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					TABLE OF CONTENT
                           1. CLUSTER PRODUCT AND PLACE


1.1 Shellac has an Ancient History
        Shellac, as the word is commonly used, refers to all forms of purified lac - a natural
resin secreted by the tiny lac insect on certain trees, principally in India and Thailand.
         “Lac” is derived from the Sanskrit word “lakh” which means 100,000 and refers to
the vast swarms of insect larvae that inundate lac trees during brood season. There is a
connection between the word “lac” and the Indo-European word for salmon, “laks”, very
likely a reference to great numbers of the fish observed in spawning shoals.
        Not much is known regarding the very early history of shellac. In the Vedic period
about 3,000 years ago it was called “Laksha.” One of the Vedic books contains an account of
a whole palace constructed entirely out of lac resin. It has been mentioned in the Atharba
Veda that both lac and lac dye served as effective and valuable medicine. It was widely
used on open wounds for quick healing and tissue regeneration. Even now it is
conventional for the labours engaged in the wood industry to use lac in case of scratches.
Use of lac in joining up of broken bones was also very important. The ancient Indian epic
„Mahabharata‟ (1300 B.C.)clearly draws reference of lac in constructing „Lakshagriha‟ A
mansion was constructed for the Kaurava brothers at Banabrata by the architect Purochak
which was highly inflammable .
        Ancient Chinese and Indian civilizations used the dye extracted from lac for dyeing
silk and leather and as a cosmetic rouge and a coloring for head ornaments. The superior
adhesive quality of the resin made it useful for setting jewels and sword hilts as well as
repairing broken pottery. The residue left after the extraction of the dye was made into a
grinding wheel for jade – a technique still in use today.
        It was in the field of medicine, however, that the most extensive applications for lac
were discovered. It was prescribed either as an emollient, or as a stimulant to tissue growth
or in the treatment of gum hemorrhages and menstrual disorders.
         In veterinary medicine lac was mixed with lard and the paste used to fill the cavities
in the hooves of horses and cattle.


1.2 PROPERTIES OF SHELLAC

      Ability to form films on various surfaces
      Electrical insulating properties
      Moulding properties
      Adhesive & binding properties
      Flavourless, odourless and edible properties
      Decorative & protective properties
      Medicinal properties
      Inflammable properties
      Ability to yield useful acids on hydrolysis

1.3 USAGES OF SHELLAC

Pharmaceuticals - Shellac is used to coat enteric pills so that they do not dissolve in the
stomach, but in the lower intestine, which alleviates upset stomachs. It is also used as a
coating        on         pills       to         "time          release"       medication.
                                                                                             1
Confectionery - Shellac is used to provide protective candy coatings or glazes on candies
like Reese's Pieces, because of its unique ability to provide a high gloss in relatively thin
coatings (like a French Polish). It was used at one time on M&M's. It is approved by the
FDA as a food safe coating when dissolved in pure ethanol (not denatured).

Hats - Shellac is used to stiffen felt used to make hats. It allows the makers to shape the felt
into brims, bowl shapes, etc.

Food Coatings - Because of its FDA approval, shellac is used to coat apples and other fruits
to make them shinier.

Electrical - Shellac mixed with marble dust is used by lamp manufacturers to glue the
metal base to glass incandescent bulbs.

         Other uses for shellac are in the manufacture of grinding wheels (it allows the
abrasive particles to break off at the low heat generated by the grinding process, thus
exposing new, fresh abrasive particles), leather finishing and painting (shellac pigmented
with white titanium dioxide is widely used by painters as a stain sealer, wall board primer,
and knot and sap sealer on wood).
               Other former uses for shellac are electrical insulators, as a glue (it bonds glass
and metal surprisingly well), phonograph records (the old 78's were a mixture of shellac,
fillers and lampblack), hair spray, no-rub floor polishes, and as a finish for bowling alleys .

1.4 PRODUCTS

List of different lac products with their price as per HS ITC Code
                                                    Average export price during 2005-06
  HS ITC
               Products                                       (in Rs.per kg.)
   Code
 13011010     Shellac                                                  185
 13011020     Seed Lac                                                 137
 13011030     Stick Lac                                                 91
 13011040     Dewaxed & Decolourised Lac                               237
 13011050     Bleached lac                                             154
 13011060     Gasket Lac                                               105
 13011070     Button Lac                                               131
 13011080     Garnet Lac                                                49
 13011090     Other Lac                                                 99
              Derivatives
 33029020     Alerutic Acid                                           1158
              By-Product
              Gasket Shellac                                           143
              Shellac wax                                              251
              Lac dye                                                  225
              Molamma lac                                               85

N.B.: HS ITC code is re-allocated from April, 2003

                                                                                               2
List of products manufactured at Balarampur cluster

                                        Kusmi seed lac Golden
                                        Kusmi Dana 3%
Semi Finished
                 Seedlac                Baishakhi Dana Golden
Product
                                        Baishakhi Dana 3%
                                        Baishakhi Dana 5%
                                        Kusmi Button Lac 1No.
                 Button Lac             Kusmi Button Lac 2 No.
Handmade Product                        Baishakhi Button Light Pure
                                        Superior Lemon
                 Handmade Shellac
                                        Shellac Lemon I
                                        MMTN
Machine Made                            M/c Made Lemon
                 Shellac
Product                                 M/c Made Orange
                                        BlackTN
Value Added      De-waxed & De-colorized lac
Product          Alleuritic Acid




               SEED LAC                               MACHINE MADE TN




 KUSMI BUTTON                   KUSMI BUTTON               BAISAKHI LIGHT
  LAC 1 NO.                       LAC 2 NO.                 BUTTON PURE



                                                                            3
                  1.5 GEOGRAPHICAL POSITION OF THE CLUSTER

       Balarampur region of Purulia district, situated at the farthest east corner of Lac
producing belt in India , at a distance of 350 KMs from the State capital , Kolkata
contributes best quality of sticklac of Baisakhi variety (famous as Manbhum variety) which
compares not less than that of Kusmi variety, renowned as best quality crop.




                                                                                        4
                           2. EVOLUTION OF THE CLUSTER

      In modern India, during the 1860 A.D. Lac dye was prepared in the Lac Factory at
Mirjapur (U.P.) for colouring the uniforms of Military men in England. At that time the Lac
resin was rejected as waste product since its uses were unknown. But during 1865s the
usages of Lac resin were innovated. Then Lac became the main finished product and Lac
dye became the waste product.

       During 1890s the B.N.R. (Assansole to Chakradharpur via Adra ) train were started.
And Balarampur became the important Lac (raw material) collection centre enabling to
expand the business through the nearest Railway Station “Barabhum”. The Gomastas of the
factories of Mirjapur (U.P.) came here to collect the raw material and gradually they
established their own units at Balarampur and Jhalda area. The finished products were
despatched from the factories of Mirjapur through Kolkata . In the meanwhile, „Angelo
Brothers‟ , the so called largest British Firm also came to Kolkata from Mirjapur. The agents
of European, Armenian and Garman companies gradually arrived in Jhalda and
Balarmpur..

       „Angelo Brothers’ , the so called largest British Firm imported the mechanized
process of shellac manufacturing first in 1918s. As a result of extensive research on Lac
culture, „Angelo Brothers‟ evolved different types of value added products from 1918 to
1927, and the mechanism was later imported by Singhanias in Purulia. The Shellac
Industries Ltd. lead by Ispahani with French collaboration established in Kolkata a
mechanized shellac firm first during 1942-45. Owing to the changing scenario in the post-
War period the Manager of Shellac Industries Ltd. was compelled to quit the activities of
shellac manufacturing and subsequently Ispahani dismantled the factory and disposed of
15 Press Machines to different scrap merchants. Later on Mr. Samar Singh Jayswal
procured the same machines from the merchants and was able to establish a mechanized
Lac factory at Balarampur during the year 1968-69.

       Later on Messrs Singhania, previously being professional agent of „Angelo Brothers‟
Company‟, received the charge of Management of that company during the mid-1980‟s,
established a solvent plant of their own for manufacturing of different value added items
during the Mid-1990‟s.

      Production statistics in the Cluster during last decades are noted below :

                                PRODUCTION IN PEAK SEASON
              Year                     (per day in M.T.)
                               Handmade             Machine made
              1930                33                      -
              1946                40                      -
              1957                12                      -
              1980                 6                     2.5
              1996                 7                      6
              2007                 8                     12


                                                                                           5
                         3. NATIONAL / INTERNATIONAL SCENARIOS

3.1 HISTORY

        India and Thailand ( host tree – rain tree ) are the main areas in the world where lac
is cultivated. But presently Indonesia ( host tree – Rangini)emerges as one of the major lac
cultivating country in the world.
        India was, up to 1939, perhaps the only processor and exporter ( 45 – 50 thousand
M.T. ) of lac in the world. At that time Germany and USA processed a little portion lac in
their country. Average sticklac production of Thailand was then 3,000 to 4,000 M.T. and
India used to import the entire production.
        Japan occupied Thailand at around 1941. Thailand was liberated by USA in the year
1945. Both Japan and USA encouraged in lac production which resulted in rise in annual
production in Thailand to 10,000 M.T. by 1956.
        Exports from India have fallen from around 29,000 M.T. (equivalent to 50,000 M.T. of
produced) in the mid-1950‟s, to around 7,000 M.T. (equivalent to 12,000 M.T. of produced
per annum, by the late 1980‟s. Principal causes behind this were – Abolition of usage of
phonogram disc (consume 80% of lac production), Introduction of synthetic resin,
competition from Thailand, transfer of management Angelo Brothers‟ (biggest company of
the then India having 40% share of total production and also the sole path finder of
mechanized production and value added products).

                                           Stick Lac                                       Export
             Average       Highest                       Lowest                     Quantity     Value
 Decade                                Corresponding                Corresponding    (M.T.)     (In Rs.
            production    production                   production
                                            year                         year                   Crore)
              (M.T.)        (M.T.)                       (M.T.)
1931-1940       43731          3800      1936-37           32692      1931-32         31414        1.98
1941-1950       43000         65000      1946-47           30863      1948-49         25519        5.78
1951-1960       43000         49000      1956-57           24407      1953-54         29300        8.60
1961-1970       33000         38700      1967-68           17651      1964-65         17244        4.79
1971-1980       20000         23869      1973-74            9119      1978-79          8684       11.32
1981-1990       16200         20300      1986-87           11650      1983-84          6626       21.80
1991-2000       20000         25500      1997-98           14785      1990-91          7561       74.41
2001-2006       19500         21500      2001-02           17500      2002-03          6809      131.09




                     National Trend during last 30 years



                                                                        Export Turnover (Rs in
                                                                        Lakh)
                                                                        Stick Lac (M/T)

                                                                        Export Quantity (M/T)
19 -76
19 -79
19 -82
19 -85
19 -88
19 -91
19 -94
19 -97
20 -00
20 -03

       6
     -0
  75
  78
  81
  84
  87
  90
  93
  96
  99
  02
  05
19




                                                                                                          6
        In the early-1990‟s liberalization, free trade, increase of USA dollar value in respect
of Indian rupee resulted in large amount of procurement of seedlac from India by USA.The
impact was a hike in price and rise of business volume for Indian lac. In 1996 Thailand
offered cheaper rate to USA and subsequently the Baisakhi crop in India was very large in
1997 which resulted in sharp fall in price of seedlac ( Rs. 34 from Rs. 85 per kg on chouri
parta basis) and the market again crushed down. But consecutive failure of production of
Baisakhi crop ( the major commercial crop of India ) however helped the market to regain
its stability.

       Demand in the internal market increased from 2000-2001 and indigenous
production was found insufficient to meet the requirement of export and internal
consumption. So searching of new producing country emerged out. Then Indonesia came
to the picture as a potential producing country and import of sticklac from Indonesia to
India started in the year 2000-01. In that year the quantity of import was very little, only 100
M.T. But it increased rapidly to 6,450 M.T. in 2005-06. It is expected that the import quantity
will be 8,500 M.T. in the current year, i.e. 2006-07.

3.2 RAW MATERIAL PRODUCTION

State Wise Production Of In India During Last Five Years.
Name of State             2001-2002    2002-2003    2003-2004          2004-2005      2005-2006
Jharkhand                     10150         7640          9860             10780           6414
West Bengal                    1350          835          1270              1395            926
Uttar Pardesh                  1000          650           500               490            310
Chattisgarh                                 5175          5140              4270           6015
Madhya Pardesh                              1925          1905              2870           2515
Maharastra                                   610           635               875           1160
Gujrat                                       140            90                75             50
Orissa                         7950          290           250               405            415
Andhra Pradesh                               200            90                40             15
Assam & Meghalaya                              35           60                85            165
Bihar                                           -            -                15             15
Total (Indian Union)          20450        17500         19800             21300          18000



                             Stick Lac Production(M.T.)

  12000

  10000
                                                                     Jharkhand
   8000
                                                                     Chattisgarh
   6000                                                              Madhya Pardesh
                                                                     West Bengal
   4000
                                                                     Others
   2000

      0
            2002-03       2003-04        2004-05          2005-06


                                                                                              7
Average production of stick lac (M.T.) in the world

     Name of the Country                       Average Production of Stick lac (M.T.)
     India                                                          19,000
     Thailand                                                        8,000
     Indonesia                                                       8,000
     China                                                           1,000
     Vietnam                                                          400
     Myanmar                                                          50
     Total                                                          36,450


                  Average World Production of Stick lac (M.T.)

