POLY ALUMINIUM CHLORIDE CONTENTS SECTION 1 PRODUCT CHARACTERISTICS AND SPECIFICATION SECTION If PRODUCT APPLICATIONS SECTION Il INDIAN MANUFACTURERS, SECTION IV IMPORT/EXPORT LEVEL SECTION V PRICE DETAILS VI INDIAN DEMAND. SECTION VII_ BROAD OUTLINE OF MANUFACTURING PROC SECTION VIIL_ 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SECTION I PRODUCT CHARACTERISTICS AND SPECIFICATIONS, Product specification Alternate name PAC Chemical formula AM(OH):5(80.)o.25Ch as Molecular weight 108.79 Form and specification This generally available as a solution with an aluminium content of 10% weight expressed as ALO; It is also produced in the form powder with the aluminium content of 30% weight expressed as Al2O3SECTION II PRODUCT APPLICATIONS A partially hydrolysed Aluminium Chloride solution (# = 1.5), which may incorporte a small amount of sulphate has been introduced in Japan, England and Australia as an alternative to Alum, which is known as Poly Aluminium Chloride Polyaluminium chloride is reputed to provide faster flocculation and stronger flocs than alum in some applications. Polyaluminium Chloride is used as a coagulant in water purification.SECTION - HL INDIAN MANUFACTURERS. Indian Manufacturer of Polyaluminium Chloride * —— Grasim Industries Lid, Chemical Division Birlagram 458331 Nagda ‘Madhya Pradesh Synergy Chlorinations Pvt. Ltd. 101, Synergy House, Gorwa Subhanpura Road, Baroda * DCM Shriram Industries Ltd., Kanchenjunga 18, Barakhamba Road, New Delhi-110 001 Installed capacity: 13860 tonnes per annumNew Project ‘The following new project for Poly Aluminium Chloride is under planning Name of the company Name of the Nature of collaborator collaboration Summit (India) Water Summit Research Technical Treatment Labs, USASECTION - IV IMPORT AND EXPORT DETAILS Present import level Small quantity Present export level Around 4000 tonnes per annum Sample of individual exports - Period 2002 ‘Name of the exporters | Quantity in] Valuein Rs. | Country Date Port tonnes Grasim Industries Ltd, 18, 227529 Bangkok 01.01.2002_to | Mumbai 16.01.2002 Grasim Industries Ltd. 18 227529 Bangkok 01.01.2002 to | Mumbai 16.01.2002 Grasim Industries Led. 18 227529 Bangkok 01.01.2002 to | Mumbai 16.01.2002 Grasim Industries Ltd. 18 BelIS Jakarta 17.01.2002. to | Mumbai 31.01.2002 Grasim Industries Ltd, 18 230155 Bangkok 16.02.2002 to | Mumbai 28.02.2002 Grasim Industries Lid. 1s 230153 Bangkok 16.02.2002. to | Mumbai 28.02.2002 Grasim Industries Led. 18 238838 Jakarta 16.02.2002. to | Mumbai 28.02.2002 Grasim Industries Ltd. 9 230104 Singapore 16.02.2002, to | Mumbai 28.02.2002 Grasim Industries Lid, | 7 100832 Dubai 16.03.2002 t0 | Mumbai 31.03.2002 Grasim Industries Lid. 15 246149 Port Kelang | 01.04.2002 to | Mumbai 30.04.2002 Grasim Industries Lid. 18 228019 Bangkok 17.09.2002. to | Mumbai 31.09.2002 Grasim Industries Lid. [38 35440 Bangkok 17.09.2002, to | Mumbai 31.09.2002 Grasim Industries Lid, | 38 97908 Port Kelang | 17.09.2002 to | Mumbai 31.09.2002 Grasim Industries Lid. 18 67D Jakarta (02.09.2002 to | Mumbai 16.09.2002 Grasim Industries Lid. 19 292131 Penang 02.09.2002 to | Mumbai 16.09.2002SECTION - V PRICE DETAILS Basie price Rs. 23 per kg Taxes and duties. Extra as applicableSECTION VI INDIAN DEMAND. ‘The demand for Polyaluminium Chloride is assessed in the water treatment sector ‘The important Aluminium based flocculants used in the water treatment sector are Aluminium Sulphate, granules Aluminium Sulphate, Solution Iron containing Aluminium Sulphate, granules Polyaluminium salts, solution Demand Assessment for Polyaluminium Chloride Polyaluminium chloride has been introduced in the country only in recent time. The use pattern is still in the developing stage. The Grasim Industries exports the products in good quantity and also sell the products to the nearby units, Present estimated demand including export demand for. == [>> Polyaluminiuen Chloride Around 14000 tonnes per annum, Growth rate in demand The growth in demand for Poly Aluminium Chloride would largely depend upon the increased investments by the Government agencies in water treatment for public distribution as well as the investments by the Indian industries in the effluent treatment facilities. ‘The growth in demand for Poly