CAFFEINE 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 1
1.1. General details SECTION I PRODUCT CHARACTERISTICS AND SPECIFICATIONS Appearance White crystalline powder Molecular formula C 8 H 10 N 4 O 2 Molecular weight 194.19 Density at 18 deg.c 1.23 Melting point 238 deg.c ph of 1% soln. 6.9 Caffein anhydrous 98.5% - 101% Water (at 80 deg.c) not more than 0.5% Residue on ignition not more than 0.1% Arsenic not more than 3 ppm Heavy metals not more than 0.001% 1.2. Pharmacological effects of Caffeine The drug exerts multiple effects on the heart. It has a positive inotropic effects on the sinoatrial mode, causing a transient increase in heart rate, force of contraction, cardiac output and work of the heart. It constructs the cerebral blood vessels, but directly dilates peripheral blood vessels, thus it decreases peripheral vascular resistance. The effect of this decreases in vascular resistance on blood pressure is compensated for by increased cardic output. Other pharmacological effects of Caffeine include the following:- it stimulates, voluntary skeletal muscle, increasing the force of muscle contraction and decreasing muscular fatigue; it stimulates, induces a mild diuresis by increasing renal blood flow and glomerular filtration rate and decreasing proximal tubular reabsorption of sodium and water and stimulates glycogenolysis and lipolysis, but the increase in blood glucose and plasma lipids usually are not significant in normal patients. 2
SECTION II PRODUCT APPLICATIONS Caffeine is used in wide range of pharmaceutical formulations and beverages (Cola Drinks), Ayurvedic medicines and has the potential of being used in confectionery. Caffeine stimulates all levels of the central nervous system. In oral doses of 100 to 200 mg, it stimulates the cerebral cortex producing a more rapid and clear flow of thought, wakefulness, or arousal in fatigued patients and improved prychomotor coordination. Its cortical effects are milder and of shorter duration than those of the amphetamines. In slightly larger doses, Caffeine stimulates medullary vagal, vasomotor and respiratory centres, inducing bradycardia, vasoconstriction and an increased respiratory rate. 3
SECTION III INDIAN MANUFACTURERS Indian Manufacturers of Caffeine include the following * Amsar Pvt. Ltd 47,Laxmibai Nagar,Indl Estate,Fort, Indore-6. * Ahinsha Chemicals Pvt. Ltd. National Highway,P.O. Milanpur-781 337, Nalbari, Assam * Associated Drug Co. (P) Ltd., 13th Mile, Bangalore South, Kumbalagode 560 074. Karnataka * Bengal Chemicals & Pharmaceuticals Ltd. (A Govt. of India Enterprise) Panihati B.T. Road, 24-Pgs(N)-743 176 * Bakul Aromatics & Chemicals Ltd A/6,MIDC,Patalganga Indl Area,Kaire-410 207 Dist Raigad.Maharashtra. * Chemipharm. Vishvesar Nagar,Vikas Estate, Goregaon (E), Mumbai-400 063. * Eagle Pharmaceutical Works 114,Belgrami Road,Match Factory Lane, Kurla, Mumbai-400 070 * G.B.Nitrochem Pvt. Ltd. Budge Budge Trunk Road,Gopalpur,P.O.Sarkar Pool South, 24,Parganas,West Bengal-743 382 * Jasmine Chemical Inds E-16/1,Tarapur Indl MIDC Area, Boisar,Dist Thane. 4
* Khoba Chemicals & Synthetics Pvt. Ltd., Survey No.7/5-B, (Green Hills (Boral Village), 35th K.M. Bidar - Aurar Road, Tq. Aurad (B), Dist. Bidar, * Karnataka Phyto Chemicals, 100/2,Manipal Co-op Indl Estate, Manipal, Dakshin Kannada Dist * Kores (India) Ltd. Kores House, Plot No.10 Off Dr. E.Moses Road Worli, Mumbai-400 018 * North East Caffeine Industry Pvt. Ltd. Karanga P.O,Jorhat-8. Assam. * Natural Vitamins Pvt. Ltd. Sector C/27-A, Sanwer Road Industrial Area, Behind Modern Breads, Indore-452 003. M.P. * Pefco Industries Ltd Plot No 59 A,65 B,65 C,66 A,MIDC Indl Area,Dhatav,Roha Dist Raigad,Maharashtra * Parina Laboratories Pvt Ltd 6104/13,GIDC, Ankleshwar-393 002 * Pharma Indiana Labs Plot No.40,GIDC Indl Estate,Vapi, Gujarat * Peak Agro Chemicals Peak Chemical Industries Ltd., Regd. Office : Sevoke Road, 2nd Mile Siliguri-734 401, West Bengal * Suven Pharmaceuticals Ltd., Dasaigudem, Suryapet, Nalgonda Dist., 5
