1.

CASHEW SECTOR

1.1. GAP AND ISSUES ANALYSIS

Input supply and procurement: The sector is characterized
by seasonal availability of domestic inputs. The procurement
pattern amongst the medium and large players is as follows:
April – June From India (Maharashtra, Orissa, A.P, T.N, Kerala)
Nov- Jan ( Tanzania, Indonesia).

Global sourcing is pursued directly through importers. While

medium and large players can pursue this initiative, the
smaller players do not have the resources or wherewithal to
pursue such initiatives. Constraints are also evident in terms
of shifting cultivation patterns in some locations such as
Kerala. Products such as rubber yield higher return to the
cultivators and hence many cashew cultivation plantations
have shifted to other crops.

With regard to quality of inputs raw material from East Africa

is preferred. This is because the products from therein is more
standardized (size, moisture, oil content, breed). The
procurement from India is in different assorted sizes landings
are from different regions - Maharashtra, Orissa, A.P, T.N,etc.

So as to facilitate optimal stocking of inputs/optimize freight

costs, warehouses may be also located at ports- Kochi or more
distant Tuticorin.

Quality: Development of innovative processing technologies

for process improvement and to reduce cost of production.

Studies on nutritional aspects of cashew kernels are essential

with an idea to bring out the beneficial aspects of nut nutrition
and to enhance its market acceptability.
Comprehensive survey on the quality of cashew kernels with
special reference to micro contaminants such as Pesticide
residues, micotoxins, heavy metals, micro organisms etc so as
to alleviate the apprehensions on the health quality of cashew
kernels.

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Presently USA and EU countries are very particular in residue
analysis in Parts per Trillion (PPM analysis is not enough). So a
well-equipped lab with highly sophisticated testing apparatus
is essential for the sector. This facilities can be shared by
other sector in the growth pole area such as fisheries, food
processing etc

Training and Skill upgradation: Training of labour is

currently in house (on- the- job). Specialized training inputs is
particularly relevant as the cluster enterprises move towards
manufacturing value added products and lower the exposure
to risk for workers.

A training institute equipped with a modern pilot plant is

essential for the development of the sector. We should
upgrade the status of the cashew processors to food
processors so that young generations are attracted to this
field by systematic training. Also, evolve technologies and
practises that create better working conditions for people in
the factories processing units. Incorporate improved training
to instil better, safer and cleaner practises, specially for
women workers to ensure steady flow of workers into the
sector.
In future, this training centre could also become the centre for
upgrading present conditions of all processing centres in the
state.

Policy: Countries such as Vietnam have attracted FDI which

has led to establishment of socio – environmental and quality
compliant production infrastructure, declining exchange rates
vi-a-vis the USD has also led to their being artificially
competitive in export markets.

• Appropriate policy frame work is required and schemes

need be synergised to establish value added production
and providing facilities in terms of technology access, or
CFCs/parks on a PPP basis. Cluster enterprises
particularly export oriented production could also
eventually shift to consumer packs than current bulk
packing.

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 • A corpus fund is need be evolved to finance micro/
cottage enterprises in a Mutual Credit Guarantee Fund
Scheme (MCGFS) mode. SIDBI may serve as a vehicle to
evolve and contribute such a fund that may be employed
to leverage the collateral free credit amongst informal
sector micro / tiny enterprises for technology
upgradation

Production, Technology and Product Development:

• Product is sold, as a commodity .It is necessary to
explore the possibilities of value added manufacturing
options.
• The working conditions of cashew processing centers are
to improved for getting maximum productivity from
workers, with special attention on women workers’ issues
.
• Steam boiling process is an option to enhance
productivity. However, R&D initiatives are required to
explore the means of retaining the original taste/ flavour
of cashew.
• Moving up the value chain would involve graduating to
manufacture products in retail packs under global brand
names. This would involve the establishment of a
necessary facility for pursuit of pilot testing different
products and appropriate packaging. Links with Global
marketers may be made as part of market development
interventions.
• Meeting Global standards in terms of USFDA norms, GMP,
isa vital also for smaller and medium sized enterprises.
• Segregation of commercially important components from
CSNL, Cashew Testa and Cashew Gum.
• Upgradation in job quality as also meeting the above
norms and progressively important norms regarding
social compliance will involve development of shop floor
with appropriate ergonomics seating arrangements,
electric ovens, gloves etc.
• Development of hygiene and sanitation standards
(HACCP/ISO) to work out control parameters in
processing with the objective of implementing systems
that would ensure safe and quality cashew kernels for
human consumption, in these days of frequent inspection
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 by foreign buyerts in processing factories and hightened
consumer awareness.
• Collection and preservation of cashew apples and
development of value added product from the same.
• An R&D center could be explored for technology
intervention in cashew processing such as Freeze Dry
Processing and other latest processing methods.
Otherwise this sector remains traditional. More of R&D
works are essential for value addition of cashew kernels.

Pollution Control:
Presently the smoke from the drum roaster is directly
discharged to the atmosphere with out any treatment. It is a
thick smoke contains a lot of carbon particles and traces of
CSNL. Besides this industry creates some sorts of water
pollution while discharging the liquid waste of steam boiling
with out treatment.

