Project Profile on Mott MacDonald

Guar Gum Powder for Pharmaceutical and Food Industry iNDEXTb

Sector Agro and Food Processing

Sub - sector Agro Processing
Project No. AF-21
Project Title Guar Gum Powder for Pharmaceutical, Cosmetics and Food Industry
Project Description
The project envisions setting up of a specialty grade guar gum powder manufacturing unit. It is
proposed to manufacture Pharmaceutical, Cosmetic and Food grades, which find ready domestic and
export market.

Product Application

Applications of Speciality grade Guar gum powder are as under:

 In pharmaceutical industry it is used as tablet binding and disintegration agent, gelling/
viscosifying / thickening, suspension, stabilization, emulsification, preservation, water
retention/water phase control, binding, clouding/bodying, process aid, etc.

 In cosmetic industry it is used as a thickener, protective colloids in Skin care products,

creams and lotions. It is also used in toothpaste, and shaving cream for easy extruding from
the container tube

 In food industry, it is used for gelling, thickening, clouding and as a binding agent in ice
creams, puddings, flavoured milk etc; and also as natural colloidal ingredient.

 It has various other properties like easy solubility in cold & hot water, film forming property,
resistance to oils, greases and solvent, water binding capacity and functioning at low
temperature. This makes it useful in varied industrial functions.

Market & Growth Drivers

Per annum Guar seeds production across the globe figures around 1.5 million tons. India dominates
the world Guar seeds production- contributing around 75% - 80% (around 1.0 million tons). In India,
Rajasthan dominates Guar production contributing around 70%, followed by Haryana (12%) and
Gujarat (11%).

The major countries producing and exporting Guar and its derivates are India, followed by Pakistan,
Sudan, USA, Italy, Spain, France, Greece and Germany.

India’s consumption of guar and its derivatives is around 6 lakh tons a year. As per market sources,
guar production in the country was estimated to range between 5 - 7 lakh tonnes in the year 2005-06.
Rajasthan being the leader, its share was estimated around 3 lakh tons, followed by Gujarat at 80,000
tons and Haryana at 75,000 tons.

The major Indian Guar and its derivatives products importers for the year 2005 – 2006 were USA
importing (48431.66 MT), Germany (16410.55 MT), China (14602.68 MT), Belgium (3803.14 MT),
South Africa (3290.80 MT), Australia (3041.26 MT) and UK (2911.88 MT).

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Project Profile on Mott MacDonald
Guar Gum Powder for Pharmaceutical and Food Industry iNDEXTb

Major Indian Guar Products Importing Countries

France UK
Germany 1% 3% South A f rica
10%
3%

USA Others
40% 43%

Source: G O I, Estimates 2005- 2006

The following table provides Indian trade statistics of guar and its derivatives for last 4 years.

Guar Gum Treated & Pulverized Guar Gum Refined & Split
Sr.
Years Export Import Export Import
No.
Quantity Value Quantity Value Quantity Value Q* V**

1 2003-04 77797.6 33603.92 0.25 1.72 38072.29 15317.01 473 52.13

2 2004-05 76792.54 44525.02 0.3 1.44 49801.43 22165.98 0.33 0.08

3 2005-06 134190.6 80047.58 69.56 41.59 49381.32 23797.65 16.23 22.71

4 2006-07 34557.36 21842.72 NA NA 10874.51 4473.27 NA NA

(Source: Department of Commerce, India. Q* is Quantity in MT, V** is Value in INR Lacs)

As per Government of India’s estimates exports of Guar and its derivates for the year 2005 –
2006(Apr-Dec) accounted to 183571.9 MT. The exports included 134190.6 tons of treated and
pulverized Guar gum, valued at INR 8004.75 million and 49381.32 tons of refined Guar splits
valued at INR 2379.77 million.