Aluminium Chloride is likely to be in tune with the overall industrial and economical growth rate in the country. Estimated growth in demand 8 0 9% per annum Export potentials There have been substantial exports of Poly aluminium Chloride in the powder form by Grasim Industries Ltd, The present level of exports is estimated to be around 4000 tonnes per annum.SECTION - VIL BROAD OUTLINE OF MANUFACTURING PROCESS Aluminium hydroxide is fed into the reactor containing sulphuric acid and hydrochloric acid. ‘The solution obtained is neutralised with calcium carbonate resulting in a mixture of PAC solution and gypsum crystals. ‘The gypsum crystals are filtered and separated from the slurry. Gypsum thus obtained can be used for the purposes of gypsum boards, cement ete, after being washed with water, S8AIOH)s+2H)SOy + 10HCL + CaCO, -—---> Alg(OH)i (S04) Cho + —COz (CaSO4.2H20+11H20 Global technology suppliers 1 Kemira P.O. Box 902, S-25109 HELSINGBORG Sweden 2. Summit Research Labs 45 River Road Suite 300 Flemington New Jersey - 08822 USA 9 +Major plant and machinery and suppliers Reactor Arison Engineering Ltd., 16-17, Motibaug, Chembur Mumbai-400 071 Fluidtech Engineers 10/8, Chakrapani Road Race View Colony Guindy, Chennai-600 032 Neuttraliser ‘Sharplex Agro Process (I) Pvt. Lid., 302, Hill View Industrial Estate, LBS Marg. Ghatkopar (W), Bombay-400 086 Filter ‘Air Filer Industries Mercantile Building 2nd Floor, G.P.O. Box 886 9A, Lal Bazar Street Caleutta-700 001 Divya International 23A, Netaji Subhas Road, &th Floor, Room No.28, Calcutta-700 001 Centrifuge Hydrabad Met Chem. Pet. Ltd., 34, C.LE., Phase Il, Gandhinagar, Opp. IDPL Colony Hyderabad-500 037 Spark Engineers Pvt. Lid., 5/332, State Bank Colony TI ‘Salem-636 004 Boiler Cethar Vessels Ltd No, Dindigul High Road, Trichy Firetech Boilers Pvt. Ltd. No.211, 2nd Cross, 38th Main, B.T.M. Layout 2nd Stage, Bangalore-68 10SECTION VIII RAW MATERIAL REQUIREMENTS, UTILITY AND AVAILABILITY Raw material requirements sis: One tonne of the product Aluminium hydroxide 0.80 tonne Sulphuric acid 0.25 tonne Hydrochloric acid 0.47 tonne Calcium carbonate 0.13 tonne Fuel 160 litres, Power T5HP. Raw material availability Sulphuric acid Binani Industries Ltd., Kerala Tanfac Industries Ltd.. Cuddalore Hydrochloric acid ‘Chemfab Alkalies, Pondicherry ‘Tamil Nadu PetroProducts, Chennai Calcium carbonate Aranthangi Chemicals (P) Ltd_Aranthangi Balaji Minerals, Salem Cal Chem, MumbaiSECTION - IX GLOBAL SCENARIO Global demand Global demand for Polyaluminium Chloride is estimated to be around 0.4 million tonnes per annum. Global Developments Rasio considers Polyal n Chloride expansio: Rasio Chemicals is carrying out an economic feasibility study on the possibility of expanding its Polyaluminium Chloride plant at Squarnish, Canada. The current facility commissioned in 1990, has capacity of 15,000 tonnes per year. The company is considering diverse spectrum of PAC products. Kemira Chemicals’ Kemwater unit is investing FM25m ($5.5m) in production of solid Polyaluminium Chloride in Helsingborg, Sweden. Engineering work has setup 20,000 tonnes per annum granulation unit which was commissioned in 1997. Capacity for the feedstock Polyaluminium Chloride solution will also be doubled to 40,000 tonnes per year. Production of the dry solid will permit more distant exports to potential markets in Thailand, Africa and the Middle East. International Manufacturers of Polyaluminium chloride include the following, 1. GEO Speciality Chemicals 9213, Arch St., Pike Little Roae AR 72206 2. Toyo Soda Manufacturing Co. ‘Toso Bldg, 7-7, Akasaka 1-Chome Minato-Ku, Tokyo 107 3. Central Glass Co, Ltd., Kowa-Hitotsubashi Bldg., 3-7-1, Kanda Nishiki-Cho Chiyoda-Ku, Tokyo 101 4, Coyne Chemical 3015 State Road, Croydon PA 19021EKA Nobel Inc, Paper Chemical Divi 2211 NewMarket Pkwy, Suite 106, Marietta, GA 30067 General Chemical Corporation 90E Hasley Road, Parisppany, New Jersey 07054-0397 Geo Specialty Chemicals 1920 Benhill Ave, Baltimore, MD 21226 Gulbrabdsen Co Ine PO Box 5523, Clinton New Jersey 08809 Holland Co. Inc 153, Howland Ave, Adams MA 01221 Peridot Chemicals (NI) Ine 100 Alexander Avenue Pompton Plains, New Jersey 07444 Reheis Ine 235 Synder Ave, PO Box 609, Berkley Hiehgts, New