                                    400
                               1,000            50
                                                                                    India
                  8,000
                                                                                    Thailand
                                                                                    Indonesia

                                                                    19,000          China
                                                                                    Vietnam
                   8,000
                                                                                    Myanmar




Crop Wise Stick Lac Production in India for the last 5 Years


                             Baisakhi                          Kusmi
      Year
                  Baisakhi          Jethwi           Katki          Aghani          Total
2001-02                      9000            2750            5500            3200           20450
2002-03                      7500            2100            4600            3300           17500
2003-04                    10000             2500            5000            2300           19800
2004-05                      7200            1000            9400            3700           21300
2005-06                    10700             3200            3300            800            18000




                                                                                                8
3.3 RAW MATERIAL CONSUMPTION

Stick Lac Consumption in India for the last 5 Years

Year                                 Stick Lac consumed (M.T.)
               Indigenous    Imported        Total       National      Export Market
                                                          Market
2001-2002            20400          190         20590           7400           13190
2002-2003            17850          461         18311           7300           11011
2003-2004            19850          756         20606           7600           12406
2004-2005            21350         1703         23053           8300           14753
2005-2006            17900         5655         23555           8600           14955




                       Stick lac consumption (M.T.)

   25000

   20000

   15000

   10000

       5000

          0
         2001-02       2002-03         2003-04            2004-05       2005-06

                                  Balarampur     Others




                   Average Sticklac Consumption (M.T.)


                        36450
         40000
         30000                           21200
         20000
                                                             9200
         10000
               0
                     World             India          Balarampur

                        World      India       Balarampur
                                                                                       9
3.4 MAJOR PRODUCTION CENTRES

      National

     Factories located mainly at - Balarampur (W.B), Khunti , Murhu Jharkhand),
Kothgora, Shakti, Dhamtori (Chattisgarh), Gondia (Maharashtra), Jhalda, Tulin ( W.B),
Bundu , Chakradharpur (Jharkhand)

                                No. of Units           Average yearly       % of production
                                                         Stick Lac           go to Export
     Major Places
                                                        Consumption             Market
                            Large        Small             (M.T.)
Balarampur (W.B)              8           115                      9200                  45
Khunti                        5            1                       4200                  80
Murhu                         1             -                       300                  50
Kothgora                      6             -                      3400                  80
Shakti                        3             -                       400                  50
Dhamtori                      -            8                        800                 NIL
Gondia                        5            3                       1400                  33
Jhalda,Tulin                  1            30                       800                 NIL
Bundu                         1            11                       150                 NIL
Chakradharpur                 1             -                       150                  90


      International

      Some large units in U.S.A. produce mainly Bleached lac powder and Germany
produces, through solvent plants ,Dewaxed shellac, Alleuritic acid and garnet lac.

Big Business
       Wm. Zinseer & Co. of New Jersey, USA, is the world‟s largest shellac firm. Three
factories are devoted to the bleaching and de-waxing ( through the use of solvents ) of tens
of thousands of pounds of shellac each day.


3.5 PRODUCTION & TURNOVER

Production of Finished Lac & Turnover in India for the last 5 Years

    Year                 Production (M.T.)                  Turnover ( in Rs. Crore)
                 National Market     Export Market       Domestic  Export        Total
2001-2002                    5327             7016             67.9       100.06     167.96
2002-2003                      5092               5820       74.92        100.68     175.60
2003-2004                      5245       6632 + EOU         82.31        129.21     211.52
2004-2005                      5650       7301 + EOU        118.36        165.88     284.24
2005-2006                      5570       7280 + EOU        102.91        159.62     262.53

                                                                                         10
National Turnover & Share of the Cluster


                             Total Turnover (Rs in Crore)

         300

         250
         200

         150
         100
          50

           0
          2001-02         2002-03          2003-04            2004-05   2005-06

                                     Balarampur      Others




                     Turnover in Export Market ( Rs in Crore)

         180
         160
         140
         120
         100
          80
          60
          40
          20
           0
          2001-02         2002-03          2003-04            2004-05   2005-06

                                     Balarampur      Others




                     Turnover in National Market (Rs in Crore)

         140
         120
         100
          80
          60
          40
          20
           0
          2001-02         2002-03          2003-04            2004-05   2005-06

                                     Balarampur      Others



                                                                                  11
3.6 MARKETS

      Major National Market

       Kolkata, Delhi, Jaipur, Mumbai, Amritsar, Chennai. Major portion of export
destinated through Kolkata and the major domestic market is Jaipur.

Share in export market of different places and media
Place                                           2004-05                 2005-06
BANGALORE AIR                                             11.44                     23.94
ICD BANGALORE                                             69.44                     15.96
MUMBAI AIR                                               113.19                       1.6
KOLKATA AIR                                              510.33                    201.12
DELHI AIR                                                 50.58                     17.56
HYDERABAD AIR                                              1.01
CHENNAI AIR                                               28.83                     25.54
MUMBAI AIR                                                 12.9                      9.58
KOLKATA SEA                                            13882.68                   12755.3
DELHI (ICD)                                               35.33                    279.34
CHENNAI SEA                                              275.95                    638.48
NHAVA SHEVA SEA                                             282                    285.72
TUTICORIN SEA                                                                         1.6
AMRITSAR RLY. STN.                                       331.17                    344.87
ICD JAYPUR                                                 7.94                      9.58
JOGBANI                                                    0.37
PETRAPOLE LAND                                             12.4
RAXAUL LAND                                                  2.3                  3.19
OTHER PORTS                                              648.71                1048.71
TOTAL                                                  16276.57               15662.09



                Export of Lac through Principal Places
                                         Others 9%
                    Chennai 4%

     Amritsar 2%


   Delhi 2%




                                                          Kolkata 83%




                                                                                       12
3.7 EXPORT PERFORMANCE

Export Performance over the Years ( Value Rs. in Lakh)

YEAR                   SHELLAC      SEEDLAC      OTHERS     TOTAL
1999-2000                   4135.71      2890.18     957.12       7983.01
2000-2001                   7963.52             759.00          651.71      9374.23
2001-2002                   6472.30             856.92         2676.78     10006.00
2002-2003                   5714.32             636.59         3717.89     10068.80
2003-2004                   8190.38             903.42         3827.12     12920.92
2004-2005                  11182.93            1378.01         4026.57     16587.51
2005-2006                   8854.48            2043.66         5063.94     15962.08




                               Export perfornace

     100%
      80%
                                                                         OTHERS
      60%
                                                                         SEEDLAC
      40%
                                                                         SHELLAC
      20%
       0%
               1999- 2000- 2001- 2002- 2003- 2004- 2005-
               2000 2001 2002 2003 2004 2005 2006


Export Trend


   18000.00
   16000.00
   14000.00
   12000.00
                                                                         SHELLAC
   10000.00
                                                                         SEEDLAC
    8000.00
                                                                         TOTAL
    6000.00
    4000.00
    2000.00
        0.00
               1999-   2000-   2001-   2002-   2003-   2004-   2005-
               2000    2001    2002    2003    2004    2005    2006


                                                                                      13
3.8 DESTINATION OF EXPORT
Region Wise Destination of Export
                                                                                                                           (Value in Rs./Lakhs)
Region                             2003-04                                   2004-05                                       2005-06
East Asia                                                 2635.38                                5487.88                              3503.44
West Asia                                                  540.18                                1038.41                                1755.9
Africa                                                    1690.93                                      2324.1                         2253.05
America                                                   1608.52                                1607.05                              2858.04
Australia                                                    61.53                                             84.36                     19.67
East Europe                                                  33.93                                             24.39                     55.94
West Europe                                               4228.46                                      5072.7                         5304.61
Others                                                    2121.99                                      948.64                           211.44
TOTAL                                                    12920.92                               16587.53                             15962.09




                     Region wise destination of export

              6000

              5000

              4000

              3000

              2000

              1000

                   0
                       East Asia

                                    West Asia

                                                Africa

                                                           America

                                                                     Australia

                                                                                 East Europe

                                                                                                 West Europe

                                                                                                                  Others




                                   2003-04                     2004-05                         2005-06




                                                                                                                                            14
Country wise destination of export (Value Rs. in Lakhs)
                 2004-05                                                                                                              2005-06
     Destination     Exports                                                                     Destination                              Exports
     INDONESIA                                                                2903.50            U.S.A.                                                                     2716.80
     GERMANY                                                                  1672.82            A.R.E.                                                                     1764.84
     U.S.A.                                                                   1666.63            GERMANY                                                                    1513.65
     A.R.E.                                                                   1189.61            INDONESIA                                                                  1257.74
     SPAIN                                                                     989.50            CHINA                                                                      1180.70
     BANGLADESH                                                                855.41            SWITZERLAND                                                                1136.85
     ITALY                                                                     737.04            SPAIN                                                                       837.08
     SWITZERLAND                                                               686.99            BANGLADESH                                                                  810.00
     U.A.E.                                                                    631.03            ITALY                                                                       705.76
     U.K.                                                                      554.36            JAPAN                                                                       455.19
     OTHERS                                                                   3751.98            OTHERS                                                                     2883.47



                                                                                                                                                 U .S .A .
                                                         IN D O N E S IA                                        O TH E R S                        19%
                        O TH E R S                            19%                                                 23%
                          23%




                                                                                                                                                                A .R .E .
                                                                           GERMANY                 JAPAN                                                         11%
             U .K .                                                          11%                     4%
              4%
                                                                                                     IT A L Y
            U .A .E .                                                                                  4%
              4%                                                                                                                                             GERMANY
                                                                                                 BANGLAD ESH
                                                                  U .S .A .                                                                                    11%
    S W IT Z E R L A N D                                                                             4%
                                                                   11%
            4%
                                                                                                                S P A IN                    IN D O N E S IA
                        IT A L Y                                                                                  5%             C H IN A
                                                   A .R .E .                                                                                      8%
                          5%            S P A IN                                                                                   6%
                                                     8%
                                          6%
                                                                                                    S W IT Z E R L A N D
             BANGLAD ESH                                                                                    5%
                 5%




3.9 INTERNATIONAL SCENARIO


                                               Import of Seed Lac From Indonesia

   6000

   5000

   4000
                                                                                                                                                                     Quantity
   3000
                                                                                                                                                                     Value
   2000

   1000

              0
                                   2001-02         2002-03                           2003-04   2004-05                       2005-06




      The Seed Lac imported from Indonesia is processed in India as Stick lac.
      Yearly 100-200 M.T. of Shellac and 4000 M.T. of seed lac are exported from Thailand
mainly to U.S.A.

                                                                                                                                                                              15
3.10 IMPORTANCE OF THE CLUSTER

       In the perspective of International scenario, the above data depicts an average
consumption 25% of sticklac in the Cluster. In the perspective of National scenario, the
above data depicts an average consumption 43% of sticklac in the Cluster, 43% total
turnover, about 32% Export turnover and 60% National Turnover, thereby implicating that
the cluster does not have a counterpart and considering all avenues and interventions from
the view point of consumption of raw materials & turnover, it may be concluded that this
cluster is Benchmark cluster of its own.




                                                                                       16
                                     4. CLUSTER PROFILE


4.1 PRINCIPAL STAKEHOLDERS

A. Small Firms : There are 94 small firms in the cluster, which possess only bhatta. These
firms procure sticklac from the local market & transform the material to Shellac. They wash
seedlac from other firms which have washing facility against certain job charges.

B. Medium Firms : There are 21 medium firms in the cluster, which possess bhatta and
Barrel Washing Machine.

C. Large Firms : There are 8 Large Firms in the cluster, which possess Hydraulic Press
Machine and Barrel Washing Machine. Out of these only one possess solvent plants and
three firms possess bhatta. One firm produces value added products and it is a 100% Export
Oriented Firm. Out of 8 Large Firms only 5 are exporters , one of them is a 100% EOU.

 Typology of       No. of         Capacity/day        Labour engaged          Yearly Turnover (Rs.
    Firm           Firm              (Kg.)                                    in Crore)

                                                    Man Woman Total


SF                       94                  6640    498      277       775                       15

MF                       21                  2800    238      231       347                        5

LF                          8               12250    260      135       395                       85

TOTAL                   123                 21690    996      643    1517                        105


4.2 RAW MATERIAL ARRIVAL & CONSUMPTION

Crop wise arrival of sticklac at Balarampur for the last 5 years ( in M.T. ) :


Year        Baishakhi           Jethuwa    Katki    Kusmi    Old crop     Imported      Total

2001-02             4060            1770    2350      1950          300           600      11000

2002-03             3300            1400    1050      2100          350           600           8800

2003-04             3625            1535    1500      1300          120           700           8780

2004-05             2440             700    2326      2090           50           860           8466

2005-06             3450            1515     900       250           75          2800           8990


                                                                                                  17
Sticklac consumption in the cluster for the last 5 Years

Year                                        Sticklac consumed (M.T.)