* Su - Vi Pharmaceuticals & Chemicals Ltd., (Formerly known as Su-Vi Chemicals Ltd.) 501, 5th Floor, Ramdas Building 456, Kalbadevi Road, Mumbai-400 002 * Task Jay Pharma Pvt. Ltd. Factory : 234/235, M.I.D.C., Akkalkot Road, Solapur-413 006. * Valiant Industries Ltd., (Now known as Valiant Chemical Corporation) 74, Matru Smriti, 2nd Floor, Road No.4,Scheme No.6, Sion (E), Mumbai-400 022 * Yenkay Medico Drugs (P) Ltd. Survey No.14, Gaddapotharam Village, Jinnaram Mandal, Medak Dist. (A.P.) Indian installed capacity 600 tonnes per annum 6
SECTION IV IMPORT/EXPORT TRENDS 4.1. Imports 4.1.1. Present import level: 5500 kg per annum 4.1.2. Countrywise Imports Period April 2001 to March 2002 Country Quantity in Kgs Belgium 60 China P RP 250 France 25 German F REP 3600 Switzerland 750 USA 752 4.1.3. Sample of individual imports of Caffeine and its salts Period 2002 Name of the Importers Quantity in Value in Rs. Country Date Port Tonnes May India Laboratories 0.750 181107 China 01.01.2002 to Chennai 10.01.2002 Wockhardt Ltd., 1.200 834189 Germany 09.01.2002 to Mumbai 16.01.2002 S.K.Age Exports 0.050 21465 Tema 17.01.2002 to Mumbai 31.01.2002 Cadila Pharmaceuticals 1.000 246945 China 16.04.2002 to Mumbai 19.04.2002 Wockhardt Ltd., 1.200 876945 Germany 25.06.2002 to Mumbai 28.06.2002 Wockhardt Ltd., 1.200 945305 Germany 01.08.2002 to 07.08.2002 Mumbai 7
Anti dumping duty on Caffeine The Designated Authority in the Commerce Ministry has recommended the continuation of the anti dumping duties in force on imports of Theophylline and Caffeine from China. In its final findings on the sunset review of the definitive anti dumping duty recommended on imports of Theophylline and Caffeine from China, the Authority concluded that the "domestic industry" is suffering "material injury" from dumped imports of these goods from China. The Authority also held that the injury to the domestic industry would get intensified due to imports from China in case the anti dumping duty in force is removed. It has pegged the revised `duties, which may come into force from the date of notification to be issued by the Central Government, at $5.71 per kg in the case of Theophylline and $6.86 per kg in the case of Caffeine. While Theophylline occurs in tea, Caffeine occurs in tea leaves, coffee beans and other plant material. Both the items are used in medicines. Since none of the importers/consumers of Theophylline and Caffeine in India or the exporters from China responded with the information sought by the Authority, the export price for the purpose of the investigations has been determined on the basis of the information compiled by the Directorate General of Commercial Intelligence and Statistics (DGCIS). For the same reason, the Authority has not determined the dumping margin for individual exporters. The government has imposed final anti dumping duties on import of Theophylline (an alkaloid similar to Theobromine, found in tea leaves) and Caffeine from the European Union. The Finance Ministry in a notification imposed duties equal to the difference between the amount $10,686 per metric tonne on Theophylline and $11,486 per metric tonne on Caffeine imported from the EU and their landed value of imports. The anti dumping duty imposed under the notification shall be levied with effect from the date of imposition of the provisional anti dumping duty i.e. January 31, 2001 and shall be paid in Indian currency. 4.2. EXPORTS Negligible quantity 8
SECTION V PRICE TRENDS Basic price Taxes and duties Rs.550 per kg Extra as applicable 9
SECTION VI INDIAN DEMAND Indian demand level: Growth rate in demand Supply: Around 150 tonnes per annum 7 to 8% per annum Matches the demand Export opportunities for Natural Caffeine is high. 10
