Gautham-03103-OLEORESIN

MARKET ANALYSIS OF OLEORESIN IN INDIA COMPARISON WITH OTHER MAJOR COUNTRIES

M.P.BIRLA INSTITUE OF MANAGEMENT

RESEARCH WORK ON MARKET ANALYSIS OF OLEORESIN PRODUCT IN INDIA

WITH COMPARISON OF OTHER MAJOR COUNTRIES

A DISSERTATION SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE

AWARD OF MBA DEGREE OF BANGALORE UNIVERSITY.

BY GAUTAM UMANTHJI M REG.NO-03XQCM6035 UNDER THE GUIDANCE OF SUMITHRA SREENATH (ADJUNCT PROFESSOR) M.P.BIRLA INSTITUTE OF MANAGEMENT ASSOCIATE BHARATIYA VIDYA BHAVAN. BANGALORE-560001



DECLARATION

I here by declare that this research work embodied in this dissertation entitled

“RESEARCH WORK ON MARKET

ANALYSIS OF OLEORESIN PRODUCT IN INDIA WITH COMPARISON OF OTHER

MAJOR COUNTRIES” has been carried out by me under guidance of and supervision

of Prof Sumithra Sreenath, faculty M.P.B.I.M Bangalore

I also declare that this dissertation has not been submitted to any university/institution

for the award of any degree/diploma.

Place: Bangalore Gautam Umanathji M

Date: June 2005



Acknowledgement

Any research is impossible without the contribution of people towards it other than the

researcher.

I would like to thank my guide Sumithra Sreenath and Dr.K.V.Prabhakar who guided

me all through the project.

My special thanks to Dr.V.Praksh, Director, Central Food Technological Research

Institute (CFTRI), Mysore, Who helped me in providing necessary data.

Finally I would like to thank our beloved Principal Dr.N.S.Malavalli who encouraged

me to do this project.



Executive summary

This research work has been done to study the market analysis of oleoresin product in

India.

He research methodology started with the market survey done through direct

communication to the market players in the oleoresin industry, analysis of data,

interpretation and detailed study of overall industry, its layers and existing customers

of the product.

The research provides recent market trends, industry analysis, market analysis,

product specification, location advantage and detail financial planning that helps to set

up a new plant in Belagaum District.



Table of contents

Literature Review

Introduction To The Company

Vision

Company Profit

Market Analysis

Strategy

Research Paper



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



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

included as well. However, if we look at the traditional condiment paprika producing

countries we can observe that Morocco, South Africa, Israel, Slovenia and Spain have

relatively constant production. India tried to adjust its production to the spice industry's

requirements. Zimbabwe focused its paprika production for oleoresin extraction. All their

products were exported to Spain and Germany mainly for oleoresin (pigment) extraction

and as it can be seen on this table their production has increased year by year according to

the market requirements. Unfortunately the recent political developments in Zimbabwe are

greatly hindering and they might significantly reduce their paprika production and export.

TABLE I. Paprika Production

Country 1999 2000 2002

Morocco 12,000 12,000 12,000

South Africa 11,000 10,000 9,500

Zimbabwe 10,000 22,000 23,000

China 200,000 200,000 200,000

Israel 2,600 2,600 2,600

India 45,323 65,000 48,000

Slovenia 6,100 6,100 6,100



Spain 6,000 6,000 6,000

North America 56,000 50,000 50,000

Late in 1999 I was privately informed by a wheat breeder colleague of some problems of

condiment paprika production in India due to the air pollution and adulteration as explained

earlier. My immediate response was to produce the Indian Condiment Paprika here in

Australia in cooperation with the appropriate Indian organizations. Dr Norbert Somogyi

contacted me, a research scientist attached to the Indian Vegetable Crop Research Institute,

Condiment Paprika Research Unit (later Paprika Unit), India. He and his superiors liked the

idea and after exchanging many faxes and letters the possibility of a close cooperation was

suggested.

The Indians provided me with seed of their most popular varieties. These varieties were

included in a small-scale variety trial at The University Sydney, Plant Breeding Institute,

Cobbitty. This trial, my earlier experiments and the practical experience of many market

gardeners demonstrated that Capsicums of Indian origin could be successfully grown in

this country. The Indian condiment paprika varieties are performing satisfactorily even at

Cobbitty in spite of the fact that the site is not ideal for paprika production.

It was clear that condiment paprika could not be grown in Australia with the same crop

husbandry practice as in India and many other paprika producing countries where the hand

labor is relatively cheap. It was decided that a research program should be initiated to find

out the best crop husbandry practices and develop cultivars that are suited for mechanized

production systems.

To achieve these aims an application was made to RIRDC for a grant to assist this program.

The reasoning for this grant was to introduce and further develop genetic material of

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 Institute-



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.



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



Table III. Pigment (ASTA) Levels of Selected Cultivars

Cultivars ASTA

Papri Mild 155

Conquistador 130

K.801.8 195

K.801.2 185

K.50 187

Sz.20 180

K.121 205

K.57-231 210

Sz.80 238

SzNFD 320

One of the main aims of our plant improvement work is to develop cultivar or cultivars

suitable for mechanized production particularly for mechanized harvesting. We identified

the gene in a wild species, Capsicum chacoense, which allows the fruit to be detached from

the calyx at full maturity; however, in this species the fruit is soft at this stage. Earlier it

was believed that the same gene causes both the detachability and the fruit softening at

ripening. We successfully separated the detachability from the softening gene. We have

now several early generation lines in our backcrossing program where the detachability is

combined with the condiment paprika characteristics.



It is important both from hand or machine harvesting point of view that the pedicel should

easily snap off the stem. We identified a trait, which allows the very easy separation of the

pedicel. We have several F4 condiment paprika lines having the 'snap off' trait.