Marketing and market development

• The enterprises in the cluster are largely in the lower end
of global value chain. They need graduate into retail
packing stage and marketing under global brand name
and marketers such as Marks & Spencers, Sainsburry, K-
Mart etc.
• The brand of Kollam Cashew in terms of drum roasting
and de shelling is yet to be protected and promoted.
• The drum roasting and manual de-shelling help the end
product to retain flavo0ur due to oil retention. Market
such as Japan offers a premium for such products.
However brand promotion and cost competitiveness and
market penetration initiatives need be enhanced if
Kollam cashew is to serve higher market share vis-a- vis
global competitors. De-shelling involves the removal of
shells in a manner as to retain quality kernel inside. In
many locations outside Kerala the skilled labour force
from Kerala is used for such manual operations.
• However, in some locations the alternative process of
steam boiling is being pursued.

Finance:

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 The medium sized enterprises are affected by inadequate
financial resources to stock inputs for an extended period of
time. Even medium sized enterprises confront supplies with
wide price fluctuations.

For instance the globally sourced inputs the price are as

follows: RS. 38/Kg (April –June) Rs. 33 (July – Sep), and Rs. 35
(Nov – Jan). The ability to stock inputs over extended period of
time by medium sized and smaller unts influence the
profitability of the enterprises. Evolution of consortia amongst
the medium and larger, small enterprises to stock inputs is
vital in this context.

Cottage enterprises are starved of cash to meet basic

requirements : cash purchase of inputs, meet living
expenditure over period of credit sale etc.

Strengthening industry associations:

The major industry association in this region includes Cashew
Manufacturers and Exporters Association, Cashew export
promotion Council etc.

The industry association have facilitated declaration of Kollam

as ‘Town of Excellence’ eligible for various support schemes
offered by department of. Commerce, GOI.

The capacity building of industrial associations to:

• Implement large infrastructure upgradation / incubator
projects under PPP basis.
• Establish a business information center as to offer
information and services to large as well as SMEs is
critical. The information service may be in terms of
market information – network with conveners networkers
with potential FDI/ Jv partners, information fair in India /
abroad and specifically on incomong – out going related
business delegates in India, shifting consumer trends etc.

Establishing efficient industry / institutional linkages:

• Stake holders meet with Fis are particularly critical to
evolve appropriate instruments as to adequately finance
SMEs and Micro / cottage units.

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 • Establishment of an incubation center for value added
production may be on PPP basis involving local academic
/ institutions such as TKM College of Engineering,
Polytechnics etc.
• R &D fund proposed to established at CEPC Laboratory
and Technical Division will be managed by an SPV
involving industry association representatives as well as
members of Cashew Export Councils.

1.1.1. SWOT Analysis

Strengths. Weaknesses.
• Skilled workforce • Inadequate WC facilities
available to stock inputs procured
• Established global supply optimally during season,
sources of input- raw inadequate warehousing
cashew. facilities to stock inputs
• Strong linkages and over time.
presence in the export • Scope to upgrade job
market. quality and working
• Large and medium conditions in the shop-
enterprises employ floor particularly in
advanced quality and smaller enterprises of the
packing systems, and are processing centers.
quality compliant as to • Little value addition to
meet international inputs
marketing requirements. • Inadequate protection and
promotion of the cluster
brand
• Inadequate linkages with
Fis (in terms of
customized financial
instruments) for medium
and small players as well
as tiny sector/inadequate
incubation facilities to
explore value added
production.
• Entrepreneurs are not
very enterprising.
• No collective effort for
skill up-gradation of
workers.

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 Opportunities. Threats.
• Need for large and • Food safety issues
medium players, especially in view of large
particularly, to move up export markets and the
the value chain is increasing pressure of
evident. The products compliance both in export
are also primarily and domestic segments
processed and sold in • High wages for organized
bulk packaging than units driving “peak load”
consumer packs. and some new
Manufacture of value investments to other
added products could states like Tamil Nadu and
increase trends towards. AP
• Appropriate grading and • Shifting domestic
packing facilities, pilot cultivation towards other
plants established as crops affecting domestic
CFCs could specifically supply-need for value
help smaller enterprises addition at processing
graduate. stage so that higher
• Scope to link up directly margins may be offered to
with global marketers producers
and realize higher value. • Competition from other
• High nutrition value of parts of the country (with
the product – scope for cheaper labour) and the
generic promotion as a world (better factor
health food. conditions etc.)
• Scope to protect/promote • Poor working conditions
uniqueness and labour and tedium of job not
intensive nature by attracting new generation
means of registration of workers
under the GI Act.

1.2. OVERALL INTERVENTIONS

Overall interventions that are under consideration for the

larger Growth Pole Programme are listed, some of these have
been incorporated into thee one-year project.

Input supply and procurement

Given total raw cashew about 1 lakh tons storage capacity
warehouse is required at a conservative estimate as to ensure
that cluster enterprises operate at higher capacity utilization .
Such warehouses may be established at Kollam at locations
mutually agreeable. Could also explore setting up a common
container stuffing centre.

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Quality
Up grade the existing lab facilities.

Training and Skill upgradation

Set up a training center for cashew processing in tie up with
ITI and ITC.

