1

ANIMAL GLUE

CONTENTS

SECTION I PRODUCT CHARACTERISTICS AND SPECIFICATIONS SECTION II PRODUCT APPLICATIONS SECTION III INDIAN MANUFACTURERS SECTION IV IMPORT/EXPORT TRENDS SECTION V PRICE TRENDS SECTION VI INDIAN DEMAND SECTION VII BROAD OUTLINE OF MANUFACTURING PROCESS SECTION VIII RAW MATERIALS REQUIREMENTS 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

2

SECTION I

PRODUCT CHARACTERISTICS AND SPECIFICATIONS 1.1 Product Characteristics Animal glue is a protein derived from the simple hydrolysis of collagen, which is a principal protein constituent of animal hide Glue is supposed to be an impure material deeper in colour with less thickening power but with greater degree of dispersive efficiency. The distinction between gelatin and glue is not very sharp. Commercially, gelatin is understood to cover a very pure glue supplied as thin sheets, colourless (or) of very pale colour possessing a high gelatinising power but comparatively poor agglomeration properties. An interesting property of animal glue solution is that glue is transformed from a liquid to a gel state on cooling and reverting to a liquid on reheating. This property is of primary importance in many adhesive applications Animal glue is commercially available in a number of forms including the dry granulated products for use as hot glues, cold liquid glues for immediate use and a wide selection of composition glues in cake or jelly form. Approximate chemical composition� Carbon 51.29

Hydrogen 06.39 Oxygen 24.13 Nitrogen 18.19

Density Approximately 1.27 gm per cc

Moisture 10% to 14%

Ash content 2.25% to 4%

Solubility Soluble in water,insoluble in oils, waxes, organic solvents and absolute alcohol. They are emulsified as water oil system under appropriate conditions.

SECTION II

Flakes Chips Powder Cake

Commercial form

3

PRODUCT APPLICATIONS The term glue refers to the crude form of Gelatine. Glue refers to the product finding chiefly industrial applications as an adhesive in plywood, paper board, match, abrasive and similar industries. Gelatine refers to the product in a much purer and cleaner form finding use in food, pharmaceutical and photographic industry and in some specific areas of industry as an adhesive. Sector of application Nature of uses

Adhesive Animal adhesives are of various kinds derived from skins and bones of the animals. The form is known as Hide glue and the latter as Bone glue. Fish glue are derived from the skin of various fishes, casein glue is derived from casein obtained from milk of various animals.

Used in bonding furniture, musical instruments, decorative veneers,book binding, packaging, sizing Animal blood glue is also utilised for various purposes.

Miscellaneous In manufacture of abrasive papers, paper tube winding and sealing cartons etc.

4

SECTION III

INDIAN MANUFACTURERS

There are number of producers of Animal glue in the medium and small scale sector. Indian producers include the following * Bhopal Glues & Chemicals (P) Ltd. Jinsi, Bhopal-462 008 * Esdee Paints Ltd., 203, Navketan, Chembur,

Mumbai-400 071. * Galaxy Hotmelts and Industries, Palani,

Tamil Nadu * Jiwan Glue Industries Gill Road, Near Canara Bank Ludhiana-141 003 * Kerala Chemicals and Proteins Ltd., (A joint venture of Kerala State Industrial Development Corporation Ltd., Nitta Gelatin Inc., Japan and Mitsubishi Corporation,Japan). Kathikudam P.O. (Via) Koratty, Trichur Dist - 680 308 Gelatin Division: KEPIPL PB NO.3109, Kusumagiri, Kakkanad, Kochi-682 030 * McAdams Chemical Mfg. Co., (Formerly known as Mcadams Balsen Chlorates (P) Ltd.,)

Tiruchirapalli * Naina Glues and Chemicals Ltd., Maharashtra * Pioneer Miyagi Chemicals Pvt. Ltd, (Asia Glues & Chemicals Pvt.Ltd.,-Sister concern) Cuddalore * Rallis India Ltd., A-14/A, SIPCOT Industrial Complex, Cuddalore-607 005

5

* Sudes Chemicals.

