Kanta Chemicals Company, was started in 1971 to manufacturer and distribute natural essential and aromatics chemicals, by JK Gupta. Today, with over 30 years of experience in essential oils and aromatic chemicals, Kanta chemicals has established a strong base for future growth and prosperity. JK Gupta, who is also the president of the Essential Oils Manufacturers Association and is confident that the Indian essential oils will sooner or later capture the world markets. In an interview with indiamarkets, he discloses the secret behind the Indian Essential oils industry’s enviable position in the world market.

indiamarkets : What is the general scenario of the essential oils industry in India, and what are the reasons for the oils to gain importance and popularity in the recent years?
Gupta : Essential Oils or most commonly known as Spice oil. They are the volatile components present in most spices and provide the characteristic aroma of the spices. Spice oils are mostly used in food, cosmetics, perfumes and personal hygiene products like toothpastes, mouthwashes and aerosols, besides in a variety of pharmaceutical formulation.

Though, India was never a major exporter of these essential oils, but when there was an increase in demand from the other countries, due to Aromatherapy gaining popularity in India as well the world market, which is being viewed as alternative therapy for many ailments, India started looking seriously at this emerging and profitable market. As we know that India has been producing Mentha Oil, Mentha Prolac, and Sandalwood oil, but then its consumption was confined to within the country only. Today, more than 70 per cent is being exported and the remaining oils constitute only 30 per cent of exports from India.

Due to rise in demand for oils, India started agriculture and extracting oils such as Geranium and Lavender, thus saving foreign exchange worth Rs. 10 crore. There might not be immediate results about the progress of the industry, but it is remarkable achievement that today we have stopped import of Geranium and Lavender oil worth Rs 10 crore.
 
Spice oil is normally extracted by steam distillation. Spice oils have the major advantages such as standardization, consistency and hygiene. The standard of quality expected in a spice oil differs depending on its end use. Therefore, these oils are custom-made to meet the exact requirement of the user.

indiamarkets :  What are the export potentials of the essential oils and  how has the Indian exports progressed over the last few years ?
Gupta : India is a leading exporter of spice oils to West Europe, USA and Far East. Earlier China was the leading exporter of Mentha Oil, but today India has left China behind and has become number one exporter in the world and supplies as much as 4,207 metric tones worth US$ 29.25 million. The growth in exports of Mentha Oil is evident with the fact that in the year 1994-95 exports stood at 1,583 metric tones which has grown to 4,207 metric tonnes valued at US$ 29.25 million. During April and July 2000, 1,200 metric tones valued at US$ 7.92 million of Mentha Oil has been exported.

Whereas Spice Oil and Oleoresins, which had 16.72 metric tones exports in 1994-95 rose to 2,750 metric tones in 1997-98 earning US$ 71.80 million of foreign exchange. Between April-July, 2000 the exports figure has registered 1,000 metric tones worth US$ 23.80 million.

Besides, Mentha Oil which acounts for 70 per cent of exports, other 30 per cent include Black Pepper oil, Cardamaom oil, Cedar wood oil, Costus root oil, Ajwain oil 20 per cent and 30 per cent, Calamus oil, Carrot seed oil, Cellary seed oil, Chamomile Blue oil, Cumin seed oil 30 per cent, Cyperiol oil, Dill seed oil 45 per cent, Ginger oil, Juniper Berry oil, Valerian Root oil, CIS-3-Hexanole Pure 90 per cent, Linalool Ex. Basil 98 per cent, Peppermint oil, Metnhone, Menthyl Chavicol 99.5 per cent, Mentha Piperata oil, Mentha Citrata oil, 2-Octane Pure 95 per cent, Spearmint oil 60 per cent, and 80 per cent and Thymol Crystal.

indiamarkets.com : Which are the main products and major players in the essential oils market in India?
Gupta : As of today there are number of manufacturers of essential oils in the country and majority of them have small scale units. The manufacturers are spread across the whole country. The most important products include Mentha Oil, Mentha Prolac, Sandalwood Oil, Spearmint Oil, Cedar wood Oil, and Black Pepper Oil. Since the last 40 years Hindustan Richardson used to manufacture essential oils and was the leader at that time, but today many units have been set-up at Badaun, Sambhal, Rampur, and Barabanki in Uttar Pradesh and in Ludhiana in Punjab. The total production of essential oil today stands at 12,000 metric tones and nearly 6,000 metric tones is being exported to West Europe (particularly to Switzerland), USA, and the Far East. As a matter of fact in Switzerland and France Aromatherapy is being clinically practiced thus an increasing demand for essential oils.

indiamarkets : What are the advantages enjoyed by India ?
Gupta : The biggest advantage enjoyed by India is that China will not be a major threat to India’s Essential oils’ market, since China has diversified into growing exportable vegetables and over 50 varieties of Salad leaves. After facing a serious threat from India, China has started converting the land used for agriculture of Spices to vegetables and salad leaves. As per the increase in demand for newer essential oils in the world market, India has started growing such crops so as to cater to the new demands.

indiamarkets : What are the policies of the government for this sector and what are the problems being faced by the industry?
Gupta : The tax regime in the country is not conducive for the growth of this sector, which falls under the small scale sector. For example, the purchase tax levied on the buyer of raw-material from the farmer, results in low payment to the farmer since the manufacturer doesn’t want to pay from his own pocket and in order to maintain his earnings pays the reduced rates to the farmer, which in turn hurts the farmer and finally dissuades him to look for any other more profitable crop. On Mentha, the government has put 16 per cent excise and on top of that 4 per cent CST is levied, which makes the product cost more, and results in tough competition in the international markets.