Policy
• Appropriate study is required of policy and macro-
economic parameters that is leading to rapid increase in
market share of such competing countries.
• Study the policy and micro – economic parameters
(exchange rates, interest rates) and factor conditions
( interest / labour cost etc) that influence the competitive
potential of competing countries.
• Approximate policy framework/synergisation of schemes
to facilitate implementation of pilot plants/ incubation
facilities, and also packaging facilities on a PPP basis.
• Evolution of a corpus fund to facilitate better linkage
between micro/tiny enterprises and FIs

Production, Technology and Product Development

• Establishment of R&D fund as to pursue steam boiling
alternative option related to R&Das to evolve process in
retaining original flavour of the end product
• Workshops and BDS on quality and compliance front
• Ergonomic and job quality related study and
interventions.
• Establishment of incubation center and pilot plant for
processing and packaging facilities on PPP basis.
• Seminars and workshops to generate greater awareness
of HACCP certification, USFDA, GMA is critical particularly
for smaller enterprises.
• Establishment of a food standards information portal
could also be critical in the context
• Collective efforts are essential for improving the working
conditions of the women workers especially in shelling
section.
• Establish a resource center for canalizing the benefits of
R&D centers in different parts of the world.

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 • Modify an existing cashew processing unit in the growth
pole as model processing center with public private
partnership..

Pollution Control
• To conduct studies on Pollution control and occupational
hazards.
• Design and develop a proper system for controlling air
pollution.
• Develop proper liquid waste treatment systems.

Marketing and market development

• Explore scope for the registration of the product from
Kollam under the GI Act. This may be pursued to protect
the uniqueness and quality of Kollam cashew for eg. in
terms of skill base of cashew workers particularly in the
area of de-shelling, for instance. This could contribute to
livelihoods and higher earnings through brand protection
and promotion.
• Synergising schemes for large exporters and medium
sized exporters of the Department of Commerce (GOI)
with respect to: for instance India Brand Equity Fund and
market access initiative particularly in the context of
establishing warehouses and retail outlets abroad.

Finance
• Establishment of consortia amongst SMEs to facilitate the
stocking of inputs over an extended period of time.
• Appropriate evolution of networks amongst micro and
tiny cottage enterprises to avail support under MCGFS.

Strengthening industry associations:

• Exposure visits and training on different GOI schemes
related project implementing agencies, evolution of PPP
related SPVs etc.
• Establishment of a cluster business information center at
a cluster associations.
• Pursue various other association led value added
initiatives.

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 Establishing efficient industry / institutional linkages
• Establish better FI – industry linkages.
• Establishes linkages with R & D, academic institutions as
to implement incubation facilities and promote R & D.

1.3. ONE YEAR- PROJECT APPROACH AND SECTOR THEME

The theme in this well-established sector is to introduce new

work methods and process efficiencies through demonstrated
technology and work practice changes.
Specific focus is also directed at the aspects of worker-safety,
health and environment (SHE) and, hygiene standards in the
processing chain. Even as this sector has been profitable and
continues to grow, the issues mentioned have not received
sufficient attention in recent years.

It is believed that once these issues have been satisfactorily

demonstrated to the industry along with sector-wide
discussion and dissemination, the other factory owners will be
in a position to adopt the improved practices on their own.

1.4. PROPOSED INTERVENTIONS

The cashew sector, in addition to being a well-established and
high-performance sector is also significantly export oriented.
Given its performance, and the fact that all major players
represent the organised sector with consistently good
performance in terms of turnover, it is assumed that the
industry will have the capacities to make strategic
investments in its improvements, once better and more
improved processes are demonstrated to them.
The idea is to design and demonstration project for
introduction and uptake of efficient and cleaner production
practices in the sector and through this, aim at a
mainstreaming of these cleaner (and food safety standard
compliant) practices. In addition, linking demonstrated
financial returns of the improved practices to the sector would
make for a wider uptake

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1.4.1. Project Components:
In this regard, process efficiencies will be demonstrated for
two types of units, those with the traditional drum-roasting
based process (most units) and those with the newer, steam-
boiling process. These are proposed with envisaged
contribution from the beneficiaries in the form of input raw-
material, to begin with.

• Improved process efficiencies in different unit types

–Drum roasting (traditional)- 2 units in the organised
sector and 2 in the unorganised sector
–Steam boiling (newer method)- 2 units from the
organised sector.
--Shelling and peeling (processing – in the roasting
system)- this would be covered in the 2 organised units
(drum roasting) and in addition, 2 units from the
unorganised sector will also be taken up, that
concentrate on this activity.
--Grading, re-grading and packing-- this would be
covered in the 2 units in the organised sector (drum
roasting), 2 units in the organised sector(steam boiling),
mentioned earlier. In addition, 2 units from the
unorganised sector will also be taken up, that
concentrate on this activity.
• Research and development (processes and management
systems): this includes an overall systems approach to
resource and process optimization including
interventions in the management practices followed, to
ensure all-round efficiencies
• Improved safety, health and environment (SHE) with a
particular focus on worker health and safety. This would
further draw from a number of other proposed
interventions, like the module on work methods
improvement to address specific issues of posture-
change and tooling; adoption of mechanization; adhering
to food safety standards etc.
• Improved hygiene for Food Safety Standards compliance:
Demonstration, system upgradation and training
(including training of trainers)
• Work methods improvement (R&D and capacity building)

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2. FISHERIES SECTOR

2.1. ISSUES AND GAP ANALYSIS

A brief elaboration on critical gaps in different fronts are given
below. These are base on several consultations with different
stakeholder groups in the sector. Some of these have been
picked up for interventions in the one-year Quality
Improvement project.