One of the manufacturers of guar gum powder is Rama Industries- Deesa, with a production
capacity of 8000 MT per annum and other is Amba Gums & Feeds Products - Ahmedabad with a
capacity of 150 MT per month and sales volume of INR 100 million. There are two units of Guar
Gum powder operating around Ahmedabad, H.B. Gum at Kalol GIDC and Hindustan Gums at
Sachana, Near Viramgam. These all are producing Industrial quality Guar gum powder.

Growth Drivers
 Pharmaceutical & cosmetics industry together register an average growth rate of around 9%. The
processed food industry also is growing by an average of 8.5%. All these consuming industries
are part of the FMCG sector and hence their growth is directly linked with growth of market
demand getting generated with increase in population.

 Apart from the industry targeted in this project, Guar powder has various other industrial
applications in diverse fields like foundries and ceramics, textiles and carpets, household

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Project Profile on Mott MacDonald
Guar Gum Powder for Pharmaceutical and Food Industry iNDEXTb

products, paints, personal care products, paper industry etc;. Considering the demand from all
these user segments, the overall demand for guar gum powder will enhance convincingly and see
an upward trend.

 As a natural colloidal material and thickening agent it is preferred in developed countries like
USA, Europe and Japan and hence its export demand will also grow in the coming period.

Why Gujarat?

 Gujarat contributed 11% to the national produce in the year 2004-2005 producing 157100 MT of
guar gum seed, hence required quantum of raw material is readily available in Gujarat.

 Guar seeds produced in south part of Rajasthan are brought to Gujarat for trading and
processing purpose, as processors and consuming industries are located in Gujarat.

 The consuming industries like pharmaceutical, cosmetics and food processing are well
established in Gujarat, which can generate sufficient market for end products.

 Gujarat has several large size Guar gum manufacturing units, engaged in manufacturing of other
industrial grade products; hence technical manpower and technology are readily available.

 Good transport and infrastructure facilities with well developed ports, roads, rail and air
connectivity will facilitate domestic as well as international trade.

Technology/Process
Plant
 Guar split is fed in the pneumatic system to feed in to the turbo screen that is suggested at the
high of plant. After the initial screening which is done to remove any foreign matter, the monitored
material is stored in a storage hopper. The material then is taken by gravity to double cone mixer
as and when required for pre-hydrating of guar splits.

 The pre hydrated guar splits are at a time sent by gravity to hopper of flacker that crushes the
guar splits and uniformly moves it to the ultra fine grinder, which grinds the material without
generating too much heat. The grinded material is then fed into a dryer.

 Centrifugal screen is used to screen the material, which is again passed through turbo screens for
additional precautions, separating the oversize material in terms of grade and particle size. The
oversized particle will be sent to the same grinder for recycling, and the process will be repeated.

 The material that passes from all the screens is sent to Nuta mixer separately by gravity for
blending and assembling it to a uniform lot, which is then tested and packed.

Manufacturing Process
 Guar seed pods are first sun dried and thrashed, to separate seeds from them. These seeds are
then processed in industry. The by products of guar (Korma, Churi) are utilized for cattle feed.

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Guar Gum Powder for Pharmaceutical and Food Industry iNDEXTb

 The seeds are then pulverized and the germ is separated from endosperm, which contains about
80% Galactomannan (gums), and polysaccharides. Two halves of the endosperm are obtained
from each seed, known as Un-dehusked Guar Splits.

 When the polished endosperm are removed and separated from the fine layer of fibrous material
a husk and refined Guar splits are obtained. These refined splits are then pulverized and treated
and processed using tailor made technology for specialty grade products for usage in industries
specified. After pulverization, sieving is done to get the required mesh size i.e. fine, coarse, etc.

 The Guar gum is mechanically extracted by roasting, differential attrition, sieving and polishing of
Guar seeds. The sieved gum is then passed through the blenders to make it homogenous and
later it is packed for marketing.

 The gum is refined to make yellowish white powder as per the quality specifications required by
consuming industries and grades specified. It is consumed in this form world wide.