Jersey - 07922 Summit Research Labs 45 River Road Suite 300 Flemington New Jersey - 08822 Westwood Chemical Corporation 46, Tower Drive, Middletown NY 10941SECTION X DISCUSSIONS ON ECONOMIC CAPACITY, PROJECT COST AND PROFITABILITY PROJECTIONS Economic capacity 3000 tonnes per annum Project cost Rs.240 lakhs Assessment of project cost 1. Land S.No. | Description Cost Rs.in lakhs Cost of land of tacre at Rs.5.5 lakh per acre 5.5 12 Cost of levelling, laying internal roads/fencing and 0.55 compound wall Subtotal 6.05 2. Building S.No. | Description Cost Rs.in lakhs 52.1_| Factory building of area 450 sq.m. at Rs.3200/sq.m. 14.40 22 [Non-factory building of area 150 sq.mat 675 Rs.4500/sq.m. Subtotal 21.15 3. Cost of Plant & Machinery S.No. | Description Cost Rs.in lakhs ‘3.1___| Cost of basic plant and machinery 80.00 ‘3.2 | Instrumentation and control 6.00 3.3 | Pipelines and valves 8.00 3.4 | Structurals for erection 4000 Subiotal 38.00 35 | Ociroi, excise duty, sales tax, etc.at 12% 11.76 36 Packaging and insurance charges (29%) 1.96 37 Transportation charges (2%) 1.96 3.8 | Machinery stores and spares (2% 1.36 3.9 | Foundation charges (2% 7.96 3.10 _| Installation charges (2%) 1.36 Total cost of plant and Machiner 119.564, Technical know-how fees Rs.2.5 lakhs 5. Miscellaneous fixed assets SNo._] Description Cost Rs.in lakhs S.1,__| Electrification 2.00 5.2. _| Steam boiler and auxiliaries 3.00 5.3. | Water storage tank, borewell etc. 1.50) 5.4. | Fuel storage tank 1.50 55. Laboratory equipment 1.50 5.6. | Office machinery & equipment 7.00 5.7. | Material handling equipment, packaging machinery, 1.00 ‘weigh balance, etc. 58. | Diesel generator 400 5.9. _| Effiuent treatment 2.00 Total 17.50 6. Preliminary & Pre-operative expenses: SNo._] Description Cost Rs.in lakhs 6.1,__| Preliminary expenses 7.00 6.2. _| Pre-operative expenses: 6.2.1 Establishment 1.00 6.2.2 Rent rates and taxes 1.00 6.2.3 | Travelling expenses 1.20 6.2.4 | Interest and commitment charges on borrowings 3.50 6.2.5 | Insurance during construction period 2.00 6.2.6 _| Other preoperative expenses and deposits = 6.2.7 | Interest on deferred payment = Total 270 7. Provision for contingency Rs. 11.19 lakhs 8. Working capital margin Rs. 62.62 lakhs 9. Total project cost Rs.240 lakhs 10. Means of Finance Promoter's contribution Rs.96 lakhs Term loan from financing institutions Rs.144 lakhs Total project cost s.240 lakhs11. Financial statements: Re In aks 5.96 Spares and maintenance 7A7 Selling expenses 34.50 Total variable cost (A) 497 64 B Fixedcost Salaries and wages 12.00 Interest on term loan and working capital loan 34.37 Depreciation 15.19 ‘Administrative expenses 20.70 Total fixed cost (B) 02.20 G__ Total cost of production (A+B) 50883 D.__ Selling price per kg. Gin Rupees) 2 E. Annual sales turnover 80.00 F.__ Net profit before tax (E-O) 3017 33 G.__ Breakeven point in %SECTION XI SWOT ANALYSIS ‘Strength ‘Growing demand for the product\ Weakness Producers are not distributed all over India, Therefore freight cost is high. Opportunity Export Threat ‘Substitution possibilitySECTION - XII FACTORS INFLUENCING THE POSITION FOR A NEW INDUSTRY AND. RECOMMENDATION Pol iminium chloride is generally considered as a superior substitute for Alum in water treatment. Aluminium Sulphate remains as an important product, finding vital applications in water treatment and in the paper industry.The demand for the product has been steadily going up, requiring additional capacity creation. Poly Aluminium Chloride is presently produced by a few organisations in the country. The demand for the product appears to be largely confined to areas near the production centre, in view of the high cost of transportation of Polyaluminium chloride in liquid form. ‘The product can be transported over long distance in powder form, which would result in higher sale price for the product. ‘Though Polyaluminium Chloride is considered as a superior flocculant, the use level in India is still on the low side, perhaps due to the price factors as well as the absence of focussed market development work. Globally, Polyaluminium chloride is gaining importance, in view of its superior applications and there could be scope for further exploitation of the global market.