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Literature Review
The market for high quality condiment paprika for the spice and cosmetic
industry is
rapidly increasing worldwide. Historically, India has produced the high quality
condiment
paprika required; however, exports have declined significantly over the last 10
years.
This is partly the result of heavy metal contamination caused by air pollution
and bad
publicity because of some Indian companies selling adulterated paprika. At the end
of 1999
the Indian authorities had to destroy approximately 25,000 tons of
adulterated paprika.
Exports decreased significantly, with the Indians exporting virtually no condiment
paprika
to their traditional customers Czechoslovakia, Japan and Germany by 2006.
The India research organizations tried to restore the reputation of their
product by
producing the famous paprika cultivars in overseas countries such as Israel,
South Africa
and now in Australia. ASAS Pty. Limited successfully negotiated with the
Indian
Vegetable Crop Research Institute Ltd. to obtain the rights to be the sole
licensee of their
famous condiment paprika cultivars for the South Pacific region.
With the help of the Indian cultivars and other genetic material we hope to
establish a
viable condiment paprika industry in Australia. During 1995-96 the total paprika
products
imported into Australia were valued at $5.3 million. If we consider the
Australian,
European, North American, Japanese and South East Asian consumption then
we can
conservatively estimate these markets at 19,000 t y -1 which is a potential
market of $55
million. To exploit this opportunity it requires the development of elite
adapted varieties
and integrated production, harvesting and processing systems.
Capsaicin and oleoresin extracted from condiment paprika for pharmacology
and the
cosmetic industry must also be considered. Due to the restricted use of
artificial coloring
MARKET ANALYSIS OF OLEORESIN IN INDIA COMPARISON WITH OTHER MAJOR
COUNTRIES
M.P.BIRLA INSTITUE OF MANAGEMENT
agents allowed in cosmetics and canning industries, demand for the resin is
increasing
rapidly. Demand for the milled paprika product has grown by 42% in the last
five years.
We estimate the current growth is 20% per annum.
This rapid increase in Australian imports reflects current global demand.
European
condiment paprika marketing experts estimated 20% growth in condiment
paprika
consumption in Europe and Asia.
It is interesting to study the world condiment paprika trends. Table I. shows
condiment
paprika production data of selected countries. These data are based on recent FAO
reports
and it is suspected that both in China and North America the hot chili
production is
condiment paprika to produce cultivars with high initial pigment (> 200
ASTA) and dry
matter content suitable for direct seeding and mechanical harvesting. To
develop a
commercially viable integrated production, harvesting and processing system for
identified
markets by 2002. In this Project ASAS Pty Ltd was in cooperation with
industrial/commercial partners, The University of Sydney, Plant Breeding
InstituteMARKET ANALYSIS OF OLEORESIN IN INDIA COMPARISON WITH OTHER MAJOR
COUNTRIES
M.P.BIRLA INSTITUE OF MANAGEMENT
Cobbitty and the Indian Condiment Paprika Research-Development Ltd. A
three-year
research grant was approved. The plant breeding part of the program is proceeding
well as
will be explained further on. Nevertheless, the commercial production and
mechanization
part had major setbacks.
It may be said that it was difficult to decide which is needed first. Should the
production be
established at first then buy the machinery or the reverse. Our industrial
partner tried to
grow paprika without having specialised harvester and drying facility. After two
years they
decided that low yield, harvesting by hand and using batch driers are
uneconomical and
therefore they discontinued their cooperation with us. During the 1999/2000 season
on Mr.
Graham Blight's property at Whitton two hectares of Szegedi 80 paprika
cultivar was
successfully direct sown and had a stand of approximately 220,000 plants per
hectare. With
the help of the NSW Department of Agriculture they identified a pre-emergence
weedicide
(Devanol) that can be successfully used with direct seeded paprika. Mr. Blight also
found
that in the case of direct seeding only furrow or drip-irrigation can be used
because
overhead watering on clayey loams can be detrimental on emergence.
I estimated the yield at 22 tonnes per hectare. Unfortunately due to lack of
availability of
specialised machinery it was hand-harvested and because of the high labour
costs only
approx. 10 tonnes were harvested. The drying was done by a tomato batch-drier,
which also
proved to be very expensive. It was established that agronomically paprika
can be grown
on a large scale, however, without full mechanisation including specialised
driers it is
uneconomical. A specialised harvester costs approx. USD130,000.00 and a mobile
drier is
about the same. Including the machinery, drier and improved research
equipment half a
million dollars initial investment is needed.
In opposition to the commercial production attempts the plant improvement
program
progressed according to plan. Thirteen Indian condiment paprika cultivars were
reselected
in 1997. 102 selections were grown at Cobbitty in 1997/98 and 24
outstanding progenies
were sown in variety and strain trials on two sites at Merriwa and Cobbitty. The
Merriwa
trial averaged a converted plot yield of 23.4 t/h while the Cobbitty trial's
mean yield was
26.1 t/h. The pigment test at Merriwa averaged 143.7 ASTA and at Cobbitty
204 ASTA.
MARKET ANALYSIS OF OLEORESIN IN INDIA COMPARISON WITH OTHER MAJOR
COUNTRIES
M.P.BIRLA INSTITUE OF MANAGEMENT
Both the yield and the pigment tests indicate the lower nutrient status and
weed
competition of the Merriwa site.
