Uploaded on December 2011

Product & Applications

Kattha and cutch are extracted from wood of Khair tree. These trees with their botanical name as Acacia are found in abundance in the forests of Uttar Pradesh, Bihar, Rajasthan, Gujarat, Himachal Pradesh and Nepal. There are different varieties of this tree such as Acacia Sundra, Acacia Catechuoides and Acacia Catechu. Manufacture of Kattha is an important forest based industry. Kattha is widely consumed as an applicant in paan, it also has medicinal qualities. While cutch a bye product during kattha manufacturing is used in tanning industry, as an additive and preservative in many industries.

Manufacture of these products is simple and Central Forest research Institute has developed an improved process.

The technology for such products is available and does not require any sophistication. Compliance with PFA Act for such a unit is essential.

Industry Profile and Market Assessment

In India chewing paan is quite popular. This habit is predominantly followed in eastern India like Assam, West Bengal, Bihar, Orissa. It is also popular in Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra. In other words paan is consumed in nearly all parts of the country. Katha is one of the essential ingredients in preparation of paan. Paan is again a popular item people consume after food in parties, marriages. Katha is being produced in the country since long and it is a mass consumption item. It has medicinal values as well and is used in ayurvedic medicines. It cures itching, indigestion, bronchitis and is effective in treatment of leprosy, ulcers, boils, piles, and throat diseases etc. It's by product cutch has various industrial applications. It is one of the important sources of vegetable tanning material used extensively as an additive to the drilling mud used for oil drilling and for preservation of sailing rods, fishing nets, mail bags etc. Both the products are versatile with varied applications.

Manufacturing Process & Know How

The process of manufacturing is simple and standardized. Heart wood of Khair or acacia is cut into fine chips and around 8-9 kgs are kept in a wire net cage to avoid direct contact with heated surface of the extractor. Extraction is done by boiling chips with water for about three hours. These cages with about 25-27 ltrs of water nearly three times the weight of chips are placed in extractors. Extract from each extractor are mixed after filtering with the help of muslin cloth and concentrated in an open pan on fire and then kept in shade to facilitate crystallization of kattha for about two days. After complete crystallization the curd like mass is passed through frame and plate-type filter press operated manually and then then it is washed with cold water to improve the quality of kattha. It is then placed on wooden frames with canvas cloth to separate traces of cutch. Finally kattha is cut into uniform tablets with the help of wire cutter or knife and dried in sheds. The mother liquor after removal of kattha is further concentrated in an open pan till it becomes viscous and then poured in wooden frames for drying. The dried material is cutch. About 100 kgs of acacia chips give 5 kgs of kattha and 14 kgs of cutch, the yield depends on the quality of chips. The process flow chart is as under

Know how is available with Central Government research Laboratories. The machinery is all indigenously fabricated available.

The rated production capacity of 3000 kgs of kattha per year would yield 8400 kgs of cutch as a bye product.

Plant and Machinery

The unit does not require standard machines, rather it Needs few fabricated facilities as

  • Aluminum extractors capacity 50 kg - 5 nos
  • Aluminum concentration pan 50 kg - 15 nos
  • Wire net cages - 20 nos
  • Wooden frames with canvas screen - 10 nos
  • Plate type Filter press manual - 5 nos
  • Furnace (Bhatti) - 10 nos
  • Misc. tools

The total cost of machinery is estimated to be Rs.1.47 lakhs.

The unit will also require miscellaneous assets such as furniture, fixtures, storage facilities etc. the total cost of these is estimated to be Rs. 0.30 lakhs.

The total requirement of power shall be 5 HP, the unit will need 1500 lits of water daily.

Raw material and Packing Material

The basic raw material for the unit is good quality khair and acacia wood. Uttar Pradesh is one of the leading in cultivation of these trees apart from a part of Bihar. These trees are also found in nearby regions of Nepal. Requirement of wood is estimated to be 60000 kgs per month.

On an average the raw material cost has been estimated to be Rs.6.60 lakhs at Rs.17/kg whereas packing material would cost Rs. 40000/-. At 60% capacity in 1st year the cost works out to Rs 4.20 lakhs.

Land and Building

For smooth operation of the unit, it will require 300 sq. mts of open land and a built up area of 150 sq. mts. The total cost of land and building is estimated at Rs. 3.90 lakhs. A large storage area for wood will be needed whereas the processing does not require a big covered area. Covered area with asbestos sheet roofing will be sufficient.


For smooth functioning of the unit the requirement of man power is expected to be around 9 persons.

Sales person self
Skilled Workers 2
Helpers 4
Supervisor 1

The annual salary bill is estimated to be around Rs.1.50 lakhs.

Sales Revenue: (100% capacity)

Selling price varies depending on the product quality. Price of kattha varies from Rs.200/- to Rs. 300/- per kg. For the sake of projection it has been taken at Rs.225/- per kg. Whereas that of cutch it is assumed to be Rs.130/- per kg. Hence, the total income from kattha would be Rs. Rs. 6.75lakhs and that of cutch Rs. 10.92 lakhs. At 60% capacity utilization it works out to Rs. 10.60 lakhs.

Cost of Project


Rs. lakhs

Land & Building 3.90
Plant & Machinery 1.47
Other assets 0.30
Contingencies 0.53
P & P expenses. 0.50
Margin money 0.56
Total 7.26
Means of Finance  
Promoters Contribution 2.26
Term Loan 5.00
Total 7.26



Rs. lakhs

Sales 10.60
Raw material 4.20
Salary 1.50
Utilities 0.60
Stores & Spares 0.06
Repairs & Maintenance 0.12
Selling expenses 1.05
Administrative expenses 0.36
Depreciation 0.65
Interest on T.L 0.67
Interest on W.C 0.11
Cost of production 9.32
Profit 1.28

Requirement of Working Capital





Margin Money

Raw material 1 month 30% 0.42 0.12
Stock of finished goods 15 days 25% 0.31 0.08
Working expenses 1 month 100% 0.25 0.25
Sale on credit 15 days 25% 0.44 0.11
Margin money for W.C 0.56

Break Even point


Machinery Suppliers

None of the machinery is standard type and is to be fabricated to requirement.

For further information please contact

Information Manager
TIMEIS Project
E-mail: timeis@ficci.com