To be able to produce hybrid seed in a reasonable price bracket we designed a system

where the identification of genetic male-sterility in seedling stage is needed and the male-

sterile plants are to be propagated with the help of micropropagation. Male sterile plants

together with the pollen source are planted out in the field where the fertilisation will take

place with the help of bees. It must be pointed out, that besides import replacement and

export possibilities of paprika products we see a number of new avenues that may outweigh

the previously mentioned commercial prospects.

These are:

• The hybrid seed production scheme that is under investigation is patentable. This

will also include a protocol of commercial micropropagation of capsicum and a

possible hybrid seed export.

• Both of the genes of detachability from the calyx and 'snap off' trait of pedicel may

be patented. Nevertheless, the protected cultivars possessing these genes will open

up a seed export.

• We should not neglect that besides the commercial values a great deal of scientific

progress will be made serving other crops as well.

Most of the Australian investors look at condiment paprika only as a source of spice. The

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



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

milling: AUD24,996.00 (@ $6/kg). In general it is estimated that 10 - 14 kg of dried

paprika is needed to produce 1 kg of paprika oleoresin depending on the pigment content of

the raw material. If we take the average that is 12kg than from the 25 t/ha produce we

obtain 347.00 kg oleoresin which has a value of AUD34,022.66 (@ $98/kg) Using the

petrochemical (Hexane) extraction method the cost of processing is fairly low cc. $1.50/ kg

of the extract. Mr. Graham Blight did some test marketing as fresh produce on the

Melbourne and Sydney markets.

He found, particularly in Melbourne, that the public was glad to buy these new 'sweet

chillies'. We found out with every introduced crop eg. wheat, cotton etc. that the introduced

cultivars in their original forms do nor perform as well as the locally improved cultivars at

a later stage. This syndrome is quite obvious in the case of condiment paprika. For this

reason a further plant improvement program is a must. Up-to-date we are extremely

grateful to RIRDC for providing us with a research grant during the past three years. We

reapplied for further support and further two years has been approved. Unfortunately we

received approx half of the monies we applied for.

This reduction of research monies means that we have to cut back drastically our research

program. The paprika story is very similar to the cotton. The local farmers except one were

afraid at the beginning of the cotton growing in NSW. The cotton industry really started

when on my encouragement two American cotton farmers moved to the Namoi Valley.



Maybe our solution is to encourage a few Zimbabwe paprika farmers to come here.(Derera,

2000)

INTRODUCTION TO THE COMPANY:OILS AND

OLEORESINS 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.

Spice Extracts- Essential oils and Oleoresins:

Spice extracts serve as an alternative to whole and ground spices and provide stability

required in product formation. Essential; oils are the aromatic, volatile components present in

most spices that provide the characteristic flavor and aroma to the spice. They offer a number

of advantages, as they do not impart color to the end product. They are usually uniform in

their flavoring qualities and free of enzymes.

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.



SPICE OILS AND OLEORESINS:

India’s production capacity of spice oils and oleoresins is not fully exploited and there exists

a vast untapped demand, particularly in the emerging markets. Changing food habits, demand

for natural flavor and color, and the assurance of quality and hygiene is predominantly

responsible for the increase in demand for spice oils and oleoresins.

India has unique position in the export of spice oils and oleoresins in the world. Exports of

these products have shown an annual growth of 15 percent in quantity and 41 percent in

value terms over the last five years. The major markets for spice oils and oleoresins are the

USA, the UK, Germany, France, Canada, Japan and South Korea.

Technology used:

1. At present, steam and distillation and chemical solvent extraction processes are

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-of-

the-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.



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.

Raw materials, plant and machinery

The major raw materials required are dry ground spices such as chilies, ginger, turmeric,

coriander and fine spices and carbon dioxide.

The main plant and machinery required are extractors, separators, circulation pump, pre-

heaters, and measuring and controlling systems, which can be imported from Austria. The

others, which need to be imported, are the CO2working tank and condenser from Germany.

The cooling unit, compressor, etc., can be procured indigenously.

Marketing

The company can sell its entire production in international markets, and it may initially enter

into a marketing tie up for this purpose. It may enter into an agreement for buy back of 100%

production of spice oils/oleoresins extracted from ground spices.

Location and capacity

The project is best located in the districts of Guntur, Warangal, or Nalgonda, which are rich

in chilies, or the districts of Ananthpur and Prakasam, which have abundant quantities of

coriander and ginger. Depending on the promoters capacity to invests, a project with an

installed capacity of around 1500 metric tones of spices can be set up to produce 150mt of

spice oils and oleoresins.

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.



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. Company’s

customers would be UK, Sweden, Sri Lanka, Spain, South Africa, Singapore, Poland,

Philippines, Netherlands, Mexico, Malaysia, Korea, Japan, Italy, Indonesia, Denmark,

Canada, and Belgium etc.

The key to success

Establishing and maintaining working relationships and contractual agreements with

American importers, Asian brokers and wholesalers.

Bringing the new facility to maximum production within three years of operation.

Increasing our profit margin with the use of improved technology in the facility (super fluid

technology)

Effectively communicating, to potential customers, the company’s position as a differentiated

provider of the highest quality value added provider.

Financial needs

To start up the minimum feasible capacity plant of 1 tone per day of raw material, the

company requires rs3, 00,00,000 which will be financed partly by financial partly by

financial institutions and partly through own funds. The project cost includes the working

capital margin also.



Vision statement To be the highest quality provider of spice oleoresins by procuring highest quality raw

material and efficient quality management techniques and also to be best managed company

in the spice sector.

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 company’s 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



OLEO RISE PVT LTD the proposed name of the oleoresin plant plans to produce I ton per

day of raw materials to export 96 liters of chili oleoresin in American and European markets.

