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SODIUM CHLORATE

CONTENTS

SECTION I PRODUCT CHARACTERISTICS AND SPECIFICATION SECTION II PRODUCT APPLICATIONS SECTION III INDIAN MANUFACTURERS SECTION IV IMPORT/EXPORT LEVEL SECTION V PRICE DETAILS SECTION VI INDIAN DEMAND SECTION VII BROAD OUTLINE OF MANUFACTURING PROCESS SECTION VIII RAW MATERIAL REQUIREMENTS, UTILITY

AND AVAILABILITY SECTION IX GLOBAL SCENARIO SECTION X DISCUSSIONS ON ECONOMIC CAPACITY, PROJECT COST AND PROFITABILITY PROJECTIONS SECTION XI SWOT ANALYSIS

SECTION XII FACTORS INFLUENCING THE POSITION FOR A NEW INDUSTRY AND RECOMMENDATIONS

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SECTION - I

PRODUCT CHARACTERISTICS AND SPECIFICATION 1.1. General Details Appearance Colourless, odourless crystals or white

granules Chemical formula NaClO3 Molecular weight 106.45 Purity Around 99% Odour Odourless Density 2.5 g/cm3 Melting poin

t

248 deg.C Solubility in cold water Soluble in about 1 ml Solubility in boiling water 0.5 ml

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SECTION - II

PRODUCT APPLICATIONS

Application sector

As bleaching agent in pulp and paper manufacture.

Other applications:- In matches Tanning and finishing leather. As an oxidiser in the manufacture of dyes and also used in printing fabrics.

To produce chlorine dioxide.

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SECTION - III

INDIAN MANUFACTURERS

General Details It is possible to produce both Sodium Chlorate and Potassium Chlorate in the same facilities, if the plant would be designed accordingly. Indian Producers * Chemfab Chlorates Ltd. Cuddalore Main Road, Abishegapakkam, Pondicherry-605 007 The chlorate production facility near Pondicherry has been expanded to about 3,500 tonnes per year. * TCM Ltd., (Formerly Travancore Chemical & Mfg. Co. Ltd.,) Factory 1 :P.B. No. 19, Kalamassery - 683 104 (Kerala) * Shree Chlorates 101-102, Block "B" Radhakrishna Complex, 10/1, Manoramaganj, A.B. Road, Indore-452 001 * Chemofine Industries, 6/258, S.F.S. Mansarovar Jaipur-302 020

Indian installed capacity Around 9000 tonnes per annum

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SECTION - IV

IMPORT/EXPORT LEVEL

4.1. Present import level 3500 tonnes per annum Countrywise Imports Period April 2001 to March 2002 Country Quantity in Kgs

Finland 2760328 France 321666 German F REP 400000 Sweden 21000 4.2. Present export level Around 25 tonnes per annum Countrywise Exports of Sodium Chlorate Period April 2001 to March 2002 Country

Quantity in Kgs

Albania 19619 Tanzania REP 6000

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SECTION - V

PRICE TRENDS

Basic price Rs.30000 per tonne Taxes and duties Extra as applicable

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SECTION -VI

INDIAN DEMAND

User sector Sodium chlorate is predominently used in the pulp and paper industry as a bleaching aid. The paper has to be bleached to increase the whiteness of the paper and to remove lignin components of the paper. The bleaching process is one of the environmental bottlenecks in the paper process. However, by choosing the right chemicals, much improvement can be achieved here. Bleaching agents used in the paper sector Oxidative reagent Chemical formula

Industrially available Chlorine Cl2 Sodium hypochlorite NaOCl Calcium hypochlorite Ca(OCl)2 Chlorine oxide ClO2 Hydrogen peroxide H2O2 Oxygen O2 Ozone O3 Hardly available Sodium perchlorate NaClO4 Per acetic acid CH3COOOH Chlorine monoxide Cl2O Hydrogen H2 Potassium ermanganate

KMnO4

De-oxidative reagent Chemical formula Industrially available Sodium dithionite Na2S2O4 Hardly available Zinc dithionite ZnS2O4 Sodium bisulphite NaHSO4 Sulphur dioxide SO2 Sodium borohydride NaBH4 Calcium dithionite CaS2O4