7.1. Process routes SECTION VII BROAD OUTLINE OF MANUFACTURING PROCESS Process route From tea waste Synthetic route 7.2. Synthetic route Caffeine is produced by the reaction of dimethyl urea, monochloro acetic acid and anhydrous aluminium chloride. 7.3. From tea waste:- Caffeine can be produced from tea waste in the form of fluff, stalks and leaves. Tea waste is first mixed thoroughly with the requisite amount of lime and water. It would then be cooked in a cooker. The cooked tea waste would then be fed to a continuous extractor, where Caffeine would be extracted from tea waste by using suitable solvents. The extractors are partially filled with benzene to immerse the tea waste and is boiled with steam to a temperature of 80 deg.c. The extract is taken to evaporators and concentrated to crude Caffeine after evaporation of solvent, which is recycled for usage again. The crude Caffeine is heated with activated carbon for decolourising, which is followed by treatment with boiling water. The dissolved caffeine in the boiling water is filtered in the filter press. The clear filtrate thus obtained is saturated with Caffeine and is allowed to crystallise in the open tank. The crystals of caffeine with nearly 40% of water are dried in drier and finally the clear crystals are powdered and packed. Around 50 kg of tea waste would be required for one kg of Caffeine. The features of the above process are given below: a) Caffeine can be extracted economically and in pure form, from tea waste. b) Tea waste from various sources such as wastes from tea processing, instant tea manufacture and burnings from the gardens can be used for extraction of Caffeine. c) The conventional machinery used for solvent extraction of oil seeds can be adopted with slight modifications for the continuous extraction of caffein by this process. 11
Source of technology * National Chemical Laboratory, Pune * Regional Research Laboratory (RRL),Jorhat, Assam Major plant and machinery and suppliers Name of the equipment Blender Name of the company ACE Pack Machines 23, V.N. Industrial Estate Bharathi Colony,Near Athiparasakthi Temple Peelamedu, Coimbatore-641 004 Febchem Engineering Works Plot No.A/2, Sector-A, Sanwer Road, Industrial Area Indore-452 003 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 12
Distillation column Chemac Equipments Pvt. Ltd. Regd. Office & Factory: M.J.D'Souza Compound, Safed Pool, Saki Naka Mumbai-400 072 Hydrabad Met Chem. Pvt. Ltd., 34, C.I.E., Phase II, Gandhinagar, Opp. IDPL Colony Hyderabad-500 037 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 Extractor Adam Fabriwork P. Ltd., 203, Rajguru Appartments New Nagardas Road, Andheri (E), Mumbai-400 069 Super Scientific Works P.Ltd., E-70-71, Sardar Estate, Ajwa Road, Baroda-390 019 13
SECTION VIII RAW MATERIAL REQUIREMENTS AND AVAILABILITY Raw Material Requirements Basis : One tonne of Caffeine Tea waste : 50 tonnes Benzene : 0.27 tonne Activated carbon : 0.01 tonne Utility requirements Basis : One tonne of Caffeine Power : 464900. units Steam : 6 tonnes Source of supply of raw materials Name of the raw materials Tea waste Benzene Name of the company Tea waste can be procured from the tea processing units. Kochi Refinery Ltd., Kochi, Kerala Chennai Petroleum Corpn., Chennai Bharat Petrochemical Corpn.Maharashtra IPCL, Gujarat 14
SECTION IX GLOBAL SCENARIO Estimated global demand Around 12000 tonnes per annum Estimated demand in USA Around 7000 tonnes per annum Of the total global demand, around 60 to 70% is used in the production of soft drinks and beverages. Global producers:- * Boehringer Pharma Ingelheim KG Kanda Center Building 2-3-2, Kajicho/Chiyoda-ku Tokyo 101-0044, Japan * Shairatori Pharmaceutical Co.Ltd., 11-24, Tsudanama 6-Chome, Narashino Chiba Pref 275 Japan. * Tateyama Kasei K.K 3766, Tobari Kasugi-Cho, Imizu-gun, Toyama Pref 939-03, Japan * ASU Limited Warwick Road Old Trafford, Manchester M-16 0DD U.K. * Siber Hegner Limited Mackenzie House, 221-241, Beckenham Road Beckenham BR3 4UP U.K. * Arrow Chemical Inc., PO Box No.580 West Wood, NJ 07675 USA * Blossom Farm Products 13-36-G Lyle Terrace Fairlawn, New Jersey NJ 07410 15
* Certified Processing Corpn. Organex Fine Chemicals HWy 22-T, Hill side, NJ 07205 * Hagelin & Co. Inc., (ME) 50-G, Williams Pky, East Hannover, New Jersey NJ 07936 * Henlex & Co. Inc., 750 3rd Avenue, New York, NY 10017 * Knoll Fine Chemicals, Div. of Knoll Pharmaceuticals Co. (M) 120E 56 St., New York, NY 10022 * Mutchler Chemical Co. Inc., 99A, Kinder Kamack Road, West Wood, NJ 07675 * MMM Chemical Corporation 527 Madison Avenue New York, NY 10022 * Penta Manufacturing Co., (ME) Post Box No.1448, Fairfield, New Jersey,NY 07007 * Pfizer Inc., 235-TE-42nd St., New Jersey, NJ 10017 * Ruger Chemical Co. Ltd., 83 Cordier St., Irvington, New Jersey NJ 07111 * Sigma Chemical Co., Post Box No.14508 3050 T Square St., St. Louis MO 63178 * S.S.T. Corporation 1373 Broad St., Clifton, NJ 07015 16
