PARACETAMOL

A. INTRODUCTION
Paracetamol is a widely used basic drug which is used for fever, joint
pains, head ache, flu etc by formulating it into tablets, capsules or
liquids.

B. PRODUCT USES & SPECIFICATIONS

Pharmaceutical grade Paracetamol is white. However, on prolonged
exposure to air, a grey or pink colour develops.

Physical properties:
Alternate names Acetaminophen, p-Hydroxy acetanilide, p-acetyl
aminophenol, Acamol, Abensanil
Chemical C8H9NO2
formula
Appearance White crystalline powder
Molecular weight 151.16
Melting point 169 to 170.5 deg.C.
PH 5.3 to 6.5 at 25 deg.C.
Density 1.293 gm/cc
Solubility Very slightly soluble in cold water considerably more
soluble in hot water.
It is soluble in methanol ethanol, dimethyl
formamide, ethylene dichloride, acetone, ethyl
acetate. Slightly soluble in ether. It is insoluble
petroleum ethers, pentone, benzene.
Grades and Specification of Paracetamol
Generally, two types of Paracetamol are commercially produced
namely powder and granules.

Purity level:
Powder 99.5%
Granules 90%
The granular grade is called 'direct compressible' product which is
easier to use for making tablets
Specification of Paracetamol I.P Property
(Powder)
Description White crystalline powder slightly
bitter in taste
Assay <99.53%
Solubility About 10% MCOH (as per IP)
Identification Confirm to ABCD of IP
Melting range 169 to 170 deg.C.
pH 10% suspension 5.7
Heavy metals <0.001%
4-amino phenol <0.005%
4-chloro acetanilide <0.001%
Loss on drying <0.1256%
Sulphated ash <0.0715%

Paracetamol is used in the treatment of

*. Reduction of fever
*. Relief of muscle and joint pain
*. Relief of cold and flu symptoms
*. Relief of common headache
Paracetamol lacks anti inflammatory action in rheumatic disorders.
However, it is less toxic than the Aspirin and does not produce anemia
and liver damage, which sometimes result from the continued use of
acetanilide and acetophenotidine.

Paracetamol is also an important intermediate in the manufacture of

other pharmaceuticals like the antimalarial amodiaquine.

Analgesic Action The analgesic action of Paracetamol

involves peripheral and central influences.
Paracetamol is a valuable central analgesic
but weak peripheral anti inflammatory
agent and exhibits good and prompt
antipyretic action. It does not stimulate
respiration and causes less gastric irritation
and have no effect on cellular metabolism
or clotting factors.
Formulations Paracetamol is available as tablets, syrups
and injections.
Common side effects Side effects of Paracetamol are rare and
usually mild
Usage in pregnant women Paracetamol is widely used in pregnant
and nursing mother women and nursing mothers without any
significant adverse effects on the mother or
infant.
Usage in infants and Paracetamol is safe for use in children with
children appropriate adjustments in dosage as per
the weight of the child.
SPECIFICATION
Specification of Paracetamol Granules B.P.
Description White granules or white granular
powder odourless;slightly bitter
taste.
Assay, % by mass 90.59% as C8H9NO2
Solubility Sparingly soluble in water, freely
soluble in alcohol, very slightly
soluble in chloroform and in
ether.
Identification Test A, IR Absorption spectrum
Melting range Between 168 to 172 deg.C
Heavy metals Not more than 20 ppm.
4-aminophenol Not more than 0.005%
Related substances By TCL method
Sulphated ash Not more than 0.1%
Loss on drying Not more than 0.5%

C. MARKET POTENTIAL

The Indian pharmaceuticals market looks poised to grow to $55 billion

in 2020, according to a new McKinsey & Company report — “India
Pharma 2020: Propelling access and acceptance, realising true
potential”. This will be a quadrupling of the market from the $12.6
billion the industry made in 2009. The report states that the pharma
market has the further potential to reach $70 billion by 2020 if
aggressive growth efforts are embraced.
Acknowledging existing discontinuities in global pharmaceuticals
markets, the report says it is the BRIC countries, including India, that
will lead growth in the coming decade.

The other countries in the BRIC bloc are Brazil, Russia and China.

The Indian pharmaceutical industry has been growing at 13-14 per

cent in the past five years, a significant increase over the nine per cent
growth witnessed between 2000 and 2005. According to the report,
five new opportunities will capture 45 per cent of the market by 2020,
growing from the $3-billion industry today to $14-18 billion in 2020.
These are patented products, consumer healthcare, biologics, vaccines
and public health.