 The modern high technology units employ hammer /or Jet mills and other equipment’s using the
latest techniques to produce powders with higher fineness, finer colloid formation, higher water
absorption and consistency, especially as per Pharmaceuticals, Cosmetics and Food processing
industries’ requirements.

Feed Stock of Guar Seeds

Screened to remove extraneous material

Seeds roasted in a rotary furnace, loosing of husk results

De-husking, screening or sifting (crude endosperm) Husk and germ removed

Residual impurities
Second screening and polishing; about 98% endosperm removed
results

Tempered with 50% de-ionized water, flaked between

rollers. This is not generally practiced

Ultra-fine milling & conveying through for sifting and

obtaining different particle size distribution

Sifting, screening and Centrifuging of GGP to required

quality affords the finish product Lab Testing

Packing & Storage

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Guar Gum Powder for Pharmaceutical and Food Industry iNDEXTb

Suggested Plant Capacity & Project Cost

The suggested capacity for the proposed unit is - 20 ton /day input and considering 250 days working
in a year the unit will have installed capacity of 5000 TPA.

The indicative Project cost estimated for the proposed project is INR 75 million (US $ 1.67 million).

Estimated Cost of Project & Means of Finance

Sr.No. Cost of project INR in million

1 Land and Land development 4.00

2 Building 7.50
3 Plant & Machinery 20 MT /day processing capacity 38.50
4 Miscellaneous Fixed Assets 5.00
5 Preliminary & preoperative including technology 2.63
6 Provision for contingencies 5.00
Fixed cost of project 62.63
7 Margin Money for working capital 12.37
Total Block Capital Project cost 75.00
Means of Finance
8 Promoters contribution 21.43
9 Term loan 53.57
Total Means of Finance 75.00

As indicated above, the proposed project will require an approx 3000 sq. mt of land with an proposed
built up area of 2000 sq. mt. Considering 250 working days in a year the unit is proposed to have an
installed capacity of 5000 TPA. The total fixed cost of the project is estimated at INR 62.63 million and
INR 12.37 million is the working capital margin which adds upto total capital cost of INR 75 million.
The unit being proposed to cater to domestic as well as International demand is suggested to have a
Debt equity ratio of 2.5:1. Thus, the estimated term loan amounts to INR 53.57 million and Equity at
INR 21.43 million.

List of Main Plant & Machinery

The proposed project would require the following main plant and machineries and utility equipments.
List of Plant and Machinery

Sr. Machinery Quantity Suppliers

1 Pneumatic conveying System 1 set Trumatic Engineers- Ahmedabad

2 Split cleaning Vibratory screen 2 Goldin India Engineering Co. Vadodara

Trumatic Engineers- Ahmedabad

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Guar Gum Powder for Pharmaceutical and Food Industry iNDEXTb

Sr. Machinery Quantity Suppliers

3 Split washer 2 Trumatic Engineers- Ahmedabad

4 Double Cone Mixer 2 Trumatic Engineers- Ahmedabad

5 Water Tank 3 Trumatic Engineers- Ahmedabad

6 Double chilled roll Flakers 3 Trumatic Engineers- Ahmedabad

Machine Shanta Flakers & Dryer Co. Pvt. Ltd

7 Ultra fine Pulverizer 3 Trumatic Engineers- Ahmedabad

8 Boiler with1.0 MT steam per 1 Trumatic Engineers- Ahmedabad

hour with 15 kg pressure.

9 Heat Exchanger 4 IDMC- Vithal Udyog nagar, Vallabh Vidhyanagar

Alfa-Laval India Ltd, Pune

10 Pneumatic dryer line 2 Trumatic Engineers- Ahmedabad

11 Blower, Cyclone, Dust collector 2 line Aerovent Projects Pvt. Ltd, Mumbai
with accessory Trumatic Engineers- Ahmedabad

