AN ECONOMIC STUDY OF PROCESSING OF MANGO FRUITS

IN CHITTOOR DISTRICT OF ANDHRA PRADESH

By

K.ARUN KUMAR
B.Sc. (Ag.)

PROJECT REPORT SUBMITTED TO THE

ACHARYA N. G. RANGA AGRICULTURAL UNIVERSITY

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS
FOR THE AWARD OF THE DEGREE OF

MASTER IN AGRIBUSINESS MANAGEMENT

DEPARTMENT OF AGRICULTURAL ECONOMICS AND

BUSINESS MANAGEMENT
SRI VENKATESWARA AGRICULTURAL COLLEGE
ACHARYA N. G. RANGA AGRICULTURAL UNIVERSITY
TIRUPATI – 517 502 (A.P)

JULY, 2010
 CERTIFICATE

This is to certify that Mr. K. ARUN KUMAR has satisfactorily prosecuted

the course of research and that the project report entitled “AN ECONOMIC

STUDY OF PROCESSING OF MANGO FRUITS IN CHITTOOR DISTRICT

OF ANDHRA PRADESH” submitted is the result of original project work and is

of sufficiently high standard to warrant its presentation to the examination. I also

certify that the project report or part thereof has not been previously submitted by

him for a degree or diploma of any university.

(Dr. S.SUBBA REDDY)

Place: Tirupati Chairman of the Advisory Committee

Date:
 CERTIFICATE

This is to certify that the project entitled “AN ECONOMIC STUDY OF

PROCESSING OF MANGO FRUITS IN CHITTOOR DISTRICT OF
ANDHRA PRADESH” submitted in partial fulfillment of the requirements for the
degree of MASTER IN AGRIBUSINESS MANAGEMENT of S.V Agricultural
College, Acharya N. G. Ranga Agricultural University, Tirupati is the record of the
bona fide project work carried out by Mr. K. ARUN KUMAR under our guidance
and supervision. The Student Advisory Committee has approved the project report.
No part of the project report has been submitted by the student for any other
degree or diploma. All the assistance and help received during the course of
investigation have been duly acknowledged by the author of the project report.

(Dr. SUBBA REDDY)

Chairman of the Advisory Committee

Project report approved by the Student Advisory Committee

Chairman Dr. S. Subba Reddy

Coordinator of MABM
Department of Agricultural economics
S.V.Agricultural College
Tirupati-517502.

Member Dr. T.V.N.Sastry

Professor
Department of Agricultural economics.
S.V.Agricultural College
Tirupati-517502.
 CONTENTS

Chapter Title Page No.

EXCUTIVE SUMMARY

I INTRODUCTION

II METHODOLOGY

III RESULTS AND DISCUSSION

IV SUMMARY, CONCLUSIONS AND

SUGGESTIONS

BIBLIOGRAPHY
 LIST OF TABLES

TABLE PAGE
TITLE
NO. NO.
Area, Production and Productivity of mango in World, India,
1.1 Andhra Pradesh and Chittoor.
Investment particulars of Sri Varsha food products India Ltd.,
3.1 mango processing unit

3.2 Costs of processing of Totapuri mango tonnes

3.3 Cost and returns per tonne of mango pulp

Break-even analysis (BEA) for mango processing by Sri varsha

3.4 food products India Ltd.,

3.5 Financial efficiency measures

 ACKNOWLEDGMENTS

Accomplishment of this thesis is the result of benevolence of Almighty,

benediction of my teachers, love of my parents and impetus of my friends.
I consider it a great privilege to work under the able and highly exceptional
guidance of my Major Advisor Dr.S.Subba Reddy, Coordinator MABM Programme,
Department of Agricultural economics, Tirupati. I feel elated to express my deep
sense of gratitude for his affectionate guidance, unending benevolence and constant
encouragement throughout the period of study. His yeoman service during drafting
and editing of this project report was of immense value. I wish to thank his from my
heart of hearts.
I accord my sincere thanks to Dr.P.Raghuram, Professor & Head,
Department of Agricultural economics. S.V.Agricultural College,Tirupati Sri
B.Pratap Reddy,Assistant Professor and Smt I.Bhavani Devi, Assistant
professor,Department of Agricultueal Economics, Tirupati for their constant
encouragement, guidance and suggestions, with out which the project would not
have progressed smoothly .
It’s my previlage to convey my deep sense of gratitude to Dr.T.V.Neelakanta
Sastry, Professor, Department of Agricultural economics, S.V.Agricultural College,
Tirupati for his keen interest, acquiescence, benign attitude and valuable
suggestions.
I extend my heartfelt thanks to, Mr.V.Umapathi director business, Sri
Varsha food products India limited Renigunta. I sincerely thank him for orienting
me into logical line of thinking and rationalizing during the course of present
investigation.
I am greatly beholden of vocabulary and owe a deep sense of honour to my
beloved Parents Sri K.Gunteppa and K.Lakshamamma for their love and dedicated
efforts in shaping my career since childhood.
My heartiest love and affection are always due to my best friends Naveen,
Balaji, Janardhan their joyful company.
I feel in dearth of diction to express my sincere thanks to all my classmates
and to my seniors for their cooperation.

Place: Tirupati (K.ARUN KUMAR)

Date:
 DECLARATION

I, K. ARUN KUMAR hereby declare that the project report entitled “AN

ECONOMIC STUDY OF PROCESSING OF MANGO FRUITS IN

CHITTOOR DISTRICT OF ANDHRA PRADESH” submitted to,

S.V.Agriculture College, Tirupati, Acharya N. G. Ranga Agricultural University

for the degree of MASTER IN AGRIBUSINESS MANAGEMENT is the result of

original project work done by me.

Place: Tirupati (K. ARUN KUMAR)

Date:
Name of the Author : K. ARUN KUMAR

I.D.No. : TMABM/08-01

Title of the Project : AN ECONOMIC STUDY OF PROCESSING OF

MANGO FRUITS IN CHITTOOR DISTRICT OF
ANDHRA PRADESH - A CASE STUDY OF SRI
VARSHA FOOD PRODUCTS INDIA LTD.,
Degree : MASTERS IN AGRIBUSINESS MANAGEMENT

Faculty : AGRICULTURE

Department : AGRICULTURAL ECONOMICS AND BUSINESS

MANAGEMENT

Major Advisor : Dr. SUBBA REDDY

University : ACHARYA N.G. RANGA AGRICULTURAL

UNIVERSITY

Year of submission : 2010

EXECUTIVE SUMMARY
The project entitled “An economic study of processing of mango fruits in

Chittoor district of Andhra Pradesh - A case study of Sri Varsha food products India

Ltd.,” was taken up with the following objectives.

1) To study and analyze the cost and returns of processing of mango fruits per tonne
product.

2) To evaluate the performance of Sri Varsha foods products through SWOT

Analysis.

3) To identify the problems and suggest suitable remedies for efficient functioning of
factory.

The study pertaining to the evaluation performance of Sri Varsha food products

India Ltd was carried out in S.N. Puram village of Chittoor District of Andhra Pradesh.