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Comparsion of substitution products for bleaching in paper industry The following comparison of important properties and common applications of such substitution products namely chlorine compounds, ozone and hydrogen peroxide highlights the importance of the products and their comparative merits. Characteristics Chloride Sodium

hypochlorite Stable bleaching powder of available chloride 60 to 70%

Chlorine dioxide

Ozone Hydrogen peroxide

Chemical formula Cl2 NaOCl CaOcl granules ClO2 O3 H2O2 Form Liquid gas solution - Gas Gas Liquid Commercial strength 100 12-15 70 Upto 0.35 2 35-70 Percent stability Stable tank cars Light Yellow

unstable Liquid Stable

Greenish yellow gas explosive high

Unstable Stable

Toxicity to Microorganisms

High High High High High Medium

Hazards associated with handling and use

High Medium Medium High High Medium

Corrosion High Medium Medium High High Low Deodorizing High Medium Medium High High High Cost Low Medium Medium Medium High High Applications Control of slime

growth H2S and odour, ROD reduction, fly control, sludge bulking and foaming control ammonia oxidation disinfection

Control of slime growth disinfection

Control of slime growth disinfection

Control of slime growth and odour disinfection

Odour control BOD reduction oxidation of refractory organic compounds disinfection

Control of slime growth H2S and odour, sludge bulking

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Use level of Sodium chlorate in Indian paper sector Traditionally, liquid Chlorine has been used for bleaching purposes in Indian paper mills. However, in recent times, considerable objections have been raised all over the world by the environmentalists about the use of Chlorine in paper mills. Considering such environmental factors as well as efficacy levels and factors of economy, number of substitutes such as Stable Bleaching powder of available Chlorine 60 to 70%, Chlorine dioxide and Hydrogen peroxide are now being used. In India, the use of Chlorine dioxide and Hydrogen peroxide are still not extensive. Several paper mills are now switching over to Stable Bleaching powder of available Chlorine 60 to 70% and Chlorine dioxide for bleaching purposes. It is the general view that the use of Chlorine in paper mills for bleaching purposes would ultimately be given up all over the world; sooner in developed countries and perhaps latter in developing countries. Chlorine dioxide is the likely substitute in the near future. Large paper mills like JK Paper mills are presently planning to use Chlorine dioxide in large quantities. Chlorine dioxide considerably reduces the environmental impact of chlorinated organic compounds in effluent from the bleaching plant. Sodium chlorate, which is used as a bleaching agent in pulp and paper mills, is rapidly gaining market share as an alternative to elemental Chlorine, By the end of this year EPA (Environmental Authority) is expected to finalise its cluster rules, which will define regulations on emissions from pulp and paper plants. These will probably include an eventual ban on elemental Chlorine as a bleaching agent giving a boost to Sodium chlorate, which is elemental Chlorine free. Demand level for Sodium chlorate Growth rate in demand The growth rate in demand is likely to be in the region of 8 to 9% per annum in the coming years, in view of the environmental compulsions facing pulp and paper industry.

Estimated demand Around 11000 tonnes per annum

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SECTION - VII

BROAD OUTLINE OF MANUFACTURING PROCESS

General details Sodium Chlorate is manufactured by the electrolytic oxidation of Sodium Chloride using Titanium substrate anodes. Sodium Chloride is thrown out from the solution by evaporation and Sodium chlorates crystallizes on cooling. Sodium Chlorate is produced from an acid solution of Sodium Chloride, which is heated and electrolyzed , with Sodium chlorate crystallising out. Energy accounts for more than 45 to 50% of the manufacturing cost by global standards. By products The only byproduct in the manufacture of Sodium Chlorates is Hydrogen gas. Hydrogen comes out of chlorate cells contaminated with about 3% Oxygen and 0.5% of Chlorine. In Indian factories, Hydrogen is being blown out, after scrubbing the Chlorine by alkali. In developed countries abroad,the Sodium Chlorate units use Hydrogen for burning as fuel or as raw material for producing Hydrogen peroxide and other chemicals or is compressed and sold in cylinders. The recovery of Hydrogen involves substantial investment which may not be worthwhile for small units. Outline of manufacturing process The manufacture of Sodium chlorate is carried out by the electrolysis of saturated acidulated brine containing some Sodium dichromate (about 2 gms per litre of brine). The Sodium dichromate present in the electrolyte reduces the corrosive action of hypochlorous acid formed by the hydrochloric acid present. The brine solution (solution of common salt NaCl) is first made free from any Ca and Mg impurities and introduced into an undivided rectangular steel cell, the temperature of which is maintained at 40 deg.C by cooling water. At Cathode, OH- ions liberated by the reduction of water react with Na+ ions to give Sodium hydroxide. Chlorine liberates at Anode.