Metro and Tier-1 markets, which have been growing at 14-15 per cent
in the last five years, will drive growth in the industry. They account
for 60 per cent of the Indian pharmaceuticals market today and look
set to continue growing to a market size of $33 billion by 2020. This
will be the result of rapid urbanisation and the expansion of medical
infrastructure. Rural markets, on the other hand, will constitute 25
per cent by 2020, up from 20 per cent currently, while Tier-2 markets
will decline from the present share of 20 per cent to 15 per cent.

Epidemiological factors such as an increased patient pool by 2020,

increasing accessibility to drugs due to an increase in investment in
medical infrastructure, a greater acceptance of new medicines and
greater affordability are the drivers of this growth.

Affordability will result in half of the forecasted growth, with rising

incomes and increasing insurance coverage lowering the cost of drugs.
Increases in income will result in an additional 73 million people in
middle and upper class segments, while 650 million people will have
health insurance by 2020. While private insurance will grow by 15 per
cent by 2020, the majority of people will be provided insurance
through government-sponsored schemes which focus on the ‘bottom
of the pyramid’ segment of society.

“While growth in the pharmaceuticals market has thus far been driven
by rising affordability, the industry needs to be more proactive in
enhancing accessibility and acceptance of modern medicine,”
cautioned Mitra.

There have been a number of changes in the industry over the past
five years. The report points to the discontinuous development in the
broader healthcare sector, combined with the changing structure of
the business itself due to significant changes in the leaders of the
industry. Four of the leaders in the pharma market today, including
the market leader, are new participants. The flux is also being caused
by shifts away from traditional sources of growth in favor of news
ones.

Identifying changes organisations in the pharmaceuticals industry will

have to make to adapt to the upcoming changes, the report places
importance of the building of large brands through brand portfolio
managements. A shift away from traditional business models is also
suggested, with companies being advised to import talent from outside
the industry and encouraging more risk-taking.

The government will also have to take an active role to ensure the potential of the
industry is realised. McKinsey suggests raising spending on healthcare to three per
cent of GDP, increasing investments in rural and Tier-2 healthcare infrastructure,
adopting measures to contain healthcare costs and increasing the number of doctors in
the system as policy measures to aid the industry.
Paracetamol is extensively used in India. There are about 300 brand
names for Paracetamol in India, which are sold in the market in the
formulated form.

Therefore, the market is highly competitive

Indian demand for Paracetamol 25000 tonnes per annum.
Export demand 3000 tonnes per annum
Total demand 28000 tonnes per annum

In spite of the fact that the adequate capacity for Paracetamol in India,
the product is still imported from China, mainly due to the price and
credit terms offered.

Growth rate in demand

It can be reasonably projected that the growth rate in demand for
Paracetamol would be in the region of 9 to 10% per annum in the
coming years.

D. TECHNICAL ASPECTS

1. INSTALLED CAPACITY
The production capacity of Paracetamol is estimated at 0.8 tonne per
day on 3 shift basis and the capacity works out to be 240 tonne per
annum.

2. PLANT & MACHINERY

Machine name
Reactor
Nutraliser
Crystalliser
Centrifuge
Tray drier
Pulveriser
Boiler
Refrigerator
Air compressor
Vacuum pump
Nutech filter
Testing laboratory

The total value of plant and machinery is estimated at Rs.160.00

lakhs on turn key basis.

3. MANUFACTURING PROCESS
Two processes are generally used in the country for the manufacture
of Paracetamol.
i) From phenol
ii) From Paranitrochlorobenzene

From phenol
The manufacture of Paracetamol involves preparation of para amino
phenol as the first step and acetylation of para amino phenol to
produce Paracetamol as the next step.

Para amino phenol can be prepared from phenol by first converting

the phenol to para nitro phenol with sodium nitrite and sulphuric acid
and then converting the nitrosophenol to para amino phenol by
reduction with sodium sulphide and ammonium carbonate.

From Para NitroChloroBenzene

80% of the country's production is presently carried out by the Para
nitro chloro benzene route.
The process by PNCB route is briefly described below.

Para nitro chloro benzene is reacted with caustic soda under pressure
of 5 kg/sq.cm and temperature of 150 deg.C for a period of 8 hours in
an autoclave. The product of the reaction would be Para nitrol phenol
(PNP), which would be separated by crystallisation and filteration.
The PNP would be treated with acetic acid to pH level of 3 and then
subjected to reduction, for conversion of PNP to para amino phenol
(PAP).

The Para amino phenol would be acetylated to produce crude

Paracetamol.