Hence all the required data were collected from the records maintained by the factory.
 Details regarding the processing of mango fruits per tonne of processed product

were obtained from the records the factory. Relevant processing data such as problems

and marketing aspects were collected randomly from 30 traders and 90 farmers from

eight villages who are involved in such activities. Total costs include fixed costs and

variable costs per tonne of mango processed products. SWOT analysis which measures

strengths, weaknesses, opportunities and threats faced by the factory were collected

from the factory records and analyzed. Problems were identified and finally solutions to

the problems were suggested.

The major findings of the study are

1. Break even analysis at the existing level indicated that processing unit registered
Break Even Output (BEO) 2040.9 tonnes of pulp.
2. The net returns were found to be with Rs.4951.6 per tonne of pulp.
3. Cost of processing per tonne of mango pulp amounted to Rs.49965.5 for this unit.
4. Operating ratio and gross ratio were higher for Sri Varsha mango processing unit
with 0.94 and 0.96.
5. Current ratio and current liability ratio were higher for this processing unit 2.04 and
0.43, whereas working ratio was 2.46. If the ratio is greater than one, it could be
presumed that the factory had sufficient current assets to meet current obligations. A
current ratio of roughly two was considered to be a satisfactory figure.
6. Net capital ratio and equity value ratio were 2.63 and 0.60 respectively for this unit,
whereas debt equity ratio was 0.61.
7. Capital per unit of gross income was 0.44, whereas rate of capital turnover was 124.7
and Input-output ratio was 1:1.07.
8. BEO was lower for the processing unit, whereas margin of safety was higher for this
unit.
9. Sri Varsha food processing was also provided with good infrastructure facilities.
10. The location was well suited to the factory for the availability of water, for
processing and accessibility.
Suggestions made to the company

At present Sri Varsha food products India Ltd., Chittoor District was using

Totapuri mango to make pulp and other beverages for meeting the demand in domestic

and export markets. Hence, in this context the other popular varieties of export viz.,

Alphanso from Maharashtra and Banganapalli from Krishna district were made popular

with all the technical support encouraging state and central government policies on food

related industries.

At present in mango production pests (stone weevil and fruit fly) and diseases

(anthracnose) were increasing and posing lot of problems both in production and

marketing. Hence, IPM technology should be geared up adequately to stop these

problems with adequate staff and services of AEZ.

There is need to reduce post harvest losses by using grading and standardization

techniques and use of plastic crates in transportation and storage.

There is a need to:

Improve the linkages between farmers and processing units, reduce the handling

losses which nearly constitute to 15 percent, improve the availability of research by the

factory, improve the factory with good testing and research facilities, develop the

technical knowledge of local manpower, reduce the losses of recovery of pulp from the

slice, lack of required number of perforated plastic crates to facilitate efficient storage

of raw fruits and minimizes fruit spoilage and adequate investment is required to

construct durable storage structures in place of thatched sheds.

 CHAPTER – I

INTRODUCTION

1.1 MANGO: AN OVERVIEW:

India secured prestigious second position in the production of fruits next to

Brazil in the world with average annual production. This was due to India’s ideal

soil conditions and congenial climate. India contributes to more than 12 per cent of

world fruit production. Among the fresh fruits grown in India, mango continued to

dominate the other fruits in fruit basket with 37 per cent share in the total export

earnings of fresh fruits from India 1 .

In India, mango is supplied from March to mid August. The North Indian

cultivars are alternate-bearers, whereas South Indian ones are generally regular-

bearers. About 20 varieties are being grown commercially in south India. They are :

Alphonso, Banganapalli, Bombay Green, Chausa, Dashehari, Fazil, Gulab khas,

Himsagar, Kesar, Kisenbhog, Langra, Mankurad, Neelum, Pairi and Totapuri.

Mango is being grown in almost all the States viz., Andhra Pradesh, Uttar Pradesh,

Bihar, Karanataka, Maharashtra, West Bengal and Gujarat. All these States together

contributed for about 82 per cent of the total production in India.

1 The Hindu Survey of Indian Agriculture S.D. Shikhamany and

G.S.R. Murti 2009, P:145.
1.1.1 Current economy in the India:

In the world production, India produced nearly 127.5 lakh tonnes of mango

on an average per annum, which was approximately 47.2 per cent of total world

production. Mango occupied 23.09 lakh hectares in India, which constituted nearly

52.4 per cent in the world area under mango. In India, Andhra Pradesh ranked

second in mango area, which was next to Uttar Pradesh, but with regard to

production Andhra Pradesh secured first position (approximately 39 lakh tonnes).

Uttar Pradesh and Bihar followed next occupying second and third position. In terms

of productivity 8 tonnes of mango per hectare were obtained from Andhra Pradesh

on an average as against 7.1 tonnes per hectare of India’s average productivity of

mango (Table 1.1).

Table 1.1: Area, Production and productivity of mango in world, India,

Andhra Pradesh and Chittoor district:

Area Production Productivity

Sl.
Particulars (Lakh (Lakh (Tonnes/
No.
hectares) tonnes) hectare)
40.9 290.00 8.00
1. World
(100.00) (100.00) (100.00)
23.09 127.50 5.5
2. India
(56.4) (44.01) (68.75)
4.97 39.17 8.00
3. Andhra Pradesh
(21.5) (30.7) (142.67)
0.59 4.87 8.00
4. Chittoor District
(12.02) (12.5) (100.00)

Source: Horticulture, Government of Andhra Pradesh, P.54.2009-2010.

 With regard to area, production and productivity in Andhra Pradesh, Krishna

District secured first rank with the area of 62930 hectares and annual production of

516026 tonnes. Chittoor district was the next important District in Andhra Pradesh

and occupied an area of 59380 hectares with the production of 486916 tonnes. The

third rank attributed to Adilabad District with the area of 54011 hectares with annual

production of 442890 tonnes. Other Districts were of minor importance with regard

to area and production of mango.

Mango fruit utilization begins from its raw stage to chutney, pickles and

drinks which are prepared out of it. Ripe fruits are consumed in various forms like

desserts, squashes, syrups, nectar, jams, jellies and mango leather. It is an

outstanding source of vitamin-A and good source of vitamin-C, besides it has many

minerals and other vitamins.

The demand for mango fruits and its pulp in the country and abroad is

increasing day-by-day. This earns sizeable amount of foreign exchange through its

exports. Major importers of Indian mangoes were Bangladesh (33.76%), UAE

(27.21%) and Saudi Arabia (6.83%) and U.K (4.95%). The export earnings of

mango pulp also increased from Rs.57.98 crores in 1993-1994 to Rs.241.99 crores.

Mango pulp was also exported to the U.K, U.S, Canada, Saudi and Middle East.

