3.3.3 Cost structure
The major cost for this process is the cost of raw materials. They procure materials from various parts of India and also Tanzania, Africa. They do not differentiate between fixed and variable costs. The final processed cashews are sold at 400-450 per kg. Also, a by-product from this process is the cashew-oil which is extracted and sold separately, this is done in a separate plant and also adds to the revenues of the firm.
3.3.4 Investments: Existing and Planning
The major capital investment for this industry is made in plant and machinery. There are various equipment which are used for drying, peeling, moisturizing and grading the cashews. These equipment form a major part of expenses for the firm and they are capitalized …show more content…
Future requirements are to be done on a long term investment basis.
3.3.5 Future Plans: Expansion/Diversification
During our interaction we learnt that they plan to expand organically or in a phased manner. Their growth target being 10-15% year on year for the next five years .There is not much diversification possible in this field, as its one natural product and they mainly supply to wholesalers. Even the flavoring is mostly done in the retail part of the value chain. The only by product is the cashew nut oil generated but the quantity generated is minimum and hence it’s not even as popular as almond oil. Thereby cashew nut manufactures can only forward or backward integrate as they are restricted in diversification …show more content…
1) Quality degradation due to manually cutting machines
This risk can be mitigated using some slight modifications in the fixtures for holding cashews while cutting, so that it does not degrade the quality of cashews. Once we do these changes in fixture we need to train the labor to work on these modified fixtures. We also need to take into consideration the operational time required to cut the kernels out as compared to the existing cutting process.
2) Supply Constraints due to unseasonal rains
This risk can be reduced by importing cashews from African countries. In African countries the quality and the grade of Cashew is better than that of India. Also the rates of raw materials is less as compared to rates in India. In India the cashew cultivation is restricted to a narrow belt of Coastal Maharashtra, Goa and Karnataka. The prices are usually higher as compared to the African countries. Also by doing this we can ensure that there is an all year supply of Cashews and the need for storing the roasted cashews throughout the year for the demand throughout the
The major cost for this process is the cost of raw materials. They procure materials from various parts of India and also Tanzania, Africa. They do not differentiate between fixed and variable costs. The final processed cashews are sold at 400-450 per kg. Also, a by-product from this process is the cashew-oil which is extracted and sold separately, this is done in a separate plant and also adds to the revenues of the firm.
3.3.4 Investments: Existing and Planning
The major capital investment for this industry is made in plant and machinery. There are various equipment which are used for drying, peeling, moisturizing and grading the cashews. These equipment form a major part of expenses for the firm and they are capitalized …show more content…
Future requirements are to be done on a long term investment basis.
3.3.5 Future Plans: Expansion/Diversification
During our interaction we learnt that they plan to expand organically or in a phased manner. Their growth target being 10-15% year on year for the next five years .There is not much diversification possible in this field, as its one natural product and they mainly supply to wholesalers. Even the flavoring is mostly done in the retail part of the value chain. The only by product is the cashew nut oil generated but the quantity generated is minimum and hence it’s not even as popular as almond oil. Thereby cashew nut manufactures can only forward or backward integrate as they are restricted in diversification …show more content…
1) Quality degradation due to manually cutting machines
This risk can be mitigated using some slight modifications in the fixtures for holding cashews while cutting, so that it does not degrade the quality of cashews. Once we do these changes in fixture we need to train the labor to work on these modified fixtures. We also need to take into consideration the operational time required to cut the kernels out as compared to the existing cutting process.
2) Supply Constraints due to unseasonal rains
This risk can be reduced by importing cashews from African countries. In African countries the quality and the grade of Cashew is better than that of India. Also the rates of raw materials is less as compared to rates in India. In India the cashew cultivation is restricted to a narrow belt of Coastal Maharashtra, Goa and Karnataka. The prices are usually higher as compared to the African countries. Also by doing this we can ensure that there is an all year supply of Cashews and the need for storing the roasted cashews throughout the year for the demand throughout the