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Acetic Anhydride It is produced from acetaldehyde (obtained from alcohol feedstock) and used to manufacture vinyl acetate monomer (VAM) in the pharmaceutical industry. It is also used in the manufacture of pigments, dyes, cellulose and pesticides etc. Manufacturing process Ketene process Acetic acid is converted into hot vapor where it breaks down into ketene and water in the presence of catalysts. The ketene so produced again is reacted with acetic acid to give acetic anhydride. Oxidation process Acetaldehyde is converted into acetic anhydride by oxidizing the liquid acetaldehyde in the presence of catalysts. Capacity structure VAM organics is the largest producer with an installed capacity of 33,000 ton per annum. Ashok organic, Mysore acetate and IOL have smaller capacities. The total installed capacity is around 62,000 ton per annum whereas the demand hovers around 34,000 ton per annum. most of the consumption is captive. Markets VAM It is the largest consumer of acetic anhydride and constitutes nearly 40% of the demand. VAM is usually used in the downstream products such as adhesives, textiles, and paints. Drugs/ pharma Drugs and pharmaceuticals constitute 28% of the total production. It is used in the manufacturing of Aspirin. About 0.8 tons of anhydride is required to produce 1 ton of Aspirin. This constitutes 3% of the total production. Manufacturing 0.9 ton of Paracetamol requires 1 ton of acetic anhydride and it constitutes 14% of the total demand. Vitamins constitute nearly 2% of the total demand and intermediates like MCA account for 8% of total demand. Dyes and pigments These account for nearly 11 % of the total demand for anhydride. Cellulose acetate This is used in the downstream products such as cigarette filters. About 1 ton of anhydride is required to produce 1 ton of the cellulose acetate.
Demand and pricing Demand has seen a
steady rise, but the capacity utilization has been around The prices are dependent on the prices of the raw material namely molasses. After the decontrol in 1993, prices have become very volatile affecting the profitability of the producers. The import duty for acetic anhydride was reduced from 65% in 1994-95 to 40% in 1996-97. Unlike acetic acid domestic prices were pegged slightly lower than the landed costs. All the major manufacturers of acetic anhydride also manufacture acetic acid. Hence the sizeable difference between international and domestic prices of acetic acid allows the producers to peg the prices of acetic anhydride just below the landed cost. Outlook The demand is expected around 45,000 tonnes this year. The industry is suffering from overcapacity. Only those manufacturers with forward integration will be able to withstand the slow down in the sector. Consolidation in the industry is envisaged. However, with the reducing of import duty the flexibility of the local manufacturers will be eroded. The declining international prices of acetic acid have resulted in the reduction of the prices of the anhydride. This has resulted in the reduction of the competitiveness among domestic producers. Major Producers(mt) Andhra Sugars 3058 Ashok Organics 6600 IDI 100 IOCL 3000 Vam Organics 33000 Vasantdada Shetkari SSK 3000 Mysore Acetate 100
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