Company ownership

Oleo Rise pvt ltd will be a private, family owned preparer and exporter of Indian grown

spices. It will be owned and operated by Mr.S.S.Patil Padaki.

Company locations and facilities

Oleo Rise pvt ltd will have its main warehouse and office located in Hubli. The warehouse

will have the capacity to prepare approximately 90 tons of exportable oleoresins. The

proposed facilities will also handling shipping. The main extraction plant will be situated in

Saundatti,

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).

OLEORESIN PARIKA UPTO 1000,000 C.U. OIL SOLUBLE



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%

1) PAPRIKA OLEORESINS (OIL SOLUBLE)

COLOR C.U Physical appearance

Xanthophylls Absorbance ratio T capsicum

100,000+/-1,000 Deep red liquid 63 gms/kg 0.98 to 1.00 29 to 32 gms/kg

40,000+/-500 Deep red liquid 25 gms/kg 0.99 to 1.00 12.5 gms/kg

20,000+/-500 Deep red liquid 12.6 gms/kg 0.97 to 0.99 6.6 gms/kg

PARRIKA OLEORESIN (WATER SOLUBLE) IS AVAILABLE FROM 20,000 C.U TO

50000 C.U



Sourcing

The facility will be located in Saundatti, dist Belgaum, in the state of Karnataka. The place is

very near to Badagi, the source of chili and also near to Andhra’s Guntur chilies, other inputs

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.



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.

Supercritical Fluid Technology:

A Power Tool for the Nutritional Industry

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.

Supercritical fluid extraction is an extraction process using a supercritical fluid as a solvent.

When a fluid is taken above a particular temperature and pressure (critical point of the

respective fluid), it exists in a condition called the supercritical fluid state. The Physio-

chemical properties of a fluid in the supercritical state are in between those of a typical gas

and liquid. For example, the density of a supercritical fluid can be changed by varying the

pressure on the fluid. As a result, a supercritical fluid can have a density that ranges between

those exhibited by gases to liquid-like values when the fluid is compressed at high pressures.

Carbon dioxide certainly the most popular fluid because of its physiological compatibility,

non-toxicity, inflammability, easy availability, convenient critical parameters (Tc=31 degrees

Celsius, Pc=7.38 MPa), inexpensiveness and environmental friendliness.

Supercritical fluid processing shows numerous advantages when compared to traditional

organic solvent extraction. In traditional extraction, for example, the residual solvent is

unavoidable and is usually measured in parts per million (ppm). In supercritical fluid

extraction, however, there is no residual solvent in the final product. This translates into



lower operating costs because of the reduction in post-processing steps, clean-up and safety

measurements.

Extracts processed with CO2 technology are also more desirable than extracts processed with

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 post-

processing 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 of interest. This tuning capability is extremely

important because recent trends in the herbal industry indicate an extract is often more

effective and much safer to use than the whole herb itself. Studies comparing supercritical

fluid extraction and alcohol extraction indicate that the overall extraction yield obtained by

alcohol solvents is often higher. However, the reason cited is because unwanted compounds

such as waxes, tannins and chlorophyll are also extracted. In other words, the total volume

extracted may be greater with alcohol solvents but the percentage of desired active

compound in that extract may be lower. Since supercritical fluid extraction is highly

selective, the purity of the desired active compounds in the total extract is higher and closer

to the total yield, leaving much less waste and no need for additional processing steps.

This has benefits for an array of products. For instance, many spices are known for their

therapeutic value. The active ingredients present in such spices can be grouped in two

categories. The volatile fraction essential oils is responsible for the flavor of the spice, while

the non volatile fraction oleoresins contains most of the compounds responsible for the spices

medical attributes. As opposed to processing with organic solvents or by steam distillation,

supercritical fluid technology can, in a single step, selectively extract the oleoresin and

essential oil fractions and then separate them by sequential depressurization. Furthermore,

most affinities (i.e., the material left over after extraction) have a highly marketable value

due to the content of fiber and protein, which are not soluble in CO2. Several spices,



including clove, fennel, paprika, ginger, nutmeg and chili, are processed commercially using

supercritical fluid extraction.

Once important group of bioactive compounds is antioxidants. The antioxidants used in the

food industry can be grouped into natural antioxidants and synthetic antioxidants, with the

latter including butylated hydroxyabusike (BHA), butylated hydroxytoluene (BHT), tertiary

butylhydroquinone (THBQ) and propyl gallate (PG). Both types of anxioxidants play a very

important role in the food market. The driving force behind their prominent role is the

demand for natural food ingredients free of chemical additives. Some herbs and spices

exhibit antixidant properties, including rosemary, sage, oregano, thyme, clove, allspice and

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 supercritical CO2 to high

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



low operating costs. Therefore, supercritical fluid technology is an ideal tool for the

processing of active compounds for use in food products and dietary supplements.

Table 3

Oleoresin yield (% of Pressure Extracted paprika)

Pigment yild (% of total pigment) b

Pigment concen in oeloresin (g/kg)

1 2 2000 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 18.6 31.1 4000 2.8 17.9 26.9 5000 2.3 23.1 42.1 6000 1.7 26.0 62.9 7000 1.7 27.9 66.7 Total 11.5 10.8 11.5 11.1 12.2 32.7 40.9 41.9 40.8 48.2 3000 7.9 8.1 8.5 7.8 31.4 40.6 41.7 34.7 16.4 20.7 20.4 18.4 4000 2.9 14.1 20.6 5000 2.8 29.5 44.3 6000 2.7 20.4 31.2 7000 2.5 25.9 42.6 Total 10.8 10.9 11.2 10.3 45.6 70.1 62.1 60.6 4000 9.2 9.4 9.2 42.0 34.2 41.3 18.9 15.1 18.6 5000 2.3 21.6 39.2 6000 2.4 14.7 24.8 7000 3.6 23.9 27.7 Total 11.5 11.8 12.8 63.7 48.9 65.3 5000 9.0 9.2 49.6 49.0 22.7 22.0 6000 4.4 18.7 17.8 7000 3.8 19.3 21.2 Total 13.4 13.0 68.3 68.3 6000 9.0 53.7 24.3 7000 4.4 22.6 21.4 Total 13.6 76.3



