BUSINESS PERFORMANCE ANALYSIS OF FRUIT PROCESSING – A CASE OF PAIYUR FRUIT PRODUCTS Pvt. Ltd. IN KRISHNAGIRI DISTRICT OF TAMIL NADU
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Date
2009-07-15
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University of Agricultural Sciences, Bangalore
Abstract
Food Processing Industry has enormous significance for India's economic development
because of its vital linkages and synergies with industry and agriculture. While India has an
abundant supply of food, the food processing industry is still nascent. This study focuses on the
performance of fruit processing unit in Tamil Nadu. The data from management records, balance
sheets, profit & loss account and trading account were obtained for a period of 9 years. The
major seasonal fruits like mango, guava, tomato and pineapple are processed. The procurement
model adopted by the unit is unique where in mango (Alphonso and Totapuri) is directly sourced
from growers located in three districts namely Krishnagiri, Dharmapuri and Salem. The company
makes advance payments at the beginning of the season and the final settlement by way of open
cheque to the mango suppliers so as to facilitate easy transaction. Further, the firm sells finished
product (mango pulp) to eight major corporate directly which avoids middleman in marketing
process. Firm is also involved in merchandize export through the above-mentioned buyers. The
growth and business performance of the unit was accessed through financial / ratio analysis and
compound annual growth rate. It could be observed that the firm registered an impressive
performance with annual compound growth rates of 16.8, 15.7 and 27.00 per cent for raw mango
procurement, pulp manufactured and sales of finished product (pulp) in that order. Firm is
having comfortable liquidity to meet shot and long-term financial obligations. The gross profit
margin has increased over the years, but net profit margin has remained constant and declined
and has not increased as fast as gross profit margin, implying that the operating expenses relative
to sales have been increasing over many years. Increasing expenses should be identified and
controlled. The reasons attributed for the success of the firm are- direct raw mango procurement
from the growers which has enhance their bonding direct marketing of mango pulp to corporates
and capacity utilization by way of undertaking process on higher basis.
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