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G.K. Nair

Kochi, Sept. 21 The appreciation of the rupee against the dollar has negatively impacted the export value realisation of the oleoresin industry, which ships out its entire products.

Speaking to Business Line, Mr C.V. Jacob, Chairman of Synthite Industrial Chemicals Ltd (SICL), at nearby Kolencherry, said his company — with 50 per cent export share of the country’s total oleoresin exports — had been losing on value realisation due to appreciation of the rupee against the dollar.

He said India accounts for 75 per cent of the world oleoresin trade with almost all the processing units located in Kerala. India supplies full range of oleoresins as the country has most of the raw materials.

Besides, the raw materials that are in short supply are imported on condition that it would be re-exported with 30 per cent value addition.

Hence, there has been no problem with the availability of raw materials, he said.

Apart from Synthite there are four more units in the country that are exporting their products. Therefore, these Indian players compete for purchasing of raw materials as well as selling, he said. “This competition is disadvantageous to the industry as this situation is often exploited by the overseas buyers,” he said.

The total exports of oleoresin and spice oils from the country are estimated at around Rs 580 crore and of this Synthite accounts for Rs 280-300 crore, he said. The company’s annual requirement of raw materials is 40,000 tonnes and of this chillies make up for 25,000 tonnes, which is used for extracting paprika natural colour. Other raw materials are pepper, ginger, turmeric, nutmeg and vanilla.

Mr Jacob said the requirement of good quality chillies was met by farmers in Harihar Nagar in Mysore. Out of the one-lakh tonnes of chillies produced by farmers, 50 per cent is absorbed by the oleoresin industry and balance is bought by other sectors such as grinding industry.

Synthite, in order to save on transportation cost, has set up an extraction plant in Harihar Nagar with a capacity to handle 30,000 tonnes of chillies a year. The company saves Rs 4.5 crore on this head, he said.

The company imports 3,000 tonnes of light berry pepper from Vietnam and another 500 tonnes from Sri Lanka. To meet the demand of the overseas customers, 2,000 tonnes of ginger is imported from Nigeria. One thousand tonnes of turmeric with high curcumin content is bought from Vietnam at competitive prices, he said.

The company recently installed a new system to produce high quality oleoresin using Chinese CO2 (carbon dioxide) high pressure extraction technology. Extraction is done without heating and using any other solvents and hence the end product has true representation of the spices.

“There is a good market for it and the price is more than double because of the high quality profile,” he said.

Mr Jacob said the company was importing mustard from Canada to meet its 2,000 tonnes annual requirement for extraction. The quality mustard, he said, would be available from Andhra Pradesh from next year.

Synthite has also recently established a spices powdering unit using modern technology at its main unit here, he said. Apart from the Harihar Nagar unit, it has a natural flowers extraction unit at Maruthur near Mettupalayam in Tamil Nadu where flowers such as jasmine, tuberose and memosa are extracted for supplying to perfume industry. ‘Marigold’ is also extracted for which 25,000 tonnes of this flower is cultivated by farmers in the region on a buy-back arrangement, he said.

Another unit, Sijmak Oils Ltd at Kozhikode is mainly concentrating on production of coco flavour, extraction of rosemary etc. He said that Synthite was concentrating on vanilla of late and it bought 450 tonnes of green beans last year for processing. It got 80 tonnes of cured beans of which 70 tonnes was exported to Canada, the US, Japan, Germany etc at $20-$22 a kg. Ten tonnes were used for extraction for overseas buyers, he said.

The company, located at Synthite Valley in the rural village of Kadayiruppu, is set to make a turnover of over Rs 300 crore during the current fiscal, Mr Jacob added.

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