What Is the Potato Processing Industry?



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Potato consumption is migrating away from raw potatoes and toward manufactured food products. Potatoes are processed to improve their taste, flavor, and shelf life. Frozen potatoes, which include French fries provided in most quick-service restaurants (QSRs) around the world, are one of the most popular commodities in the processed potato market. Potato crisps, another manufactured product, are the most popular snack foods in developed countries.

 

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In the food sector, potato flour is used to bind meat mixtures and thicken gravies and soups. Potato starch is transformed into fermentable sugars that are used in alcoholic beverages in some countries.

 

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Scope of Potato Processing Industry

The potato processing industry is thriving, and it's going through a time of expansion, thanks to rising global demand for vegetarian foods, the growth of the hospitality business, hotel dining, the growth of the processed food industry, and customer desire for higher quality and sustainability. Globally, the processed food industry sector is worth more than 2.2 trillion dollars, with over 420,000 enterprises.

 

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Potatoes can be boiled, fried, or baked and used in a wide variety of dishes, including potato pancakes, potato dumplings, mashed potatoes, twice-baked potatoes, potato soup, and many others.

 

Potato Processing market Regional Outlook


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North America, Latin America, Eastern Europe, Western Europe, Asia Pacific, Japan, and the Middle East, and Africa make up the global potato processing market. Because of the presence of big potato processing companies in these regions, Europe and North America are expected to dominate the potato processing industry.

For factors such as government policy, foreign direct investment, and mergers and acquisitions, major participants in the potato processing business are concentrating their efforts in the Asia Pacific area. In the projected period, the potato processing market is expected to be driven by growth in potato output in the Asia Pacific region.

The potato processing market is predicted to rise in developing nations such as India and China as urbanization increases.

 

India in Comparison to Other Countries

The Indian economy is mostly Agro-based, with approximately 58 percent of the people directly employed in agricultural vocations, which are the primary source of income. Many fruits and vegetables are produced in abundance in the country, with the country ranking first or second in the globe. India is the world's second-largest producer of potatoes, with an anticipated 52 million tonnes produced in 2019.

 

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In advanced countries, the percentage of potatoes processed surpasses 65 percent, contributing significantly to the development of their rural economies. The notion of potato processing and value addition into a varied product range began about 20 years ago in India with the production of Potato Chips. PepsiCo was inspired by the product's commercial success and consumer approval to build more processing facilities for Potato Chips, which prompted a few more domestic companies to follow suit.

After that, McCain, a Canadian company, opened their plant in 2008, and HyFun Foods opened its first processing plant in Gujarat in 2015 to produce frozen French fries and potato specialties.

 

Advanced Technologies and Government Support



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India has adopted new technologies and sophisticated farming practices for seed potato multiplication in recent years, yielding significant returns in terms of potato quality, improved yields, and prolonged shelf life in contemporary cold storage.

 

The following are the areas in which government agencies should assist the potato processing industry:

·  They assist in raising public awareness about the consumption of processed potato products.

·  CPRI, as well as private sector R&D institutions participating in the development of newer potato varieties, should be encouraged, facilitated, and given enough financial support.

·  To aid the raw potato post-harvest handling system so that wastages caused by handling and transportation can be avoided, as well as made more cost-effective.

·  Because Frozen Potato Products have such a high global demand, financial aid is urgently needed for promotion and advocacy efforts through venues such as exhibits, trade shows, and hosting buyer-seller meetings.

·   The MoFPI and other government agencies, such as APEDA, should commission studies from expert consultants to identify new global markets for India's diversified potato products.

 

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Ø  Introduction

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·         Project Objective and Strategy

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·         Properties

·         BIS (Bureau of Indian Standards) Provision & Specification

·         Uses & Applications

 

Ø  Market Study and Assessment

·         Current Indian Market Scenario

·         Present Market Demand and Supply

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·         Statistics of Import & Export

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·         List of Suppliers and Manufacturers

 

Ø  Personnel (Manpower) Requirements

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Ø  Plant and Machinery

·         List of Plant & Machinery

·         Miscellaneous Items

·         Appliances & Equipments

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Project at a Glance

Along with financial details as under:

 

  •     Assumptions for Profitability workings

  •    Plant Economics

  •    Production Schedule

  •    Land & Building

            Factory Land & Building

            Site Development Expenses

  •    Plant & Machinery

             Indigenous Machineries

            Other Machineries (Miscellaneous, Laboratory etc.)