Procurement and supply of inputs:

• It is seen that there is recent decline in some of the
species of fishes in this area.
• The unscientific fishing practise, the presence of foreign
fishing vessels in the closed proximity of the state with
equipped vessels and environmental changes caused a
decline in some species. Segment of industry are of the
belief that the trawling ban (June-August) is contributing
to the supply constraint. The ban has been imposed
largely to facilitates breeding of fish and avoid
depletion, however, some industry representatives are
of the belief that the ‘ban season’ is not appropriate. It
is also believed that foreign vessels fish beyond India’s
functional waters during this season
• The trawler operators and industry stake holders need
explore product diversification fishing from conventional
fish verities like shrimp prawns, fin fish, cuttlefish, squid,
etc. to tuna. For these purpose long trawlers are
required. Conventional fishing vessels (trawlers) may
have to be modified in terms of extension by about 20
feet. Further, appropriate modifications for stocking the
catch within the vessels (tuna hanging rods) will have to
be made.
• Consumables such as fishing nets, floats, and paints are
currently being supplied by traders to trawler operators
and craft owners. Such consumables accounts for a
significant portion of their operating costs
• Aquaculture farming options need to be encouraged
amongst industry as to enhance supply of inputs.

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• Presently fishermen in this sector do not have any link
with the institutions that are providing data of marine
resources based on satellite imaging systems and
thereby they have not planned their fishing based on
the availability of resources. So they are
not in a position to save their fixed expenses (cost of
fuel) in a lean period.
• The fish landing centres in this area are not comparable
with those in the competing countries. None of the
landing centres do not conform to the minimum
specification of the leading importing countries. The
landing centres are the first stage in the contamination
of the product.
• After the introduction of Euro standards and HACCP in
fishing industries the demand for pure fresh water is
absolutely essential in primary stage of fisheries such as
for cleaning the fishes in the landing centre up export.
As per the norms of EU the water used for fish
processing conforms to 62 parameters. Presently in this
sector the dirty sea water is used for washing fishes in
the landing centres.

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Marketing and Market Development:
• Enterprises including the medium and large exporters
in the region could progress towards greater access
to market.
• In this area there is no facility for storing the
harvested fish. This results in poor economic
bargaining in commercial operations as they often
finds it difficult to store the material for a better deal.
• Exporters are yet to avail of support under existing
GOI schemes offered through the Department of
Commerce. This is particularly in terms of
establishing warehouses abroad as to optimize
freight cost.
• Value added production largely domestic markets by
trading agents may be facilitated by refrigerated
vans. Subsidy/PPP options may be
synergized/evolved. Low value fish such as mackerels
could be cleaned in 1or 2 kg consumer package and
transported to markets in other Indian States
including institutional sales. Tie up with retailing
corporate (eg. Reliance) may also be explored in this
interest, as may be ties with hotel chain for supply.
• Appropriate options to access markets more
conveniently need be considered. Further for
procurement of refrigerated trucks the schemes
MoFPI need be synergized with enterprise needs.
Appropriate PPP schemes may also be evolved to
facilitate sharing costs in terms of capital/operating
expenditure of such refrigerated trucks by consortia
of enterprises.
• Appropriate incubation/pilot plants facilities may be
established to facilitate value added production, also
targeting domestic markets

Production Technology and Product Development:

• Quality Control:
Establishment of a central quality control laboratory
is a critical option that mends consideration. The
Central Institute of Fisheries Technology and Exports
Inspection Agency currently conducts necessary test.
However there are several tests as per EU norms that
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 may not be conducted with a existing facilities. The
services of centralized labs may be employed for
microbial/chemical analysis-pesticide residue and
heavy metal contamination etc. The facility may also
be used by cashew and other similar food processing
sectors in the growth pole.
• Developing technology and implement facilities for
value added items
• Waste utilization:
Appropriate value addition of waste products,
conversion into fish meal may be explored as means
to enhance earnings of stake holders-trawler owners
as well as auctioneers.
• Unscientific discharge of processed waste to the
environment in this area causes a great problem to
the environment. The continuous discharge of
effluents degrade the quality of the surroundings and
affects adversely the water bodies and flora and
fauna of the area surrounding the unit. This also
affects the other industries and economic operations
like tourism adversely. Thus, it brings a catastrophic
disaster to the economy by many way.
• Products are largely block free zed- IQF free zed.
Scope for value addition is yet to be appropriately
explored. Auctioneers who constitute a significant
segment along the value chain. May explore
domestic marketing of block
fee zed products-retail marketing of value added fish
products. Incubations facilities are required for the
same. Exporters may also utilize the facility.
• High power costs have been affecting margin of ice
plant factories of trawler operators and also other
segments. There is need to explore options of
sustain ably reducing the costs of power-Electricity in
such cases. These ice plant operators are availing of
subsidized power supply @ Rs. 3.50 per unit of
power. Nevertheless there is scope for further
reduction in cost in sustainable options. The bio-
fuel/wind options may be appropriately explored.
The option of using coir waste/pith is to be
considered.
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Finance
• Due to seasonal variations in catch and hence in terms
of price of inputs, many exporters are finding if difficult
to operate at normal capacity utilization levels.
• It is thus that a significant portion of landed catch is
procured from more resource rich exporters from other
regions.
• The need for industry stake holders to access
appropriate finance as to facilitate stocking of inputs is
critical. Financing instruments to facilitate extended
stocking of inputs in a consortia mode may be
considered –the same has been pursed in a relatively
similar fashion in the nearby Kottayam rubber cluster for
SSI units.