Nine Agri Export Zones (AEZs) are functioning exclusively for mango

exports in the country since 2003. Out of these, two AEZs are working in each State

viz., Uttar Pradesh, Maharashtra and Andhra Pradesh, one AEZ each in West

Bengal, Gujarat and Tamil Nadu States. These are taking up mango promotion

programmes both in areas of production and export marketing of mango in India and

abroad.
1.1.2 Objectives of the study:

Besides being a rich source of nutrients, cultivation of mangoes brings higher

income to the farmers. It is possible to have value addition through processing,

which in turn, offers vast opportunities for employment and income generation. The

processing of mango fresh fruits into pulp is an important agri-business in Chittoor

district and hence the Agri Export Zone is located in this District for exporting

mango pulp and fresh vegetables. The present study was undertaken with the

following specific objectives:

1. To study and analyze the cost and returns of processing of mango fruits per

tonne of product.

2. To identify the problems and suggest suitable remedies for efficient

functioning of factory.

3. To evaluate the performance of Sri Varsha foods products through SWOT

Analysis.

1.1.3 Scope of the Study:

Indian Fruit Processing industry is very huge with many players. There are some

very big Multi National Companies in the market along with a number of

domestic and small scale companies. The mango fruit is processed and marketed

by a number of companies in the country. This study aims to identify the

problems and suggest suitable remedies for efficient functioning of factory. The

study is also aimed at to evaluate the performance of Sri varsha foods products

through SWOT Analysis.

1.1.4 Limitations of the Project:

The study was conducted over a limited period of time with a limited size of

sample and hence suffered from drawbacks. The conclusions drawn are applicable to

that area and the areas with similar conditions. The necessary data required to

compute costs and returns from processing were obtained from the processors who

were generally suspicious for fear of taxation. However, they were told about the

purpose of the study and obtained accurate information.

1.1.5 Plan of the project:

The Project is presented in four chapters. The first chapter deals with the

introduction, highlighting the importance of mango processing and mango

processing industry along with objectives, scope and limitation of the study. The

second chapter deals with selection of mango processing unit, collection of data,

analytical tools employed and concepts adopted for the study. The third chapter

encompasses a critical analysis of the Results and discussions. The final chapter

presents the summary and conclusions of the study.

 Company profile

Sri Varsha food products India ltd established in 2004 brings forth a variety

of fresh fruit pulps and concentrates like guava fruit pulp, totapuri mango pulp, red

papaya pulp, tomato paste etc. fruit pulps concentrates are used extensively in the

food industry for the manfacture of jams, juices etc.company is flourishing and

progressing the rapid growth of company has been made possible because of the

hard work and guidance managing director, Mr K.Viswanatha naidu. Company is

certified with ISO 9001:2008 and applied forISO 22000:2005 certification.

Company successfully extended clientele in China, Germany, gulf countries,

Netherlands Nepal, Nigeria and Russia, The factory have a spacious and well

maintained ware house spred in 40000 sq ft and semi finished godowns

about15000.sqft.

Infrastructure:

Its up to date infrastructure is supported by a strong and well equipped

technical units.

1.covered finished godowns-40000 sq ft

2.semi covered finished godowns-15000sq ft

3.Ripening chambers-250000sq ft

4.Ripening shed – 30000sqft

5.Main processing building -12000 sq ft

6.Administrative building-4000 sq ft
 It has modern canning facility,laminarairflow, autoclave,incubator, hot air

oven, refractometer, colony counter, Ph meter, Binocular microscope with ultra

model online & micro biology central lab.

Quality.Assurance:

It provides customers with natural, fresh and aseptic fruit pulps and concentrates. It

has well resourced team of experts who pay special care toward maintaining the

hygiene and purity of fruit products. With in span of 6 years, it has earned a special

place among the top most exporters and manufacturers of fruit pulps, concentrates

and tomato pastes. It has team of technical experts who have improvised new

techniques in order to increase productivity. The organization aims at providing

clients with high grade quality fruit products at reasonable prices. It has successfully

been able to please the clients with quick and safe delivery of fruit items. It was one

of the chief mango concentrate and mango pulp exporters from India.

Range of mango pulp and concentrate like:

Mango

1.Alphanso mango pulp

2.Raspuri mango pulp

3.Totapuri mango pulp

3.Totapuri concentrate

The mango pulp produced by it was available in bottles tetra packs and in

various quantities and could be altered as per the demands of the clients. They were

ensured to be aseptic and rich in all the natural vitamins and minerals
Guava

Guava pulp was made from natural guava fruit to be free from rot or pests. It

is offering a wide range of natural guava pulp like

1. Pink guava pulp

2.White guava pulp

3.White guava concentrate

Guava concentrates and pulp were widely used in manufacturing of jams, juices, etc.

Papaya

It was considered to be one of the foremost manufacturers and exporters of

papaya pulp and concentrate in India. It has offered a variety of papaya fruit pulp

like:

1. Red papaya pulp

2. Red papaya concentrate

3.Yellow papaya pulp

4. Yellow papaya concentrate

The papaya pulp is widely used in the manufacturing of various food items

like jams, juices, pickles, etc. papaya pulp has the flavor, nutrition and essence of

the natural papaya fruit.

Name of the Author : K. ARUN KUMAR

I.D.No. : TMABM/08-01

Title of the Project : AN ECONOMIC STUDY OF PROCESSING OF

MANGO FRUITS IN CHITTOOR DISTRICT OF
ANDHRA PRADESH - A CASE STUDY OF SRI
VARSHA FOOD PRODUCTS INDIA LTD.,
Degree : MASTERS IN AGRIBUSINESS MANAGEMENT

Faculty : AGRICULTURE

Department : AGRICULTURAL ECONOMICS AND BUSINESS

MANAGEMENT

Major Advisor : Dr. SUBBA REDDY

University : ACHARYA N.G. RANGA AGRICULTURAL

UNIVERSITY

Year of submission : 2010

EXECUTIVE SUMMARY
The project entitled “An economic study of processing of mango fruits in

Chittoor district of Andhra Pradesh - A case study of Sri Varsha food products India

Ltd.,” was taken up with the following objectives.

1) To study and analyze the cost and returns of processing of mango fruits per tonne
product.

2) To evaluate the performance of Sri Varsha foods products through SWOT

Analysis.

3) To identify the problems and suggest suitable remedies for efficient functioning of
factory.

The study pertaining to the evaluation performance of Sri Varsha food products

India Ltd was carried out in S.N. Puram village of Chittoor District of Andhra Pradesh.

Hence all the required data were collected from the records maintained by the factory.
 Details regarding the processing of mango fruits per tonne of processed product

were obtained from the records the factory. Relevant processing data such as problems

and marketing aspects were collected randomly from 30 traders and 90 farmers from

eight villages who are involved in such activities. Total costs include fixed costs and

variable costs per tonne of mango processed products. SWOT analysis which measures

strengths, weaknesses, opportunities and threats faced by the factory were collected

from the factory records and analyzed. Problems were identified and finally solutions to

the problems were suggested.

