Tuesday, November 29, 2011


Public sector industrial entities in India are known to be notoriously inefficient unless they are bestowed with some sort of monopoly guaranteeing little or no competition in the market place. Government of India as well as States receive practically no dividend on the huge investments made on these white elephants set up under the old discredited policy of achieving "commanding heights" in the national economic landscape. In the food area every one knows the tragic fate of companies like the Agro-industries Corporations at state levels, erstwhile Modern Bakeries, Civil Supplies Corporations, NAFED, etc and how these organizations were either wound up or sold to private sector or maintained with no hope of redemption,  bleeding the exchequer. If at all government can claim some credit, it comes rom the cooperative sector companies like dairy cooperatives in different states, chocolate cooperative CAMPCO and a few others. This goes to show that doing business is not government's cup of tea! Food Corporation of India, a monolithic and monopolistic company of the government is limping along with no appreciable efficiency and is continuously being indicted for the food grains mismanagement. Kerala State Cashew Development Corporation (KSCDC) was recently in the news regarding its "ambition" to get into value added segment in Cashewnut, already having a monopoly for procurement of the nuts in the state at government dictated prices from the growers. With no worthwhile technical base within the organization their endeavor has very little chance of assuming any significance. Here is a take on this program as enunciated by its CEO.    

"Three years after introducing branded value-added products in the domestic market, the Kerala State Cashew Development Corporation (KSCDC) is all set to roll out new products. The chocolate-coated cashews are the new addition to the innovative range of products by the KSCDC. The technology for the cashew chocolates has been developed by the Central Food Technology Research Institute (CFTRI), Mysore, and the product is poised to be launched by the end of this financial year. They would be available in milk chocolate and brown chocolate varieties and the production will begin at the Kottiyam and Ayathil units of the KSCDC once the machinery is installed. Another product in the pipeline is cashew noodles. Marketed as 'CDC cashews,' the four value-added products now offered by the KSCDC include Cashew Soup, Cashew Vita, Cashew Powder and Cashew Bits.� KSCDC Managing Director K A Retheesh told 'Express' that the sweet and crunchy chocolate cashews are expected to be� a hit among kids. "The vitamin content in cashew is very important for growing children, but many kids are reluctant to have cashew kernels. On the other hand kids will find the chocolate coated ones attractive,'' he said.While cashew kernels contribute to the lion's� share of exports, the value-added products target the domestic market. The turnover from� value-added products during the previous financial year was Rs 12 crore against the total turnover of Rs 212 crore. Almost 90 per cent of the value-added products of the KSCDC are sold in the domestic market. The CDC cashews are marketed also in the Gulf countries. Establishing a strong domestic market is important for the survival of the industry in the country. ''With countries such as Vietnam giving Indian exporters a run for their money in the international market, we should be able to establish a strong domestic market," he said.

Those, who have some memory of the past track record of this Company, may still remember the fiasco during late nineteen nineties when some attempts were made to develop value added products and get into the market to expand the user base for Cashewnuts. Unfortunately the products, in spite of being excellent in quality, were not marketed successfully for which he Company did not had any expertise and experience. One can only wish the Corporation better luck this time, though it does not require too much intelligence to predict that the result may not be different now too. It is not realized that Cashewnut is one of the costliest nuts in the market and any value addition is bound to make it beyond the reach of many consumers in India. Export option is limited since most value added products in foreign markets are branded with strong recall credentials and it is beyond comprehension as to how the value added products of KSCDC are  going to be sold in such countries.One can only hope that the current plans, if and when executed will not end up as another financial disaster!    


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