Calcutta. * Shaw Wallace & Company Ltd., Agriculture & Chemicals Division 166, Thambu Chetty Street, Post Box No.14, Madras-600 001. * Shibi Capsules, Pitchaiveerampet, Ozhukarai Commune,

Pondicherry-605 010. * Strides Arcolab Ltd. Strides House, Bilekehalli, Bannerghatta Road, Bangalore-76 * V.P.N. Gelatine Pvt. Ltd., 5, 1 Street, Sylvan Lodge Colony Kilpauk, Chennai-600 010. Factory :310-Chetti Ped Village, Thandalam (P.O.), Sri Perumpudur Taluk, Kancheepuram Dist.-602 105 New projects - Gelatine * Transgel Industries Ltd. 7-1-58, 1-305, 3rd Floor Divyashakthi Complex Hyderabad

Indian installed capacity 25,000 tonnes per annum

6

SECTION IV

IMPORT/EXPORT TRENDS Import level : Negligible quantity Export level : Around 1000 tonnes

7

SECTION V

PRICE TRENDS

Period: November 2002 Ex-factory price Rs.65 per kg Excise duty 16% CST 4%

8

SECTION VI

INDIAN DEMAND 6.1 General Details The Animal glue finds predominant applications in the match industry, abrasive industry and in paper industry, particularly in security paper manufacture. 6.2 Typical Formulations Animal glues are usually applied at 25 to 50% concentration and at 60 deg.C. In this state, it has a paint like consistency and can thus be readily spread, in the form of a thin continous film. This film thickens on cooling, permitting rapid development of desired tackiness and holds the adhesive at joint surface and thus eliminates the danger of bleeding from the joint under pressure. Book Binding Glue Animal glue 30 parts Water 29 parts Glycerine 30 parts Preservative 1 parts Paper Box Glue Bone glue 45 parts Water 15 parts Glycerine 39 parts Preservative 1 parts Formic acid,phenol and formaldehyde etc are suitable preservative. Can Label Glue Starch 100 parts Water 700 parts Animal Glue 10 parts Sodium silicate 100 parts Turpentine 50 parts

9

6.3 The consumption pattern of glue in the country

6.4 Demand Total estimated demand for glue in the country

including export demand is around 18,000 tonnes per annum.

6.5 Growth rate demand : 7 to 8% per annum.

Match industry60%

Abrasive and miscellaneous

20%

Paper 20%

10

SECTION VII

BROAD OUTLINE OF MANUFACTURING PROCESS The manufacturing process of the different types of animal glues primarily vary in the initial treatment of the raw materials. Process outline The commercial production of Glue and Gelatine by hydrolysis of Collagen Animal glue is generally produced under alkali process, whenever hide fleshings and bone sinews are processed. Normally, the hide fleshings are dumped in the washers, either mechanical or fluidised air washers with running water for a period of two hours to remove the lime and then transfered to soaking vats. Soaking is carried out for a period of 6 to 8 days. The object of soaking is to remove the flat and non-collagenous material. They are again trasferred to the washers. After running water wash, dilute hydrochloric acid is used to remove the alkali till the stock becomes neutral. After the final running water wash, the stock is transferred to the extraction tanks. In the extraction tanks,the stock is filled with water and heated between 70 to 90 degrees centigrade and extract is taken at periodic intervals.

Process

Acid Process

This involves essentially adjustment of the pH value of Glue and gelatine and subsequent extraction of gelatine at a low temperature between 50 to 60 degrees centrigrade.

Alkali Process:-

This involves treatment of the collagenous material with alkali under rigid controlled conditions of temperature,pH value and time. In general, a suspension of lime is used as alkali medium; the treatment being prolonged as long as 70 to 100 days.