Pigment Concentrations in Extracted Paprika Oleoresins

Concentration (g/kg)

Capsorubin 3.29 0.71 5.32

Capsanthin 23.30 2.15 39.10

Zeaxanthin 9.01 1.31 14.96

-cryptoxantin 9.20 2.78 8.78

-carotene 4.92 2.01 3.02

Total 56.36 9.47 76.36

Red/yellow ratio 1.30 0.55 1.85

Advantages

��Superior Product:

��Extracts with delicacy and freshness: close to natural

��No residual solvent

��High Potency of active components

��Free of biological contaminants Longer shelf life

��Superior technology:

��Environment – 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.



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 company’s 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.

Packaging:-

20 ltrs. HDPE Pails sealed in corrugate boxes or

200 ltrs HDPE Drums or as per buyers specification.

Labeling:-

Drum is sealed and labeled as per UN regulations with a label showing manufacturer’s

name & address, net wt., gross wt, pkg. No., Batch No. and Hazard label.

Competitive Comparision

In order to differentiate the company’s 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 that adhere to

environmentally sound farming practices and avoid the use of pesticides and chemical sin

crop production.



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

company’s marketing efforts will further separate OleoRise Pvt.L td from the larger market

and from company’s 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 company’s products, company

will adhere to higher quality standards than approximately ninety- five percent of the market.

Also the company plans to produce vanilla concentrates.



MARKET ANALYSIS



Market analysis summary

Export of spice oleoresins started way back in 1971-72. Around three tonne of the product

was exported then and fetched Rs.1.41 lakh. From there it has been a success story and in 98-

99 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 value-

added spice products, which have been heartening, and point to good prospects. And the

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

and downs as is the scene now.

It is in these conditions that there is the need to have a shift and go in for exporting value-

added products, exporters say. There could be a 50 per cent drop in bulk pepper exports this

year. However, these falls could be countered with shifts to value-added products, they add.

Availability of quality material could mean a massive hike in export of value-added spice

products.

Export of spice oleoresins started way back in in 1971-72. Around three tonne of the

eproduct was exported then and fetched Rs.1.41 lakh. From there it has been a success story

and in 98-99 touched 2,750 tonne to fetch over Rs.300 crore.



Exports of value-added spices such as curry powder, spices oils and oleoresins continued to

maintain consistency and showed an upward trend. Curry powder shipments moved up to

3,250 tonnes valued at Rs.25.07 crore from 2,800 tonnes worth Rs.20.8 crore. Spice oils and

oleoresins increased to 2,175 tonnes valued at Rs180 crore from 2,060 tonnes worth

rs.177.04 crore, they said. However, mint products experienced a decline to 4,070 tonnes

valued at Rs.160.18 crore from 4,583 tonnes worth Rs.180.12 crore.

Attributing the drop in exports of chili, fenugreek and cumin to good production of other

orgins and low prices, Mr. Ramkumar Menon, Chairman, All India Spices exporters Foru,

told Business Line, “we are expecting good crop this season by January or February which

will make our product competitive and improve the exports.”

China is a major competitor in Chili, and they had a good crop. Added to this, Pakistan,

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

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 % 13 13.08 13.1 12.98 14.2 12

Total % 27 28.08 29 29.98 31.5 27&

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,



Trend In India’s Spice Exports

With the efficient working of the Spice Board of India the recent trend in the spice market is

just out-standing.

Board has formulated and implemented a three-tier quality certification programmed

conforming to HACCP. Award of Spice House Certificate for good manufacturing practices,

award of Logo for quality of the product and accreditation under ISO 9000 for international

acceptance are the three certification systems adopted by the Board. Yet another area of

activity centered upon by the Board is Value Addition. India can now boast as the monopoly

supplier of spice oils and oleoresins the world over. In case of curry powders, spice powders,

spice mixtures and spices in consumer packs, India is in a formidable position. The consistent

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.



CHART

0 2000 4000 6000 8000GIN

GER

NUTMEG & M

ACE

CARDAMOM (SMALL

)VANILL

ACUMIN

CURRY POW

DER

CORIANDER

TURMERICPEPPERCHILLI

OILS &

OLE

ORESINS

MINIT

PRODUCTS

Series2

Series1

Rest of theworld

India

Rest of theworld

India

(QUANTITY) (VALUE)



Estimated export of spices from India

During APRIL –JUNE 2004

Item Quantity

(Tonnes)

Value

(US $ MIL) Pepper 4,600 9.03

Cardamom (small) 150 1.30

Cardamom (large) 225 0.69

Chilli 51,000 41.41

Ginger 1,450 1.83

Turmeric 16,500 13.74

Coriander 17,750 8.90

Cumin 6,000 9.50

Celery 1,450 1.01

Fennel 3,550 2.62

Fenugreek 6,300 2.58

Other seeds (1) 7,500 3.40

Garlic 400 0.33

Nutmeg & Mace 265 1.09

Vanila 8.83 4.19

Other spices (2) 6,500 5.07

Curry powder 2,750 4.86

Mint Products (3) 2,925 24.24

Spice oleoresin and other oils 1,950 35.34

Total 131,274 171.14



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 Year’s

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 year’s 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

without warning. One must proceed cautiously. The adoption of an early ‘positioning’

strategy is critical to Bolster performance, as is adherence to new legislation regarding

regulations for the development of flavors.