The product would be further bleached with Activated carbon to

produce Paracetamol of snow white colour. The product would be then
dried in a tray dryer and then ground to the size of 40 microns.

The shop floor operations require careful and optimum control to get
satisfactory process Efficiency and quality levels.
4. RAW MATERIAL REQUIREMENTS, UTILITY AND AVAILABILITY
Raw material requirements for Paracetamol production:
Basis : One tonne of Paracetamol
Para nitrochloro benzene (PNCB) 1.25 tonne
Acetic anhydride 0.76 tonne
Acetic acid 0.34 tonne
Caustic soda 0.75 tonne
Iron powder 0.30 tonne
Hydrose 0.01 tonne
Activated carbon 0.01 tonne
Sulphuric acid 0.25 tonne
 Value
Per MT Qty Rate Rs
MTs Rs lakhs
PNCB 1.25 300 40000 120.00
Acetic anhydride 0.76 182 72000 131.33
Acetic acid 0.34 82 70000 57.12
Caustic soda 0.75 180 32000 57.60
Iron powder 0.30 72 70000 50.40
Hydrose 0.01 2 160000 3.84
Activated carbon 0.01 2 85000 2.04
Sulphuric acid 0.25 60 20000 12.00
434.33

5. LAND & BUILDING

Land required-one acre-cost Rs.15.00 lakhs
Building-area required-7000 sq.ft Cost Rs.56.00 lakhs

6. UTILITIES
Power:
The connected load requirement of power is 100 HP.

Water:
Water requirement is 5000 litres per day.

Man Power Requirement:

Category Nos. Monthly Total monthly
Salary Salary
Supervisor 3 9000 27000
Skilled 3 7000 21000
Helpers 6 5000 30000
Accounts/Office
Assistant 2 6000 12000
90000
Add : Benefits 20% 18000
Total 108000
Total wages per annum [Rs.lakhs] Rs.12.96 lakhs

7. IMPLEMENTATION SCHEDULE
After making arrangements for the finance the project can be
implemented in six months period.

8. ASSUMPTIONS
Installed capacity per annum Paracetamol-240 MTS
per annum
Capacity utilization-Year -1 60%
Year-2 70%
Year-3 80%
Selling price per unit Rs.280000 per MT
Raw material at 100% Rs.434.33 lakhs per
annum
Consumables /Packing materials Rs.2200 per MT
Power and Fuel-100% (Rs.lakhs) Rs.61.04 lakhs
Wages & salaries -100% (Rs.lakhs) Rs.12.96 lakhs
Repairs & Maintenance- p.m. Rs.20000
Depreciation Written down value
method
General & administration Expenses per Rs.50000
month
Selling expenses 2% on sales
Interest on term loan and Working capital 14% per annum
finance
Income tax provision 34 % on profits

LIST OF MACHINERY SUPPLIERS

Name of the Name of the company
equipment
Reactor Chemitherm Plants & Systems P. Ltd.,
31, First Main Road
R.A.Puram, Chennai-600 028

Phgazh Chemical Plant & Equipment Pvt Ltd

69-2nd Main Road
Ambattur Industrial Estate
Chennai 600 058.
Neutraliser Sharplex Agro Process (I) Pvt. Ltd.,
302, Hill View Industrial Estate, LBS Marg
Ghatkopar (W), Bombay-400 086
Crystalliser Excel Industrial Services
White House, D-111/8,Ist Main Road,
Anna Nagar (East)
Chennai-600 102

Phgazh Chemical Plant & Equipment Pvt Ltd

69-2nd Main Road
Ambattur Industrial Estate
Chennai 600 058.
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
Tray dryer Sri Rudran Instruments Co,
56 Vaikunda Puram, 2nd Street
Nungambakkam, Chennai-600 034

Ganson Ltd.
645, Anna Salai,
Chennai-600 006
Pulveriser 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
Boiler Cethar Vessels Ltd.,
No.4, Dindigul High Road,
Trichy

Firetech Boilers Pvt. Ltd.