Our aim is mechanical harvesting and therefore it is extremely important to
have a
synchronised ripening. From practical point of view the large portion of the yield
should be
available at first harvest. In this regard the standard Szegedi 80' s
performance was
acceptable while a selection of Kalocsai 801.2 was the best, 92.5% of the total yield
came
off with the first harvest (Table b). It was decided in agreement with the Indian
colleagues
that the four outstanding lines be sown for seed increase, to be subjected to
further tests
during the 2000/2001 season and the best line to be submitted for
registration for Plant
Variety Protection. It must be noted that a number of our selections have
reasonably high
pigment (ASTA) content (Table II)
Table II. Proportion of Yield at First Harvest
Cultivars Origin %
Papri Mild USA 58.1
Conquistador USA 50.0
K.801.2 PBI 92.5
K.801.8 PBI 71.0
Sz.80 Indian 80.6
K.121 Indian 80.3
K.57-231 Indian 79.0
Sz.20 Indian 74.9
K.50 Indian 72
SzNFD Indian 65.2
Zimbabwe farmers realised that the spice is only a side product of the
condiment paprika
industry the main application is coming from pigment extraction to be used in the
cosmetic
and food industries. Some of our companies looking at the potential of the paprika
industry
examined only the milled spice side of the trade and found it too small considering
it solely
as an import replacement. Some other representatives of the local spice business
stated that
India rules the oleoresin industry and we do not have a chance to compete with
them. I am
quoting from AIC Market Briefs regarding paprika oleoresins dated 3rd August 2000
when
they state: "However, the Indian product (paprika oleoresin) is generally
regarded as too
MARKET ANALYSIS OF OLEORESIN IN INDIA COMPARISON WITH OTHER MAJOR
COUNTRIES
M.P.BIRLA INSTITUE OF MANAGEMENT
hot for optimal use as a colorant." If I go further and quote from the Kancor Crop
Updates
dated 21 st July 2000: "Oleoresin Paprika. Indian sources of raw material have
almost dried
up except for limited availability of cold storage stock. Zimbabwe situation
continues to be
uncertain. The world supply situation continues to be firm and more buyers are
chasing the
limited supplies. Oleoresin availability is extremely limited and prices are
moving up in
response to the raw material situation - this situation is expected to continue."
Further on I may quote a few $s and cents figures: Under our environment
and with
reasonable crop husbandry we can produce 25 t/ha of raw paprika. Minimum 1/6 th
of the
produce will be milled product and that equals 4166 kg. The store value of
this is after
Spices form a major class of natural ingredients used in most food products today.
Indian
food is well acclaimed the world over for its richness in taste and aroma, due to the
variety of
spices that form a distinguishable part of our food. In western countries and indeed
in most
parts of our world, both flavor and color value of spices is utilized to a great extent.
Oleoresins are viscous-to-tacky material extracted from ground spices with volatile
solvents.
They provide a more complete flavor profile than essential oils. They consist of
essential oils,
soluble resins and other non-volatile items such as heat components. Oleoresins are
hygienic;
being free from bacteria, they can be standardized for flavoring strength. They
contain
natural anti-oxidants, are free from enzymes, have a long shelf life and are less
bulky in
storage.
prevalent in India. The chemical extraction of food materials is being phased out
due
to the health hazards associated with chemicals and solvents used in these
processes.
2. The extraction processes used here is the super critical fluid extraction (SCFE)
method, which makes use of carbon dioxide as solvent. This technology is state-ofthe-art and globally proven; moreover, it is environmentally friendly. It is extensively
used in Europe, the USA and Japan. The price realizations of products obtained from
this process are much higher compared to the products obtained from the
conventional method, as the former do not contain a chemical residue and purity
levels are very high.
3. The liquid carbon dioxide coming out of the pump is heated up to the required
temperature of extraction at 60-70 degrees centigrade, when it reaches a liquid and
gas phase and is admitted into the extractor through a removable basket with
perforated disks at the bottom and top to allow the liquid/gaseous CO2 to pass
through the ground spice material.
4. The gaseous CO2 diffuses the oils and oleoresins present in the spice and liquid
CO2
being under super critical condition absorbs the food materials to be extracted and
oils and oleoresins flow out of the extractor.
5. Before it enters the separators, the pressure is dropped to certain level wherein
the
oleoresins portion is separated in the first separator. On a further drop in pressure,
the
essential oils are separated in the second separator.
MARKET ANALYSIS OF OLEORESIN IN INDIA COMPARISON WITH OTHER MAJOR
COUNTRIES
M.P.BIRLA INSTITUE OF MANAGEMENT
6. The residual CO2 coming out of the second separator is condensed in the
condenser
and returns back to the day tank for recycling. This process continues till the
essential
oils and oleoresins are extracted completely.
After extracting the essential oil and oleoresins from the spices by the SCFE
method, the
residue powder can be utilized as cattle feed and poultry feed for its protein value
and as an
ingredient in bakery products for flavoring.
In Karnataka Badagi and districts of Belgaum are suited for the cultivation of chilies
and
capsicum.
Business concept
The proposed name of the company is Oleo Rise pvt ltd and EOU which plans to
export the
oleoresins of chili, pepper, turmeric and capsicum to American and European
markets
through personal selling and direct marketing.
The company will have its own web designed to serve its customers.
MARKET ANALYSIS OF OLEORESIN IN INDIA COMPARISON WITH OTHER MAJOR
COUNTRIES
M.P.BIRLA INSTITUE OF MANAGEMENT
As oleoresins market is highly customized the company opts for strong relationships
of its
customers and strives to be differentiated high quality provider of oleoresins in the
market.
Oleo rise pvt company plans to prepare chili, pepper, turmeric and capsicum
oleoresins
grown in Karnataka, Andhra Pradesh, Maharashtra and Kerala for exportation to
USA,
European markets, China and Asia and sells to wholesaler in the domestic markets.