Item wise exports from India:

QT

Y

VALUE QTY VALUE QTY VALUE

(M

T)

(Rs. In

lakhs

(MLN

US $)

(MT) (RS.

LAKHS)

(MLN

US $)

(MT) (RS.

LAKHS)

(MLN

US $)

2001-02 2002-03 2003-04 (E)

22877.36 20368.79 42.81 21608.58 17887.98 36.99 16700.00 14350.50 31.2 Om (SMALL) 1030.91 6167.80 12.96 681.83 4707.42 9.73 690.00 3301.00 7.19 OM (LARGE) 1576.84 2391.66 5.03 1449.53 2057.08 4.25 800.00 1107.00 2.41 69997.50 25244.02 53.06 81021.50 31514.68 65.16 81500.00 35511.25 77.39 6464.20 2311.47 4.86 8461.43 2396.59 4.96 5000.00 2340.50 5.10 C 37777.58 9073.71 19.07 32402.30 10337.99 21.37 34500.00 12751.88 27.79 ER 15924.80 4833.87 10.16 18064.95 5564.64 11.51 21000.00 7103.75 15.4 17247.70 14818.03 31.14 10422.07 9326.33 19.28 6700.00 4983.75 10.8 4251.01 1236.59 2.60 3959.95 1225.43 2.53 4400.00 1389.00 3.03 4374.41 1695.82 3.56 4159.63 1783.75 3.69 5200.00 2143.00 4.67 EK 6582.11 1617.14 3.40 13192.82 2551.06 5.27 7500.00 1660.75 3.62 ED SPICES 9978.51 2790.79 5.87 14919.85 3617.36 7.48 10000.00 2324.75 5.07 1105.59 409.78 0.85 1538.77 698.68 1.44 3500.00 1321.13 2.88 & MACE 1346.05 1990.19 4.18 1380.56 2847.36 5.89 1450.00 2731.53 5.95 27.30 1750.61 3.68 25.17 2225.72 4.60 26.32 3606.35 7.86 CE 20529.48 6516.57 13.70 23897.69 7383.12 15.27 24000.00 7663.00 16.70 MIXTURE 6305.41 5052.61 10.62 8491.90 6893.67 14.25 7600.00 6508.13 14.18 PRODUCTS (3) 11295.45 48474.34 101.88 13589.16 56557.94 116.94 11250.00 42505.00 92.63 4510.42 37311.10 78.42 4838.81 39094.23 80.83 4750.00 37206.25 81.08 243202.63 194054.88 407.85 264106.50 208671.02 431.45 246566.32 190508.50 415.



Industry Participants:

Exporters of Organic Spices

Peermade Development Society

Kandhamal Appex Spices associations for Marketing (KASAM)

Wynad Social Service Society

Samanwita

Health of People and Environment (HOPE)

Exporters with Spice House Certificate

Accelerated Freeze Drying Co. Ltd., Willingdon, Island.

Akay flavours & Aromatics Ltd., Cochin.

Allkoshys All Spices

Asis Herbex Ltd.

Arjuna Natural Extracts Ltd., Alwaye

AVT Mccormick Ingredients Ltd., Cochin

Bolst’s Indian Condiments (P) Ltd, Bangalore.

Cochin Spices Ltd, Cochin

Devon Foods, Kottayam

Dindigul Capsicum resins Pvt. Ltd.

D.V. Deo Aromatics Pvt. Ltd., Cochin



D.V. Deo, Cochin,

Eastersn Foods, Adimali

Eastern spices & Exporters, Adimali,

Enjayes Spices and Chemical Oils Ltd., pathanamthitta,

Esquare Food Products Pvt. Ltd., madras,

GDPA Foods Pvt. Ltd.

General Commodities Ltd., Bangalore.

Global Natural Products Ltd., Securnderabad

Global Spices PVt. Ltd., Palakkad.

G.R.K. & Co

Harmony Spices Ltd., Cochin,

Integrated Spices and Foods Ltd

Jain Irrigation Systems Ltd.

Jamandas, Madhavji International Ltd., Bombay

Kancor Flavours & Extractss Ltd., Angamaly

Kays Spices & Agro Industries, Pathanamthitta.

Kedar Spices ltd

Kisher Spices Company

Lanco Pakers, Erode.

Madhur Food Products Ltd.

P. Mittulal Lalah & Sons, Madras



M.M. Poonjiaji Spices Ltd.

Mount Sahiya

M.T.R. Foods Ltd

Mas Enterprise Ltd

Naturite Agro Products (P) Ltd., Hyderabad.

Om Oil & Flour Mills, Cuttack,

P.C. Kannan & Co.

Plant Lipids (P) Ltd., Kolenchery

Ramdev exports

Rani Food Products, Kozhikode.

Sami Labs Ltd.

Sanat Products Limited

Sara Spices, Kizhakkambalam

Sark Spices Products Pvt. Ltd., Alleppey.

South India Produce Co

Shree Balaji Gums & Spice Stuff Private Limited, Mumbai

Sipco Masalas, Cochin,

S.P.G. Ramaswamy Nadar & Sons, Tamil Nadu

Sijmack Oils PVt. Ltd., Cochin,

S.V.S. Natarajan & Son

Synthite Industrial Chemicals Ltd., Kolenchery/

Tata Tea Ltd., Cochin.



Thekkady Agro Products Exporters.

Uniterd Aromatics Pvt Ltd., Pathanamthitta

Vallabhdas Kanji Ltd., Alleppey

Exporters with Indian Spices Logo

A.V. Thomas & Co. Ltd., Cochin,

Bolst’s Indian Condiments (P) Ltd., Bangalore

Devon Foods, Koottayam

Eastern Overseas Limited, Bombay.