               Indigenous       Imported             Total            National         Export Market
                                                                      Market

   2001-2002            10400              600         11000                    5800              5200

   2002-2003             8200              600          8800                    5400              3400

   2003-2004             8080              700          8780                    4500              4280

   2004-2005             7606              860          8466                    4500              3966

   2005-2006             6190          2800             8990                    4500              4440


4.3 TURNOVER OF THE CLUSTER FOR LAST 5 YEARS


        Year                                       Turnover ( in Rs. Crore)

                                National                     Export                      Total

            2001-2002                      47.28                        38.87                     86.15

            2002-2003                      52.74                        32.13                     84.87

            2003-2004                      51.70                        40.36                     92.06

            2004-2005                      63.50                        46.33                    109.83

            2005-2006                      55.75                        51.00                    106.75



4.5 OTHER STAKEHOLDERS

By- Product Processing Unit

There are 2 units which only produce Black TN from Molamma, Passewa by machine ( of
capacity 300 Kg./8 Hrs. from 900 Kg. of raw material ) engaging 16 labours.

Service Provider

There are two Service providers providing washing facilities (transforms sticklac to
seedlac). One of them is a Co-operative Society , viz., West Bengal Lac Artisans‟ Co-
operative Society which provides service to the small firms and take necessary charges.


                                                                                                    18
There are three firms possessing Hydraulic Press Machine- engaged only in Job works.
They provide melting facilities to the small firms and take necessary charges.

Arhatdar ( Raw Material provider )

There are 17 Arhatdars in the cluster who provide go-down facilities and give advance
against the value to the raw material suppliers coming from outside the cluster and acting
as a mediator between suppliers and buyers. They charge 3% commission on the sale value
from the suppliers as brokerage.

Local Buyer

There are 8 buyers in the cluster inclusive of four manufacturer-buyers, who buy finished
products and sell them mainly in National market ( mainly in Kolkata, Delhi, Joypur,
Amritsar, Chennai, Sitamarhi, Cuttack, Hyderabad, Gowhati, Jalandhar, Kanpur ,etc.). The
manufacturer-buyers participate in Export market.

Machine Supplier

There is only 1 Machine supplier in the cluster who supplies Barrel Washing M/c, Crusher,
Impurities Separator. Hydraulic Press and other related machines are brought from
Howrah. The suppliers provide escort services at the time of break-down.

Utility Items Supplier

A number of various items are required during the process, viz. Chaluni (Flat Sieve) of
different nos. ranging from 1 to 120 ( e.g. 40 no. Chaluni means 40 pores in a linear inch ) ,
tin plate, Brush, Broom , Basket ,etc. which are collected from local market.

Fuel Supplier

The main fuel for shellac and Button lac manufacturing is charcoal. Persons from local
villages supply charcoal to the firms in the cluster.

Consumables Suppliers

Consumables items, viz. Marking Cloth (of different quality), Oxalic Acid, Soda, Sulphuric
Acid, Titanium dioxide are collected from local market. Some units also collect costly
material such as Titanium dioxide from Kolkata.

Packaging Material Suppliers

Packaging materials such as Jute Bag, Cartoon etc. are collected from the local market.

Khalifas

There are 20 Khalifas in the Shellac Cluster who stitch the cloth Bags and take necessary
charges.


                                                                                           19
Assessor of Seedlac Content in Stick lac

Three persons are engaged in the cluster to assess the seedlac content ( chouri parta ) of the
sticklac by washing.

Commission Agent for Sale in Local Market

Three persons are engaged to sell the product of the units in local market and it is
compulsory to the units to sell products through the agents in case of local market.

Balarampur Khudra Lakksha Kutir Silpa Baybasayee Samity

It is the Lac Industry association established in the year 2002-03 with 132 members with a
view to promote fair trade practices amongst the traders and to fulfill the interest of the lac
growers, shellac wokers as well as small entrepreneurs towards marketing of their product
and at the same time to establish a common facility centre for the benefit of the members.
Entire Small Firm owners and Medium Firm owners are the members of the Association.
Besides these, Assessor of Seedlac content (in sticklac), Commission agents for Sales ,
Traders of Molumma and two by-product processing units are the members of this
association. Though it was constituted for different noble purpose, the association could not
institute these due to financial constraints. But it helps negotiating in market places for
determination of legitimate prices of the raw material as well as finished goods in the
interest of the entrepreneurs. (Annexure-II)

Chapra Byaparik Sabha

It is informal Industry association consisting of 35 members which include all Large firms,
Arhatdars, Buyers. No significant role of this association is observed in preserving the
interest of its members and in controlling the market.

Though these associations have difference in opinions but both of them organized extensive
movements for exemption of lac products from the purview of VAT, which resulted in
positively. And the Govt. kept the lac products exempted from imposing of VAT.




                                                                                            20
                            5. VALUE CHAIN ANALYSIS


Raw Material
Stick Lac
Rs. 109 per Kg.


            Transportation Cost = Rs. 0.08 per kg.

       After Transportation
       Rs. 109.08 per kg.


            Processing charge Rs. 1.53 per kg. Sticklac
            Material yield = 0.732 kg. (including reintroduce of by-product)
            from per kg. sticklac
            0.033 kg (obtained from processing of per kg sticklac)
            by-product sold to market @ Rs. 65.00 per kg.



           After Processing to Seedlac
           Rs. 151.11 per Kg.



            Processing charge Rs. 10.91 in respect of per kg. Sticklac
            Material yield = 0.686 kg. (including reintroduce of by-product)
             from per kg. sticklac
            0.009 kg (obtained from processing of per kg sticklac)
            by-product sold to market @ Rs. 45.00 per kg. &
            0.04 kg (obtained from processing of per kg sticklac)
            by-product sold to market @ Rs. 25.00 per kg.


             After Processing to Button Lac
             & Processing of Waste
             Rs. 178.03 per Kg.




                  Market Price
                  Rs. 195 per Kg.             NET PROFIT/ SALE AFTER SELLING OF
                                                   PRODUCT & BY-PRODUCTS

                                                                11.36%




                                                                               21
                                                               Material yield Cost per   Price of
                                                               from 1 Kg of Kg. Of       Product
                                                               Sticklac(Kg.) Sticklac    /Kg (Rs.)
                                                                              Processing
                                                                              (Rs.)
Sticklac
Chouri Parta Price = Rs. 160/kg
Chouri Golden Content = 27.25 Kg.
Price of per kg Sticklac (= Rs. 27.25/40*160)                                      109.00

Transport
Transport Cost is Rs. 3 to 7 per bag of 60 kg.
according to the distance.
Rs. 5 per 60 kg. Bag is taken into consideration.
Transport Cost of per Kg. Stick Lac = Rs. 5/60                                       0.08
Price of per kg Sticklac after transportation                                               109.08

Sticklac to Seedlac
Capacity of washer = 8 Maund (320 Kg.)
Motor of 10 H.P.
In normal practice, 6 bhora (bag), i.e., 60 X 6 =
360 kg. is feed at a time.
In a day of 8 hrs. washer can be run twice.
Cost for washing 360*2 = 720 kg. of sticklac are
as follows:
Sieving, Crushing, Washing
                           Labour 4 no. @ Rs. 48 =     192
                               Electricity charges =   200
               Caustic Soda 1.5 Kg @ Rs. 22/Kg =        33
                                       Basket (L.S.)    20
Drying
                           Labour 2 no. @ Rs. 47 =       94
Sieving, Unwonning
                         Labour 12 no. @ Rs. 47 =       564
                                             Total =   1103
                         Processing Cost per Kg. =                                   1.53
By-product received from processing of per Kg
of Sticklac
1. Chankpati - 0.0167 kg (reintroduced in the                         0.0167
process )
2. Mollamma Lac - 0.033 Kg. ( sold to market @                          0.033
Rs. 65/Kg.)
Seedlac obtained from per Kg. Sticklac =                            0.732013
27.25/40*1.05+0.0167(Chankpati)= 0.732013 Kg.
Cost per Kg of Seedlac                  = Rs.                                      110.62   151.11
(109+0.8+1.53)/0.732
Seedlac to Button Lac
Capacity of a Bhatta is 40 kg/day/8hrs.
Cost of processing 40 Kg. Sticklac are as follows :
                        Labour @ Rs. 6 per Kg. =        240
                Charcoal 28 Kg. @ Rs. 7 per Kg.=        196
                                          Cloth =       125
                                 Cloth stitching=      10.5
                                    Oxalic acid=         4.5
                                                                                                     22
                                        Tin Plate=    20
                                           Total =   596
                         Processing Cost per Kg. =                   10.91
By-product received from processing of per Kg of
Seedlac
3. Kirilac - 0.0125 Kg.( Sold to market @ Rs. 45            0.009
per Kg.)

Waste processing
By-product received from further processing cloth
bag as per Kg of Seedlac processed
Cloth bags of 10 bhatta (40 X 10= 400 Kg)
processed at a time and the cost of that process
are as follows :
Waste Process 1
                        Labour 3 no. @ Rs. 47 =      141
             Caustic Soda 2.5 Kg @ Rs. 22/Kg =        55
                                     Fuel(L.S.) =    100
                                          Total =    296
                       Processing Cost per Kg. =                      0.54
By-product received from per Kg of Seedlac
processed:
4. Dnari Passewa - 0.0125 per kg (reintroduced              0.009
in the process )

Waste Process 2
                       Labour 0.5 no. @ Rs. 47 =     23.5
                                 Sulphuric Acid=       10
                                    Drum (L.S.)=        3
                                         Total =     36.5
                       Processing Cost per Kg. =                      0.07
By-product received from per Kg of Seedlac
processed:
5. Rang Passewa - 0.05 per kg ( Sold to market               0.04
@ Rs. 25 per Kg.)
Button Lac obtained from per Kg. Sticklac =                 0.686
37/40*0.732013+0.009(Dnari Passewa)= 0.686
Kg.
Cost of Button Lac = Rs.                                            122.13    178.03
(109+.08+1.53+10.91+0.54+0.07)

SELLING PRICE                                                       133.77    195.00
PROFIT:                                                              11.64
Selling Price of by-product 2 = Rs. 65 X 0.033                        2.15
Selling Price of by-product 3= Rs. 45 X 0.009                         0.41
Selling Price of by-product 5 = Rs. 25 X 0.04                         1.00
Total Profit =                                                        15.19
Net Profit / Sales                                                  11.36%
Net Profit / Capital Employed                                       12.44%




                                                                                       23
              6. ANALYSIS OF BUSINESS OPERATIONS(AOBO)


6.1 RAW MATERIALS (STICK LAC)


        Lac (laccifer lacca) are scale insects (insects that attach themselves pin great numbers
to plants and trees ) which deans the sap from the park of there post trees allowing them to
secrete lac resin which scraped of and manufacture into shellac. To produce just 1K.G. of
lac resin, around 3,00,000 insects lose their tiny lives.

       The life cycle of a lac insect takes about six months and consists of four stages: egg,
larva, pupa and adult. With this life cycle the young are hatched twice a year, although the
harvested trees are left for one to two years to allow new branches to develop.

        After the trees have been infected with brood lac, the so called crop requires little or
no attention until harvest. Once cultivated it is scraped off of the twigs, usually in simple
factories or refining centres ( although sometimes simply with a wooden mallet ) producing
stick lac, which is hung out to dry in order to remove moisture. The quality and value of
stick lac depends very much upon a variety of factors such as the host tree, the climate,
whether the crop is harvested before or after the emergence of the larvae and methods of
drying and storage. In India the yield of stick lac averages three times the weight of brood
lac used.




                                                 Stick lac




                                                                                             24
       Tree branches covered with the unhatched eggs (broodlac) are tied to trees that are
infected by lac where they are thrive. Lac insects thrive on the twigs certain trees and the
principal lac host trees in India are Palas, Kusum and Ber.

       Depending upon the procurement time of the sticlac from the tree, Sticlac are called
as Baisakhi, Jethua , Katki, Aghani. Host tree of Jethua and Aghni crop is Kusum. However,
Aghani crop is famous as “Kusmi” named as per its host tree. Host tree for Baisakhi and
Katki crop are Palas and Ber.



          Grade                        Baisakhi                             Kusmi
          Crop              Baisakhi       Katki             Jethwi       Aghani
Harvesting Time             Oct-Nov.       June-July         January      July
Procuring Time              June-July      Oct-Nov.          July         February
Host tree               Palas    Ber       Palas, Ber        Kusum        Kusum
Yield %                     50    57.5             45            60                  65


Storage

      The Sticklac can be stored up to three years. But the quality of lac resin (melting
power, adhesive power, colour etc.) are going to deteriorate from the first year.


Quality

       The chouri content ( Lac resin content ) in stick lac depends upon the stage of
maturity at which it is procured. The crop can be procured at different stages of maturity,
such as Ari ( Semi-matured stage) , Matured and Fuki ( After leaving out of Lac insect from
the shell).


    Major learning :
                           Production is seasonal
                           Production affected by the climate
                           Yeild % & quality depends on crop type, host tree, harvesting time and
                            procurement time.
                           Inadequate storage infrastructure
                           Quality degrades after one year.