The major findings of the study are

1. Break even analysis at the existing level indicated that processing unit registered
Break Even Output (BEO) 2040.9 tonnes of pulp.
2. The net returns were found to be with Rs.4951.6 per tonne of pulp.
3. Cost of processing per tonne of mango pulp amounted to Rs.49965.5 for this unit.
4. Operating ratio and gross ratio were higher for Sri Varsha mango processing unit
with 0.94 and 0.96.
5. Current ratio and current liability ratio were higher for this processing unit 2.04 and
0.43, whereas working ratio was 2.46. If the ratio is greater than one, it could be
presumed that the factory had sufficient current assets to meet current obligations. A
current ratio of roughly two was considered to be a satisfactory figure.
6. Net capital ratio and equity value ratio were 2.63 and 0.60 respectively for this unit,
whereas debt equity ratio was 0.61.
7. Capital per unit of gross income was 0.44, whereas rate of capital turnover was 124.7
and Input-output ratio was 1:1.07.
8. BEO was lower for the processing unit, whereas margin of safety was higher for this
unit.
9. Sri Varsha food processing was also provided with good infrastructure facilities.
10. The location was well suited to the factory for the availability of water, for
processing and accessibility.
Suggestions made to the company

At present Sri Varsha food products India Ltd., Chittoor District was using

Totapuri mango to make pulp and other beverages for meeting the demand in domestic

and export markets. Hence, in this context the other popular varieties of export viz.,

Alphanso from Maharashtra and Banganapalli from Krishna district were made popular

with all the technical support encouraging state and central government policies on food

related industries.

At present in mango production pests (stone weevil and fruit fly) and diseases

(anthracnose) were increasing and posing lot of problems both in production and

marketing. Hence, IPM technology should be geared up adequately to stop these

problems with adequate staff and services of AEZ.

There is need to reduce post harvest losses by using grading and standardization

techniques and use of plastic crates in transportation and storage.

There is a need to:

Improve the linkages between farmers and processing units, reduce the handling

losses which nearly constitute to 15 percent, improve the availability of research by the

factory, improve the factory with good testing and research facilities, develop the

technical knowledge of local manpower, reduce the losses of recovery of pulp from the

slice, lack of required number of perforated plastic crates to facilitate efficient storage

of raw fruits and minimizes fruit spoilage and adequate investment is required to

construct durable storage structures in place of thatched sheds.

 CHAPTER – II

METHODOLOGY

This chapter presents procedural outlines adopted in, method of data

collection and analytical techniques used in attaining the stated objectives of the

study. The contents of this chapter are presented under the following convenient

headings.

2.1 SELECTION OF MANGO PROCESSING FACTORY

2.2 COLLECTION OF DATA

2.3 METHODS OF COMPUTATION

2.4 TECHNIQUES OF ANALYSIS

2.5 CONCEPTS AND TERMS USED IN THE STUDY

2.1. SELECTION OF MANGO PROCESSING FACTORY:

Sri Varsha Food Products India limited was selected for the study.

2.2 COLLECTION OF DATA:

Secondary data pertaining to the description and agro-economic aspects of

the study area were collected from Srivarsha food products India, Chittoor.

From the processing factory, the details like ownership, pattern of

investment, labour use, processing costs, methods of packing of pulp, techniques

of production, etc., were collected. Every effort was made at the time of survey to

convince the respondents informing them that the present survey was purely for

academic research and not for any other purpose. The data collected pertained to

agricultural year, 2009- 2010.

2.3 METHODS OF COMPUTATION:

An economic analysis of these enterprises necessitates proper estimation

of the cost of inputs, input services and the valuation of output. The procedures

followed in computing the processing and marketing costs of mango are

described below.

2.3.1 Processing:

The data regarding the costs and returns from mango processing were

collected from the factory through a well structured schedule and personal

discussion. The processing costs were categorized into variable costs and fixed

costs and later these items of costs were apportioned per tonne of product/season.

2.3.1.1 Variable costs:

The costs incurred for the purchase of raw fruits, human labour,

chemicals, coal, diesel and lubricants, electricity charges repairs and maintenance

charges, incidental charges viz., stationary, printing, telephone, telegram and

postage and interest on working capital were considered as variable costs. These

were assessed first for entire firm and then apportioned to one tonne of mango

pulp per season.

2.3.1.2 Fixed costs:

These costs include depreciation on building, machinery and equipment,

salaries of permanent employees, rents, bonus to staff, medical expenses to

workers and all prepaid expenses viz., taxes, insurance, license, and interest on

fixed capital. These were assessed first for entire firm and then apportioned to

one tonne of mango pulp.

2.3.1.3 Raw fruits:

Raw fruits for processing were brought from various sources viz., directly

from producers, local wholesalers, wholesalers at regulated market yard and from

distinct wholesalers. Depending on these sources (from producers to distant

wholesalers), the cost of raw fruits varied from Rs.16000 to 17000 per tonne of

mango fruit.

2.3.1.4 Coal, diesel and lubricants:

Market price formed the basis to estimate the cost of coal, diesel and

lubricants. Market price for one tonne of coal was Rs.3600 and for one litre of

diesel it was Rs.39.50

2.3.1.5 Cans (or) tins and barrels (or) drums:

Based on marketing of pulp the prices of empty cans and barrels varied.

For exporting pulp to other countries, the price of each can was Rs.25 and each

barrel price was Rs.1300 and for domestic consumption the price of each can was

Rs.39 and each barrel was Rs.1600, which included 16.32 per cent central excise

duty, 4 per cent central sales tax (CST) and 12.5 per cent Andhra Pradesh

Government Sales Tax (APGST).

2.3.1.6 Repairs and maintenance charges:

Repairs and maintenance charges of machinery, building, effluent

treatment plant and vehicles used in the processing of mango were computed on

the basis of actual amount incurred by the processors.

2.3.1.7 Interest on working capital:

It was estimated at the rate of 13.5 per cent per annum (the rate at which

commercial banks advance short term loans).

2.3.1.8 Depreciation:

Annual amount of depreciation on all assets owned by the processors was

calculated following the straight line method.

Original cost of the asset – Junk value at the end

Annual amount of deprecation = ________________________________________________________________

Useful life of asset

2.3.1.9 Interest on fixed capital:

It was charged at the rate of 13.5 per cent on the value of fixed assets

(excluding land) such as building, machinery, equipment and effluent treatment

plant.

2.4 TOOLS OF ANALYSIS:

For convenience the tools of analysis are divided into 4s sections. These

are:

2.4.1 Break even output (BEO) analysis

2.4.2 Financial efficiency measures

2.4.3. swot analysis

2.4.1 Break-even output (BEO) analysis:

A break-even analysis is the determination of the functional relationship

of total revenue and total costs to output rate and the derivation of functional

relationship of profit to output. When actual costs are segregated into fixed and

variable costs, any variation in quantity of output would cause a change in

variable costs and inturn, on the contribution and profit. The management has,

therefore, to know the effect of such an increase in output on its profits and the

study of cost volume profit relationships enables management to plan for profits.

A break-even analysis chart can be defined as a chart which shows profit

or loss at various levels of activities. The level at which neither profit nor loss is

incurred is called the break-even point. A processing unit is said to be at break-

even point, when its total costs are equal to total revenue i.e. when the

contribution margin is exactly equal to the fixed costs. The appropriate formula

to estimate the break-even output is

Total fixed costs of the unit

Break-even output = __________________________________________________________

of pulp (in tonnes) (selling price per tonne pulp – variable cost per tonne pulp)

2.4.2 Financial efficiency measures:

2.4.2.1 Cost ratios:

These ratios provide information to the manager to decide whether the

existing costs of the business firm are higher or lower. These ratios indicate what

proportion of gross income is spent for meeting different types of expenditure.

