Financial Viability

The financial analysis of the investment of a 25 MT capacity onion storage structure has been attempted and is presented below.

Salient Features:

1.         Installed capacity,       25 Metric Tonnes
2.         Capital investment      Rs.45000
3.         Investment per tonne of capacity Rs.1800

Techno-Financial Parameters and the Economics:

Four storage structures are setup in potential villages which cover at least 6 villages on a cluster basic.
It is planned to organize the Onion growers in a group on a cluster approach and the group will decide the price.

Value Addition:

To add value to the products, a processing centre was established at Bamunigaon with common facilities for boiling, de-hydration etc. Secondly, the unit is manufacturing powders of various items and packaging in different sizes such as 5 gms, 10 gms, 50 gms, 100 gms, 500 gms and selling in a brand name called “FARMERS” throughout Orissa. The cost of procurement in case of turmeric, comes to about Rs.25,000/- per MT (including procurement price, tax, transportation and bulk packing, etc.), which is sold in market at Rs.50,000.00 per MT to stockists and Rs.80,000.00 per MT to the consumers. There is 100% value addition at the level of consumers.
Though, the additional machineries were purchased and installed, there was less time to get the maximum production in terms of drying. The pulverization, packing and selling is continuing. The projection of sale volume is to the tune of Rs.1.2 crores. Out of this, only turmeric will be about Rs.60.0 lakhs. During the last financial year, we could achieve Rs.65.0 lakhs only against our expectation of Rs.80.0 lakhs. In the mean time, we are taking up consumer awareness promotion, good and attractive packaging and trying to participate in various events to boost the sales.

Farmers, those who are using the common facilities are getting higher income. There is a net gain of about 20-30%. However, the facilities are more useful to process the products, otherwise, it would be gradually more difficult for the people to cultivate the same.

Presently, the sale is taking place in 30 important cities in Orissa. In Bhubaneswar, there is direct retailing through a retain network of 700 centres, whereas, distributors/stockists are appointed for other areas.

A sales team is employed to promote the sales in the brand name of “FARMERS”, which is registered under Copy Right Act. The unit has become viable and becoming a profit-making unit. We have registered the business unit as a company. While activities at the area level is managed by the ‘Cooperative’ society now.

Recently, new packages were designed and printed to make the products more attractive. Advertisement in local television network and other promotional strategies and products.