Eastern Foods, Adimali

Global Spices Pvt. Ltd., Palakkad

GDPA Foods PVt. Ltd

G.R.K. & Co


Kays Spices & Agro Industries, Pathanamthitta.

Lanco Packers, Salem.

P. Mittulal Lalah & Sons, Madras,

Madhur Food Products Ltd

M.V.J. Foods (India) Pvt. Ltd, Cochin

M.T.R. Foods Ltd.

Ramdev exports, Ahmedabad




Sara Spices, Kizhakkambalam

Sipco Masalas, Cohin.

Exporters located in EPZs

Cochin Spices Ltd., Cochin

D.V. Deo, Cochin

Exporters with Brand Names

Agarwal Spices & Food Processors Private Ltd., Orissa

A.G. Exports, Madras

Allanasons Ltd., Bombay,

ADF Foods Ltd.

American Dry Fruit Stores, Bombay

Bolst’s Indian Condiments (P) Ltd., Bangalore

Buena Vista International Pvt Ltd., Cochin

Cochin Spices Ltd., Cochin

Cookme (Spice ) Ltd., Calcutta

Concert Spices & Exports Ltd., Cochin

Devon Foods, Kottayam

Eastern Overseas Limited, Bombay



Eastern Foods, Admali

Enjays Spices & Chemical Oils, Kottayam, Pathanamthitta.

Esquare Food Products Pvt. Ltd., Madras.

Fibag Spices Pvt. Ltd

GDPA Foods Pvt. Ltd.

G.R.K & Company, Alleppey.

Global Spices (P) Ltd

Hindustan Lever Limited

India’s Spice ‘N’ Flavor


J.Harkishandas & Co., Bombay

Krishna Chandra Dutta (Spice), Calcutta

Keshav Exports Pvt. Ltd., Bangalroe

Krishnachandra Duta (Cookme) Pvt. Ltd.

Kusum Masala

Lanco Packers, Erode.

P.Mittulal Lalah & Sons, Madras

Madhur Food Products Ltd.

Mahashian-Di-Hatti (P) Ltd., Delhi

M.M. Poonjiaji Spices Ltd., Mumbai

Moolans International

M.S. International, Bombay



M.V.J. Foods (India) Pvt.Ltd., ernakulam.

M.K. Agro Exports, Bombay

M.J. Associates

M.T.R. Foods Ltd

Namitha Corportaiton, Cochin.

Nanji Topanbhai & Co., Cochin.

Omni Exports Inc., Cochin.

Orion Traders, Bombay.

Om Oil & Flour Mills, Cuttack.

Parekh Brothers, Calicut.

Parekh Sons, Calicut/Cochin.

Paam Eatables Ltd., Delhi

Pravin masalewale

Rajesh Spices, Cuttack, Orissa

Ramdev exports


Sami Chemicals & Extracts Ltd., B’lore

Sara Spices, Aluva.

Shingal Brothers, Cochin

Sipco Masalas (P) Ltd., Cochin.

Spice ‘N’ Flavour Pvt. Ltd.,

S.P.G. Ramaswamy nadar & Sons, Tamil Nadu.

Sunrise Spices Limited



Tata Tea Ltd., Cochin

A.V. Thomas & Co. Ltd., Cochin.

Thadathil Trade And Exports Co., Cochin,

Tsai Tea Enterprises Pvt. Ltd., Bangalore

Taj Spices, Hyderabad

Tit-Bit Foods (India) Pvt. Ltd., Mumbai.

Universal Oleoresins, Cochin.

Vallabhdas Kanji Ltd., Alleppey.

Verma Overseas Pvtl Ltd.

Vimal Spices, Cochin.

Jabs International Pvt. Ltd.



STRATEGY



Strategic pyramids

Our main strategy is to communicate the unique and desired attributes of the company’s

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

doing business. The tactics we will use to communicate these strengths include, personal

selling, targeted print advertising, and improved communication capabilities via information

system improvements and a sophisticated website.

As tactics below the pyramid, we have identified three specialty publication in the United

States and two in Brazil in which we will run print ads, We also plan to increase personal

selling efforts to additional American importers. Part of the personal selling will include

invitations to importers to visit our facilities, at our expense.

Competitive Edge

Oleorise Pvt Ltd ‘s competitive edge shall comes from the advantage of having established

relationships with American importers, and Indian spice growers, spice brokers and

wholesalers.

In addition, prompt preparation and shipment provides importers with a product that is up to

one month fresher than sold by many exporters.

Marketing Strategy

Oleorise Pvt Ltd marketing strategy will include the use of targeted print media advertising

and direct selling to importers in the United States and European union. We will capitalize on

relationships with importers who will state their willingness to contact their domestic market

and recommend Oleorise Pvt Ltd.’s products. We will position ourselves as a differentiated

provider of the highest quality oleoresins. The primary goals of all marketing efforts will be

to communicate this to potential customers.



Marketing Programs

Our most important marketing program is an increase in personal selling combined with

targeted direct mail and print advertising. The program is intended to establish contractual

agreements with, increase brand awareness of our product in the United States, and

communicate our position as a provider of the highest quality oleoresins in the market.

Another key marketing program is the development of a sophisticated Website. The goal of

this program is to increase our presence on the world wide web and provide additional means

of communication and customer data collection.

Because Oleorise Pvt Ltd adheres to higher quality standards, the price of oleoresins is

slightly higher (four to nine percent) than the market average. The important market largely

determines the price of imported oleoresins in the United States. Spices that do not meet

Oleorise Pvt Ltd ‘s quality standards are resold on the Indian market at the current market

price.