Policy
• Policy and microeconomics parameters in competing
countries such as Thailand have been also affecting
competitiveness and value realization by Indian seafood
exporters.
• This has been in terms of relatively higher depreciation,
in currency, a liberalized import regime by virtue of
which about 50% of seafood processed, for re-export is
imported from other regions of the world depending on
cost advantage. Great investments in aquaculture
farming have also contributed to high capacity
utilization and hence price competitiveness of Thai
enterprises.
• The high incidence of power costs on many segments in
the industry such as on cold store facilities, ice-
manufacturing units are also an important concern.
• High levels of FDI in competing economics have also
enhanced their competitiveness by virtue of helping
them upscale economics.

Strengthen industry associations

• The cluster is characterized by, largely tiny and small
units in the trawling and trading agent segment. The
industry associations representing these categories are
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 relatively weak and industry-institution linkages are
weak.
• These associations may offer value added services to
members in terms of offering.
• Input negotiation services for members
• Serving as a financial intermediary for member units.
• Establishing information portal/using a newsletter to
continuously improve the information level of the
business member in respect of, schemes and initiatives
of different institutions etc.

Skill Up-gradations
• Continued up-gradation of skills of personnel in
processing plants operated by exports in the region as
well as peeling/pre-processing sheds in the region is
critical.
• Training in the area of aquaculture farming is a means to
viable alternative to fishing in the depleted high seas.
• Training is also required in the areas of HACCP, quality
assurance, sanitation and hygiene in the shop floor.

Physical infrastructure
• Adequate quantity of portable water, proper sanitation
facilities for workers and widening of approach roads to
landing centers are all critical requirements.
• Appropriate development of fish landing facilities to
accommodate long lined vessels need be explored.
• Appropriate purification plants for Pre processing of Molluses for
removing contamination and micro organisms
• Adequate infrastructure is required for supply sufficient
quantity of diesel and kerosene. ,

To summarise, the following are critical areas for intervention

in the fishery sector:
• The fisheries sector in its present form though it has the
critical numbers is still unorganized in nature and does
not have any bargaining power.
• The poor and un-hygiene condition of landing and
auction centers.

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 • Un availability of potable water and quality ice at the
landing centers.
• Poor sanitation and allied issues.
• Dumping of wastes including plastics in the sea shore.
• Lack of post harvest infrastructure such as cold storages
ice plants, peeling centers fish curing centers and
processing plants.
• Even though this area is enriched with heavy fish
landing, there are very limited centres for value addition.
• Lack of Central Quality Control Laboratories in the growth
pole area.
• Limited exposure to organized market.
• There is no collective effort for boosting up of
aquaculture activities.
• Lack of proper Training cum product development centre
in the area.

2.1.1. SWOT Analysis

Strength Weakness
• Traditional base of Kerala • Inadequate access to
sea food industries appropriate working capital
• Experienced entrepreneurs facilities by trading
along the value chain- agent/exporters
trawler operators, trading • Small-craft fisherfolk have
agents and exporters. limited financial/risk taking
• Presence of appropriate ability to break out of this
support institutions in the • Un hygienic conditions of
Growth Pole Area the landing and auction
centers.
• Sub-optimal working
conditions especially for
small fishing boat based
community
• Scope to enhance
availability of potable water
(in pre-
processing/processing )
• Under exploited potential
for processing
• Inadequate quality
analysis/control facilities.
• •Poor price realizations for
local community
• Inadequate supply of inputs
and dearth of initiatives to
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 explore product
diversification options.
• Relatively weak industry
associations
Opportunities Threats
• Potential to evolve • Over exploitation reducing
appropriate financing varieties of fish catch
instruments for cluster • External factors like
enterprises as to facilitate environmental pollution
storing of inputs from the town’s liquid and
• Potential to evolve solid waste dumping adds
appropriate physical to catch depleting for small-
infrastructure (landing craft based fisher folk
centers etc.) • Inadequate efforts to
• Scope to pursue produce value added
diversification options into products may lead to cost
areas such as tuna fishing competitiveness of cluster
• Options to establish enterprises Vis-à-Vis
incubation facilities for competing countries who
value add manufacture have more favorable factor
• Core factor conditions to conditions, more rapidly
explore options to enhance depreciating exchange
supply of raw materials rates.
through aquaculture.