                                                                                               25
6.2 RAW MATERIAL BUYING

        Cultivators of adjacent places and „Paikars‟ from Jharkhand, Chattisgarh, M.P come
with the sticklac in small or big lots at the cluster and dump their sticklac in the go-down of
local traders known as commission agents or Arhatdars according to their choice and make
a part-payment of 70% and above of the total value of the stick lac and commission agents
may arrange for their fooding and lodging. „Paikars‟ may wait for selling of their stick lac
on expectation of higher market price. Arhatdars also advise them on this regard.

       Arhatdars play the role of mediators for selling the sticklac and try to sell it at
higher price. Selling is done by closed auction method, i.e., the hands of trader and buyer is
covered by a cloth and price is settled through touching of fingers . The auctioneer who
bids higher price buy the sticklac. Arhatdars get 3 % commission on the selling price from
the Pikars.

       Selling price of sticklac is based on “chouri Parta” price, i.e., per Kg. costing of
seedlac (for example, suppose a buyer buys 40 kgs of certain quality of sticklac in which
“chouri content is 25 kg at the chouri parta rate of Rs. 100, then he will pay Rs. 100 X 25 =
Rs. 2500 for 40 k.g of sticklac.

      In the past, buyers would negotiate “chouri Parta with the sellers based upon their
own experience. Now a compulsory system of washing of sample to determine “chouri
content in sticklac” has been developed in the cluster. 3 persons are engaged to assess the
seedlac content in the sticklac. A certain quantity from different portions of the lot is taken
and mined together. 2 samples of 400 gm each are taken from the mixture. 1 sample has
been sealed and kept aside to meet future disputes, if arise and other sample of 400 gm is
taken away by the assessor for washing to ascertain the “chouri content”. The result is
obtained at the 2nd day and the actual price is settled thereafter.

      Buyers generally get 3-10 days credit. ½ % discount is allowed in case where
payment is made within three days. Traders show their reluctance to sell stick lac to the
buyers who make delayed payment.

      No unit has the liberty to do direct buying of stick lac from other than local market
except imported lac. These two decisions have been taken very recently after the meeting
held between two associations.

    Major learning :

                           Lower range of local availability
                           Paikars come from adjacent states
                           Arhatdars play the role of mediators
                           Stick Lac sells at ‘Chouri Parta’ price
                           Lack of scientific method to determine chouri content
                           Assessment result of chouri content obtains after 2 days
                           Buying of stick lac from local market is compulsory



                                                                                            26
6.3 PROCESSING

    Process Flow Chart for Seed Lac / Handmade Shellac / Button Lac


    STEP 1               DAY 0              STICK LAC PROCUREMENT



     STEP 2                                          SIEVING
                         DAY 1


                                                    CRUSHING



                                                     WASHING



     STEP 3                                          DRYING
                         DAY 2



                                                     SIEVING
     STEP 4             DAY 4 & 5


                                                   UNWONNING


                                                   SEEDLAC


     STEP 5             DAY 7&8              HOT MELTING & FILTERING



                                              SHELLAC / BUTTON LAC




     STEP 6              DAY 9                    BAG WASHING



     STEP 7              DAY 10                  ACID TREATMENT


                                                                       27
       The sticklac is sieved by chaluni through 2 large flat sieve successively of increasing
number ( no. 3 to 8 – according to the quality of sticklac ) and crushed by crusher into small
grains and the residue left called “garda”. Successive sieving and crushing is required for
higher grade product.

       Then it is fed by basket into the Barrel Washing Machine. Loading time is generally
15 - 20 minute. Capacity of loading at a time of the barrel is its (Diameter X Length ) /2.
Different type of washing are done for different grades – Single Wash for Low quality,
Double Wash for Medium quality and Triple Wash for Superior quality.




             Crusher Machine                                  Barrel Washing Machine


      Single Wash – Water cleaning without or with negligible amount of soda for 45
minutes.

       Double Wash – Soda cleaning ( 750 gm. for 500 kg. ) with low quantity water for 20
minutes. Water is poured into the barrel from the top through pipe for about 25 minutes
and stopped when colour of water passing through a 60 no. net at the back side of the
barrel appears white.

       Triple Wash – Water cleaning for 20 minutes. Soda washing ( 1 kg for 500 kg
material ) for 1 hr ( superior quality ) or 45 minutes ( medium quality ). Then again water
cleaning for 30 to 35 minutes.

       [ For imported lac, the process is hand crushing, crushing by crusher machine,
sieving, again crushing by crusher machine and then feeding to washing machine ( loading
time – 20 minute, washing time – 15 minute ) ]



                                                                                           28
      Water sprinkle out from the back side pores of the machine is gathered into the
adjacent chamber ( nail kuni lake).

      After the completion of washing , bottom door of the barrel is opened and the total
mass rushes into a circular cemented basin (size of the basin depends upon the capacity of
the washer) constructed in front of the machine, top of which is at the ground level. The
masses filtered through cloth (different quality of cloth is used for different grade). After
removing „Khari‟, „Pati‟ from the mass, Seedlac is collected and kept in the bamboo basket.

      Seedlac is then spread into the open cement floor for drying. The layer of seed lac is
continuously rolled over the floor from one side to the other side with the help of a „Patri‟ (a
wooden flat strip having a long handle) for facilitating drying.

       After drying, the material is sieved through a number of Chaluni successively of
increasing pore (depending upon the quality of seedlac required) and separated according
to the size. Residue left out at this stage is „Kuni‟ and „Molamma‟. Then all materials so
sorted out are gathered and remaining impurities are cleaned through Kulo and impurities
separator machine (may be hand-driven or motor driven).


    Major learning :
                           Labour intensive
                           Sieving is done by various numbers of chaluni depending upon the
                            variety of crop and required grade
                           Parameters and duration of washing depends upon the variety of crop
                            and required grade
                           Various kinds of waste and by-products are obtained




Seedlac to Handmade Shellac / Button lac.
     At first a charge (a lot ) of 40 kg Seed lac is prepared. For superior quality the
composition are as follows :

              Fresh Seed lac                            -      38 Kg.
              Broken Seed lac & Dnari Passewa           -       2 Kg.
              Oxalic Acid                               -     100 gm.
              Titanium dioxaide                         -        3 gm.

      For lower quality, fresh seedlac may be 30 kg. and remaining 10 kg come from
Broken Seed lac, Dnari Passewa and Kuni. Titanium dioxide is not used for lower quality,
but only Oxalic Acid is used. (Oxalic acid and Titanium Dioxide are not essential
ingredients but just to improve the colour of shellac to attract the buyers. Though these are
unwarranted in the Export market, specially the Titarium dioxide for its inorganic
character)



                                                                                             29
        Then the mixed material is poured into a long (about 8 ft.), narrow (about 6”
circumference) markin cloth bag ( different quality of cloth is used for different grade of
end product ) with the help of an iron funnel and the material is tightly packed. 8 kg of the
material is packed into a bag. They used a tool called „charka‟ which has two parts - a
wooden shaft having 4 shafts engraved at one end of the first shaft and a wooden stand
with a vertical wooden strip have a channel at the top, so the main shaft of the first part can
rest horizontally on the channel of the second part and rotate freely and continuously
rotated by a person. One other person holds the other end of the bag, seated at fag end of
the bhatta, so that a portion of the bag may be placed in front of bhatta along its length. The
remaining portion of the bag, i.e., the length between first end of the bhatta and the man
rotating the shaft, rests on several wooden stands having requisite gaps. The bhatta is fired
with charcoal.

       Due to hot melting and squeezing, lac resin forced out through the pores of the bag;
leaving behind impurities such as insect bodies or twigs.

       Button Lac : The person sitting at fag end of the bhatta and holding one end of the
bag collects the filtered mass from the outer portion of the bag with a iron strip and lays
over a tin plate in the form of circular disk of approx. 4 C.M diameter and 4 M.M. thickness
(depending upon the market requirement). Time to time, he tightens the packing of the bag
as and when required, as it becomes slack due to poring out of mass from the bag. Another
person sitting in front of the bhatta also collects the filtered mass dropped down from the
bag and shapes it in the form of circular disk in the same manner. The fourth person
supplies tin plates to those persons, collect tin plates full of button lac, impresses stamp on
the button lac quickly before those become cool and hard and make those tin plates empty
by removing the finished product for their further use.




                                   Manufacturing Button Lac




                                                                                            30
Handmade Shellac : The person sitting at fag end of the bhatta and holding one end of the
bag collects the filtered mass from the outer portion of the bag with an iron strip and lays
over a hollow cylinder ( length – 22”, circumference – 31” ) made of china clay and full of
hot water. Another person spreads the mass with a date palm leaf, makes it thinner by
hand using the surface of the cylinder. Then he picks it up from the cylinder, holds the
layer in front of the bhatta to soften it and expand the mass with the help of both four
hands and legs and even with the mouth and make a thin film of approximately 0.5 mm.
thicknesses. At the end, all films are flaked. Thicker portion of four corners may be
reprocessed.

       As and when required another bag, filled with seedlac, is stitched with the previous
bag at the end which is tied with the shaft and accordingly another end of the new bag is
then tied with the shaft. The person who rotates the shaft changes his position in the
forward and backward direction as and when required. The bag which is fully exhausted is
untied there on.

      Any bag can be used for two times. But for top grade products only new bag is used.

      General capacity per bhatta per day of 8 hr. is 40 kg.

       Machinemade Shellac : Seedlac is fed in the Hydraulic Press machine. Hot melting
of the material by steam for 1 hr. as well as machine pressing produces intermediate shellac
in the form of cake. This cake-form shellac is fed into the steam pan and melted by heat of
the steam. Oxalic Acid and Titanium dioxide (only in super quality ) are mixed with the
material at this stage. It takes 20 minutes to melt the material properly. Melted mass is then
allowed to flow down the machine driven roller and the shellac is rolled into sheets
mechanically.




                           Shellac coming out from machine

                                                                                           31
    Major learning :
                           Traditional method of production in case of handmade shellac and
                            button lac
                           Workers have necessary skills
                           Percentage of seed lac is lower in a lot for production of lower grade
                           Various kinds of waste and by-products are obtained
                           Chemicals are used for better get up


6.4 BY-PRODUCTS

       At the stage of preparation of seedlac from the sticklac, materials left out are „Garda‟,
„Rang‟, „Chankpati‟,‟Khari‟,Sand,‟Kuni‟ and „Molamma‟. 20% and 25% molamma may be
obtained from garda and chankpati respectively. Lac content in rang is so less (0.3%) that it
is not viable for recycling for individual. A little amount of Rang Passewa is obtained from
water. Molamma is used for machine made shellac and Rang Passewa is used as raw
material of Black TN.

       At the time of sieving of seedlac, Kuni and molamma are obtained as residue.
Particles of below 40 and above 60 mesh are called Kuni and particles of below 60 and
above 80 mesh are called Molamma. This definition may also vary from crop to crop and
the quality of the seedlac to be produced. About 750 gm Kuni and 1.5 kg molamma are
obtained from 40 kg Baishakhi Seedlac 3% . Kuni is used mainly by those who make lac
bangles.
There are a number of by-products also obtained at the time of processing of seed lac to
shellac. For an example, from 40 kg of Baisakhi seedlac we obtain products as follows :

                     Shellac              -       34 kg
                     Kiri                 -        4 kg
                     Lost in burn         -       750 gm
                     Danri Passewa        -       450 gm
                     Rang Passewa         -       800 gm

        Kiri is the residue retained in the cloth bag after refining seedlac into shellac by hot
filtration; and contains sand, insect debris and other impurities. It is used for machine made
shellac.

        Danri Passewa is obtained by boiling the cloth bag used for melting seedlac with a
little amount of soda, available as thick slabs and is kept under water for few days. It is
100% pure good quality lac resin and is used with the seedlac for further preparation of
shellac.

       After Dnari Passewa is obtained, the bags are further boiled with more soda and
then the alkaline solution of lac is treated with sulphuric acid and thus Rang Passewa is
obtained as precipitate. It is also 100% lac resin but hydrolyzed and quality is poor. It is
used for machine made shellac known as black TN.




                                                                                               32
    Major learning :
                           Percentage of waste and by-product depend upon the variety of crop
                            and its chouri content
                           Some by-products are obtained even after getting the finished product
                           Some by-products are re-introduced in the process
                           Some by-products are sold and are processed by by-product processing
                            units



6.5 GRADING

       Grading of seedlac depends on the nature of crop as also repeated washing. There
are two varieties of Crop, namely, KUSMI and BAISAKHI. Naturally, the finished product
processed from KUSMI variety appears to be the top quality. Depending upon the presence
of impurities after washing in Seedlac it is graded as Golden, 3% & 5% gradually. In case of
Button lac production, KUSMI button No.1 and KUSMI button No.2 are the top graded
button lac. The button produced from the BAISAKHI crop is identified as BAISAKHI Light
Pure button. Handmade shellac from KUSMI and BAISAKHI variety of crops are known
as Superior Lemon (KUSMI Chapra) and Lemon I Shellac respectively. Machine made
shellac have the identity of MMTN, MM Orange and MM Lemon respectively. Actually
Shellac and Button lac would be low graded if they are admixtured with Rosin. So for
determination of grade, quantity of rosin within the shellac and button lac is examined.
Much light transparency in the shellac indicates it as best quality.