  •    Other Fixed Assets

            Furniture & Fixtures

            Pre-operative and Preliminary Expenses

            Technical Knowhow

            Provision of Contingencies

  •   Working Capital Requirement Per Month

             Raw Material

            Packing Material

            Lab & ETP Chemical Cost

           Consumable Store

  •   Overheads Required Per Month And Per Annum

         Utilities & Overheads (Power, Water and Fuel Expenses etc.)

             Royalty and Other Charges

            Selling and Distribution Expenses

  •    Salary and Wages

  •    Turnover Per Annum

  •   Share Capital

            Equity Capital

            Preference Share Capital

 

  •    Annexure 1:: Cost of Project and Means of Finance

  •    Annexure 2::  Profitability and Net Cash Accruals

                Revenue/Income/Realisation

                Expenses/Cost of Products/Services/Items

                Gross Profit

                Financial Charges     

                Total Cost of Sales

                Net Profit After Taxes

                Net Cash Accruals

  •   Annexure 3 :: Assessment of Working Capital requirements

                Current Assets

                Gross Working. Capital

                Current Liabilities

                Net Working Capital

                Working Note for Calculation of Work-in-process

  •    Annexure 4 :: Sources and Disposition of Funds

  •    Annexure 5 :: Projected Balance Sheets

                ROI (Average of Fixed Assets)

                RONW (Average of Share Capital)

                ROI (Average of Total Assets)

  •    Annexure 6 :: Profitability ratios

                D.S.C.R

                Earnings Per Share (EPS)

               

             Debt Equity Ratio

        Annexure 7   :: Break-Even Analysis

                Variable Cost & Expenses

                Semi-Var./Semi-Fixed Exp.

                Profit Volume Ratio (PVR)

                Fixed Expenses / Cost 

                B.E.P

  •   Annexure 8 to 11:: Sensitivity Analysis-Price/Volume

            Resultant N.P.B.T

            Resultant D.S.C.R

   Resultant PV Ratio

   Resultant DER

  Resultant ROI

          Resultant BEP

  •    Annexure 12 :: Shareholding Pattern and Stake Status

        Equity Capital

        Preference Share Capital

  •   Annexure 13 :: Quantitative Details-Output/Sales/Stocks

        Determined Capacity P.A of Products/Services

        Achievable Efficiency/Yield % of Products/Services/Items 

        Net Usable Load/Capacity of Products/Services/Items   

       Expected Sales/ Revenue/ Income of Products/ Services/ Items   

  •    Annexure 14 :: Product wise domestic Sales Realisation

  •    Annexure 15 :: Total Raw Material Cost

  •    Annexure 16 :: Raw Material Cost per unit

  •    Annexure 17 :: Total Lab & ETP Chemical Cost

  •    Annexure 18  :: Consumables, Store etc.,

  •    Annexure 19  :: Packing Material Cost

  •    Annexure 20  :: Packing Material Cost Per Unit

  •    Annexure 21 :: Employees Expenses

  •    Annexure 22 :: Fuel Expenses

  •    Annexure 23 :: Power/Electricity Expenses

  •    Annexure 24 :: Royalty & Other Charges

  •    Annexure 25 :: Repairs & Maintenance Exp.

  •    Annexure 26 :: Other Mfg. Expenses

  •    Annexure 27 :: Administration Expenses

  •    Annexure 28 :: Selling Expenses

  •    Annexure 29 :: Depreciation Charges – as per Books (Total)

  •   Annexure 30   :: Depreciation Charges – as per Books (P & M)

  •   Annexure 31   :: Depreciation Charges - As per IT Act WDV (Total)

  •   Annexure 32   :: Depreciation Charges - As per IT Act WDV (P & M)

  •   Annexure 33   :: Interest and Repayment - Term Loans

  •   Annexure 34   :: Tax on Profits

  •   Annexure 35   ::Projected Pay-Back Period And IRR