11

Process Details Most of the skin used for the manufacture of glue and gelatine is the wash from tanneries, where it receives a short treatment with saturated lime water. Skin pieces which are to be utilised for glue manufacture are again subjected to liming for 12 to 15 days. After removal of alkali by water and acid, the hides are placed various times in hot water so as to extract the glue. Warming may be carried out in jacketed pans utilising some cheap mineral oil: castor oil serves the purpose well, as heating medium. Oil temperature should not exceed 120 Deg.C as this darkens the colour of glue. The water temperatures should range between 105 Deg. and 120 Deg. The glue solution is removed and evaporated under vacuum. Some clarifying agent such as alum is also added. Concentrated solution is then allowed to set in small 8"x4"x1/2" pans. The jelly is then allowed to get dried. The drying nets are 6'x3' with wire netting of about 3/4" mesh and wooden frame. The glue thus prepared may contain about 15% moisture. In the case of bone-glue manufacture, bones are crushed and washed. The bones are next soaked in 2 to 8% hydrochloric acid converting the bone protein into gelatin. Wooden vats are used for the purpose. Benzene is used for degreasing purposes as solvent. Degreasing requires from 4 to 6 hours and 15 tonnes of bone require 2,000 gallons of solvent. Glue is next extracted by cooking in autoclaves by water. Glue is obtained from the solution as in the case of hide glue process.

Source of technology

McAdams Chemical Mfg. Co., (Formerly known as Mcadams Balsen Chlorates (P) Ltd.,) 70-B, Viralimalai Road, Edamalaipatti Pudur, Tiruchirapalli- 620 012.

12

Major plant and machinery and suppliers Name of the equipment

Name of the company

Washing tank Billion Plastics Pvt. Ltd., 912, Tulsiani Chambus, Nariman Point Mumbai-21 Spark Engineers Pvt. Ltd., 5/332, State Bank Colony II Salem-636 004

Reactors 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

Boilers Cethar Vessels Ltd., No.4, Dindigul High Road, Trichy Firetech Boilers Pvt. Ltd. No.211, 2nd Cross, 38th Main, B.T.M. Layout 2nd Stage, Bangalore-68

Dryers The Anup Engineering Ltd., Behind 66 KV Electric Sub Station Odhav Road, Ahmedabad-382 415 ATRE Thermal Products Pvt. Ltd., Pushpa Heights, 1st Floor, Bibwewadi Corner, Pune-411 037

Evaporator Excel Industrial Services White House, D-111/8,Ist Main Road, Anna Nagar (East) Chennai-600 102 Alfa Laval Saunders (India) Ltd., No.18, Gill Nagar, Fist Street Chennai-600 094

13

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

Vacuum pumps Southern India Instrumech Pvt. Ltd., 160, Baba Nagar, Villivakkam Chennai-600 049 Travaini-Maneklal Vacuum Technology Pvt. Ltd., Manek Mahal, 7th Floor, 90, Veer Nariman Road, Churchgate, Mumbai-400 020

14

SECTION VIII

RAW MATERIAL REQUIREMENTS AND AVAILABILITY

8.1 Types of animal glue 1. Hide Glue 2. Bone Glue Hide glue is derived from the collagenous material present in the hides and connective tissues. Bone Glue is derived from the collagenous material present in the structure of bones. 8.2 Raw materials used for Hide Glue and Gelatin: (a) Hide Fleshings (b) Hide Cuttings (c) Limed Hide Cuttings (d) Salted Hide Cuttings (e) Hide Splits (f) Green Cattle Bones (g) Degreased Bones (h) Sun-dried Cattle Bones (i) Bone Sinwes The above raw materials are readily available in the country. 8.3 Raw material requirement Basis: One tonne of Animal Glue Fleshing/leather cuttings 4 tonnes Other chemicals like Lime,soda ash and hydrochloric acid 8.4 Utility requirements per tonne of product Power 500 units Fuel 160 litres

15

8.5 Raw material availability 8.5.1 Hides/Skins Veg.chrome tanned hides (in

‘000 pcs) Finished leather skins (in ‘000 pcs)

1991-92 5448 26400 1992-93 7512 25596 1993-94 8004 30636 1994-95 11736 33096 1995-96 14760 28968 1996-97 15096 34560 1997-98 16605 48576 Present Production level

18000 50000

Production of bovine hides and skin (Quantity in ‘000 tonnes) 1997 388.2 1998 389 1999 384 2000 401 2001 407 8.5.2 Bones The total availability of offal/bones in the country generated from large slaughterhouses is estimated to be more than 21-lakh tonnes per annum.