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Hence the products of electrolysis are actually Sodium hydroxide and Chlorine at the Cathode and Anode respectively. NaCl ---------> Na+ + Cl- <------- 2H2O + 2e- ----------> H2 + 2OH - At cathode <--------- Na+ + OH- NaOH Cl- - e ------------> Cl Cl + Cl <----------> Cl2 At anode Since the cell is undivided (contains no diaphragm), the products of electrolysis (NaOH and CL2) react to form Sodium hypochlorite, which is then oxidised to Sodium chlorate. NaCl + 3H2O --------> NaClO3 + 3H2 Source of technology

* Central Electrochemical Research Institute (Council of Scientific & Industrial Research) Karaikudi - 630 006, TamilNadu. Major plant and machinery suppliers Name of the equipment

Name of the company

HT switch panel, comprising of 1 No. Incoming 11 kv OCB complete with ammeter, volmeter, selector switches for earth fault and instaneous and oil switches (2) for rectifier transformer (2) for auxiliary transformer.

Switzer Instruments Ltd. No.9, South Boag Road, T. Nagar, Chennai-600 017 Flameproof Equipments Pvt. Ltyd., House No.28, 1st Floor, V Cross Street, Lake Area Nungambakkam, Chennai-600 034

Rectifier transformer for 4000 A DC output with 40-80-120 volt regulation regulator controlled rectifier panel, control cubicle and necessary batteries for control voltage supply.

The Andrew Yule & Company Ltd. (A Govt. of India Enterprise) Yule House, 8 Dr. Rajendra Prasad Sarani Calcutta-700 001 Bharat Bijlee Ltd. P.B. No.100, Belapur Road Kalwa, Thane-400 061

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Transformer suitable for out out door location 100 kva transformer 11 kv/440 v

The Andrew Yule & Company Ltd. (A Govt. of India Enterprise) Yule House, 8 Dr. Rajendra Prasad Sarani Calcutta-700 001 Bharat Bijlee Ltd. P.B. No.100, Belapur Road Kalwa, Thane-400 061

Motor control centre for MV distillation to various load centre

Electrical contractors

Copper busbars for rectifier to cells, interconnection of cells and back to rectifier transformer to suit the layout and ration BI/P

Electrical contractors

Cables 11 kv/433 v pilc cables to the requirement of load centres BI/P

Flameproof Equipments Pvt. Ltyd., House No.28, 1st Floor V Cross Street, Lake Area Nungambakkam, Chennai-600 034 Sagar Steel Pvt. Ltd., 39, SNS Plaza, 41, Kumara Krupa Road, Bangalore-560 001

Sundry items like bush button stations cable glands etc.

Flameproof Equipments Pvt. Ltyd., House No.28, 1st Floor V Cross Street, Lake Area Nungambakkam, Chennai-600 034 Sagar Steel Pvt. Ltd., 39, SNS Plaza, 41, Kumara Krupa Road, Bangalore-560 001

Pulveriser with motor and other accessories (capacity 120 kg per hour)

ACE Pack Machines 23, V.N. Industrial Estate Bharathi Colony,Near Athiparasakthi Temple Peelamedu, Coimbatore-641 004 Frigmaires Engineers PO Box 16353, 8, Janata Industrial Estate Senapati Bapat Marg Opp Phoenix Mill, Lower Parel (W) Mumbai-400 013

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Rectangular MS cell tank with welded titanium anodes and feed inlet pipe, effluent outlet etc.

Shree Krishna Fabricators Pvt. Ltd., A/403, Raj Crescent, Royal Complex, Eksar Road, 1st Circle, Borivali (West) Mumbai-400 091 Texel Fabricators Pvt. Ltd., 335, Sidco Industrial Estate, Ambattur, Chennai-600 098, Tamil Nadu

Electrolytic grade copper busbars for interconnecting the cells and also the main busbar

Electrical contractors

Self priming special pumps Akay Industries Hardevi Chambers 90, Pantheon Road P.B. No.3020, Chennai-600 008 Sam Industrial & Pumps Co. Pvt. Ltd., P.O. No.7006 Metupalayam Road, Coimbatore-641 043

Centrifuge

Hydrabad Met Chem. Pvt. Ltd., 34, C.I.E., Phase II, Gandhinagar, Opp. IDPL Colony Hyderabad-500 037 Spark Engineers Pvt. Ltd., 5/332, State Bank Colony II Salem-636 004

Rotary dryers

Bhuvaneswari & Co. Old Trunk Road Chennai-600 043 Dynamic Furnaces Pvt. Ltd. 65, Universal Industrial Estate I.B. Patel Road, Goregaon (E), Mumbai-400 063