    Major learning :
                           Grading of the product depends upon the variety of crop and washing
                            procedure


6.6 PACKAGING

       Packaging of Shellac or Button Lac is made through Jute Bag with a net weight of 50
Kg. / 75 Kg. While Exporting in Foreign countries the Shellac is packed in the new Jute
Bags. For the purpose of exporting it to USA it is first packed in a cloth Bag prior to
packaging in Jute Bag. Sometimes, these Jute bagged shellac or Button lac is also finally
packed in Wooden Packing Boxes to make it more secure and safe. Super quality Button
Lac is exported in the cartoons with a Net weight not more than 20 Kgs, or in case of prior
demand two baskets with net weight of 20 Kgs. in each are placed face to face within a Jute
Bag and then packed for export. From the experience it appears that a few enterprises pack
the button lac after rejecting the broken, de-shaped & black-spotted ones from the
standpoint of maintaining their goodwill.


    Major learning :
                           Normally finished products are packed in 50 and 75 Kg bags
                           Cartoon of 20 Kg net fished product are also packed for quality button
                            lac
                                                                                               33
6.7 TRANSPORTATION

       Transportation of shellac and Button lac is mainly done through Transport Agency .
While sending in small lots to Kolkata or any other nearest city/ State capital those are
dispatched through Bus services. At the time of dispatching to Joypur city of Rajasthan or
any other remotest cities/ state capitals collectively the local buyers arrange for a full
capacity of a Truck say 15 Tonnes. When the goods are to be sent to Giridih ( 250 KMs
away from the cluster) the local buyers arrange for at least 5-6 nos. of Truck.


    Major learning :
                           Absence of fixed transportation system

6.8 PRICING

       Pricing of Shellac or Button lac knows no law. A balanced rate is never found
prevailing in the market. Marketing of these products is found extremely unstable. Price
fluctuating compels the lac growers to dispose of their products at the prevailing rate.
There is a very speculative market in the business of these products. Moreover, due to
fluctuating, gambling and unstable market of the product the market price is affected
abruptly which would be more evident from the table below :

        Selling Price (Rs./Kg) of Baisakhi Light Pure Button Lac at the Local Market

Date           01/11/06            12/01/07             12/02/07            24/02/2007
Price             190                  166                    128               150

As a result of several movements organized by the two associations operating in the cluster
it has been decided that there would be a certain minimum difference between the price of
Chouri Parta and finished product of Stick Lac which the under mentioned data exhibits :

                   Difference of price between chouri parta price & selling price of finished
        Crop                                  product ( in Rs. )


Kusmi                                                    35
Baisakhi                                                 25
Katki                                                    30
Mednipur                                                 40

       Notwithstanding the aforementioned decision the stability in the market price could
not be achieved due to the reasons of insufficient capital , high recurrence of short term
fluctuation and speculation in the market. Many enterprises have been closed due to the
burden of loan. Again, the tiny units would not continue to run the business by procuring
raw materials if the finished products remain unsold and the owners realize that the wages
should be paid to the labours even if they remain idle since the labours are once got
released no labour would be available for the work. When such a situation arises, the local

                                                                                           34
buyers suddenly comes forward to take this opportunity by expressing their unwillingness
to purchase the products. At this stage, the small unit owners are generally compelled to
sell the products at a cheaper rate approach the local buyers repeatedly to procure their
products at a rate even if it would be the cheapest. As a result, the price of Shellac and
Button lac comes down drastically.

    Major learning :
                            Fluctuating, unstable and speculative market
                            Distress Sell
                            Suppression of information
                            Average education level is low


6.9 MARKETING

       Among the 8 large firms in the cluster one is 100% Export oriented unit and out of
the rest 7 firms, 4 firms export 10-25% of their end product direct and balance of the
product they use to sell in Kolkata to the Exporters and Buyers. Those firms sell a very
small quantity of their product in local market.

       Out of 21 Medium firms existing in the cluster , a few entrepreneurs manage to sell
their end product in outer market like Kolkata and to some extent at Joypur, Delhi,etc. and
all others use to sell their product in the local market.

        All the Small firms sell their product in the local market exclusively.

      Percentage of total procured finished product sent to different markets by the local
buyers will be evident from the table below:

Market                          Seed lac                        Shellac and button lac
Joypur                                       10                                   40
Delhi                                        80                                   5
Kolkata                                      10                                   35
Chennai                                       -                                   5
Others                                        -                                   15


    Major learning
                   Restricted marketing channels
                   No existence of professional management and control
                   Absence of consultants for technological, marketing and quality related
                    issues




                                                                                              35
6.10 SEASONAL EFFECT

       In summer as well as in Winter the production of Seedlac is very high. During the
Rainy season production of seedlac hampers badly because sufficient sun rays are not
available for drying of the product. During the rainy season as also the Autumn season to
some extent crisis of labour becomes an acute problem for the production of Seedlac and
shellac since during this time they are engaged in cultivation of Paddy and also its‟
harvesting.
The main commercial crop in our country is the BAISAKHI. The supply of raw materials
during the months of June-July becomes sufficient resulting in an increase in the
production. On the other hand, during the months of January-February the production
hampers badly due to meager supply of raw materials.


    Major learning :
                            Utilisation of installed capacity affected for various seasonal effects



6.11 LABOUR WELFARE

       It is the most important factor in the production of Shellac and Button lac. The
labours have to render their jobs in front of sever heat of Chulla (Bhati) and dust full air at
the time of sieving. They have to inhale obnoxious smell mainly at the time of washing of
imported lac. The labours engaged in the production of handmade shellac have to work
with their organs (hands, legs and mouth). Some units appear to be very congested and
unhygienic even. National Institute of Occupational Health (NIOH) may be pursued for
guidance in adopting the control devices.

       Different labour welfare measures should also be thought of for the labours engaged
in this activity. As a result of uninterrupted movement of Lakksha Sramik Samity the
labours here enjoy themselves yearly 5(five) days‟ Pay Holiday and avail of Puja Bonus.
For this measure, the labours have been benefited to some extent in this sector . But these
labour welfare measures are not adopted in other units situated in the adjoining states
resulting to somewhat higher cost of production in the cluster units. It is observed that the
labours engaged in production of handmade shellac have been leaving these Bhatas
gradually and engaging themselves in the Bhatas at other states like Chhattisgarh and
Jharkhand at a higher wage rate. Thus the units in Purulia have been facing labour crisis
day by day.


    Major learning
                           Inadequate labour welfare




                                                                                                      36
6.12 CREDIT SUPPORT

       Credit support plays a vital role for the promotion and extension of production of
Shellac and Button lac. The lending institutions step back while considering the proposal
for finance to the smaller lac based units due to the reasons of hidden market, gambling
trade as also high fluctuation in market price. On the other hand, they come forward easily
to provide Term Loan, Working Capital loan ( C.C. Limit) to the Large firms since they
could provide requisite securities and credentials. Some medium firms have also availed of
Bank loans. A few enterprises have availed of assistance of Margin Money Loan under
Rural Employment Generation Programme(REGP) of KVIC. But situation of the smaller
enterprises to avail of financial assistance from the lending institutions is not very
encouraging.
       To maintain the existence in the market the firms must have the capacity to hold the
finished products unsold for a period of at least 45-50 days. In that case, a smaller
enterprise producing goods of medium quality requires Working Capital of at least Rs.6.50
Lakhs from the view point of prevailing market price. Where as the smaller units could
never think of contribution of Promoter‟s stake. Though group loan would be beneficial to
some extent to the smaller units but the local banks are found uninterested in the matter.


    Major learning :
                           Major processors are financially weak
                           There is no linkage between the financial units and the small firm
                            owner


6.13 QUALITY CERTIFICATION

        Quality certification enables a product to participate in a competitive international
market. So all the Shellac and Button lac manufacturing units must obtain quality
certification. At present none of the enterprises have obtained quality certification. The
enterprises do not feel any necessity for this quality certification for the finished goods for
participation in the domestic market as well as in the international competitive market.
They do not have any awareness of this provision even the buyers also does not insist on
the same. Only for the marketing in the domestic market it is examined whether there is
resin in the shellac or Button lac. At the time of export, an Export Clearance Certificate
should have to be obtained from Shellac Export Promotion Council for which a minimum
charge is levied. In addition to this, there is a lack of BDS that could provide services.
(details of ISI Specification are furnished in Annexure-III).


    Major learning :
                           Firm owners are less interested about the quality
                           Testing facilities are not available




                                                                                                 37
                             7. INSTITUTIONAL SET UP

NABARD
       The district level office of NABARD is headed by the Assistant General Manager . It
has the scope to strengthen the economy of the district. NABARD has also different
schemes in order to support various promotional interventions in the Rural Non-farm
sector aiming at creation of employment opportunities. These schemes cover Rural
Entrepreneurship Development Programme, etc. With a view to promote the SSI units,
NABARD can play a pivotal role in promoting and strengthening the SHGs in the district
through the NGOs. Moreover, NABARD can provide credit facilities to enterprises under
„Re-finance scheme‟. Keeping in view the promotional activities of NABARD, it‟s
involvement in the Cluster Development Programme (CDP) [at Balarampur] has also been
thought of.

Commercial Banks
       There are two(2) branches of Nationalized Commercial Banks at Balarampur are
viz., Central Bank of India, Malti and United Bank of India, Balarampur. Nature of
financing to units is most discouraging. This is mainly due to fluctuating, gambling and
unstable market of the product. At the time of extending credit facilities to different units
these institutions act in a very preservative manner. They have to provide mainly working
capital loans to the lac processing units. It may be mentioned that the recovery position of
these Banks in the locality appears to be quite satisfactory. Often S.F. owners could not
provide „adequate‟ margins to these institutions which compel the later to keep themselves
away from lending credit.

State Co-operative Agriculture and Rural Development Bank(WEBSCARD)
         WEBSCARD Bank Ltd. has its branch at Balarampur which can extend credit
facilities to SSI units mainly through hypothecation limit as per their norms. It can not be
denied that lac based industries has enormous employment opportunities directly or
indirectly. It can play a key role in helping the lac based SSI units through credit lending
which would mainly support the economic standard of the locality.

Divisional Forest Office ( DFO)
       The Divisional Forest Office plays a key role in providing vested Forest Lands for
plantation of lac host trees in view of promoting and extending lac cultivation in the district
. Lac host trees in the five(5) State Brood Lac Farms (SBLF) have been arranged in such a
manner from which Brood lac can be obtained sufficiently.

District Rural Development Cell(DRDC)
       The District Rural Development Cell(DRDC) plays an important role in promoting
the SHGs Below Poverty Line in the district. The dimension of poverty has been
demarcated in terms of annual income of the family being below Rs.10,000.00 or ownership
of land smaller than 5 acres ; neither owing a Pucca house, T.V., fan, light , petroleum gas,
two wheeler vehicle , etc. DRDC has formed 14,000 SHGs in the district out of which only
850 belong to SSI sector which include 20 Lac processing. Lac processing SHGs have also
been formed in Hura and Puncha Block besides in Jhalda and Balarampur Block.

District Industries Centre (DIC)

                                                                                            38
        The District Industries Centre (DIC) headed by the General Manager with its
headquarter at Purulia caters services in the promotion of SMEs. The entrepreneurs
expressing intents to set up manufacturing/service             unit are encouraged to file
Entrepreneur‟s Memorandum (Part-I) and those who have already commissioned their
units file Entrepreneur‟s Memorandum (Part-II) and on submission of those Memorandum
, an Acknowledgement is issued merely by mentioning the nature of activity , e.g.,
Manufacturing , Servicing. Besides this function, the DIC sponsors the application to
commercial Banks under Prime Minister Rojgar Yojana (PMRY). DIC recommends
subsidies for the new units to the District Level Committee for the implementation of West
Bengal Incentive Schemes. DIC provides schedules of different trade fairs to Industry
associations. It also extends co-operation to the Bengal National Chamber of Commerce and
Industries in conducting Entrepreneurship Development Programmes (EDP) for both men
and women in the district. The DIC is the pioneer in promotion of SSI sector in the district.
It pursues for qualitative investment with its investor-friendly attitude.

Lac Development office (LDO)
       Lac Development office is headquartered in Purulia town. The lac Development
officer has the responsibility of development of Lac Schemes and extension of lac
cultivation. This office also arranges for distribution of seed brood lacs to lac growers free
of cost in collaboration with SEPC and with active support of the district administration
every year. Besides, it also arranges selling of seed brood lac to different SHGs, mainly
women SHGs at a minimum price every year.


Khadi & Village Industries Board (KVIB)
       The Khadi & Village Industries Board (KVIB) is responsible for implementation of
the Rural Employment Generation Programme (REGP) under Margin Money Assistance
Scheme for individuals and societies. Lac processing units are eligible for availing the
benefits under this scheme. On an average the District Office of KVIB sanctions about 50-60
proposals for different activities. After sanction of the proposals the KVIC arranges for
training of the beneficiaries at Multi-Disciplinary Training Centre(MDTC) , Birati, 24-
Parganas(N).