With the
production of 1 ton per day capacity strives to create the differentiation as the best
quality
provider of oleoresins. It will 100% EOU with 100% tax exemption up to 10 years.
Oleo rise
pvt co. plans to buy quality spices and prepares value added extracts packed to
serve the
wholesale markets. The finished product, oleoresin (pepper, chili, capsicum and
turmeric)
packed in 10 liter bottles and sold in the US, European and Asian markets.
Companys
customers would be UK, Sweden, Sri Lanka, Spain, South Africa, Singapore, Poland,
Philippines, Netherlands, Mexico, Malaysia, Korea, Japan, Italy, Indonesia, Denmark,
Mission
Oleo Rise Pvt Ltd plans to serve oleoresin importers and enthusiasts by exceeding
minimum
acceptable quality standards and by providing the highest quality at lowest possible
price in
the market. Company will value its relationships with future customers and hope to
communicate its appreciation to them through outstanding, guaranteed product
quality,
personal service, and efficient delivery. The companys commitment to its
customers and
countries of ISA and Asia will be reflected through honest and responsible business.
Objectives
The objectives of oleo Rise pvt ltd production of 210 tons (raw material)
approximately per
year in the first year of operation at the proposed facility and reach maximum
capacity of 300
tons per year-by-year three.
o Increase sales by 10% per annum for 3 years.
o Establish strategic relationships with 10, 15 American importers in Los Angeles,
San
Francisco, and Seattle.
o Increase gross margins from 16 to 20% at the end of year three.
o To achieve the maximum capacity of 80% by the end of year three.
COMPANY PROFILE
Which is the center place for raw materials. The location has the advantage of
availability of
cheap labor, raw material, water and electricity.
It is 150 km away from Guntur and 120 km away from Bagega that are very famous
for high
quality chili.
Products
Oleo Rise pvt ltd deal exclusively in chili, pepper, capsicum and turmeric oleoresins,
grown
in the southern states if India. Spices are purchased directly from growers and are
extracted
and packaged into 10-liter bottle in the Oleo Rise pvt ltd plant. The final product is
suitable
for sale and exportation and is the raw material for pharmaceutical companies, food
processing industry and hotels.
Product specification
Oleoresin Paprika (CAS NO. 465-42-9)
The classic food grade and 100% natural red color is widely used in the food
industry.
Oleoresin Paprika is also a critical input for poultry feed improving the color of meat
and
eggs to enhance market acceptability and fetch premium prices.
Ashian Herbex has been supplying chili color to buyers around the globe for several
years.
The quality of products conforms to the specifications of the American Spice Trade
Association (ASTA) and the US Food and Drug Administration (FDA).
Specifications
Description Reddish Viscous liquid
Homogeneity Ensured by uniform emulsification
Solubility Soluble in water
Residual solvent < 30 ppm
Capsinoids <0.2 %
Color value Up to 100,000 cu
Absorbance ratio (r/y) Ratio >0.995%
such as capsicum , pepper and turmeric can be grown in the companies own
irrigated lands.
With additional financing, we would be able to buy larger volumes at lower prices.
The
company plans to establish one or more of six private or grower cooperatives.
Contracts will
be secured six months in advance of harvest.
Procurement
With own procurement office and experienced staff in all the major chili growing
regions of
south India, the company will be positioned to purchase the right quality to meet
the specific
requirements of the buyers. Having the people with wide experience and knowledge
of the
chilies market the company will be in position to offer a whole verity of chilies grow
in
India, each with its own characteristics in colour, pungency, size and shape. The
company
also ship chili Oleoresins with specific capsaicin contents and scoville heat units as
required
by our buyers.
Recognizing the need of supply the customers with the high quality products the
company
should setup cold storage facilities around the chili growing regions. This enables to
supply
chilies with good color and quality not only during the season but right through the
year.
Technology
Improvements in technology will include the use of partially automated selecting
machines,
which will allow for increased production capacity with a lower machine- to-operator
ratio
then normal. Additional storage capabilities will decrease shipping and cargo
charges and
will reduce the need for permanent shipping and cargo employees. High-technology
information systems upgrades will improve all aspects of business;
Especially inventory control, tracking of shipments and cargo, and communication
with
clients in import countries.
MARKET ANALYSIS OF OLEORESIN IN INDIA COMPARISON WITH OTHER MAJOR
COUNTRIES
M.P.BIRLA INSTITUE OF MANAGEMENT
The extraction rocs used will be the Super Critical Fluid Extraction (SCFE)) METHOD,
makes use of carbon dioxide as solvent. This technology is state-of-the-art and
globally
proven; more over, it is environmentally friendly.
In the last decade, new trends have emerged in the food industry. These
trends include an
enhanced concern for the quality and safety of food products, increased preference
for natural
products over synthetic ones, and broadened regulations related to nutritional
and toxicity
levels of active ingredients. Consumers are more educated and health
conscious than ever
before, and are demanding higher quality products for consumption. These
trends have
driven supercritical fluid technology to become the primary alternative to traditional
solvent
extraction for the extraction and fractionation of a active compounds.
other solvents. Supercritical fluid extraction with CO2 delivers the most natural
smelling and
tasting extracts because there are not volatiles removed in a residual solvent
removal postprocessing step. Additionally, because CO2 processing requires low
temperatures, there is
less deterioration of heat-sensitive components in the extract, Furthermore, since
there is no
oxygen in the process, the potential for oxidation of the extract is significantly
minimized.