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Feed tanks

Agarwal Associates, 255, Kalpana Society Waghodia Road, Baroda-390 019 Aristo Engineers J-3, Vikas Udyog Nagar, Behind Kasturi Tiwer Phatak-Goddeo Road, Bhayander (E), Thane-401 105 B.M. Industries Plot No.5223, Phase IV GIDC, B/h. Klockner Windsor India Limite Vatwa, Ahmedabad-382 445

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SECTION - VIII

RAW MATERIAL REQUIREMENTS, UTILITY AND AVAILABILITY

Raw materials and utility requirements Basis One tonne of Sodium Chlorate Raw materials S.No.

Raw material Requirement in in kgs

1. Sodium Chloride 520 2. HCl 15 3. Sodium dichromate 1 4. Barium chloride 6 Utilities S.No.

Utilities Requirement per tonne

1. Power 5800 unit 2. Fuel 160 litres Raw material availability Sodium chloride There is no constraints for the supply of Sodium chlorde Hydrochloric acid The nearby sources for the supply of Hydrochloric acid include the following. * Chemfab alkalies, pondicherry * The Travancore Cochin Chemicals Ltd.,Kerala

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SECTION - IX

GLOBAL SCENARIO 9.1. Global demand 2.5 million tonnes per annum 9.2. Global regionwise demand pattern

USA38%

Canada16%

Europe30%

South America8%

Other countries8%

9.3. Demand forecast in North America(In '000 tonnes) 1995 2000 % annual growth

Pulp bleaching 1585 2040 5.2 Perchlorates 70 80 2.7 Mining 13 15 2.9 Others 15 20 6.0 Total 1683 2155 5.1

USA AUSTRALIA FRANCE0

10

20

30

40

50

60

70

80

90

IN P

ER

CE

NTA

GE

USA AUSTRALIA FRANCE

COUNTRY

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9.4. Global use pattern by end use Most of the Sodium Chlorate produced in the world is used for paper pulp bleaching. The next important use in the manufacture of perchlorates.

Pulp & Paper94%

Perchlorates4%

Mining1%

Others1%

Source: Consulting Resources Corp (Lexington, MA). 9.5. Important global producers Company Location Capacity

in ‘000 tonnes per year

EUROPE

Aragonesas

Sabinanigo,Spain 45

Caffaro

Brescia, Italy 12

Eka Chemicals Oulu, Finland 55 Ambes, France 70 Mo-i-Rana, Norway 50 Aloby, Sweden 70 Stockvik Sweden

45

Elf Atochem

Jarrie, France 85

Finnish Chemicals Aetsa, Finland 135 Joutseno,Finland

65

Solvay Portugal Povoa de Santa Iria, Portugal

18

Simonis BV.,Netherlands

Natron Chemie, Netherlands

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UNITED STATES OF AMERICA

CXY Chemicals

Taft,LA 140

Eka Chemicals Columbus,MS 221 Moses Lake,WA

65

Elf Atochem

Portland,OR 50

Georgia Gulf

Plaquemine,LA 28

Huron Tech Claiborne, AL 47 Augusta, GA 140 Eastover, SC

90

Kerr-McGee

Hamilton,MS 143

Sterling Pulp

Valdosta,GA 110

Western Electrochemical Cedar City, UT 7 CANADA

Albchem Bruderheim,AB

86

BC Chemicals Prince George,BC

73

CXY Chemicals Amherstburg, On 55 Beauhamois,PQ 48 Brandon,MB 110 Bruderheim, AB 72 Nanaimo,BC

20

Eka Chemicals Magog,PQ 160 Valleyfield,PQ

124

Norkraft Quevillon Lebel-sur-Quevillon, PQ

17

PCI Chemicals Dalhousie,NB

24

Saint Anne Chemical Nackawie, NB

10

Sterling Pulp Buckingham,PQ 143 Grand Prairie,AB 57 Thunder Bay, ON 57 Saskatoon,SK 55 Vancouver,BC

101

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SOUTH AMERICA

Eka Chemicals Jundiai,Brazil 30 Talca Huano, Chile

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CXY Aracruz, Brazil 36 ASIA Chi Chang Chemical & Wood Work Co.Ltd.,