* Universal Preserva Chem Inc., 284 N Sixth St., Brooklxn, NY 11211 Caffeine, chocolate can fight cancer Coffee and chocolate could form the basis of new drugs to treat cancer, heart disease and inflammation, British scientists have said. Scientists at the University College London have found that Caffeine and a related molecule called Theophylline can block an enzyme which is crucial for cell growth. This means that modified forms of Caffeine could one day be used to stop uncontrolled cell growth in cancer or prevent blood clots that cause heart attack and stroke. Caffeine can reduce risk of developing parkinsons disease Caffeine can reduce the risk of developing Parkinson s disease (PD) because it blocks A 2A receptors in the brain and stops the drop in dopamine levels associated with the disease. The researchers injected mice with 1-methyl-4-phenyl-1,2,3,6-tetrahydropyridine (MPTP) which gives the mice symtoms of PD, reducing their dopamine levels. Pretreating the mice with caffeine stopped the dopamine levels from faslling, reducing the toxicity of MPTP. Caffeine is thought to act as an antagonist to A 2A adenosine receptors in the brain. Dopamine replacement is the current treatment for PD. Therefore researchers say that their results enhance the potential of A 2A antagonists as a novel treatment for this neuro degenerative disease. Adverse effects of Caffeine As part of a larger long term study of osteoporosis, Rapuri et al. Compared the bone mineral density of women in high and low categories of caffeine consumption to examine the interaction between caffeine intake, genetic type and osteoporosis. They found that women with high caffeine intakes had significantly higher rates of bone loss at the spine and that women who were homozygous for a mutation in the vitamin D receptor (VDR) gene are at greater risk for caffeine related bone loss. An editorial by Massey stresses that modeerate caffeine ingestion less than 16 ounces of brewed coffee per day or 32 ounces of brewed tea is not associated with increased bone loss., Study on Caffeine A group of researchers have uncovered evidence for why caffeine's stimulating effects stay long. They have also identified a protein that appears to play a key role in how caffeine exerts its long lasting effect. Dr.Gilberto Fisone of the Karolinska Institute in Stockholm, Sweden and his colleagues found that mice genetically engineered to lack the protein, dubbed DARPP-32, did not experience as long a period of stimulation from caffeine as other mice. 17
Fisone said that DARPP-32 may therefore represent the means by which one cup of coffee can perk people up for more than the few minutes it takes to drink it down. The scientists have found a mechanism, a molecule,which mediates the ability of coffee to cause a prolonged stimulant effect. Fisone noted that some people believe themselves to be addicted to caffeine and understanding more about how the substance acts on the body may help explain why they get hooked. Other substances of abuse-- including cocaine and amphetamines -also interact with DARPP-32, the researcher added, increasing the possibility that this protein plays an important role in addiction. Previous research has shown that coffee helps stimulate the body by blocking receptors that would otherwise be activated by adenosine, a chemical that has depressant effects. In the study, published in the journal Nature, Fisone and his team show that blocking the adenosine receptors sets off a chain of chemical reactions, part of which indicates activating the DARPP-32 protein. Once activated, the protein then helps to amplify the effects of caffeine on the body, the researchers demonstrate, enabling caffeine's initial stimulating effect to last for a few hours. In the current study, Fisone and his colleagues developed their theories based on studies with mice engineered to produce no DARPP-32. When these mice were given caffeine,they initially responded to the stimulant, but the effect was much more short lived than that seen in mice with normal amounts of the protein. 18