The Price list

Chili Oleoresins 20$/Litre

Pepper Oleoresins 125 $ / Litre

Turmeric Oleoresins 75$ / Litre

Garlic Oleoresins 80$ / Litre

Promotion Strategy

Relationships are key to success in the export business. Importers shall have an authority on

several occasions to visit the Oleorise Pvt Ltd’s facility, family home, and farms from which

spice is purchase. Additional accounts and contacts with importers will be established and

maintained through personal contact. Personal selling will remain our most important means

of promotion. In addition to personal selling Oleorise Pvt Ltd will identify several specialty

publications within which print advertisement will run. Direct mail, in the form of personal



letters will also be sued to communicate with existing and potential clients. Our budget for

promotion activities is as follows:

o Personal Selling which includes phone expenses, travel for Oleorise Pvt Ltd’s

employees and for importers who we invite to India 1 lakh annually.

o Print Advertising in three specialty publications and direct mail: 12,000 monthly.

o World Wide Web presence:75000 to produce a new site and annually to maintain the

site.

Distribution Strategy

Distribution is one of the greatest challenges faced by Oleorise Pvt Ltd. Distribution costs for

internal sales will be absorbed by the customer but distribution costs of exports will be

absorbed by the company. Increasing the volume of the exports make the company eligible to

receive reduced fees and helps ensure that trucks and rail cars are running at maximum

capacity.

Apart from the main selling idea through direct marketing, OleoRise.Pvt L Ltd will try to

establish strategic alliance with the distributors in different countries who shall market in

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.



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

maximum for production capacity in 2001 representing a thirty-three percent growth over the

previous year.

Personal selling

Through personal contact we need to confirm in writing orders for larger quantities of our

product from American and European importers and wholesalers. In addition we need to

establish sales agreements with at least six, possibly ten, additional American importers.



Sales Forecast

Unit Sales 2004 2005 2006

Export 13440 litres 14784 16262.4

Other 0 0 0

Total Unit sales 13400 14784 16262.4

Unit Prices (per

Kg)

2004 2005 2006

Export $20.0 $22.18 $28.29

Other $0.00 $0.00 $0.00

Sales

Export 2688005 327909.12 460063.3

Other $0 $0 $0

Total Sales 2688005 327909.12 460063.3

Direct Unit Costs 2004 2005 2006

Export 535.71 Rs 563.5 6001

Other $0.00 $0.00 $0.00

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



Strategic Alliances

Our most valued alliances will be those we shall develop with American importers. They

have the ability and willingness to purchase larger quantities of our products and recommend

us to other importers. Additional alliances with trucking contractors and the Spice Board of

India will of prime importance.



Research Paper

Condiment paprika research conducted in India with reference to this i compare this to our

country as it plays very important role before market research as to know the growing

condition and availability of materials.

Abstract: Indian condiment chilly/capsicum plant improvement research is ages old. The

production and processing industry is in its infancy. The research is producing condiment

chilly/capsicum cultivars suitable for a highly mechanized crop husbandry system, with

genes for early lignifications of the stem, fruits for detachability of the calyx, high dry matter

and pigment content. A potential hybrid seed production system is discussed.

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



from the use of leaded petrol. Some unscrupulous companies were selling adulterated paprika

that created bad publicity for the industry. The Indian authorities had to destroy

approximately 25,000 tons of adulterated paprika and the paprika export industry declined

significantly as a result. Exports to their traditional customers such as Czech Republic, Japan

and Germany had nearly stopped ten years ago

[3]. More recently, both local sales and exports of whole paprika and paprika products had to

be stopped due to aflatoxin contamination. This was caused by dilution of the Indian product

with paprika imported from South America. In 1994, the senior author received a private

communication from a Indian wheat breeder colleague advising him of the problems that the

Indian condiment paprika industry was facing. The Indian Vegetable Crop Research Institute,

the Condiment Paprika Unit and the family company of the senior author, ASAS Pty Ltd.

This authorized ASAS Pty Ltd to be the sole representative of the Paprika Unit in Australia

and in the South Pacific region.

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 genotype-environment

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.



Research & Development Corporation.

I. The groundwork

ASAS Pty Limited was the applicant and later the grantee for the research project under the

title “Condiment Paprika Breeding, Harvesting and Commercialization”. The aim of this

project was to introduce and further develop genetic material of condiment paprika to

produce cultivars with high initial pigment (>200 ASTA) and dry matter content (>18%)

suitable for direct seeding and mechanical harvesting. Later aims were to develop a

commercially viable integrated production, harvesting and processing system for identified

Markets. Initial pilot tests strongly indicated that under Australian environmental conditions,

Indian cultivars generate considerably higher pigment content in their fruits than in their

country of origin. Whereas most of the Indian milled paprika on the world market is around

120-130 ASTA (American Spice Trade Association method 20.1) the same cultivars grown

in Australia were producing on a semi commercial scale 180-250 ASTA in milled product.

The first two samples were received by the senior author while visiting India. The above

Figures clearly show large differences. The question may be asked why there are such big

differences between the imported and the Australian grown milled product. The answer was

simple in the case of samples collected from supermarkets in Australia. Importers were

buying the cheapest available product.

The retail sample “5” may have been botanically derived from Capsicum, but was in fact a

residue of milled product from which the oleoresin had been extracted! The quality of this

imported product was inferior. Australians are not generally known to be paprika

connoisseurs; only those immigrants familiar with better grades of milled paprika would

Know the difference and would wish to purchase a high quality product.

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.



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.

A number of Indian cultivars have a determinate or semi-determinate habit. It was found that

the cultivar Kalocsai 801 produced an acceptable yield and a large proportion of the fruit can

be removed at the first harvest operation. This trait was utilized in our breeding program. To

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.