12 Rotary Siever (MS) 2 Trumatic Engineers- Ahmedabad

13 Nuta Mixer (Conical Blender) 4 Trumatic Engineers- Ahmedabad

Aerovent Projects Pvt. Ltd, Mumbai

14 Misc. Pipe-lines Lot Trumatic Engineers- Ahmedabad

Raw Material Availability

The main raw material for preparing Guar gum powder is Guar splits produced from Guar seeds. Guar
seeds are available from Guar pods, mainly in North Gujarat districts of Mehsana, Patan,
Banaskantha, Kutchh and Sabarkantha. Guar is also known as Cluster beans. Green Guar pods are
also used as fresh vegetable in Gujarat and Rajasthan. Guar cultivation Area, Production and Yield
per hectare in Gujarat are summarized for last 3 years period in following table:

Guar Area, Production and Yield in Gujarat

Sr. No Years Area* Production** Yield / hectare

1 2002-03 1796 557 310

2 2003-04 2660 2038 766

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Guar Gum Powder for Pharmaceutical and Food Industry iNDEXTb

Sr. No Years Area* Production** Yield / hectare

3 2004-05 2144 1571 733

Source: Directorate of Agriculture, Gujarat. (Area*in ’00 Hectares, Production** in ’00 MT)

Utilities
The proposed project of Guar Gum powder will have utility requirements in the form of Electric power,
De-mineralized (DM) water and Fuel for steam generation in boiler. Total power requirement will be
650 KWH per ton of input material, i.e.15600 KWH per day. The unit will have 1450 KVA connected
load. The unit can have power supply from SEB or can also make provision for captive generation
using DG set or a combination of both sources.

The unit will require 25 KL DM water per day for process and 5 KL for drinking purpose. Thus, total
water required will be 30 KL per day. The unit will require LDO as fuel for steam generation in boiler,
and the estimated requirement is 65 Liter per ton of input, that is 1.3 KL per day.

Man Power Required

The unit will have total requirement of 50 persons, including 6 managerial persons for looking after
production, purchase, marketing domestic and export, finance, personnel, and quality control. There
will be supervisory staff of 12 persons, skilled labors, administrative and security staff requirement will
be 32 persons. Looking to general industrial base of Gujarat, and development of Agro processing
industries in Gujarat, the proposed unit will not have any difficulty in getting required manpower both
managerial and technical.

Suggested Location
The suggested locations for the proposed unit are North Gujarat districts of Mehsana, Patan,
Gandhinagar, Banaskantha & Kutchh.

Project Time Line

The proposed project will have time line of 5 to 6 months for obtaining necessary clearances from
concerned authorities and project can be implemented in about 10–12 months.

Financial Indicators
Based on the profitability projections worked out for the proposed project, key financial indicators are
as summarized below:

Key Financial Indicators

st nd rd
Sr. No. Financial Ratios 1 Year 2 Year 3 Year
A Break-Even Point in % 30.1 29.0 28.0

B Debt-service Coverage Ratio 1.85 2.17 2.55

C Average DSCR 2.19

D Return on Investment (ROI) 38.8 % 45.0% 51.1%

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Project Profile on Mott MacDonald
Guar Gum Powder for Pharmaceutical and Food Industry iNDEXTb

st nd rd
Sr. No. Financial Ratios 1 Year 2 Year 3 Year
E IRR for a project period of 10 Years 46%
As perceived from the project cost and Means of finance table, the suggested Debt Equity Ration for
the proposed project is 2.5:1. The IRR (Internal Rate of Return) for the proposed project is approx.
46% projected for a period of 10 years.

Clearances Required
The proposed unit will have to register their manufacturing capacity with Industrial Entrepreneur’s
Memorandum (IEM), Secretariat of Industrial Approvals, Ministry of Industries and Government of
India, as it will have plant and machinery investment of more than INR 10 million.

Meeting Pharmaceutical, Cosmetics and Food processing industry standards & FDA provisions are
mandatory. Since, the proposed unit will be supplying their produce to Pharmaceutical and Cosmetics
industries it will meet IP, BP or USP standards as specified by the consumers.

Agencies to be contacted
Industrial Extension Bureau
Mott MacDonald India
Gujarat Agro Industries Corporation Ltd.

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