Shellac Export Promotion Council (SEPC)
       It has been functioning in the National Level which endorses a Clearance Certificate
for the export of Shellac and Button Lac for a nominal charge. Moreover, it also caters its
services in the rural area to the need of the lac growers for brood lac . They distribute the
brood lac to the rural lac growers free of cost by organizing different Camps with the
administrative support of the district authority. The Council also arranges for training to
lac growers for lac cultivation in collaboration with the Ramkrishna Mission Lok Siksha
Parishad, Narendrapur, 24-Parganas (S). The SEPC instituted a laboratory within this
cluster area headed by one Laboratory assistant for research on Lac Industry . It is
experienced that the entrepreneurs have got no benefits from the said laboratory during the
last one year. So SEPC has to be more pro-active in this line.


Indian Lac Research Institute (ILRI)

                                                                                           39
       Indian Lac Research Institute (ILRI) under I.C.A.R. , Govt. of India , the nearest Lac
Research Institute, headed by the Director, is located at NAMKUM, Ranchi, Jharkhand. The
Institute has the infrastructure to arrange for training for lac cultivators on improved
method of lac cultivation and processing.

West Bengal Financial Corporation (WBFC)
       The West Bengal Financial Corporation, a Govt. of West Bengal undertaking, has its
branch office in Purulia town headed by the Branch Manager. This can extend financial
support by lending credit to the needy units. It can play an important role in the expansion
of the activity of lac producing units by extending credit facilities.


7.1 PRESENCE OF NETWORKS AND INTRA AND INTER STAKEHOLDERS DYNAMICS

       It is indicated in the current institutional matrix that the relationship among various
stakeholders existing within the Balarampur Shellac cluster differs to some extent. These
cluster actors do not have inter-linkages and responsiveness upto the mark. Some of them
are seen to have distant relationship and that is limited to the extent of merely organizing
some programmes, providing certain services by way of conducting seminars, conferences,
etc.

        A few associations and institutions have pro-activeness and playing the role of
facilitators in solving the problems. For example, Balarampur khudra lakksha kutir Silpa
baybasayee Samity and Chapra Byaparik Sabha have very inter-linkages in between them.
They have also very good inter-linkages with District Industries Centre, Purulia. Both the
said traders‟ associations have also inter-linkages with the Indian lac Research institute,
NAMKUM,Ranchi. They have developed relationship based on the basic necessity of the
lac growers as also the unique final product manufactured by the members. Those two
traders‟ associations have minor relationship with the financial institutions.

        Taking into account the pro-activeness and responsiveness as also the dimension of
inter-linkages and cooperation of different direct and indirect cluster actors they have been
given a score in a five point scale. The Score „1‟ indicates that there is very little cooperation
among these cluster actors whereas the score ‟5 ‟ indicates that there is strong inter-linkages
and responsiveness among the cluster actors. These inter-linkages may be defined in terms
of joint planning, bulk purchasing of raw materials and inputs , coming forward at the time
of need of each others, increasing coordination , making close liaison with various Govt.
departments , interchanging views , availing training schemes sponsored by different
Research and Service institutions, reviewing the growth of the cluster by conducting
periodical meetings , making liaison with the Export agencies and also acting in such a way
which would be catalytic for the growth of the clustering phenomena.

       The following Govt. departments, Corporations and Boards having direct/indirect
stake in the cluster can play a very significant role for the overall growth of the cluster :

      District Industries Centre(DIC)
      National Bank for Agriculture and Rural Development (NABARD)
      Small Industries Service Institute (SISI)
      National Small Industries Corporation(NSIC)
                                                                                               40
      West Bengal State Coop. Agriculture & Rural Development Bank Ltd.(WEBSCARD)
      Divisional Forest office (DFO)
      District Rural Development Cell (DRDC)
      Lac Development office (LDO)
      W.B. Khadi & Village Industries Board(WBKVIB)
      West Bengal Financial Corporation (WBFC)
      Indian lac Research Institute (ILRI)

       District Industries Centre (DIC) has a moderate linkages with local traders‟
associations. Relationship between the District Industries Centre, Lac Development office,
W.B. Khadi & Village Industries Board , West Bengal Financial Corporation, National Small
Industries Corporation and Small Industries Service Institute is on the higher side. But it
has very less relationship with Divisional Forest Office , Shellac Export Promotion council
and Indian lac Research Institute. The inter-linkages between SISI AND NSIC are definitely
very strong. The ILRI is the leading Research Institute in the country which has immense
scope to provide input for training on improved method of lac cultivation and processing
by way of opening a Research Laboratory within the Balarampur Shellac cluster.

       The present institutional matrix clearly expresses the moderate/minimal
relationship among these stakeholders, which may be defined as one of the major
drawbacks of the Balarampur Shellac cluster. It has been experienced that a very strong
relationship is required among the cluster actors and stakeholders for the developing and
emerging cluster like Balalrampur Shellac Cluster. A significant relationship and inter
linkages among stakeholders can only stand as a source for technology, capital,
marketing,etc. for the overall sustainable growth of the cluster. Considering the situation
stated above, it should be thought of that the inter linkages among these stakeholders be
strengthened by way of conducting awareness/motivation camps. It should be taken into
account as one of the capacity building measure for this Shellac Cluster.

       There may be some lacunae of the current institutional matrix which would not be
placed out of mention here. One of the major lacunae is that it does not reveal the nature of
relationship between stakeholders and its associated members (e.g., the relationship of the
member entrepreneurs with Balarampur Khudra Lakksha Kutir Silpa Baybasayee Samity).
The stakeholders/associations have to ensure pro-activeness so that the member
entrepreneurs are benefited through their activities and programmes.

        It has been realized during diagnostic study that besides strengthening inter linkages
among the stakeholders the relationship among individual enterprises and traders‟
associations/financial institutions requires to be more transparent which may be of
immense help for both of them to play an important role to participate in the export market
of this unique product for the sustainable growth and development of this cluster in view
of modern globalization.




                                                                                           41
              8. CLUSTER MAP BEFORE INTERVENTION



              NABARD            NSIC             SISI         WBSCARD


    DIC          WBFC            Commercial Banks            DRDC


     DFO          LDO            KVIB            SEPC       ILRI



Aratdars                                                                 Overseas
  (17)                          L F (8)                                  Importers
                              Labour 395                                 (20%)
                                                          By-product
 M/C                                                      Processing
Supplier                                                  Unit (2)      Merchant
  (1)                                                                   Exporter
                  M F (21)               S F (94)                       (80%)
Other            Labour 347             Labour 775         Buyers
Consuma                                                      (8)
bles &                                                                  National
Utility                                                                 Market
goods
supplier

            BDS (3)        BDS (2)           BDS (20)
           Providing      Providing           Stitching
            melting        washing           cloth Bags
            facility       facility




                                                                               42
                                9. SWOT ANALYSIS

Strength                                      Weakness
 1.    World‟s largest processing centre       1.    Lower range of local availability
       thereby reflecting 25% of world‟s       2.    Seasonal production of raw
       total raw material consumption                material
       which is equivalent to 43% of           3.    Compulsory procurement of raw
       India‟s total consumption.                    material from local market.
 2.    Major cultivating states are in         4.    Lack of scientific method to
       close proximity                               determine the „chouri parta‟
 3.    Skilled labour                                content in stick lac
 4.    Environment friendly                    5.    Traditional method for production
 5.    Strong market demand                    6.    Low productivity
 6.    Well connected by road and rail         7.    Testing facilities are not available
 7.    Proximity of Kolkata, the major         8.    Inadequate storage infrastructure
       export market                           9.    Major processors are financially
 8.    Growing demand in domestic and                weak
       export market                           10.   Fluctuating, unstable and
 9.    Best quality of sticklac of Baisakhi          speculative market
       variety (famous as Manbhum              11.   Closed auction method for raw
       variety) produced in the district             material buying
 10.   Reliability of payments from            12.   Restricted marketing channels
       traders                                 13.   Distress Sell
 11.   Existing knowledge on processing        14.   Suppression of information
       methods and on risks related to         15.   Average education level is low
       the business                            16.   No existence of professional
 12.   Motivated Employees                           management and control
 13.   Government is committed to              17.   Inadequate labour welfare
       promote shellac industry                18.   Absence of consultants
                                               19.   Associations do not have any
                                                     financial and business activity


Opportunity                                   Threat
 1.    Wide application & scope for            1.    Shelf life problems of raw
       developing value added products               material and finished products
 2.    High potential of export market         2.    Import of sticklac is increasing
 3.    Government initiatives to develop       3.    Manual processing
       sticklac cultivation and                4.    Lack of quality awareness and
       processing                                    process knowledge
 4.    Financial support of NABARD,            5.    Quality inconsistency
       SIDBI and other financial
       institutions
 5.    Various Central Government
       projects to promote village
       infrastructure
 6.    Developing common facility
       center for storage, testing,
       capacity building, marketing and                                                     43
       effluent treatment plant
                                       10. VISION

      “ Growth in present market share in export, national, value added products through
developed net working system of purchase, marketing by upgrading technology, quality,
human resource skills and knowledge levels.”

                            11. LONG RUN OBJECTIVES

       Long run objectives for sustained impact on the cluster both with
respect to growth and development are as follows :

    Creation of raw material purchase network
    Setting up of common facility center for storage of raw material as well
     as finished products, testing facilities, information access, e-marketing
     and capacity building
    Setting up of value added products manufacturing unit with public
     private partnership
    Processing units will be empowered through better access to credit
     from financial institutions and an improvement of their processing
     capacity and quality through technology up-gradation
    Establishing a common brand and creation of a niche market of their
     own through linkages to steady marketing channels
    Establishing relationship with support institutions and firms
    Increase in productivity of 10% firms




                                     12. STRATEGY

       Major issues require strategic intervention by way of strengthening the social capital
and linking the cluster with BDS (Business Development Service) providers .This could
be achieved by the following strategic interventions in the cluster:

       The main strategy required for development of the cluster lies in changing the
mindsets of the stakeholders by way of encouraging to form network amongst themselves
in order to undertake necessary developmental initiatives, including the establishment of
necessary infrastructure facilities and in-house manufacturing facilities, which are the main
pre-requisites for accessing markets and obtaining equilibrium price of the product.

      Dissemination of information at all levels for empowerment of economic agents.
      The private sector would be empowered to steer its own route through the
development of Local Institutions, Networks and Consortia.
       Enhance its competitiveness by bringing synergy between the different segments in
the cluster.


                                                                                          44
      Consortium for purchasing raw materials will also be established for smooth supply
and to reduce the cost of production.

       Creation of common storage for raw material as well as finished products.

       Adoption of Value added plant.

       Providing all kinds of testing facilities.

       Special efforts would be made to obtain a sustainable growth in present market
share in export, national, value added products for which the products image and brand
building would be promoted.

      Market surveys for assessing the present and future demand, demand for value added
product and exploring the new areas of application.

       Consortium for marketing and a common brand will be made to articulate demand.

       Joint exposure to markets etc. will be promoted to make the stakeholders realize the
potential of joint action and the need to tackle issues of importance for the long run (such as
joint marketing/production).

       Create effective marketing linkages.

      Quality awareness and related training would be provided keeping the different
market segments in mind.

        Technical support for improving the quality, productivity and linkages wit h the
technical institutions and BDS providers will be arranged to ensure consistency in quality &
maximum capacity utilization by increasing productivity governed by the law of increasing
return.

     Other technical inputs will also be provided to treat the effluent from the washing in
a common center and to obtain product there from.

       The role of support institutions vis-à-vis the cluster would be strengthened for
availability of working capital, Creation of new BDS and capacity building. Study of
financial feasibility is the pre-condition to have the access of bank finance.

      The health and social needs of the processors shall be given an on going attention.

    Behavioural attitude with respect to social responsibility and fair trade practices
amongst the firms shall have to be promoted.

      Fluctuation of price, its causes and effect shall have to be identified in a regular
manner and to adopt remedial measures to avoid speculation in the market thereby
bringing stability.


                                                                                            45
                                 13. ACTION PLAN

       Thrust will be given to creating the necessary infrastructure and support services
as it is an urgent felt- need for the development of the cluster. This will be carried out
by creating networks amongst the cluster actors and by motivating them to take a lead
role to get the necessary technical inputs for improving productivity, quality, design etc
and for establishing the necessary linkages with the technical support institutions
before making efforts to improve the market position.