2.2. OVERALL INTERVENTIONS SUGGESTED

Procurement and supply of inputs

1. Further detailed study in appropriate season for ban of
fishing.
2 Study on cost implication of modification vessels,
replacement of existing trawlers into long liners. An
appropriate PPP scheme will have to be evolved as facilitates
modification of vessels/ procurement of vessels.
Appropriate instrument/consortia led initiative need be
explored to resolve the high cost of consumables of trawler
operators.
3.Set up a resource centre capable of providing data of marine
resources based on satellite imaging—knowledge based
inputs.
4. Improve the conditions of the landing centres and auction
halls with supply of good quality water, ice, good plat form for
loading the fishes, and proper sanitation facilities.

Market and development.

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 • Awareness workshops on schemes of the Department of
Commerce under the market access initiative
• Appropriate synergisation of schemes of MoFPI with
regard to provision of refrigerated trucks may be
explored as may be schemes with regard to
establishment of incubation centres.
• Evolution of SPVs/consortia to explore relevant
opportunity.
• Set up a common cold storage
• Evolution of SPV for establishment of centralized quality
control lab and its implementations.
• Common facilities by way of ice-plants and pre-
processing sheds, purification plants need be
established. The pre-processing (peeling shed) need be
as per EU norms. There is problem with regard to water,
ice factory, cold storages, and hence establishment of
such facilities in Kollam region on a smaller scale could
be more viable than similar larger projects in the Aroor
area. There are about 20 trading agents with their own
pre-processing facilities.
• Study evolution of appropriate policy and implementation
of sustainable alternate fuel. Appropriate PPP scheme in
terms of subsidizing relevant capital expenditure may be
explored.
• Set up a sewerage treatment plant in this area for
municipal drainage and sewerage being dumped
Policy
• Detailed study on competing economics in the ASEAN
region, specifically as to appropriately understand policy
and microeconomics conditions that have affected
competitiveness and margin of Indian seafood exports.
• Study on options of further liberalizing customs barriers
as to develop the cluster enterprises, into a regionally
competitive re-processing center (import, value addition
and export) and evolve appropriate policy.
• Evolve an appropriate PPP scheme with regard to
wind/bio-fuel options as to enhance competitiveness in
the cost of power/energy front. A subsidy option on
capital expenditure may be considered

20
 Associations and collectives
• Association to be strengthened in terms of offering value
added services to members.
• Input negotiation service (eg. Consumables for trawler
operators)
• Servicing as a financial intermediary under CGTSI option,
for offering collateral free loans to member units.
• Establishing an information portal
• Evolve SPVs from amongst member units for
implementing infrastructure project. These services may
be offered on part-fee basis as to evolve a sustainable
service under for operations.

Capacity Building
• Training of peeling shed and processing plant operations.
• Training in aquaculture farming
• Training in quality related areas
• Training programmers need be pursued under the aegis
of the CMFRI and industry associations an industry-
institutions partnership mode.

2.3. ONE YEAR- PROJECT APPROACH AND SECTOR THEME

In the first phase, given the criteria for the one-year project,
only the marine fisheries sector is being included. The
diagnostic study and stakeholder consultations have brought
out the potential for the development of inland fisheries and
aqua culture too but, given the kind of effort envisaged, these
aspects will be covered in the larger programme.

One landing center is proposed to be covered in the one-year

project. In addition the focus will also be on associated
activities and the community in the vicinity of the landing
center. Skill diversification is another theme proposed to be
addressed in the marine fisheries sector, with the attempt to
target the present community involved with this activity, to
explore alternative areas in the tourism sector. The idea is not
to take them away from their current context but to make an
additional linkage to the common resource (water bodies,

21
 shore line, backwaters) through various forms of low impact
tourism to insure complementarities.

2.4. ONE-YEAR INTERVENTIONS

2.4.1. Fisheries Sector: Marine Fisheries

Focusing on the marine fisheries aspect the intervention aims
to demonstrate the following:
• Improvements in value addition by improving hygiene in
storage and cleaning practices
• Inculcating standard processes in handling, to be used to
ensure compliance with food safety and hygiene
standards
• Improvement in working conditions through
improvements in living and working environment, better
facilities, training and availability of amenities at the
landing center.
• Cross cutting intervention on overall environment
improvement along the shore line for
 improved fish catch (value, quality and
quantity)
 food safety (value, quality)
 community health and environment

2.4.2. Project components

The one-year initiative plans to undertake a demonstration
project for upgrading one of the small fish landing centers
with all-round improvements in facilities, amenities general
environmental conditions of the area including for the locally
dwelling community. The aim is to demonstrate these
improvements all along a value chain to be able to
demonstrate the multiple benefits that accrue to the users, in
this case small craft fisher folk, who also dwell along the
landing center sites.

As one of the problems identified is to do with the dumping of

untreated sewage and storm water run-off from the town and
municipal solid waste, active engagement with the Municipal
corporation of Kollam will also be required. Since the waste
management component from the municipal areas is already
22
proposed in the overall urban development plan for the Town,
(under the proposed loan from the ADB- yet to be approved
and processed), this is being flagged under the project as an
input from the state government.

As the operations and location of the landing centre comes

under the purview of the Ports and Harbour Authority and the
fisheries department, the proposed plan will be taken up with
these and other stakeholders for their inputs and approvals.

Key stakeholder consultations have revealed that there is

scope to include and link various activities with the common
waiting area, these have been included in the components
outlined below.