These ratios are:

Operating expenses on the processing unit

Operting ratio 
Gross income form the processing unit

Fixed costs on the processing unit

Fixed ratio 
Gross income from the processing unit

Total costs on the processing unit

Gross ratio 
Gross income from the processing unit

2.4.2.2 Solvency ratios:

These ratios measure the degree of financial safety (solvency) and

liquidity of comparable business firms at a point of time. These ratios include.

Current assets of processing unit

Current ratio 
Current liabilities of processing unit

Current assets  intermediate assets of processing unit

Working ratio 
Current liabilities  intermediate liabilities of processing unit

Total assets of processing unit

Net capital ratio 
Total liabilities of processing unit

Net worth or equity:

Net worth is the surplus of total assets over the total liabilities

Net worth = Total assets of processing unit – Total liabilities of

processing unit

Total liabilities of processing unit

Debit - equity ratio 
Owner' s equity of processing unit
 Current liabilities of processing unit
Current liabilityratio 
Owner' s equity of processing unit

Owner' s equity of processing unit

Equity value ratio 
Value of assets from the processing unit

2.4.2.3 Capital ratios:

Capital per unit of gross income:

It is computed by dividing total capital invested with gross income

Total capital invested on the processing unit


Gross income from the processing unit

Rate of capital turnover:

It indicates the gross income obtained from the processing unit for every

hundred rupees of investment made in the form of total costs.

Gross income from the processing unit

Rate of capital turnover  x 100
Total value of investment on the processing unit

Gross costs of processing unit

Input – Output ratio 
Gross returns from processing unit

Net income per tonne:

To compute this ratio we require information on (1) gross income of the

processing unit (2) total cost on the processing unit and (3) total tonnes processed

in the processing unit.

Net income from the processig unit

Net income per tonne 
Total number of tonnes processed
2.4.3 SWOT ANALYSIS OF MANGO PROCESSING IN SRI VARSHA

FOOD PRODUCTS INDIA LTD IN CHITTOOR DISTRICT:

Factors influencing the strengths, weaknesses, opportunities and threats of

the factory were identified and analysed with the help of SWOT Analysis.

2.5 CONCEPTS AND TERMS USED IN THE STUDY:

2.5.1 Processing:

The processing activity involves a change in the form of the commodity.

Processing converts the raw material and brings the products nearer to human

consumption. It is concerned with the addition of value of the product by

changing its form.

2.5.2 Canning:

It is essentially a batch or a semicontinuous process where in raw food is

filled into containers (typically metal cans) and subjected to heat treatment and

held at that temperature for a specified period sufficient to inactivate all the

microorganisms present in the food. The thermal sterilization of foods by

canning has been widely accepted method for preserving food. In canning mango

pulp was filled in cans with a capacity of 3.1 kg.

2.5.3 Aseptic packing:

The term aseptic can be defined as the complete absence of any living

microorganisms. But in the food industry, it only refers to the condition in which

the food is packaged in an environment, free from viable microorganisms of

public health significance, capable of growing in the food under normal handling

and storage conditions. In aseptic packing pulp was packed in barrels or drums
with a capacity of 215 kg. It overcomes some of the major disadvantages of the

process of canning.

2.5.4 Cost of processing:

Cost of various inputs and input services used for processing of pulp in a

processing unit were split into variable costs and fixed costs.

2.5.5 Variable costs:

Costs associated with using variable resources viz., raw fruits, coal, oil and

fuel, diesel and lubricants, tins, barrels, chemicals, labour charges, incidental

charges, repairs and maintenance charges and interest on working capital in

processing of mango fruits.

2.5.6 Fixed costs:

Costs associated with the owning of fixed assets / capital items. These

include (i) depreciation on buildings, machinery and effluent treatment plant (ii)

prepaid expenses such as insurance and license fees, rents and charges and (iii)

bonus and salaries to permanent employees, medical expenses to workers etc.

2.5.7 Gross returns:

It is quantity of output expressed in monetary terms.

2.5.8 Net returns:

It is the difference between gross returns and total costs.

 CHAPTER – III

RESULTS AND DISCUSSION

In this chapter an attempt is made to discuss the results obtained from the

study. The important findings are presented and discussed under the following

heads.

3.1 To study and analyze the cost and returns of processing of mango fruits per

tonne of product.

3.2 To evaluate the performance of Sri Varsha food products through SWOT

analysis.

3.3 To identify the problems and suggest suitable remedies for efficient functioning

of factory.

3.1 TO STUDY AND ANALYZE THE COST AND RETURNS OF

PROCESSING OF MANGO FRUITS PER TONNE OF PRODUCT.

3.1.1 Methods and mechanisms of processing of mango pulp in Sri Varsha Food
Products India ltd Chittoor District.

Mango processing units in Chittoor District predominantly processing of

Totapuri (Banglora) mango and the average yield of mango pulp was 50 per cent.

3.1.1.1 Selection of mango fruits for processing

Fresh, ripe but firm and evenly matured fruits were selected for processing

purpose. The selected fruits were free from pest attack and diseases. They had no
blemishes and malformation. In general, over ripened fruits were omitted. Similarly,

under ripe fruits would shrivel and become tougher in processing activity, and hence

unselected.

3.1.1.2 Transportation and unloading of fruits

Processors had taken all the necessary care in transportation, unloading and

keeping them in thatched sheds to minimize the losses in these activities. The

selected raw fruits were brought in trucks / Lorries and stored in thatched sheds and

then covered with paddy straw to make them ripen quickly. As and when fruits were

ripening, they were taken out from lot and used for processing.

3.1.1.3 Sorting and grading

Ripened fruits free from pests, diseases and blemishes were graded manually

before washing the fruits.

3.1.1.4 Cleaning and washing

The graded fruits were washed with water either by immersing or agitating in

water. Whereas in aseptic packing the graded fruits were first washed with 5 to 7 per

cent chlorinated water, followed by fresh water.

3.1.1.5 Cutting

Washed fruits were cut into slices manually removing the mango stone. The

damaged and rotten fruits hither were separated. The fresh slices were sent to pulper

through belt conveyor. From the belt conveyor the fresh slices were fed to the pulper

through screw conveyor. Here we noticed 2 stages, in the first stage; the peel was

removed from slices and in the second stage fibrous material was removed from

pulp. After passing through pulper, the fine pulp was fed into the tank.
3.1.1.6 Sterilization

From the tank fine pulp was passed into the kettles, where the pulp was

heated upto 90°C. Immediately after reaching 90°C, pulp was removed from the

kettles. In case of aseptic packing, filtron machine was used for sterilization upto

74°C. As soon as temperature was recorded at 74°C, the pulp was removed. After

sterilization pulp was tested for brix and acidity. Here, the brix means total soluble

solids (TSS).