A broad range of selectivity and dissolving power can be obtained in
supercritical fluid
extraction just by manipulating the operating conditions such as pressure
and temperature
allowing targeting of specific compound
extremely
black pepper.
Traditional extraction methods such as solvent extraction, aqueous alkaline
extraction and
steam distillation are not selective, so antioxidant extracts often show color
(chlorophyll) and
have a strong flavor. Therefore, further purification steps are often required
for the extract
and final food product to remove unwanted residuals. Supercritical CO2
extraction, on the
other hand, inherently increases selectivity and allows for fractionation of the
extract. For
example, the active compound in rosemary can be extracted with supercritical CO2
into two
fractions by modifying pressure and temperature. The first fraction includes the
antioxidants
(carnosol and carsonic acid), which can be enriched by
high
supercritical CO2 to
concentrations without chlorophyll, while the second fraction is mainly essential oils.
In addition to their properties as natural food colors, carotenoids also play an
important role
as food ingredients due to their provitamin A activity and anxtioxidant function.
Carotenoids,
however, may be oxidized in traditional processing. In most cases,
supercritical fluid
extraction reduces the potential for oxidationl Also, since CO2 has a low critical
temperature,
it can effectively process thermolabile cartoenoids.
Lutein obtained from marigold flowers and astaxanthin from algae are two
carotenoid
products on the market utilizing supercritical fluid technology.
Supercritical fluid technology offers tremendous advantages, such as the
absence of any
organic solvent residues and selective extraction and fractionation of different
compounds.
All of those advantages are almost impossible to obtain easily from conventional
processes at
Table 3
Oleoresin yield (% of Pressure
Extracted paprika)
Pigment yild (% of total
pigment)
b
9.0 8.0 9.2 9.4 10.5 14.1 22.9 18.7 14.8 20.2 6.4 11.8 8.4 6.5 10.7
3000 2.5
4000
5000
6000
18.6
2.8
Total
3000
4000
5000
6000
17.9
2.3
1.7
7000
31.1
1.7
23.1
26.0
27.9
26.9
42.1
62.9
66.7
11.5 10.8 11.5 11.1 12.2 32.7 40.9 41.9 40.8 48.2
7.9 8.1 8.5 7.8
2.9
2.8
2.7
14.1
29.5
20.4
7000
Total
4000
5000
6000
7000
Total
5000
6000
7000
Total
6000
7000
Total
2.5
25.9
42.6
21.6
24.8
23.9
27.7
63.7 48.9 65.3
49.6 49.0
18.7
3.8
21.2
68.3 68.3
9.0
53.7
24.3
4.4
22.6
21.4
13.6
22.7 22.0
17.8
19.3
13.4 13.0
39.2
14.7
3.6
4.4
76.3
Advantages
SSuperior Product:
SExtracts with delicacy and freshness: close to natural
SNo residual solvent
SHigh Potency of active components
SFree of biological contaminants Longer shelf life
SSuperior technology:
SEnvironment friendly process;
o SCEF uses CO2 as a solvent which generally is regarded as safe gas for
extraction of natural products, thus avoids the use of organic solvents (used in
conventional processes) which are suspected carcinogens.
o The SCFE process is designated to work in a closed loop, resulting in
minimum loss of CO2 to atmosphere.
MARKET ANALYSIS OF OLEORESIN IN INDIA COMPARISON WITH OTHER MAJOR
COUNTRIES
M.P.BIRLA INSTITUE OF MANAGEMENT
o The CO2 gas used is a by-product of other processes, so the SCFE process is
not a new generator of CO2. Thus SCFE does not increase Co2 emissions that
are growing concern in global warming. On the other hand shifting from
organic solvent use may decreased the total CO2 output.
o Ability to fractionate extract in single step Flexibility to extract multiple
products by changing operating conditions.
o CO2 as solvent: safe for natural products.
Quality
With the advantage of having own procurement offices the company will be able
monitor the
quality of shilies right from the time of purchase to processing and packing thus
ensuring that
the companys customers get only the best product.
The laboratories will be equipped with state of the art equipment like HPLC,
Gas
Chromatographs, spectrophotometers to check for aflotoxin, pesticide residues,
colour,
pungency etc. A strong technical team to identify and solve quality related problems
will also
support the company.
Competitive Comparision
In order to differentiate the companys product from the product offering of
competitors, all
products are guaranteed fresh and are exported within seven days of preparation. In
addition,
all of the farms from which OleoRise. Pvt.Ltd purchases spices
to
that adhere
environmentally sound farming practices and avoid the use of pesticides and
chemical sin
crop production.
MARKET ANALYSIS OF OLEORESIN IN INDIA COMPARISON WITH OTHER MAJOR
COUNTRIES
M.P.BIRLA INSTITUE OF MANAGEMENT
There are approximately 20 Competitors who offer a product similar to the
OleoRise
PVt.Ltd. The research indicates that with the additional capacity the company would
become
one of the top, in terms of quantity, providers. OleoRise Pvt.Ltd, would have the
advantage
of established distribution channels and reputation. In addition, improvements
to the
companys marketing efforts will further separate OleoRise Pvt.Ltd from the
larger market
and from companys close competitors.
Sales Literature
Sales to some extent will be handled through personal selling. Additional sales
literature will
include a website, direct mail to specialty whole sellers, importers, and print
advertising in
several trade publications including Web publication which targets American,
European and
Asian business dealing withissues relevant to the oleoresin industry.
Future Products
By providing the finest species of oleoresins, OleoRise Pvt. Ltd plans to take
the first step
towards a differentiated product. To further distinguish the
products, company
companys
will adhere to higher quality standards than approximately ninety- five percent of
the market.