Project components include the following

• Landing center upgradation –Thangasarry:
–Shed improvement
–Refrigerated (temperature controlled) sub-section for
high value fish
–Access road development
• Multi-utility space and waiting area (including for
communication, training); Access amenities for local fish
retailing
–Sheltered waiting area (multi utility space) for fish
salespersons
–Multi-media communications/training in waiting space
(hygiene and cleanliness issues, health, women and child
development, enterprise development, waste
management, tourism etc etc)
–Sea-food kiosk/canteen for fisher-folk, also general
public
–Amenities while waiting.
• Waste management initiative in harbour for fish waste, at
all locations
–Collection system
–Awareness and sensitisation
• Infrastructure for value addition
-Pre-processing centre / training - Wadi Moothukarra
-Solar fish drying demo Wadi-Moothukarra
-Drying unit (with solar back-up)
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• Ice making unit -Moothukara
• Solid waste management, sewerage treatment
(components already included in the Urban Improvement
Project of the Government of Kerala pending approval of
funding from the ADB),
–Address municipal solid waste dumping issue
–Sewerage outfall- technical channeling and treatment

24
3. COIR SECTOR

3.1. ISSUES AND GAP ANALYSIS

Procurement and Supply.
Supply in terms of production of husk in the Kollam region is
significant. However, only a small proportion of husk is
collected and productively exploited. A hush collection
mechanism need be evolved.
This could be in terms of networked initiatives involving
Kudumbasree women SHGs, who are providing, wheel
barrows for husk collection. Collection centers may have to be
established in a decentralized fashion across the district from
where tiny/ cottage units as well as Co-operative society
enterprises could source inputs.
The husk potential per annum is about 3900 lakhs in the
growth pole region, nevertheless hardly a few lakhs are
actually collected due inadequate development of appropriate
collection mechanism. As a matter of fact study is by the coir
department and coir welfare Board indicate that even if 30%
of the available husk potential in the region is adequately
exploited, there is scope for establishment of about 50 de-
fibering units (average capability of 8000 husk per day)

Marketing and Development

Marketing strength may be developed by enterprises only
upon acquiring higher productivity levels and optimizing
procurement. This may be in terms of ratts upgradation and
raw material banks, improved collective collection of husks
may be associated with this bank.. These would also lend a
cost advantage.
• Poor direct market access to consumers affects the
potential margin of spinners as well as Co- operative
societies.
• Evolving network/consortia to operate marketing out lets
and directly supply to retail outlets/ export, value added
products, by means of offering volumes is an option.
• Enterprises are suffering from inadequate market access
to corporate /fair trade Exim promoting agencies. For
access to export market, however, manufacture of value
25
 added products such as geo-textiles and mats are
necessary.

Finance
• Working capital facility to tiny and cottage units
could greatly enchance the bargaining power of the
in formal sector spinners. Most spinners are starved
of cash and pay an exorbitant cost to husk and fibre
suppliers for (invariably) credit purchase inputs. The
mark upon credit sales by raw material suppliers is
up to 20% !
• A similar modus- operandi need be explored for
strengthening Co-operative sector enterprises that
are also invariably cash starved for working capital.
• The Mutual Credit Guarantee Fund (MCGF) option of
SIDBI may be explored for this purpose . Over 100
consortia have been financed on a similar mode in
the coir cluster at Alleppy by FIS.
• Scope to synergies CGTSI scheme for individual
financing sans collateral to micro/tiny enterprise
consortia as has been pursued by SBT finance at the
coir cluster at Alleppy. Such may also be availed for
upgratadtion at the individual enterprise levels.

Training and skill up gradation

• Proper training and skill up gradation are absolutely
necessary in the cluster so that the quality of fiber
available and spinning in the cluster and ultimately
the quality of the products are improved. So the
scope for marketing the products such as Coir yarn ,
ropes and geo textile are quite improved and there
by a sustainable cost advantage is derived.
• Appropriate establishments and subsequent
functioning of semi-automatic or fully automatic
ratts would required for skill development of the
cottage level spinners.
• However for this purpose decentralized training
institutions with pilot plant may be established by
NGOS / consortia of private and Co-operative
spinners, as has been established in the coir cluster
at Alleppy.
26
 • Training is also required to facilitate manufacture of
value added products such as geo textiles, matting,
coir polymer composite boards, composite pith
blocks, coir handicraft items etc .

Technology, Production and Product Development

• For traditional backwater retting at least 7-10 months
are required. So there is blockage of working capital.
Coir Pith
Coir Pith is generated in large quantities in the major coir production
centres. Extraction of 1 Kg. of coir fibre on an average will leave 2
Kgs. of Coir Pith. Large hillocks of Coir Pith are a common sight in
the growth pole area.. Coir Pith was considered as an agro waste in
the yester years. In this area, the Coir Pith was used largely for
reclaiming the wetlands and it create so much environmental
issues. The coir pith or coir dust, which is the spongy residual
material, is a by-product of fibre extraction, which has caught the
imagination of the horticulturists. It has immense potential as a soil
conditioner and moisture-retaining medium for horticultural
applications. It is widely being used in nurseries as a plant grows
out medium especially in hydroponics. Its demand is on the increase
due to the restrictions being imposed on mining of peat moss. With
quality assurance, this product can find a ready market, either as
such or as composted material. But the potential end users are not
fully aware of its advantages, and the promotional efforts have not
been adequate. There is dearth of testing facilities and recognized
certification agencies in the producer countries. Other garden
articles like plant liners, baskets, grow bags, shredded husks, and
bit fibres are also in demand for orchid and other cut flower
cultivation in the large and growing Market Garden sector.