Pigment content is usually expressed on a scale specified by the American Spice Trade

Association (ASTA method 20.1). Extractable pigment, which measures total pigment

content, is measured using a spectrophotometer and designated in ASTA units with higher

numbers indicating brighter color. We are determining the extractable color in paprika by

measuring the absorbency of an acetone extract by a spectrophotometer capable of accurately



measuring absorbency at 460nm. Our results obtained this way are acceptable for breeding

and the correlation between the BRI Australia Ltd, an accredited laboratory, results and our

tests gave a correlation coefficient of r = 0.85. Milled paprika and its extract, oleoresin, are

used as a natural coloring source in a wide variety of foods, cosmetics and drugs. Oleoresin is

extracted from milled paprika using organic solvents, eg. hexane, supercritical CO2 and

petroleum ether. When oleoresin is extracted from pungent capsicums or chillies it is called

“Capsicum Oleoresin”. Besides the food industry it is mainly used by security organizations

for crowd control. When the oleoresin is extracted from non-pungent paprika it is labeled as

“Paprika Oleoresin”.

The extracted “Paprika Oleoresin” has a concentrated flavor and aroma of the original milled

product. It can be diluted according to the end use requirements. The great advantages of the

oleoresin over the original milled product are It is free from pathogens and microbiological

infections; it is a sterile extract �,W�LV�D�FOHDQ�SURGXFW��LW�LV�IUHH�RI�SK\VLFDO�FRQWDPLQDQWV�� 7KH�concentrate can be easily distributed in media such as oil or water. It has also a longer shelf

life than the milled product and is free from deterioration caused by pests or moulds because

oleoresin has such a large advantage over the traditional milled product it was decided that

for India we should concentrate on creating cultivars with high pigment content and the

ability to produce high pigment yield per unit area.

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 genotype-

environment 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



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 climatic conditions and utilizing a highly mechanized

production system, we had to consider among other factors, high germination energy, a

strong upright stem, fruit setting well above the ground, synchronized flowering together

with a semi-determinate growth habit, snap-off pedicel

with detachable calyx, fruits with high dry matter (18% +), very high pigment content

(ASTA 200+), high yield and disease resistance. The paprika cultivar development was based

mainly on the classical pedigree method, and to save time and space, it was combined with



single seed descent (SSD; Fig. 1) [10]. The SSD method is widely applied in cereal breeding

programs and the senior author successfully used it earlier in

wheat and ornamental Capsicum improvement work. With this system, two or three

generations could be advanced in one year. We are using negative and positive selections

while using the SSD method. In overseas condiment paprika breeding programs, the

mechanization requirements were neglected; therefore we had to build completely new plant

types. The foundation was available in reasonably high quality Indian cultivars; nevertheless,

they were not suitable for a mechanized production system and their pigment contents could

be further improved.

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 paprika’s 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



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 submitted three selections for plant variety protection, 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.



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

a consequence, in Europe, 300 metres [20] is the compulsory separation distance for two

cultivars of seed production; in contrast in India we may need 2-3 km or even greater

distances due to the activity of the native bees. It is important to reduce the cost of hybrid

seed. We thus seek to use a designed system of sterile male paprika lines where the

identification of sterile male plants is easy, and can be determined in the seedling stage. The

selected sterile male plants can be propagated by micro-propagation or as cuttings. These

male sterile plants would be planted in the field together with the pollen source and

pollination would take place by native bees. The improvement programs are based mainly on

exploiting natural sources of germplasm by means of selection and hybridisation. Heterosis

breeding has received considerable attention in crop production. The heterosis effect in

capsicum manifests itself in higher early (yield at first harvest) and total yields, improved

chemical composition, as well as other morphological features of the fruits. There is also

significant heterosis for seed production in capsicum hybrids made by using male sterile

systems.

In male sterile Capsicum plants versus fertile ones the anthers are absent or shrunken, and

contain either no pollen or only a small amount of viable pollen. As in may other species;

there are two different types of male sterility in Capsicum, genetic and cytoplasmic. Genetic

male sterility is conferred by nuclear genes inhibiting the normal development of anthers and

pollen, usually single recessive (ms) factors. Cytoplasmic male sterility is determined by

mutant genes in cytoplasmic organelles, and is transferred only through the egg. The action

of cytoplasmic genes for male sterility may be modified by the action of fertility restoring

genes in the nucleus: it is the interactive system that is exploited in hybrid production in

many crops.



Male sterile (a) and male fertile (b) paprika flower

A wide range of methods have produced male Sterility in Capsicum. The most widely used

Treatment for induction of male sterility is ionizing Radiation, such as gamma- or X-rays.

There have Been several investigations to Determine the optimal conditions for mutagenesis

By chemical agents. Chemically induced male sterility mutants were incomplete in many

cases, climate dependent, and invariably accompanied by unfavourable effects on the

development of plants, and also caused high ovular sterility. Gametocides can induce a

temporary male sterility in several crops, including Capsicum. The use of a gametocide

requires uniform plants in the same developmental stage. Weather events can influence the

timing of application and the effect of gametocides at the optimal treatment stage. There is

also the added problem of gaining a license for the use of gametocides. Interspecific hybrids

between species of Capsicum can be made with varying degrees of success. The hybrids can

be sterile in paprika due to chromosomal or plasmon-genome incompatibility. There are

several known male sterile lines used in research programs. These differ from each other in

agronomic characters, growing time, combining ability, plant growth habit and fruit type.

They carry various male sterility genes.

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



flowering time were found to be markers for male sterility though male sterility can only be

detected at the flowering phase. Our aim is to select sterile male plants at the seedling stage,

so that only sterile male plants would be planted into the field along with the pollen source.

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 micro-

propagation [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].



Rooting percentage of cuttings derived from male sterile lines during field trials a cost

benefit study will be carried out to determine the economics of hybrid paprika seed

production in India using this system. This will enable us to determine the most efficient

method of large-scale hybrid paprika seed production within a reasonable price bracket.

Findings and Conclusion

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

production and have a high pigment and dry matter content.

Gautham-03103-OLEORESIN

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