Also the company plans to produce vanilla concentrates.
MARKET ANALYSIS OF OLEORESIN IN INDIA COMPARISON WITH OTHER MAJOR
COUNTRIES
M.P.BIRLA INSTITUE OF MANAGEMENT
MARKET ANALYSIS
MARKET ANALYSIS OF OLEORESIN IN INDIA COMPARISON WITH OTHER MAJOR
COUNTRIES
was exported then and fetched Rs.1.41 lakh. From there it has been a success story
and in 9899 touched 2,750 to fetch over Rs.300 crore.
While exports of spices have fallen by nearly 30 per cent, it has been the
exports of valueadded spice products, which have been heartening, and
prospects. And the
point to good
export of these products, curry powder or spice oleoresins or mint oil, has shown a
consistent
and steady growth over the years. And according to sources in the Spices
Board, there will
soon come a time when these value-added products will surpass the export of
spices as such.
It is believed that nearly 90 per cent of the global production of spice oleoresins is
in India.
Exports of value-added spice products, which stood at Rs.358.19 crore in 1997-98,
jumped to
Rs.459.26 crores and in 99-2000 it was around rs.470 core. For the six months of
this fiscal it
has touched Rs.264.34 crore and is expected to surpass the 99-00 figure to touch
the Rs.500
crore plus mark.
Sources point to the case of the seafood exports where value-added products,
which though
not having a major share in the export basket, have been showing consistent rise.
With bulk
export of pepper, depending mainly on the availability of the stock in the
international
market, and countries like Brazil dropping their prices and holding a sway in the
market and
also new producers coming in, there is every likelihood of the market witnessing
severe ups
which was not in the world market in the past 2-3 years has now entered the chili
market.
There has been a marginal decline in turmeric exports to 15,250 tonnes form
16,000 tonnes.
In this item also India has been enjoying a monopoly and with the new crop
arriving in
January/February exports of this item will also go up, he said. Howeve,r of late,
Burma and
Vietnam are making inroads into the turmeric market and in future they would be
competing
with us, he pointed out.
MARKET ANALYSIS OF OLEORESIN IN INDIA COMPARISON WITH OTHER MAJOR
COUNTRIES
M.P.BIRLA INSTITUE OF MANAGEMENT
Market Analysis
Potential
Customers
Growth
by
Value
2004 2005 2006 2007 2008
Current
Share
U.S.
Importers
% 14 15% 15.9 17 17.3 15%
European
Wholesalers
Industry analysis
The potential customer groups for OleoRise.Pvt.Ltd are,
USA, UNITED KINGDOM, SWEDEN, SRI LANKA, SPAIN, SOUTH AFRIC,
SLOVAKIA, SINGAPORE, SAUDI ARABIA, RUSSIAN, FEDERATION,
PORTUGAL, POLAND, PHILIPPINES, NETHERLANDS, MEXICO, MALAYSIA.
KOREA, JAPAN, ITALY, INDONESIA, HONG KONG, GERMANY FRANCE,
DENMARK, CANADA, BELGIUM, AUSTRIA, AUSTRALIA and ALGERIA,
effort of the Board during the last one-decade has improved the share of
the value added
products in the export basket to more than 60%
With the support of the Spices Board, exporters have established adequate
infrastructure for
improving quality on a sustained basis. Exporters take up quality
improvement and
technological upgradation as an on-going programme. These developments are in
tune with
the changing levels of market acceptance. Other areas focused upon by the Board
are export
promotion in identified markets, interaction with policy makers in the
importing countries,
development of new end uses, farm level training for farmers etc.
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Series2
Series1
Rest of the
world
India
Rest of the
world
India
(QUANTITY)
(VALUE)
1 Include Aniseed, Bishops Weed (Ajwanseed), Dill Seed, Poppy Seed, Mustard etc.
2. Include Tamarind, Asafoetida, Cassia, Saffron Etc.
3. Include Mint Oil, Menthol and Menthol Crystals.
Source: Estimate Based on Dgci &S Data, Shipping Bills from Customs, Last
Years
Export Trend, Consultations.
Recent market analysis attributes the increased consumer demand for natural
food products
and the associated need for flavoring compounds derived form natural sources for
the current
growth of essential oils and oleoresins in the marketplace. Adding to this.
are more venturesome flavor profile and a sought-after healthy focus. For example,
instead of
sprinkling salt, consumers are increasingly using spice or spice blends with which to
season
their food. The report identifies functional food applications and dietary
supplements as the
key development areas for essential oils and oleoresins.
The report also predicts that the US and European markets with previous
years sales of $
653 million for essential oils and oleoresins to climb to $ 796 million by 2009.
Basically this
is imported from India. The report suggests that these sectors represent emerging
markets and
offer manufacturers great potential for future growth, however; this good
news comes not
(M
T)
(Rs. In
lakhs
(MLN
US $)
(MT) (RS.
LAKHS)
(MLN
US $)
(MT) (RS.
LAKHS)
(MLN
US $)
2001-02
G.R.K. & Co
Harmony Spices Ltd., Cochin,
Integrated Spices and Foods Ltd
STRATEGY
MARKET ANALYSIS OF OLEORESIN IN INDIA COMPARISON WITH OTHER MAJOR
COUNTRIES
M.P.BIRLA INSTITUE OF MANAGEMENT
Strategic pyramids
Our main strategy is to communicate the unique and desired attributes of
the companys
products to larger segments of the American and European markets. We sell
a superior
product, yet one that can be considered a commodity. It is therefore
important that we
effectively communicate the unique aspects, which make it ideally suited for a niche
market.