3.1.1.7 Filling

Finally, the pulp was filled in the cans with a capacity of 3.1 kg can-1 through

the pipeline. In case of aseptic packing the sterilized pulp was filled in storage tank

which then, passed into the asept and star asept systems and packed in the barrels

with a capacity of 215 kg barrel-1.

3.1.1.8 Packing

After filling, the cans were then packed in strong card board cartons, in

standard packings, each carton contained six cans.

3.1.1.9 Transportation

The product was transported through the containers, in which thousand

cartons were packed. Each container weighed about 18.6 tonnes.

3.1.2 Investment particulars of mango processing units

Table 3.1 provides information on investment particulars of mango

processing units with canning and then prices prevailed for these items were

recorded and presented in the Table 3.1. The average investment of processing units

which processed nearly 17037 tonnes of pulp in a season amounted to

Rs.1381.25lakhs
Table 3.1: Investment particulars of Sri Varsha food products India Ltd.,
mango processing unit:

Sl. Value Percentage to

Particulars
No. (in Rs lakh) the total
1. Land value 500.00 36.2
2. Buildings 200.00 14.48
3. Machinery
a. Fruit washing m/c(SS304) 14.00 1.014
b. Inspection belt 4x60 two fire 30.0 2.17
c. Decanters 22 1.59
d. Canning equipment 75 5.43
e. Destoners-400 Rpm (SS304) 7.0 0.5
f. Sterilizer& Asceptic filler 250.00 18.1
g. Boiler-1 20.0 1.45
h. 2 Stage pulper&finisher (ss304) 5.0 0.36
i. Spiro flow pre heater with hot
17 1.23
water (40 c-80c)
j. 3kl holding tanks 3.0 0.22
k. Water cooled chiller 17 1.23
l. Cooling towers 5.0 0.36
m. Air compresser 1.5 0.11
n. Boiler-2 45 3.26
o. Fork lift 6.75 0.49
p. Fruit storage crates 1.5 10.86
q. Weighing bridge 5.0 0.36
r. borewells 5.0 0.36
s. water treatment plant 3.0 0.22
TOTAL 1381.25 100
Of this the investment on machinery amounted to Rs.4.88 crores accounting for

nearly 49 per cent. The investment on building amounted to Rs.2 crore and

constituted 14.48 per cent of total investment. Canning equipment (5.43%),

sterilizer& asceptic filler (18.1%), boiler-2(3.26%), fruit storage crates (10.86%)

these are the major investments of the company. The investment on rest of the

machinery such as belt conveyor, screw conveyor, rotopumps, filling tank, DS-24

and retards collectively constituted less than 14 per cent. Investment on land value

constituted 36.2 per cent.

3.1.3 Cost of processing of Totapuri mango

Table 3.2 provides information on total processing costs of Sri Varsha food

products India Ltd., processing unit. These costs are split into variable costs and

fixed costs. The total variable cost amounted to Rs.43453.84, which constituted

nearly 96.5 per cent of the total costs (Rs.45013.9 lakh). Fixed costs constituted only

3.5 per cent of total costs.

Table 3.2: Costs of processing of Totapuri mango tonnes:

Value per Percentage

Sl. Value in Rs.
Particulars tonne of to the total
No. lakh
pulp (in Rs.)
I. Variables costs
Raw fruits 2729.99 32047.78 71.19528
Causal labour charges 84.07 986.91 2.192457
Oil and fuel 20.65 242.41 0.53853
Cost of fuel wood 91.07 1069.09 2.37501
Electricity charges 7.2 84.52 0.187768
Diesel and lubricants 8.36 98.14 0.21802
Cost of packing 554.67 6511.36 14.46521
Chemicals 14.74 173.04 0.384404
Stationary and printing 0.59 6.93 0.015387
Telephone, telegram and postage 2.17 25.47 0.056591
Machinery and buildings repairs 1.56 18.31 0.040683
Fruit ripening sheds maintenance 1.36 15.97 0.035467

Vehicle maintenance 2.55 29.93 0.066501

Electrical maintenance 0.43 5.05 0.011214
Other expenses 175.975 2065.8 4.589243
Interest on working capital 6.23 73.13 0.162472
Total variable costs 3701.615 43453.84 96.53424
II. Fixed Costs
Salaries to permanent staff 42.6 500.09 1.110963
Depreciation on buildings 8.0 93.91 0.208632
Depreciation on machinery 48.45 568.76 1.263525
Opportunity cost of land 12.58 147.68 0.328073
Taxes and license charges 0.425 4.99 0.011084
Insurance fees 0.35 4.11 0.009128
Medical expenses to workers 0.22 2.58 0.005737
Interest on fixed capital 20.27 237.95 0.52862
Total fixed costs 132.895 1560.08 3.465762
III. Total costs 3834.51 45013.91 100.00
 Major components of variable costs were raw fruits Rs. 2729.9lakhs, cost of

packing Rs.554.67lakhs. Other items of variable costs such as stationary and

printing, telephone, telegram and postage, machinery and buildings repairs,

maintenance charges of fruit ripening sheds, vehicles and electricity and other

expenses were of minor importance and constituted only 10.6 per cent of total costs.

For Sri varsha mango processing total fixed costs constituted only 3.4 per

cent. For example these were: salaries to permanent staff (1.1%), interest on fixed

capital (0.50%), and then depreciation on machinery (1.3%), building (0.2%).

Among the fixed costs the major items were salaries to permanent staff,

interest on fixed capital and depreciation on machinery, buildings which collectively

amounted to Rs.132.89

3.1.4 Costs and returns in Totapuri mango pulp processing

Table 3.3 shows information on costs and returns per one tonne of mango

pulp of processing units. In this table variable costs, fixed costs, total costs, gross

returns and net returns were worked out per one tonne of mango pulp of processing

units. Total costs were higher and almost equal in these units (Rs.45013.91). The net

returns were (Rs.4951.6) similarly; the same trend was maintained in case of gross

returns (Rs.49965.4).
Table 3.3: Cost and returns per tonne of mango pulp:

(Value in Rs.)
Sri Varsha food products India
Sl. No. Particulars
ltd

1. Costs

i. Variable costs 43453.84

ii. Fixed costs 1560.08

iii. Total costs 45013.91

2 Returns

i. Gross returns 49965.45

ii. Net returns 4951.6

Table 3.3 shows information on costs and returns per one tonne of mango

pulp of processing units. In these table variable costs, fixed costs, total costs, gross

returns and net returns were worked out per one tonne of mango pulp of processing

units. Total costs were higher and almost equal in these units (Rs.45013.91). The net

returns were (Rs.4951.6) similarly; the same trend was maintained in case of gross

returns (Rs.49965.4).
3.1.5 Break even analysis

Table 3.4 furnishes information on Break-even analysis of processing units

under existing situation. The Break-even output (BEO) was worked out using the

procedure and formula discussed in methodology (Chapter-II). It is revealed from

the table the BEO (mango pulp in tonnes) was at (2040.9tonnes) processing unit,

Margin of safety was worked out and showed in 9th row of the table by taking the

difference between the rows of 8 and 5. It was 6477.6 tonnes pulp. It indicates the

efficiency of the processing units. A high margin of safety indicates that these

processing units would make more profits relatively.