16

SECTION IX

GLOBAL SCENARIO 9.1 Global demand 0.25 million tonnes per annum 9.2 Global Growth rate in demand 2.5 % per annum 9.3 Global producers * American Gelatin Co. Div. Of Health Processes Inc.,

20 Charing Cross Road, Charleston, SC 29407 USA

* Norland Products Inc., 695 Joyce Kilmer Ave New Brunswick, NJ 08902 USA

17

SECTION X

DISCUSSIONS ON ECONOMIC CAPACITY, PROJECT COST AND PROFITABILITY PROJECTIONS

Economic capacity : 300 tonnes per annum. Project cost : Rs.156 lakhs

Assessment of project cost 1. Land S.No. Description Cost

Rs.in lakhs

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

Compound wall

0.55

Subtotal 6.05 2. Building S.No. Description Cost

Rs.in lakhs

2.1 Factory building of area 450 sq.m. at Rs.3200/sq.m. 14.4 2.2 Non-factory building of area 110 sq.m.at Rs.4500/sq.m. 5 Subtotal 19.4 3. Cost of Plant & Machinery S.No. Description Cost

Rs.in lakhs

3.1 Cost of basic plant and machinery 44 3.2 Instrumentation and control 3.3 3.3 Pipelines and valves 4.4 3.4 Structurals for erection 2.2 Subtotal 53.9 3.5 Octroi, excise duty, sales tax, etc.at 12%� 6.5 3.6 Packaging and insurance charges (2%) 1.1 3.7 Transportation charges (2%) 1.1 3.8 Machinery stores and spares (2%) 1.1 3.9 Foundation charges (2%) 1.1 3.10 Installation charges (2%) 1.1 Total cost of plant and Machinery 65.9

18

4. Technical know-how fees Rs.2.5 lakhs 5. Miscellaneous fixed assets S.No. Description Cost

Rs.in lakhs

5.1. Electrification 4.8 5.2. Steam boiler and auxillaries 4.8 5.3. Water storage tank, borewell etc. 1.7 5.4. Fuel storage tank 1.7 5.5. Laboratory equipment 1.2 5.6. Office machinery & equipment 1.2 5.7. Material handling equipment, packaging machinery,

weigh balance, etc. 1.6

5.8. Diesel generator 4.4 5.9. Effluent treatment 3.9 Total 25.3 6. Preliminary & Pre-operative expenses: S.No. Description Cost

Rs.in lakhs

6.1. Preliminary expenses 1.1 6.2. Pre-operative expenses:- 6.2.1 Establishment 1.5 6.2.2 Rent rates and taxes 1.5 6.2.3 Travelling expenses 1.5 6.2.4 Interest and commitment charges on borrowings 6.7 6.2.5 Insurance during construction period 0.7 6.2.6 Other preoperative expenses and deposits - 6.2.7 Interest on deferred payment - Total 13 7. Provision for contingency Rs.8.5 lakhs 8. Working capital margin Rs.14.5 lakhs 9. Total project cost Rs.155.15 lakhs Say Rs.156 lakhs

19

Means of Finance Total project cost Rs.156 lakhs Promoter's contribution Rs.62 lakhs Term loan from financing institutions Rs.94 lakhs 11. Financial statements (Rs. in lakhs) 11.I. Cost of production Variable Cost

Rs.in lakhs

Raw material and utilities 110 Spares and maintenance 4 Selling expenses 9.75 Total variable cost 123.75 B Fixed cost

Salaries and wages 7.2 Interest on term loan and working capital loan 22.41 Depreciation 9.4 Administrative expenses 2.25 Total fixed cost 41.26 C. Total cost of production A + B 165.01 D. Selling price per kg. (in Rupees) 65 E. Annual sales turnover (Rs.in lakhs) 195 F. Net profit before tax (Rs.in lakhs)� (E-C)) 30 G. Breakeven point in % 58%

SECTION XI

20

SWOT ANALYSIS

Strength Ready availability of raw material Weakness Production of inadequate product grades Opportunity Growing demand Threat Environmental issues

SECTION XII

21

FACTORS INFLUENCING THE POSITION FOR A NEW INDUSTRY AND

RECOMMENDATIONS

Animal glue is traditional product with important application in the adhesive sector. Demand for the product is likely to go up steadily, necessitating additional capacity creation from time to time in tune with the growing demand. The technology is well established and there is no particular entry barrier for the project from the point of view of technology or raw material availability However, the environmental aspects have to be carefully managed and from this point of view, ecologically favourable design and project location are vital factors.