The unique aspects of our products include superior product selection and
preparation,
quality assurance, and efficient distribution. These are things we have done since
we started
United
their countries. This reaches to remote and small buyers who are the players in the
domestic
markets.
Sales Strategy
Strategy focuses first on meeting the increased demand from importers with
whom the
company establishes relationships for larger orders. These importers are critical to
our ability
to acquire additional accounts on both the East and West coasts of the United
States without
having to spend a great deal on sales efforts. Secondly we will focus on
increasing the
volume, while maintaining the percentage of sales, the oeoresins sold to the
internal Indian
market. When we have reached maximum sales to existing channels we can
then shift the
majority of our focus to securing additional import accounts. The company plans to
achieve
the sales target of 140 tonnes in the first year.
MARKET ANALYSIS OF OLEORESIN IN INDIA COMPARISON WITH OTHER MAJOR
COUNTRIES
M.P.BIRLA INSTITUE OF MANAGEMENT
As the market is highly customized, the company plans to adopt pull system by
entering into
contracts with the buyers and distributors, estimate the requirements and
produce as per the
requirements.
Hence the sales strategy is to identify the buyers and also try to push extra
units to the
existing customers.
Sales Forecast
The following chart and table show our present sales forecast. We project
sales to grow
approximately forty percent in 1999, increase again by twenty percent in
2000, and reach
Sales Forecast
Unit Sales 2004 2005 2006
Export 13440 litres 14784 16262.4
Other 0 0 0
Total Unit sales 13400 14784 16262.4
Sales
Export 2688005 327909.12 460063.3
Other $0 $0 $0
Total Sales 2688005 327909.12 460063.3
Direct Cost of
Sales
2004 2005 2006
Export 37 Rs 41 43
Other $0 $0 $0
Subtotal Direct
Cost of Sales
572.71 Rs 604.5 6044
Introduction
Capsicum is one of the most versatile crops in cultivation. The fruit range from tiny
very hot
Chilies and stocky pimentos through to long cayenne chilies and the giant
Bell capsicums.
Both pungent and non-pungent variants are used as foods, spices, medicines and a
source of
Pigments. In some countries capsicum is a national food used in many ways;
raw, smoked,
cooked, stuffed and as a salad and spice.
[1]. The condiment form is a highly valued spice and the extract of the
spice, oleoresin, is
used in the small goods and canning industries. More recently the cosmetic
industry is
making use of it as a source of natural pigment. Several capsicum types are
grown
throughout India. Commercial production is on a market garden scale and is
restricted to
table capsicums for salads and cooking. Chilies are mainly grown in domestic.
[2]. Recently some oleoresin was also imported for the food and cosmetic industries.
The problem has been the relatively large amount of capital required to
establish
economically sound production. Without mechanized planting, harvesting and
drying
systems, the industry will not survive in India . India has produced very high
quality
condiment paprika (Capsicum) unparalleled on the world market: its bouquet, taste
and color
are supreme. Nevertheless, Indian paprika exports have declined significantly
during the past
years. This was partly due to heavy metal contamination caused by air pollution
originating
The Indians provided us with their most popular cultivars. These cultivars were
included in a
small-scale field trial at The University of Sydney, Plant Breeding Institute Cobbitty,
NSW.
This trial, our earlier experiments and the practical experience of many
market gardeners
demonstrated that Capsicum cultivars of Indian origin can be successfully
produced on the
Australian continent. However it became clear that condiment paprika could not be
produced
economically with the same crop husbandry methods as in India and other
condiment paprika
producing countries where manual labor is comparatively inexpensive. The
imported
cultivars also expressed quite a degree of variability due to genotypeenvironment
interactions. For these reasons, it was decided to initiate a research program to find
the most
suitable crop husbandry systems and develop cultivars that were suitable for
highly
mechanized production techniques. To achieve these objectives a request was
lodged to the
Australian Government Rural Industries Research & Development Corporation
(RIRDC) for
research funding to assist the project. Subsequently, research co-operation
was established
with The University of Sydney Plant Breeding Institute, ASAS Pty Ltd, The Indian
Paprika
Unit, Szeged, and the Rural Industries.
The differences between Indian and Australian grown paprika are not simple. We
Examined the crop husbandry methods used in both countries to ascertain
whether Indian
agronomic conditions may be more advantageous for paprika production.
There is one
obvious major difference between the environments of the two countries: namely
the number
of sunshine hours and sunshine intensity to which the crop is exposed
during cultivation.
MARKET ANALYSIS OF OLEORESIN IN INDIA COMPARISON WITH OTHER MAJOR
COUNTRIES
M.P.BIRLA INSTITUE OF MANAGEMENT
Table 2 demonstrates the differences. Major paprika producing or potential
producing
regions are shown.
One of the most important goals was to find genotypes that could provide a base to
create
Cultivars suitable for a mechanized farming system. Most capsicum genotypes
have an
indeterminate growth habit, with the plants flowering and bearing fruit
continuously.
Therefore, several harvests are needed to obtain a full yield. It is essential to find
genotypes
that allow a large part of the potential yield to be harvested in one operation. An
obvious
option was to look for variants with a determinate growth habit.
be able to use a mechanical harvester efficiently the plants must stand erect
with a strong
main stem. Most paprika cultivars have a relatively weak stem, and with a heavy
production,
the plants lodge easily. It is very difficult to harvest a lodged crop
mechanically. It was
paramount to find genes that ensure strong upright plants and if possible an
early
lignifications of the stem. While a number of wild Capsicum species have a strong
lignified
stem, we found Capsicum chacoense had an early lignification of the stem,
and fruit that
were detachable from the calyx at ripening. This latter trait would be a
great advantage for
mechanical harvesting. Finally, the paprika pigment quality should be discussed.