The.Break.even.Analysis.of.mango.processing.includes.fixed.costs(Rs.132.89

5lakh),.variable.costs.(Rs.3701.61lakh), total costs (Rs.3834.51 lakh).The sale price

of mango pulp per tonne was (Rs.49965.4), total output of mango pulp was

(8518.5tons), variable costs per tonne (Rs.43453.84).

3.1.6 Financial efficiency measures applied to processing units

Table 3.5 displays information on 4 categories of ratio measures pertaining to

4 types of processing units. As per the methodology discussed in Chapter II, these

ratios were worked out and presented in the Table 3.5.

Cost ratios

Cost ratios include operating ratio, fixed ratio and gross ratio. Operating ratio

is 0.94and gross ratio is 0.96andfixed ratio is0.04.

Table 3.4: Break-even analysis (BEA) for mango processing by Sri varsha food
products India Ltd.,:

Sl. Sri Varsha food products

Particulars
No. India ltd.
1. Fixed costs (in Rs.lakh) 132.89

2. Variables costs (in Rs. lakh) 3701.61

3. Total costs (in Rs. lakh) 3834.51

4. SalePrice per tonne of pulp (in Rs.) 49925.4

5. Output (in tonnes) 8518.5

6. Total revenue (in Rs. lakh) 4256.31

7. Variable costs per tonne (in Rs.) 43453.8

Break even output
8. 2040.9
(Mango pulp in tonnes)
Margin of safety
9. 6477.6
(Mango pulp in tonnes)
Table3.5: Financial efficiency measures:

Processing unit
Sl.No Particulars
Unit-1

I. Cost ratios

i. Operating ratio 0.94

ii. Fixed ratio 0.04

iii. Gross ratio 0.96

II. Liquidity ratios

i. Current ratio 2.04

ii. Working ratio 2.46

iii. Current liability ratio 0.43

III. Solvency ratios

i. Net capital ratio 2.63

ii. Debt – equity ratio 0.61

iii. Equity value ratio 0.60

IV. Capital ratios

i. Capital per unit of gross income 0.44

ii. Rate of capital turnover
124.7
(in percentage)
iii. Input- Output ratio 1:1.07

Unit-I: Sri Varsha food products India ltd processing unit.

Liquidity ratios

Liquidity means the capacity of the processing unit to clear the short term

loans. Liquidity ratios consist of current ratio, working ratio and current liability

ratio. Current ratio is 2.04and current liability ratio is 0.43. Whereas working ratio is

2.46. These liquidity ratios show the liquidity position of processing units. Higher

the ratios greater would be the liquidity position of processing unit.

Solvency ratios

Solvency means the capacity of the processing unit to solve the long-term

loans or debts. Higher the ratio value, greater would be the solvency of the

processing unit. Solvency ratios include net capital ratio, debt equity ratio and equity

value ratio. Net capital ratio is 2.63and equity value ratio is 0.60 whereas debt equity

ratio is0.61. Here smaller the ratio value, greater the solvency position of the firm.

Capital ratios

Three types of capital ratios were considered here viz., capital per unit of

gross income, rate of capital turnover and input – output ratio. The higher ratio value

would indicate the better financial position and economic viability of processing

unit. Capital per unit of gross income is 0.44. Whereas rate of capital turnover in

terms of percentage was 124.7.Input – output ratio was 1.1.07.

3.2 SWOT ANALYSIS OF MANGO PROCESSING IN SRI VARSHA FOOD

PRODUCTS INDIA LTD IN CHITTOOR DISTRICT:

The following points were elicited from the study with regards to SWOT analysis:

Strengths

1. There is abundant availability of fruits and vegetables

2. The location is well suited to the factory for the availability of water for

processing.

3. Proximity to major Indian cities like Chennai, Tirupati and Bangalore

4. Good rail and road link helped the factory from the losses of transportation.

5. There is also the the availability of other agri products.

6. Sri Varsha food processing is also provided with good infrastructure facilities.

7. The factory maintains good marketing channels which reduces the problems

during procurement.

8. The management of the factory has experience in export markets.

9. The procurement officials of the factory maintain good relationships with the

farmers of different villages.

10. The management of the factory provides loan assistance to the farmers; as a

result the farmers will be loyal to the factory in supplying mangoes regularly.
Weaknesses:

1. Inadequate product quality and standards.

2. The factory is not provided with good testing and research facilities.

3. Poor effort on value addition and better value life.

4. Poor availability of research by the factory.

5. Inadequate technical knowledge of local manpower.

6. Lack of proper coordination by the management.

7. Poor linkages with developmental institutions.

8. Factory is provided with limited geographical area.

9. Weak linkages between farmers and processing units.

10. High handling losses which nearly constitutes to 15 percent.

11. High post harvest losses which nearly constitutes to 20 percent.

Opportunities:

1. Availability of abundant Mango,Banana,and Guava in neighboring states of

Tamilnadu and Karnataka.

2. Growing export and domestic demand for processed foods.

3. Encouraging state and central Government policies on food related industries.

Threats:

1. Growing competition from related clusters like Pune and Bangalore.

2. Increasing incidence of bacterial and viral deceases in mango, papaya and banana

and difficulty in control.

3. Global economic recession affecting export market.

4. Stringent food safety norms of developed countries like USA, Japan and other

European countries.

3.1.10 Problems encountered by processing units and remedial measures:

3.1.10.1 Problems encountered by processing units:

During the survey several problems were disclosed by the proprietors of the

processing units. These were:

1. In general the raw fruits were brought through trucks, later they were

heaped manually in the sheds resulting on an average 10 per cent fruit

spoilage.

2. The raw fruits were stored and ripened in thatched sheds which regularly

required replacement every year and these sheds were generally prone to

fire incidents and also insect attacks.

3. Washed water was not recycled resulting in excess consumption of water

and hypochlorite.

4. Conveying of fruit slices to pulper were predominantly done manually

instead of machines. This was causing infestation and hygienic problems.

 5. Recovery of pulp from the slices was not upto the mark, some produce

losses were also encountered.

6. Heating of pulp in open jacketed kettles resulted in a heavy surface heat

losses, steam condensate losses and losses in aroma. It also affected the

product hygiene adversely.

7. Cans sterilization was manual and not up to the mark.

8. They depended on merchant exporters to export mango pulp on pre-contract

basis. This situation reduced their export earnings.

9. The proprietors of processing units did not have adequate experience,

knowledge and skill to top the full potential of export of mango and other

fruits and vegetables.

10. Another important point was the prices of raw fruits and processed products

were highly fluctuating in domestic as well as international markets,

thereby causing higher risk particularly to small scale processing units.

Requisite remedial measures for strengthening the processing units:

1. Usage of perforated plastic crates would facilitate efficient storage of raw

fruits and minimizes fruit spoilage.

2. Proper storage structures such as intermediate storage sheds should be

strengthened to avoid storage losses of fresh fruits.

