Manufacturing Business in Kerala Ideas for MSMEs
Kerala is one of the most promising small business friendly places in India. The state is endowed with abundant natural resources, skilled labour, export linkages, agro based raw materials which can develop profitable MSME industries. Kerala has various business opportunities that demand lesser investment and can be scaled up slowly such as coconut processing, manufacturing of spices, coir products, herbal cosmetics, etc.
Compared to heavy industrial states, Kerala has a strong capability in value-added manufacturing, such as agriculture, eco-friendly products, Ayurveda, seafood, and natural fibres. This presents great possibilities for the first time entrepreneurs to develop sustainable businesses that have long-term demand.
Kerala has multiple attributes making it suitable for MSME manufacturing:
- Strong availability of Coconut, Rubber, Spices, Coir, Seafood
- Kochi Port will be opened for export.
- Strongly educated, competent labour force
- Rising demands of eco-friendly and herbal products
- Support from the Government via MSME schemes and subsidies
- Increase in the demand for the products from Kerala in both domestic and international markets.
Due to these capabilities, many small manufacturers in Kerala are able to market their products in not only in India but also in the Gulf countries, Europe and North America with success.
Coconut Processing Business
It is important to mention that coconut manufacturing is one of the safest and most lucrative business of the state of Kerala as it produces major portion of the whole of India’s coconut production. Entrepreneurs can have much higher margins than selling the raw coconuts by adding value to them.
Some of the most common coconut products are:
- Virgin Coconut Oil (VCO)
- Coconut milk
- Desiccated coconut powder
- Coconut flour
- Coconut-based snacks
Globally, health-conscious consumers are many who are demanding natural coconut products. There are particularly good export prospects in the Middle East and Europe.
Access Complete Business Plan: Coconut and Coconut Value-Added Products
Banana Chips and Jackfruit Processing
The famed Nendran chips, which are also one of the most sought-after varieties of bananas in Kerala, already have a high price tag in India and among Indians living overseas. Meanwhile, jackfruit processing has emerged as one of the rapidly growing businesses due to the promotion of jackfruit as a healthy and plant-based food alternative around the world.
It is a good business because raw material is available in abundance in Kerala and products are in high demand in the retail market.
Items that can be produced:
- Banana chips
- Jackfruit chips
- Jackfruit flour
- Ready-to-cook jackfruit packs
Even small units can be very profitable if properly packaged and branded.
Spice Processing and Packaging
Kerala is known as the black pepper state, cardamom state, turmeric state, clove state and many spices. Spice processing units can get started by cleaning, grinding, blending and packing of spices in small scale.
This is an industry that has benefits including:
- High export demand
- Prices of spices are premium in Kerala.
- Growing online and retail market
- Strong demand for hygienic packaged spices
Entrepreneurs can create good quality and strong regional spice brands in relatively low investment by concentrating on the branding.
Coir and Cocopeat Manufacturing
Kerala is the leading state in the development of coir industry in India and eco-friendly coir products are gaining popularity globally. The products made from coir are used in many fields, like agriculture, gardening, erosion control and landscaping.
Coir products that can earn profits are:
- Coir mats
- Cocopeat blocks
- Geo-textiles
- Riveredge Park is growing bags for horticulture.
Coir, being a natural material, is widely available in Kerala, ensuring cost-effective raw material availability for MSMEs.
Herbal Soap and Ayurvedic Cosmetics
With the growing trend of people opting for natural products over those that contain chemicals, the herbal personal care market is quickly growing. This is where local brands stand to gain a significant edge in Kerala due to the state’s ayurvedic identity.
Highly in demand are products such as:
- Herbal soaps
- Ayurvedic oils
- Natural shampoos
- Face packs
- Hair care products
As long as they have good packaging and product quality, it is possible to scale up small brands without being limited by Amazon, Instagram or export marketplaces.
Seafood Processing Business
Seafood processing and export presents huge opportunities in Kerala’s coastal economy. Urban retail markets and international trade of processed seafood products is gaining popularity.
Popular seafood products include:
- Frozen shrimp
- Fish fillets
- Ready-to-cook seafood
- Dried fish snacks
This sector is a strictly controlled one and should have refrigeration facilities but can be very lucrative.
Rubber-Based Manufacturing
Another good opportunity is the production of rubber-based products as Kerala is the major producer of natural rubber in India. Industrial and consumer products can be produced using this process.
Popular rubber products include:
- Rubber sheets
- Latex pillows
- Mattress toppers
- Rubber bands
- Household rubber items
Demand for natural latex wellness products is on the rise in the global market, particularly in luxury bedding.
Eco-Friendly Packaging Products
With the single-use plastic ban in place, there is an immense demand for biodegradable packaging products. Kerala is well endowed with raw material resources for sustainable packaging industries.
Products that are becoming more needed are:
- Areca leaf plates
- Kraft paper bags
- Banana fibre packaging
- Eco-friendly food containers
Many of these products are based on agricultural wastes, so the startup capital is generally modest.
Government Schemes for Manufacturing Businesses
The government has a number of schemes in place to ease investment pressure and access to finance for first-time entrepreneurs.
Important schemes include:
- PMEGP subsidy scheme
- MUDRA business loans
- CGTMSE collateral-free financing
- KINFRA industrial parks
- Coir Board and Spices Board assistance
The state of Kerala is extremely conducive to small manufacturing enterprises through these schemes.
How NPCS Helps Entrepreneurs Start Manufacturing Businesses
Niir Project Consultancy Services (NPCS) is one of the premier industrial consultancy firms in India assisting entrepreneurs in setting up their manufacturing enterprise successfully.
NPCS offers all the following support:
- Detailed Project Reports (DPRs)
- Market research and demand analysis
- Financial feasibility studies
- Machinery guidance
- Support and assistance in sourcing raw materials
- Manufacturing process details
- Profitability projections
From establishing a coconut processing unit to a herbal cosmetics business, or a seafood processing unit or a coir manufacturing unit, NPCS is there to help you make an informed decision with confidence when it comes to investment opportunities in Kerala.
Conclusion
The state of Kerala is endowed with significant natural resources, export infrastructure and demand for eco-friendly and value-added products, which present opportunities for small-scale manufacturing businesses. Quality, branding and focus on the market demand can create highly profitable businesses with moderate investments.
The industries like coconut processing, spices, coir products, herbal cosmetics, seafood processing and sustainable packaging are likely to witness robust growth in the near future. By thoughtful planning, government support, and expert project management, successful MSME manufacturing units can be established in Kerala as an ideal location.
FAQs
Q1. What is the best business to do in Kerala?
The industries with the highest profits in Kerala are: coconut processing, spice production, coir, herbal cosmetics and seafood processing.
Q2. How much is the capital needed for a small manufacturing unit in Kerala?
The amount of machines and production scale will determine the amount of investment in MSME manufacturing business in Kerala to be started in between ₹8 lakhs and ₹25 lakhs.
Q3. Can Small Manufacturers in Kerala export?
Yes. The spices, coir products, seafood, ayurvedic products and food items are the major export products from Kerala’s MSMEs to the Kochi Port.
Q4. For new business owners, what is the best government program?
PMEGP is one of the finest schemes as it supports subsidy for manufacturing enterprises.
Q5. What does NPCS do for manufacturing startups?
For manufacturing companies in India, NPCS offers project reports, market surveys, feasibility studies, machinery advice and industrial consultancy services.+