Besides the
taste and bouquet, color is very important in all paprika products. Capsicum species
contain
unique carotenoids, eg. keto- carotenoids, capsanthin, capsorubin and
cryptocapsin. The
major contributors to the red colour of paprika are capsanthin and
capsorubin, whereas the
yellow-orange colour is from betacarotene and violaxanthin.
Farmers want plants that establish quickly, with the highest possible yield,
free of diseases
and high ent. One of the options to achieve these aims is the utilization of hybrid
vigor using
hybrid seed. Hybrid seed of paprika is extremely expensive because it is produced
by manual
labor. Private seed companies produce hybrid seed worldwide in locations mainly
determined
by the availability of cheap labor and good growing conditions.
II. Agronomic considerations
During the 1997/98 season, selected cultivars from India and USA were
tested at two field
sites. Indian environmental conditions. In all field trials, randomised complete block
designs
with four blocks were used Nearly all introductions showed variability due to
genotypeenvironment interaction; this was particularly evident in the Indian cultivars. As we
intended
to base our paprika production on the high quality of the Indian paprika we
decided to
reselect the Indian cultivars that showed a
MARKET ANALYSIS OF OLEORESIN IN INDIA COMPARISON WITH OTHER MAJOR
COUNTRIES
M.P.BIRLA INSTITUE OF MANAGEMENT
high degree of variability. The Cobbitty trial was subjected to a simple weighted
analysis to
be able to find the types that best suited our aims. In this weighted evaluation,
pungency was
considered as our goal was to have paprika production. The Indian
introductions performed
satisfactorily but were difficult to harvest mechanically because of their
relatively weak
stems, uneven ripening, and, in some cases, the difficulty in breaking the pedicel
away from
the stem.
Effect of sowing depth on yield This result confirmed the Indian and the New
Mexican
recommendations on depth of sowing, and also emphasized the importance of soil
types and
moisture conditions. The extension workers of strongly recommended covering the
row with
a 7-10 cm cap which is removed with a dragging harrow before the
seedlings emerge
(crook stage). This method reduces the drying out of the seedbed. Post sowing
watering can
cause problems and should be avoided.
The results again supported overseas advice showing that the second sowing,
mid-October,
was the optimum sowing time. Obviously, the soil temperature must have
been above the
optimum level of around 15degreeC. At the third sowing time the seed
emergence was
significantly lower than at the second, but still acceptable. Both the first and fourth
sowings
gave significantly lower yields than the second and third sowings. They were
not different
from each other.
The most favorable sowing time at India was in the second half of October
with a sowing
depth between 15 mm and 30 mm depending on soil type. Our practical experience
and the
experimental data indicated that the Indian and New Mexican crop husbandry
practices could
be adopted in India. However, plant improvement had to be given wide-ranging
attention.
Influence of sowing time to yield III. Genetic improvement of paprika In order
to develop
paprika cultivars suitable for Indian
mechanized
Schematic Illustration
The collection was tested to find the appropriate traits to help build the new type of
paprika.
Most of the traits that we needed were represented in the collection, not in
one given
genotype but dispersed over several varieties and wild species. Therefore, we had
to establish
an ongoing crossing program to combine the appropriate genes into an
acceptable breeding
population. A number of interspecific crosses were required as well.
Although most of the interspecific combinations were impossible to achieve
according to the
literature, we found a way to establish such combinations. Some of them
needed several
years to accomplish (e.g. detachability came from a wild species). Some
Indian cultivars
displayed high yield potential and satisfactory pigment content. However, as
they had
variable levels of capsaicin content, low dry matter and inferior taste they were not
suitable
for the production of the Indian type of paprika. They were used as parents
in the crossing
program to improve the performance of the Indian paprika. Special breeding lines
were also
created to increase the numbers of fruits produced per plant. The interspecific
combinations
being used involved Capsicum chacoense, C. chinense, C. baccatum and
various other C.
annuum cultivars to achieve lignifications of the stem, and fruit detachability from
the calyx.
The program concentrated on backcrossing to maintain the Indian paprikas
quality traits
with an improved yield but with easy detachability of the fruit from the calyx.
According to
the literature easy detachability of the calyx is associated with excess softening of
the fruit at
maturity. The program used intermating of interspecific hybrids to find
recombinants that
were easily detached from the calyx while the ripe fruit remained firm. The earlier
indication
MARKET ANALYSIS OF OLEORESIN IN INDIA COMPARISON WITH OTHER MAJOR
COUNTRIES
M.P.BIRLA INSTITUE OF MANAGEMENT
that these two characteristics are determined by common genes is incorrect; they
are closely
linked and with appropriate selection can be separated. Capsicum chacoense
crosses, to
achieve detachability, were successful, but the F1 plants were sterile males and to
obtain seed
from them, they had to be pollinated with a fertile male cultivar. The
unrestrained
detachment of the fruit from the calyx was found to be a simply inherited
incompletely
dominant characteristic as it was reported.
Paprika fruits with the detachability gene. The current selection program
Selection is
conducted partly in the field and partly in the laboratory; in the field for
phenotypic
characteristics, and in the laboratory for dry matter and pigment content.