China

Chung Hwa Chemical Industrial Works Ltd.,

Taipei

Pao Hsing Chemical Co.Ltd.,

Taipei

Osaka Soda Co. Ltd.,

Japan

9.6. Global growth rate in demand Estimated annual growth rate in demand 5 to 6% per annum

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SECTION X

DISCUSSIONS ON ECONOMIC CAPACITY, PROJECT COST AND PROFITABILITY PROJECTIONS

Economic capacity : 3000 tonnes per annum Project cost : 750 lakhs Assessment of project cost 1. Land S.No. Description Cost

Rs.in lakhs

1.1 Cost of land of 2 acre at Rs.5.5 lakh per acre 11.00 1.2 Cost of levelling, laying internal roads/fencing and

compound wall 1.10

Subtotal 12.10 2. Building S.No. Description Cost

Rs.in lakhs

2.1 Factory building of area 600 sq.m. at Rs.3200/sq.m. 19.20 2.2 Non-factory building of area 120 sq.m.at

Rs.4500/sq.m. 5.40

Subtotal 24.60 3. Cost of Plant & Machinery S.No. Description Cost

Rs.in lakhs

3.1 Cost of basic plant and machinery 300.00 3.2 Instrumentation and control 22.50 3.3 Pipelines and valves 30.00 3.4 Structurals for erection 15.00 Subtotal 367.50 3.5 Octroi, excise duty, sales tax, etc.at 12% 44.10 3.6 Packaging and insurance charges (2%) 7.35 3.7 Transportation charges (2%) 7.35 3.8 Machinery stores and spares (2%) 7.35 3.9 Foundation charges (2%) 7.35 3.10 Installation charges (2%) 7.35 Total cost of plant and Machinery 448.35

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4. Technical know-how fees 50 5. Miscellaneous fixed assets S.No. Description Cost

Rs.in lakhs

5.1. Electrification 6.00 5.2. Steam boiler and auxillaries 15.00 5.3. Water storage tank, borewell etc. 4.00 5.4. Fuel storage tank 4.00 5.5. Laboratory equipment 4.00 5.6. Office machinery & equipment 3.50 5.7. Material handling equipment, packaging machinery,

weigh balance, etc. 2.50

5.8. Diesel generator 20.00 5.9. Effluent treatment 6.00 Total 65.00 6. Preliminary & Pre-operative expenses: S.No. Description Cost

Rs.in lakhs

6.1. Preliminary expenses 4.00 6.2. Pre-operative expenses:- 6.2.1 Establishment 4.00 6.2.2 Rent rates and taxes 5.00 6.2.3 Travelling expenses 6.00 6.2.4 Interest and commitment charges on borrowings 12.00 6.2.5 Insurance during construction period 11.00 6.2.6 Other preoperative expenses and deposits - 6.2.7 Interest on deferred payment - Total 42.00 7. Provision for contingency Rs.45.40 lakhs 8. Working capital margin Rs.62.55 lakhs 9. Total project cost Rs.750 lakhs 10. Means of finance Promoter's contribution Rs.300 lakhs Term loan from financing institutions Rs.450 lakhs Total project cost Rs.750 lakhs

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11. Financial statements Cost of production A Variable cost

Rs. in lakhs

Raw material and utilities 302.28 Spares and maintenance 26.90 Selling expenses 45.00 Total variable cost (A)

374.18

B Fixed cost

Salaries and wages 24.00 Interest on term loan and working capital loan 114.78 Depreciation 54.88 Administrative expenses 27.00 Total fixed cost (B)

220.65

C. Total cost of production (A+B)

594.83

D. Selling price per kg. (in Rupees)

30

E. Annual sales turnover

900

F. Net profit before tax (E-C)

305.17

G. Breakeven point in %

42

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SECTION - XI

SWOT ANALYSIS

Strength Product importance

Infrastructural facilities

Weakness Power intensive project

Opportunity Excellent market Exports

Threat Power cost Chlorine price

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SECTION - XII

FACTORS INFLUENCING THE POSITION FOR A NEW INDUSTRY AND

RECOMMENDATIONS Sodium Chlorate project should be viewed from various factors as given below: Power Sodium Chlorate project is power intensive. 50 to 60% of the cost of the production would be constituted by the power cost. Effluent There would be no discharge of effluent from the project. Water The requirement of water for the project is minimal. Demand The demand for the product is going steadily at the rate of 8 to 9% per annum. The product is highly relevant to the country’s industrial growth pattern. Exports In view of the steady increase in demand for the product in the global market, Sodium Chlorate project offers good export opportunity. Recommendation The fact remains that the project is power intensive. One of the pre conditions for success of the project is the adequate availability of power and also price of the power at competitive cost.