CREATING AMBITION

     Interactions
     Providing technical knowledge
     Personality development
     Information sharing

AWARENESS BUILDING

   Business environment in which the cluster is going to operate
   Need for testing and quality control
   Need for compliance of various statutory regulations relating to society,
    environment and quality
   Need for creating productive assets to channelise investment and expansion

NETWORK LEVEL INTERVENTIONS

Technology up gradation and in-house manufacturing

   Imparting technical knowledge for production planning, cost reduction,
    inventory control, testing and quality control
   Sourcing technical know how to improve the existing processing techniques
    and to make value added products
   Technical assistance to reduce consumption of energy fuel and power
   Providing technical know how for proper treatment of effluents discharged
    from the washing units

Establishing linkages and network

   Establishing linkages with BDS providers and technical institutions for
    technical support in production and marketing
   Establishing network and co-operation among the firms for order sharing,
    sourcing of raw material and expertise
   Establishing network among the firms to tap export markets

Exposure visits

   Exposure visits to other industrially developed, competing clusters to
    understand their working methodologies, expertise and competence
   Exposure visits to trade fairs
                                                                                       46
CLUSTER LEVEL INTERVENTIONS

Capacity Building

   Revival and strengthening of the industry associations
   Establishing linkages with various apex trade promotion bodies to
    represent the issues relating to the industry to the policy makers
   Establishing linkages with other local chamber and trade associations
   Establishing linkages with various support institutions, developmental
    agencies, technical and educational institutions
   Providing training and establishing system to enable the association to employ e-
    commerce
   Building information center in the associations

Building infrastructure facilities

   Setting up of common facility center for storage of raw material as well
    as finished products, testing facilities, information access, e-marketing
    and capacity building
   Setting up of value added products manufacturing unit with public
    private partnership
   Developing infrastructure with common effluent treatment plant


Market Development

     Market survey fo r assessing t he present and fut ure demand, demand
      for value added pro duct and ex plor ing t he new ar eas o f applicat io n .
     Promotion of Common Brand
     Image building for the cluster through joint participation
     Participation in trade fairs




12. Budget and proposed activities
                                                                                        47
12.1. Action Plan for FY 2007-08
Sl.     Activity       Objective        Duratio   Execut        Budget (Rs. '000)
No                                        n        ing     SH     SG CG Total                       Benefici
 .                                      Period    Networ                            Outcome
                                                                                                    aries
                                                    k
 1    Trust
      Building
1.1   Awareness      To create an       1 Day      DIC /   1       1    8    10     Stakeholder     100-125
      programme      awareness on        Q1       Associ                            s will know     firms
      on Small       cluster concept               ation                            the object of
      industries     to facilitate                                                  the
      cluster        imrovement of                                                  programme
      development    productivity &                                                 and their
                     competitivenes                                                 role,
                     s                                                              benefits
                                                                                    therefrom
1.2   Exposure       To facilitate        10      Associ   20      5    50   75     Participents    10-15
      visit to       group               Days     ation/                              will know     Stakeho
      understand     behaviour &          Q2       DIC                                how they      ders
      cluster        ensuring trust                                                   can enjoy
      dynamics       among                                                             win win
                     themselves                                                        situation
1.3   Disseminatio   Interaction with   1 Day     Associ       1   1    3     5     Stakeholder     100-125
      n of major     other               Q2       ation/                                will be     firms
      learning of    stakeholders                  DIC                              motivated to
      the visit      on the                                                           take joint
                     experience                                                       initiatives
                     and major
                     learning of the
                     visit
1.4   Meeting of     To monitoring      1 day     CDCC     1       2    5     8     fixation of     100-125
      CDCC 4 no.     the                each                                        next course     firms
      ( 1 in each    implementing       Q1-4                                        of action,      and
      quarter)       process                                                                        support
                                                                                                    institutio
                                                                                                    ns
  2   Market Development
2.1      Demand     Find out the          1       Consul   10      10   80   100    Scope for       100-125
        analysis of gap between         Month      tant/                            market          firm
          Shellac   potential            Q2        DIC/                             expansion
                    market                        Associ                            will be
                    demand and                     ation                            revealed
                    existing
                    available
                    capacity of
                    supply and
                    exploring the
                    new areas of
                    application
2.2   Disseminatio Stakeholders         1 Day     Associ       1   1    3     5     Stakeholder     100-125
      n the         will know the        Q2        ation                                will be     firm
      findings and  present status                 DIC                              motivated to
      opportunities of the market                                                    strengthen
      as identified and                                                             themeselve
      in the        opportunities                                                   s to gain the
      analysis      thereof                                                         oppurtunity




                                                                                                         48
2.3   Analyse         Analyse the         1        Consultant/    10   10   80    100   Area and        100-125
      scope for       present             Months   Association/                         scope for       firms
      value added     financial           Q2       DIC                                  joint
      production      relations                                                         initiatives
                      between the                                                       will be
                      stakeholders                                                      revealed
                      and scope of
                      joint initiatives
2.4   Dissemination   Stakeholders        1 Day    Association/   1    1    3     5     Stakeholder     100-125
      the findings    will know the       Q2       DIC                                  s will be       firms
      and             area and                                                          motivated to
      opportunities   scope for joint                                                   take joint
      come out        initiatives                                                       initiatives
      from the
      study
3     Technology up gradation
3.1   Sensitizing    Understanding        1 Day    Association    1    1    8     10    Pricipal        100-125
      programme      & measuring          Q1       s&                                   Stakeholder     firms
      on             of various                    resource                             s will know
      productivity   factors of                    persons/                             the way of
      development    productivity                  DIC                                  increasing
                     and means of                                                       the profit
                     productivity
                     improvement


3.2   Field study &   Assessing           1        NPC/Associ     10   10   80    100   10%             10-15
      analysis of     present             Months   ation/DIC                            entrepreneur    firm
      present         productivity,       Q3                                            es will be
      productivity    scope of                                                          motivated to
      status &        improvement                                                       introduce
      scope of        in productivity,                                                  new tools for
      improvement     scope of                                                          improvemen
                      technological                                                     t of
                      development                                                       productivity
                      & likely
                      investment &
                      pay back
                      period
3.3   Demonstratio    Introduction of     Q4       NPC/Associ     50   50   150   250   Improved        30-45
      n of tools      new tools                    ation/DIC                            Productivity    firms




3.4   Dissemination   Principal           1 Day    Association    1    1    3     5     Stakeholder     100-125
      the findings    stakeholders        Q2                                            will be         firms
      and             will know their                                                   motivated to
      opportunities   present                                                           strengthen
      come out        productivity                                                      themselves
      from the        level, scope of                                                   to gain the
      study           improvement                                                       opportunity
                      in productivity,
                      scope of
                      technological
                      development
                      & likely
                      investment &
                      pay back
                      period

                                                                                                           49
4     Capacity Building
4.1   Sensitizing To develop          1 Day    Associati   1    1    8    10    Associati     100-125
      programme the                   Q2       ons &                            on            firms
      on            entrepreneurs              resource                         Strength
      motivationa on inter                     persons                          ening
      l&            personal                                                    Stakehol
      leadership    relationship &                                              ders will
      developme motivational                                                    be
      nt            aspects &                                                   motivate
                    more towards                                                d to take
                    SPV                                                         joint
                                                                                initiatives
4.2   Awareness     To develop        1 Day    Associati   1    1    8    10    Stakehol      100-120
      programme     the               Q2       ons &                            ders will     firm
      on quality    entrepreneurs              resource                         be
                    with the                   persons                          motivate
                    concept of                                                  d to
                    quality & its                                               introduce
                    importance                                                  quality
                                                                                manage
                                                                                ment
                                                                                system
4.3   Introduce     Facilitate to     6        Consulta    20   20   60   100   20%           30 firms
      loan          avail financial   Month    nt                               small &
      facilitator   support / loan    s Q3-4                                    medium
                    from banks /                                                entrepren
                    financial                                                   eurs will
                    institution                                                 get bank
                                                                                finance
4.4   Publication   Publish           Q2&      Associati   3    3    24   30    Associati     100-125
      of cluster    cluster           4        on                               on            firms
      news letter   informations                                                Strenghe
      (Half-        and achei                                                   ning.Doc
      yearly)       vements                                                     umentati
                                                                                on of
                                                                                cluster
                                                                                progress
                                                                                and
                                                                                building
                                                                                image
5     CFC
5.1   Feasibility   To find out       Q4       ILRI /           20   80   100   Necessit      100-125
      report on     the scope and              NPC /                            y and         firms
      CFC and       areas for                  SISI                             scope for
      value         establishing                                                establish
      added         CFC and                                                     CFC (
      product       Value added                                                 inluding
                    product                                                     requirem
                                                                                ent of
                                                                                facilities)
                                                                                and
                                                                                value
                                                                                added
                                                                                product
                                                                                plant will
                                                                                be
                                                                                revealed




                                                                                                  50
 5.2      Disseminati        Principal              1 Day       Associati          1       1        3         5          Stakehol         100-125
          on of the          stakeholders           Q2          on                                                       der will         firms
          findings           will know                                                                                   be
          and                Necessity and                                                                               motivate
          oppurtuniti        scope for                                                                                   d to
          es of the          establish CFC                                                                               strengthe
          study              ( inluding                                                                                  n
                             requirement                                                                                 themesel
                             of facilities)                                                                              ves to
                             and value                                                                                   gain the
                             added                                                                                       oppurtuni
                             product plant                                                                               ty

 6        OTHERS
 6.1      Preparati        To collect,           12           Associati       10       5          60         75         All              100-125
          on of a          documetatio           Month        ons                                                       necessary        firms
          informatio       n and                 s Q                                                                    informatio
          n data           disseminatio          1- 4                                                                   ns will be
          bank             n of                                                                                         available
                           necessary                                                                                    for any
                           informations                                                                                 further
                                                                                                                        requireme
                                                                                                                        nt
 6.2  Misc. and            To meet up            Q 1-4        DIC /           5        5          40         50
      contingen            unforeseen                         Associati
      cy                   expenditure                        on
      expenditu
      re
 TOTAL                                                                        195      126        952        1273

Notes:
1. DC = DCSSI, SG = State Government of West Bengal, SH = Stakeholders
2. Action plan for the year 2008-09 is provisional but indicative of likely budget for approval. Based on the learning received during
implementation for the year 2007 -08, a modified action plan for 2008-09 will be submitted for activity based approval towards the end of the
year 2007-08.
3. Action plan for the year 2009-10 is provisional but indicative of likely budget for approval. Based on the learning received during
implementation for the year 2007-08 and 2008-09, a modified action plan for 2009-10 will be submitted for activity based approval towards the
end of the year 2008-09.
4. Detailed DPR for CFC will be submitted for consideration as per Action Plan.
5. Various local, state and national level technical and financial institutions as well as consultants/ consultancy organisation will be involved in
implementing these activities. Some names are also mentioned against some activities. However these names are not exhaustive.




 12.2. Action Plan for FY 2008-09
 Sl.         Activity            Objective           Duratio      Execut             Budget (Rs. '000)
 No                                                    n           ing            SH   SG    CG      Total                               Benefici
                                                                                                                        Outcome
  .                                                  Period       Networ                                                                 aries
                                                                    k
    1    Trust
         Building
 1.1     Meeting of           To monitoring           1 day        CDCC            1       2        5          8        fixation of      All
         CDCC 4               the                     each                                                              next             Stakehol
         nos. (1 at           implimenting            Q1-4                                                              course of        ders
         each quarter)        process                                                                                   action,
 1.2     Hand holding         To provide             1 day          DIC /          2       2       16         20        Self             SPV
         training for         support for             each         Associ                                               reliance of
         SPV 2 no.            SPV                    Q1 & 3        ation /                                              the SPV
                                                                    SPV


                                                                                                                                                51
2     Market Development
2.1   Disseminatio Stakeholders        1 Day      DIC /          1         1         3      5       Stakehold     All
      n the findings will know the     Q2         Associ                                            ers will be   Stakehol
      and            area and                     ation /                                           motivated     ders
      opportunities scope for                     SPV                                               to take
      come out       joint                                                                          joint
      from the       initiatives                                                                    initiatives
      study
2.2   Joint export   Increase in       45 days    DIC /          40        40        120    200     Increased     20% of
      through        exports           Q2-Q3      Associ                                            Exports &     the
      common                                      ation /                                           sale          stakehol
      consultant                                  SPV                                                             ders




3     Technology up gradation
3.1   Joint         Joint            6         NPC          90        30        180        300    Firms will      10%
      activity for  implementati     month                                                        increase        Principa
      productivity on of various     Q2-                                                          productivity    l
      improveme measures to          3                                                            level           Stakeho
      nt            improve                                                                                       lders
                    productivity
4     Capacity Building
4.1   Publication Publish            Q2&       Associa      6         3         21         30     Documentati     All
      of cluster    cluster          4         tion /                                             on of cluster   Stakeho
      news letter   informations               SPV                                                progress and    lders
      (Half-        and                                                                           building
      yearly)       achievement                                                                   image
                    s
4.2   Publication To provide         1         Associa      10        5         45         60     Improvement     All
      of brochure support for        month     tion /                                             of              Stakeho
                    preparing        Q3        SPV                                                customisatio    lders
                    profile of                                                                    n
                    cluster
                    products
4.3   Appointme     To assist        12        Associa      45        15        120        180    Developing      Associat
      nt of NDA     Association /    month     tion /                                             professionali   ion /
      for           SPV in           Q 1 -4    SPV                                                sm in           SPV
      Association running their                                                                   network
      / SPV         management
5     CFC
5.1   Detailed      To chalk out     3         SISI /       25        25        100        150    Necessity to    Stakeho
      feasibilty    the total        Month     ILRI /                                             establish       lders
      report for    feasibility      s Q3      NPC /                                              CFC and all
      CFC (for      report,                    Consult                                            parameters
      storage of    project                    ant                                                for the
      raw material  report, plan,                                                                 implimentatio
      as well as    likely budget                                                                 n fof the
      finished      and its pay                                                                   project will
      products,     back period                                                                   be disclosed
      testing
      facilities,
      information
      access, e-
      marketing
      and capacity
      building)
  6     OTHERS
6.1   Misc. and      To meet up      Q 1-4     DIC /        5         5         40         50
      contingenc     unforeseen                Associa
      y              expenditure               tion
      expenditure