SECTION X DISCUSSIONS ON ECONOMIC CAPACITY, PROJECT COST AND PROFITABILITY PROJECTIONS Economic capacity : 45 tonnes per annum Project cost : Rs. 200 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 0.55 compound wall 2. Building Subtotal 6.05 S.No. Description Cost Rs.in lakhs 2.1 Factory building of area 520 sq.m. at Rs.3200/sq.m. 16.6 2.2 Non-factory building of area 88 sq.m.at Rs.4500/sq.m. 4 Subtotal 20.6 3. Cost of Plant & Machinery S.No. Description Cost Rs.in lakhs 3.1 Cost of basic plant and machinery 68 3.2 Instrumentation and control 5.1 3.3 Pipelines and valves 6.8 3.4 Structurals for erection 3.4 Subtotal 83.3 3.5 Octroi, excise duty, sales tax, etc.at 12% 10 3.6 Packaging and insurance charges (2%) 1.7 3.7 Transportation charges (2%) 1.7 3.8 Machinery stores and spares (2%) 1.7 3.9 Foundation charges (2%) 1.7 3.10 Installation charges (2%) 1.7 Total cost of plant and Machinery 101.8 19
4. Technical know-how fees Rs.1.70 lakhs 5. Miscellaneous fixed assets S.No. Description Cost Rs.in lakhs 5.1. Electrification 4.8 5.2. Steam boiler and auxillaries 4 5.3. Water storage tank, borewell etc. 0.8 5.4. Fuel storage tank 1.0 5.5. Laboratory equipment 0.8 5.6. Office machinery & equipment 1.50 5.7. Material handling equipment, packaging machinery, 1.50 weigh balance, etc. 5.8. Diesel generator 4.5 5.9. Effluent treatment 0.8 Total 19.7 6. Preliminary & Pre-operative expenses: S.No. Description Cost Rs.in lakhs 6.1. Preliminary expenses 1 6.2. Pre-operative expenses:- 0 6.2.1 Establishment 1.2 6.2.2 Rent rates and taxes 1.2 6.2.3 Travelling expenses 1.0 6.2.4 Interest and commitment charges on borrowings 16.2 6.2.5 Insurance during construction period 1.3 6.2.6 Other preoperative expenses and deposits 0 6.2.7 Interest on deferred payment 0 Total 21.9 7. Provision for contingency Rs. 10.65 lakhs 8. Working capital margin Rs.17.51 lakhs 9. Total project cost Rs.199.96lakhs 10. Means of Finance Say Rs200 lakhs Promoter's contribution Term loan from financing institutions Total project cost Rs. 80 lakhs Rs.120 lakhs Rs.200 lakhs 20
11. Financial statements (Rs. in lakhs) 11.I. Cost of production A Variable Cost Rs.in lakhs Raw material and utilities 96.46 Spares and maintenance 6.6 Selling expenses 12.4 Total variable cost 115.46 B Fixed cost Salaries and wages 15 Interest on term loan and working capital loan 31.05 Depreciation 8.15 Administrative expenses 7.4 Total fixed cost 61.6 C. Total cost of production A + B 177.06 D. Selling price per kg. (in Rupees) 550 E. Annual sales turnover (Rs.in lakhs) 248 F. Net profit before tax (Rs.in lakhs) (E-C)) 70.94 G. Breakeven point in % 47% 21
SECTION XI SWOT ANALYSIS Strength Weakness Opportunity Threat Large availability of tea waste in the country Inadequate capacity in the country for the production of Natural caffeine and consequent inability to enter into the global market in a big way. Preference for Natural caffeine over synthetic caffeine in view of ecological advantages. Has to be competitive with synthetic caffeine The price of Natural caffeine is higher compared to synthetic caffeine 22
SECTION XII FACTORS INFLUENCING THE POSITION FOR A NEW INDUSTRY AND RECOMMENDATIONS Caffeine from tea waste is preferred internationally over synthetic caffeine, particularly for soft drinks. As a leading producer of tea and coffee, India should emerge as a major producer of natural Caffeine in the world. The caffeine produced from tea waste can be slightly more expensive compared to the Caffeine produced by the synthetic route. Inspite of this, Caffeine from tea waste could be preferred by several consumers. In planning for Caffeine project from tea waste, it is essential to have firm supply source for tea waste, particularly since around 50 g. of tea waste is required for 1 g of Caffeine. With the demand for tea waste coming from tea plants, the price of tea waste could go up and it is necessary to protect the project from such situation. It appears to be ideal for the tea processing unit to put up Caffeine plants as forward integration unit. 23