3. Adequate investment is required to construct durable storage structures in

place of thatched sheds.

4. Appropriate measures should be taken up for recycling of washed water and

divert the same for production of crops or other purposes.

5. In slicing and conveying operations suitable machines such as elevator to

transfer mango slices to pulper should be used in place of human labour.

6. At present export business with regard to mango pulp was being rested on

merchant exporters. In this regard AEZ should help the processing units to

provide direct link with the import countries and increasing export earnings

to processing units.

7. For overcoming the problem of under capacity utilization of the processing

units they should take up processing of other fruits and vegetables available

in other seasons.

8. There is need to improve the export intelligence, knowledge and skill of the

proprietors of processing units with regard to mango and other vegetables

with the help of AEZ.

9. There is a need to take up price stabilization measures in export business by

AEZ in Chittoor District.

 CHAPTER – VI

SUMMARY AND CONCLUSIONS

India is the second largest producer of fruits in the world next to Brazil.

Among the fresh fruits grown in India, mango continued to dominate the other fruits

in fruit basket with 37 per cent share in the total export earnings of fresh fruits from

India.

The demand for mango fresh fruits and its pulp in the country and abroad is

increasing day-by-day. Mango fruit utilization begins from its raw stage when

chutney, pickles and drinks are prepared from it. It is an outstanding source of

vitamin-A and good source of vitamin-C, besides it has many minerals and other

vitamins.

The present study entitled “An economic study of processing of mango fruits

in Chittoor district of Andhra Pradesh.-A case study of Sri Varsha food products

Ltd.,” was intended to examine the costs and returns in processing of mango pulp

and SWOT analysis aspects of mango processing.

The objectives of the study:

1. To study and analyze the cost and returns of processing of mango fruits per

tonne of product.

2. To evaluate the performance of Sri Varsha food products through SWOT

analysis.

3. To identify the problems and suggest suitable remedies for efficient

functioning of factory.
 The study pertains to the evaluation performance of Sri Varsha food products

India Ltd., was carried out in S.N. Puram village of Chittoor District of Andhra

Pradesh. Hence all the required data were collected from the records maintained by

the factory. Details regarding the processing of mango fruits per tonne of processed

product were obtained from the records the factory. Total costs include fixed costs

and variable costs per tonne of mango processed products

Fixed costs constitute:

1. Annual depreciation charges on buildings, machinery and implements.

2. Repairs and maintenance charges of factory per annum.

3. Interest as charged by nationalized banks on fixed capital as buildings, machinery

and factory site also.

4. Salaries of permanent staff and taxes paid by factory during the year.

Variable costs include:

Costs incurred on labor (human labor), raw material costs incurred in processing of

mango, costs of packing, advertising costs, marketing costs etc. All the necessary

data will be obtained from the records of the factory.

SWOT analysis which measures strengths, weaknesses, opportunities and

threats faced by the factory was collected fro the factory records and analyzed.

Problems were identified and finally solutions to the problems were suggested.

Financial ratio measures such as solvency ratios, liquidity ratios and leverage ratio

were employed to assess business performance of the factory.

Major findings of the study:

The total investment of mango processing units was Rs.27.34crores on

canning units and aseptic packing units. The major items of investment in mango

processing units were investment on machinery and buildings on which the amount

spent was Rs.5.2S8 crores and Rs.2 crores.

Total cost of mango processing amounted to Rs.45013.91 lakh for processing

units. (Of which variable cost contributed to 96.5percent respectively

The net returns were found to be Rs.4951.6 lakhs. These are higher than the

small and medium scale processing units.

Cost of processing per tonne of mango pulp amounted to Rs.49965.5 for this

unit.

Break even analysis at the existing level indicated that processing unit

registered BEO at 2040.9tonnes of pulp.

Operating ratio and gross ratio were higher for medium scale mango

processing unit with 0.94 and 0.96.

Current ratio and current liability ratio were higher for this processing unit

2.04 and 0.43, whereas working ratio was 2.46. If the ratio is greater than one, it

could be presumed that the factory had sufficient current assets to meet current

obligations. A current ratio of roughly one was considered to be a satisfactory

figure.

Net capital ratio and equity value ratio were (2.63 and 0.60) for this unit,

whereas debt equity ratio was 0.61.

Capital per unit of gross income was 0.44, whereas rate of capital turnover

was 124.7 and Input-output ratio was 1:1.07.

Conclusions:

The following conclusions have been emerged from the study:

1. In Chittoor District Totapuri was a prominent variety among other varieties

of mango and this was mainly used for making pulp to meet the demand in

domestic as well as in export markets.

2. Transportation and storage losses constituted nearly 10 per cent in this

district.

3. Investment was higher in aseptic packing processing units compared to

canning processing units.

4. Cost of processing per tonne of mango pulp was higher in Sri Varsha food

product processing unit.

5. The net returns per tonne of mango pulp was higher in these processing unit

6. BEO was lower for this processing unit. Whereas margin of safety was higher

for this unit.

7. Sri Varsha food processing was also provided with good infrastructure
facilities.
8. The location is well suited to the factory for the availability of water for

processing and accessibility.

Suggestions:

At present Sri Varsha food products India ltd Chittoor District was only

Totapuri mango is being processed to make pulp and other beverages for meeting

the demand in domestic and export markets. Hence, in this context the other popular

varieties of export viz., Alphanso from Maharashtra and Banganapalli from Krishna

district should be made popular with all the technical support to encourage state and

central government policies on food related industries.

At present only one fruit juice making factory i.e. M/s Parle International

Limited was functioning at Chittoor to produce Ready-to-serve (RTS) beverages

from mango, Guava and Papaya under the brand name of ‘Maaza’. Hence, the other

down stream units of mango pulp should be established in the District to prepare

mango jelly and other fruit bars such as ‘Am paper’, ‘Thandra’ or ‘Mango Leather’.

……. In processing units only mango is being processed and the processing was not

extended to other fruits viz., guava and papaya. Therefore, there is urgent need to

establish and promote multiproduct fruit manufacturing units in the District.

There is need to increase the area under mango export varieties with drip

irrigation facilities by providing subsidies and technical guidance. At present in

mango production pests (stone weevil and fruit fly) and diseases (anthracnose) are

increasing and posing lot of problems both in production and marketing. Hence,

IPM technology should be geared up adequately to stop these problems with

adequate staff and services of AEZ.

There is need to reduce post harvest losses by using grading and

standardization techniques and use of plastic crates in transportation and storage.

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The Horticulture Today 2009 (India) Friday, SWOT analysis of mango in
Andhrapradesh
The Agriculture Today 2010 Hindu (India) Monday, Problems of mango processing
industries in India.
The State of Food and Agriculture 2009 (FAO, 2009).

Web source
 http://www.indianstat.com
 http://www.andhra pradeshstat.com
 http://www.faostat.com
 http://www.horticulturetoday.com
 http://earthtrends.wri.org/updates/node/313
 http://www.srivarshafoodproductsindialtd.com
 http://[email protected]

 www.horticulture report.swot analysis of mango.pdf