                                                                                                                      52
                                                TOTAL       225    128   670    1003




12.3. Action Plan for FY 2009-10
Sl.   Activity       Objective        Duratio   Executing     Budget (Rs. '000)
                                                                                                         Benefici
No                                    n         Network       SH SG CG          Total   Outcome
                                                                                                         aries
.                                     Period
1     Trust
      Building
1.1   Meeting of   To                 1 day     CDCC          1     2    5      8       fixation of      All
      CDCC 4       monitoring         each                                              next course      Stakeho
      no. ( 1 at   the                Q1-4                                              of action,       lders
      each         implementin
      quarter)     g process
1.2   Hand         To provide         1 day     DIC /         2     2    16     20      Self reliance    SPV
      holding      support for        each      Associatio                              of the SPV
      training for SPV                Q1 & 3    n / SPV
      SPV 2
      no.
2     Market Development
2.1   BDS led      To                 1 Year    Associatio    75    50   125    250     Marketing        30-40
      market       strengthen         Q1 - 4    n / SPV                                 share of the     firms
      access       new                                                                  cluster will     will
                   marketing                                                            increase         have
                   channel                                                                               new
                                                                                                         linkages
2.2   Sensitizing    Understandi      1 Day     DIC /         1     1    8      10      Stakeholders     Principa
      programme      ng the           Q1        Associatio                              will be          l
      on better      various                    n / SPV                                 motivated to     Stakeho
      handling of    factors                                                            improve their    lders
      working        affecting the                                                      fund
      capital fund   working                                                            management
      & follow-up    capital fund                                                       system
      of loan to     management
      firms          and tools for
                     better control
                     of the fund
2.3   Training       To train         3 Days    DIC /         10    10   80     100     Stakeholders     40
      Programme      principal        each      Associatio                              will take        Stakeho
      on working     stakeholders     Q3-4      n / SPV                                 initiatives to   lders
      capital fund   on handling                                                        improve their
      manageme       of working                                                         fund
      nt             capital fund                                                       management
      2 no.                                                                             system

3     Technology up gradation
3.1   Joint         Joint             6         DIC /         75    50   100    225     Firms will       10%
      productivity implementati       month     Associatio                              increase         Principa
      improveme on of various         Q2-3      n / SPV                                 productivity     l
      nt            measures to                                                         level            Stakeho
                    improve                                                                              lders
                    productivity
3.2   Joint         Joint             6         DIC /         75    50   100    225     Firms will       10%
      Quality up-   implementati      month     Associatio                              inprove          Principa
      gradation     on of various     Q2-3      n / SPV                                 quality level    l
                    actions to                                                                           Stakeho
                    improve                                                                              lders
                    quality
4     Capacity Building


                                                                                                             53
4.1   Publication   Publish          Q2&4     Associatio     9        3    18   30     Documentati       All
      of cluster    cluster                   n / SPV                                  on of cluster     Stakeho
      news letter   informations                                                       progress and      lders
      (Half-        and                                                                building
      yearly)       acheivement                                                        image
                    s
4.2   Publication   To provide      1        Associat   10       5        45    60     Improvement       All
      of brochure   support for     month    ion /                                     of                Stakeho
                    preparing       Q3       SPV                                       customisation     lders
                    profile of
                    cluster
                    products
4.3   Appointme     To assist       12       Associat   15       15       90    120    Developing        Associa
      nt of NDA     Association     month    ion /                                     professionalis    tion /
      for           / SPV in        Q 1 -4   SPV                                       m in network      SPV
      Association   running
      / SPV         their
                    manageme
                    nt
5     CFC
5.1   Implementa    To chalk out    3        SISI /     As per approved DPR            Necessity to      Stakeho
      tion of       the total       Month    ILRI /                                    establish         lders
      common        feasibility     s Q3     NPC /                                     CFC and all
      facility      report,                  Consulta                                  parameters
      centre        project                  nt                                        for the
                    report, plan,                                                      implimentatio
                    likely                                                             n fof the
                    budget and                                                         project will be
                    its pay back                                                       disclosed
                    period
6   OTHERS
6.1 Misc. and       To meet up      Q 1-4    DIC /      5        5        40    50
    contingenc      unforeseen               Associat
    y               expenditure              ion
    expenditure
TOTAL                                                   268      183      627   1088




                                                                                                             54
                              ANNEXURE-I
List of Persons Interviewed


Sl.No.   Name                          Status
1        Ranjit Majhi                  Medium Firm owner
                                       and Secretary,
                                       Balarampur Khudra
                                       Laksha Kutir Silpa
                                       Baybasayee Samity
2        Subhas Agarwal                Arhatdar, Buyer and
                                       Secretary, Chapra
                                       Byaparik Sabha
3        Kishorilal Agarwal            Manufacturer,
                                       Exporter
4        Dilip Pal                     Manufacturer,
                                       Exporter
5        Santosh Kumar                 Medium Firm owner
                                       and President,
                                       Balarampur Khudra
                                       Laksha Kutir Silpa
                                       Baybasayee Samity
6        A. Panigrahi                  Manager, CBI
7        Rakhahari Kumar               Secretary, WB Lac
                                       Artisans’ Co-operative
                                       Society.
8        Biswanath Karmakar            Machine supplier
9        Brijmohan Tulsian             Buyer
10       Bablu Chatterjee              Small Firm owner
11       Ajodhya Shaw                  Medium Firm owner
12       Subhas Gope                   Medium Firm owner
13       Sanatan Dutta                 Small Firm owner
14       Subhas Dey                    Small Firm owner
15       Nikhil Kumar                  Small Firm owner
16       Swapan Kumar                  Medium Firm owner
17       Sukumar Ghosh                 Small Firm owner
18       Tinka Kundu                   Medium Firm owner
19       Nimai Kumar                   Selling Agent
20       Dhiren Kumar                  Medium Firm owner
21       Rajesh Jaiswal                Small Firm owner
22       Anup Saraf                    Arhatdar




                                                                55
Likely Infrastructure (PPP)

   1. Common Facility Centre

      Common storage facility of raw materials as well as finished goods, testing facilities ,
      information access , e-marketing and capacity building.

   2. Value added Plant

      To achieve value added product.

   3. Common effluent treatment plant

      Facilities of effluent treatment.



Likely SPV

      1.     Balarampur Khudra Laksha Kutir Silpa Baybasayee Samity

      2.     Chapra Byaparik Sabha.




                                                                                            56
ANNEXURE - II




                57
58
59
                                                     A N N E X U R E – III

Technical Specification of Shellac products required by foreign buyers

The ISI specifications of different products required by foreign buyers are provided below -

The products required by the external borrowers should conform to the requirement of
following products –
     Seedlac
     Handmade Shellac
     Bleached Lac
     Lac Dye

ISI SPECIFICATIONS (IS:15-1973)
SEEDLAC


GRADE           ESSENTIAL REQUIREMENTS                              OPTIONAL REQUIREMENTS
                 Matter insoluble in hot alcohol      Colour   Volatile    Bleach      Matter        Ash     Particle size     Wax
                                                      Index    matter      Index      soluble in
                 Basic Limit       Relaxed Limit
                                                                                        water
 Special             2.0%              3.0%           8 max      2.5%     As agreed      1%        As agreed   Not more      Not more
                                                                           between                  between    than 20%      than 5.5%
    A                3.0%              4.0%          10 max      2.5%      buyer &       1%         buyer &     passing
                                                                            seller                   seller  through 600
    B                3.0%              4.0%          12 max      2.5%                    1%                    micron is
                                                                                                             Sieve an not
    C                3.0%              4.0%          18 max      2.5%                    1%                   more than
                                                                                                             5% through
    D                5.0%              7.0%          30 max      2.5%                    1%                   425 micron
                                                                                                                 sieve


           Special                    Grade A                  Grade B                    Grade C                    Grade D

  Golden Kusmi Seedlac           Kusmi one Seedlac       Manbhum Fine Bysacky       Fine Bysacky Seedlac      Genuine Bysacky Seedlac
 Golden Bysacky Seedlac                                        Seedlac




                                                                                                                                     60
ISI SPECIFICATIONS (IS:16[Part-1]-1973)
HANDMADE SHELLAC

GRADE            ESSENTIAL REQUIREMENTS                                     OPTIONAL REQUIREMENTS
              Matter insoluble in Colour  Rosin &   Volatile  Wax         Ash %     Matter       Flow    Heat poly-    Acid lead    Iodine
                  hot alcohol     Index Orphiment matter                   Max     soluble in            meri-tation    value      content
             Basic      Relaxed Maximum                                            water Max                                         value
             Limit      Limit
 Special       0.75% 1.0%           06   Free from Not more Not more       0.5       0.5%          As     As agreed As agreed between
                                         rosin and than 2% than 5.5%                             agreed    between    buyer & seller
    A          1.0% 1.5%            12   orpiment                          0.5                  between     buyer &
                                                                                                buyer & seller at a
    B         1.25% 2.0%             15                                    0.8                    seller temperature
                                                                                                           of 150° C
    C         1.5%   2.5%            18                                    1.0

    D         2.5%   3.5%            25                                    1.0

    E         3.0%   5.0%            30                                    1.0

   Special Grade                Grade A              Grade B                Grade C                Grade D                 Grade E
    Superior Kusmi       Lemon one Shellac pure   Lemon two Shellac   Yellow orange Shellac      Pure TN Shellac          ITN Shellac
      Button Lac           one button Lac Light                       Standard one Shellac
    Special Kusmi            pure Button Lac                           Super fine Shellac
    Lemon Shellac        Superior Lemon Shellac


 GRADE            ESSENTIAL REQUIREMENTS                                     OPTIONAL REQUIREMENTS
          Matter insoluble  Colour    Rosin &     Volatile  Wax     Ash %            Matter    Flow       Heat poly-         Acid Iodine
           in hot alcohol   Index   Orphiment     matter             Max           soluble in             merisation         lead content
            Maximum %      Maximum                                                 water Max                                 value value
Type l-A       0.6%           8    Normally free Not more Not more Not more         Not more As agreed    As agreed           As agreed
                                    from Rosin than 2% than 5.5% than 0.3%         than 0.5% between between buyer          between buyer
Type l-B       0.6%           12   and orpiment                                               buyer & & seller usually          & seller
                                    and except                                                 seller  at a temperature
Type l-C       0.6%           22      when a                                                               of 150° C
                                     specified
Type l-D       0.6%           35   percentage is
                                       agreed
Type l-E       0.6%           50      between
                                     buyer and
                                        seller
Type II-A      0.3%           8

 Type Il-B        0.3%           12

Type lI-C         0.3%           22

Type lI-D         0.3%           35

 Type lI-E        0.3%           50



Type IIl-A        0.2%           9

Type IIl-B        0.2%           20

Type IIl-C        0.2%           35

Type IIl-D        0.2%           50



Type IV-A         0.2%           0.9

Type IV-B         0.2%           2.0

Type IV-C         0.2%           3.5

Type IV-D         0.2%           5.0




Type I -- product by heat process
Type II -- product by hot solvent process
                                                                                                                                        61
Type III -- Dewaxed Shellac
Type IV -- Dewaxed and Decolourised Shellac

ISI SPECIFICATIONS (IS:17-1973)
BLEACHED LAC

 GRADE                               ESSENTIAL REQUIREMENTS                                      OPTIONAL REQUIREMENTS
             Matter                                                                  Matter       Total Acid Mineral Free
                                                                          Rosin &
            soluble in    Colour     Moisture     Wax Max   Ash by mass             soluble in
                                                                          copals
           hot alcohol                                                                water      Cholrine Value   Acid   Chlorine
                                    As agreed
                                     between
                         As agreed                 0.2%        0.5%                   0.3%
                                      buyer &
                          between
                                    seller case                             Nil                  As agreed between buyer & seller
                          buyer &
                                    of Bonedry
                           seller                  5.5%         1%                     1%
                                     Bleached
                                   Lac Max 6%


BUREAU OF INDIAN STANDARDS SPECIFICATION (Doc: CHD 22 [9281]-c1989)*
  LAC DYE

 SL. No.                          CHARACTERISTICS                                            REQUIREMENTS
    1.                            Melting point,0C, MAX.                                      230 (with charring)
    2.                  Volatile matter at 1350C, percent by, mass                                    0.1
    3.                     Ash content, percent by mass, MAX.                                         0.7
    4.             Cold water insoluble matter, percent by mass, MAX.                                 52
    5.              Hot water insoluble matter, percent by mass, MAX.                                 10
    6.             Hot alcohol insoluble matter, percent by mass, MAX.                                 1
    7.                               Acid Value, MAX                                              234----245
    8.                     Dye content, percent by mass, MIN.                                         90
    9.                   UV ---Visible absorption spectrum, MAX.                        230, 292, 340, 500 and 530 nm




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