Selection is
repeated until the progenies show uniformity, usually in the seventh to tenth
generations after
the last cross. When some of the advanced lines are sufficiently uniform they are
subjected to
a rigorous program of at least three years of field testing, starting with
three row plots and
finishing with twelve row plots. When the performance of a line is acceptable, it is
submitted
for variety protection. This is followed by large-scale regional field tests on
commercial
properties and industrial tests before commercial release.
Outcomes:
During 2004 Indians
namely
Sunired, Earlysuni and Cerise Sweet. The first two cultivars are
reselections from
introduced cultivars, which showed variability where first grown in India.
Cerise Sweet
originated from old Indian breeding material of the senior author; Sunired
produced 89%
of its total yield in the first harvest, and is therefore a good candidate for
mechanical
harvesting; Earlisuni is fast maturing with good dry matter and pigment
content; Cerise
Sweet (Fig. 4) is a constantly high dry matter and pigment (over 280 ASTA)
producer. In
our experiments, Cerise Sweet gave the highest pigment production per
unit area. Due t o
the selection process all three cultivars have the snap off gene that allows
an easy
separation of the pedicel from the stem.
This crop produced fruits with 328 ASTA Fifty of our advanced lines are
entering in our
first year Variety and Strain trials.
MARKET ANALYSIS OF OLEORESIN IN INDIA COMPARISON WITH OTHER MAJOR
COUNTRIES
M.P.BIRLA INSTITUE OF MANAGEMENT
Capsicum Hybrid Seed Research underway is attempting to produce
condiment paprika
hybrid seed in an economically acceptable price bracket. Currently hybrid
paprika seed is
sold by seed number, not by weight. Capsicum is a facultative open-pollinated crop
in India
due to the activity of native bees, but is a facultative self-pollinated crop in
Europe.
Honeybees are not attracted to Capsicum because the nectar content in the flowers
is low. As
Type and range of male sterile lines used in the breeding program To generate male
sterility
in condiment paprika we collected known male sterile Capsicum lines from
around the
world. This collection consisted of cytoplasmic and genetic sterile male lines.
We
backcrossed these lines into condiment paprika and during the selection
program we
established sterile male lines of paprika. Gamma irradiation of seeds was
also used to
generate male sterility in the Longum group type of Capsicums. Seeds were
soaked in
distilled water for 0, 48 and 96 hours prior to irradiation at 3, 5, 7, 9, 12,
and 15 Krads.
Seeds, soaked for 0, 48 and 96 hours, not exposed to radiation were used
as controls.
Controls did not produce male sterile plants. The overall frequency of male
sterility among
the irradiated materials was 0.3% (Table 7). The percentage of sterile male plants
increased
with increasing radiation dose. Induction of male sterility was more successful
with
increasing soaking periods. The mutants were incorporated into our breeding
program. Plant
material was grown in flying insect proof isolation tunnel houses. Certain
phenotypic
/physiological characteristics, e.g. shrunken anthers of male sterile flowers, plant
height and
The production field would show a uniform pattern (number of male sterile rows
alternating
with a certain number of rows of pollen source) ensuring the efficient usage of
available land
and other resources. In order to identify a genotype with a unique trait that
cannot be
observed at a particular growth stage, markers can be used. These can be
phenotypic or
molecular. Since no phenotypic markers for male sterility were apparent at seedling
stage we
decided to use the Amplified Fragment Length Polymorphism (AFLP) method
to find
molecular markers linked to the ms3 male sterility gene, which is widely
used in our and
other research/breeding programs. We have one candidate primer combination
, which
potentially allows us to select for male sterility at the seedling stage. The
validation of this
possible marker is underway. Sterile male plants can be propagated with the
help of micropropagation [38, 39] or as cuttings . Different explant types can be used to
propagate sterile
male lines in vitro. Several media have been tested, and that with the highest
multiplication
rate will be used for propagation. Cutting-derived young plants are produced
in the
greenhouse and then tested under field conditions to compare to seed derived
seedlings.
AFLP DNA fingerprints of sterile and fertile parents and bulks of the 2-primer
combination
which produced polymorphism. Arrows indicate the polymorphic bands, present in
the fertile
parent and progenies of fertile bulks. M - 25bp ladder, Ps - Sterile Parent, Pf - Fertile
Parent,
Bf - Fertile Bulk, Bs - Sterile Bulk, M - 25bp ladder.
It is planned that male sterile plants will be planted with a pollen source, with
pollination
taking place by insects, mainly native bees (genera Trigona, Austroplebeia,
Xylocopa, and
Amegilla) . These sting-less native bees are found across Australia and are known to
be good
crop pollinators even for Solanaceae, where buzz pollination is required [42].
As per the report findings and market analysis data analysed the company
can is viable to
market its product in India. The projected market of the company represent
the market
feasibility.
The major strength is the upcoming market and many of foreigners entering
India for
business and leisure.
Initially to cope up with the customer needs and pattern of the production,
the capacity
utilization is only 40%. That is the reason the company will show the
negative market
entrance.
The location is such that all the resources are readily available at cheaper rate.
It is challenging task to bring the product into the market initially.
As many huge players are already present, the company will initially have to
struggle to
complete and position itself in the market.
Though there are many huge players, what makes the company viable is the
USP of the
company to sell high quality oleoresins. Here is a huge demand for highest quality
oleoresins,
which very some companies manage to deliver to the market.
Conclusion
We believe that by applying this system we should be able to produce paprika
hybrid seed in
an economically acceptable price bracket. If so, the product would be
marketable
worldwide because of the increasing demand for paprika as a spice and
natural coloring
agent. This could open up a new avenue for the Indian industry as an
exporter of paprika
products and hybrid seed of our improved cultivars that are both fit for
highly mechanized