No.211, 2nd Cross,
38th Main, B.T.M. Layout
 2nd Stage,
Bangalore-68
Refrigeration plant Karna Industries Ltd.
10/67, Industrial Area
Kirti Nagar, New Delhi-110 015
Neptune Refrigeration Co. Ltd.,
153, Mount Road,
Chennai-600 002
Air compressor ELGI Equipments Ltd.,
Elgi Industrial Complex III,
Trichy Road,
Singanallur, Coimbatore-641 005

K.G. Khosla Compressors Ltd.,

19.8 KMS, Delhi-Mathura Road,
Faridabad-121 003, Haryana
Kaeser Kompressoren India
9 & 10, Symphony `C' Bldg.,
Range Hill Road
Shivaji Nagar, Pune-411 020
Vacuum pump Southern India Instrumech Pvt. Ltd.,
160, Baba Nagar, Villivakkam
Chennai-600 049

Travaini-Maneklal Vacuum Technology Pvt. Ltd.,

Manek Mahal, 7th Floor,
90, Veer Nariman Road,
Churchgate, Mumbai-400 020
Neutch filter 1. Aristo Engineers
J-3, Vikas Udyog Nagar,
Behind Kasturi Tiwer
 Phatak-Goddeo Road,
Bhayander (E), Thane-401 105
2. A.V. Industrial Plastics Corp.
202/Him Shikhar,
1st Floor, Plot No.113
Sector 21, Near Apna Bazar
Nerul, Navi Mumbai-400 706
3. Bifriends Engineering Works
Klm College, Sant Narsi Mehta Marg,
Parsiwadi, Ghatkopar (W),
Mumbai-400 084

LIST OF RAW MATERIAL SUPPLIERS

Sulphuric acid Coimbatore Pioneers Fertilisers Ltd., Coimbatore
Activated carbon Active Carbon India Ltd., Hyderabad
Bleachaid Minerals, Hyderabad
Gowrishankar Chemicals, Karnataka
Indo German Carbons Ltd., Kerala
Core Carbons Pvt. Ltd. Coimbatore
Caustic soda Chemfab Alkalies & Chemicals Ltd., Pondicherry
SPIC Heavy Chemicals Ltd., Chennai
Chemplast, Mettur, Tamil Nadu
Acetic acid EID Parry (India) Ltd. Madras
Trichy Distilleries & Chemicals Ltd.
Senthannipuram, Trichy
PNCB Hindustan Organic Chemicals Ltd., Maharashtra
Deepak Nitrite Ltd., Pune
FINANCIAL ASPECTS

1. COST OF PROJECT
Land 15.00
Building 56.00
Plant & Machinery 160.00
Technical know how fees 5.00
Other Misc. assets 5.00
Pre-Operative expenses 20.00
Margin for WC 11.07
272.07
2. MEANS OF FINANCE
Capital 99.07
Term Loan 173.00
272.07

3. COST OF PRODUCTION & PROFITABILITY STATEMENT

[Rs.lakhs]
Years 1 2 3
Installed Capacity (MT) 240 240 240
Utilisation 60% 70% 80%
Production/Sales (MT) 144 168 192
Selling Price per MT Rs.280,000
Sales Value (Rs.lakhs) 403.20 470.40 537.60
Raw Materials 260.60 304.03 347.46
Packing materials 3.17 3.70 4.22
Power & fuel 36.62 42.73 48.83
Wages & Salaries 12.96 13.61 14.29
Repairs & Maintenance 2.40 2.64 2.90
Depreciation 25.25 21.49 18.29
Cost of Production 341.00 388.20 435.99
Admin. & General expenses 6.00 6.30 6.62
Selling expenses 8.06 14.11 16.13
Interest on Term Loan 24.22 21.19 15.14
Interest on Working Capital 7.26 7.26 7.26
Total 386.54 437.06 481.14
Profit Before Tax 16.66 33.34 56.46
Provision for tax 5.66 11.33 19.19
Profit After Tax 11.00 22.01 37.27
Add: Depreciation 25.25 21.49 18.29
Cash Accruals 36.25 43.50 55.56
4. WORKING CAPITAL

Months Values % Margin Bank

Consumptions Amount Finance
Raw Materials 1.00 21.72 25% 5.43 16.29
Finished goods 0.25 7.10 25% 1.78 5.32
Debtors 1.00 33.60 10% 3.36 30.24
Expenses 1.00 0.50 100% 0.50 0.00
62.92 11.07 51.85

5. PROFITABILITY RATIOS BASED ON 80% UTILISATION

Profit after Tax 37.27

= 7%
Sales 537.60
Profit before Interest and Tax 78.86
= 24%
Total Investment 323.92
Profit after Tax 37.27
= 38%
Promoters Capital 99.07
6. BREAK EVEN LEVEL
Fixed Cost (FC):
[Rs.lakhs]
Wages & Salaries 14.29
Repairs & Maintenance 2.90
Depreciation 18.29
Admin. & General expenses 6.62
Interest on TL 15.14
57.24
Profit Before Tax (P) 56.46

FC x
BEL = 100 = 57.24 x 80 x 100
FC +P 113.70 100
40% of installed capacity