.76 25% 2.44 7.32
Finished goods 0.50 5.73 25% 1.43 4.30
Debtors 1.00 17.50 10% 1.75 15.75
Expenses 1.00 0.50 100% 0.50 0.00
33.49 6.12 27.37
Say -
-> Rs.27.34 lakhs
5. PROFITABILITY RATIOS BASED ON 80% UTILISATION
Profit after Tax 54.40
19%
Sales 280.00
Profit before Interest and Tax 90.25
89%
Total Investment 101.46
Profit after Tax 54.40
192%
Promoters Capital 28.37
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6. BREAK EVEN LEVEL
Fixed Cost
(FC):
[Rs.lakhs]
Wages &
Salaries 11.43
Repairs & maintenance 1.32
Depreciation 5.20
Admin. & General
expenses 13.23
Interest on TL 4.00
35.18
Profit Before Tax (P) 82.42
FC x
100 35.18 0.80
BEL = 117.60
FC +P
24% of installed capacity
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