• The potential for manufacturing Coir polymer composite

board is also to be explored which is substitute for wood.
The Coir Research Institute , Kalavoor Developed the
technical know-how for making this items.

3.1.1. SWOT Analysis

Strength Weakness
• Traditional skill in spinning • Poor husk collection
• Established market facilities / systems affecting
linkages and support competitive availability of
institutions (Coir Fed and husk .
27
 Coir Board show rooms) to • The particular variety,
facilitate the marketing “Mangadan” coir has
function. limited application in the
• Presence of coir matting sector.
departments field office to • Informal sector enterprises
facilitate necessary training operating in the lower end
/ other interventions related of the value chain with
to cluster development. scant resources to invest in
technology or value added
production with out fiscal
assistance.
• Inadequate de-fibering
capacity.
• Limited access to
institutional finance.
Opportunities Threats
• Exploit scope for producing • Sector not attracting new
value added products such investments or employees,
as geo- textiles given work methods and
competitively (with forward condition
linkages) • Supply constraints of husk
• Enhance competitiveness affecting capacity utilization
through better financing of cluster enterprises and
institutions to avoid cost of hence competitiveness
credit purchase. • Competitive threats from
• Employment of spinning units employing
decentralized CFCS to automatic ratts in other
facilitate de-fibering units, states such as Tamil Nadu .
ratts and semi- automatic • Inadequate profit margin
loom manufacture. leading to exist of labour
• Exploit opportunities to force from the spinning
enhance utilization of under sector.
utilized husk potential in
the growth pole area.

3.2. OVERALL INTERVENTIONS SUGGESTED

• Establishment of a husk collection mechanism upon

networking with Kudumbasree/ NGOS- SHGS.
Collections centers may also have to be established in a
decentralized fashion
• Establishment of decentralized CFCS across the growth
pole area These CFCS would offer modernized fully
mechanised defibring and even ratt facilities for coir
spinning units (both the ‘private’ sector as well as the
co-operative segment). Decenterlized CFCS for geo
textile manufacture could also be established. Similarly

28
 CFC for Coir Pith blocks and briquettes, Needled felt
pads etc manufacturing could be set up in the cluster.
• Effective steps to set up coir tufted mats manufacturing
unit in the growth pole area by attracting private
entrepreneurs, which have very high export potential.
• Evolution of consortia /SPVS amongst private sector as
well as Co-operative sector enterprises to established
decentralized CFCS in PPCP (Public Private Community
Partnership) basis.
• Exposure visits to similar successful interventions in
Allepply coir cluster (intervention by coir board, SBT
and SBI ), Coir Cluster at Pollachi as well as handloom
cluster at Kannur.
• In the case of de-fibering units, the cost of power are
significant. As a competitiveness oriented option, scope
for employment of bio fuel –coir pith/ husk etc. may be
explored

Technology, Production and Product Development:

Apply Green decortication and microbial treatments
New environmentally friendly methods for fibre production are
of interest. These can be locally exploited on relative small-
scale, and have the potential to produce a more constant
quality of fibres. Novel developments by the Central Coir
Research Institute, under Coir Board, using a biotechnological
approach with specific microbial enzymes have reduced the
retting time substantially. High quality fibre production has
been maintained.
• There is inadequate capacity in terms of de-fibering
units. There are only two de-fibering enterprises in the
cluster. They are private sector operators. The de
fibering units in the Co-operative sector have not been
up to the mark.

Training and skill up gradation

• Establishment centralized training facilities in the
cluster
• Training in semi-automatic and fully automatic coir yarn
spinning is important

Finance
29
 • Evolution of consortia amongst micro/cottage
enterprises
• In-corporation of appropriate financing instrument for
financing micro enterprises upon identification of
appropriate intermediaries (NGOS, industry
association)
• Appropriate deployment of the CGTSI scheme to
upgrade enterprises individually as also provide working
capital facility (WCTL).

Marketing Interventions
• . Evolving consortia /network amongst spinning
enterprises and co- operative societies could help them
together and jointly offer volume and supply to retail
/outlets/exporters etc. The value addition in terms of
Geo textiles and matting manufacture is also critical.
• Establishment of links with fair trade agencies and
developmental nodes such as the Cell/ Center for Social
Responsibility of the CII could help enhance the market
access and exports orientation of the spinners who are
all in the informal sector.
• Linkages with traders such as (Korea Trade Authority)
KOTRA and the relevant chamber of commerce could
facilitate exports of Goe- textiles in Korea and similarly
to other countries. Sri Lankan goe- textile exports are
largely oriented towards, South Korea at present.

3.3. ONE YEAR- PROJECT APPROACH AND SECTOR THEME

This traditional, old and well-established sector is currently

faced with a number of problems through the length of its
value chain. Whilst there is great need to take more intense
and sector-wide initiatives, the initial strategy will only focus
on the immediately-doable aspects.

The theme for the one-year project concentrates on collection

efficiencies in the process, to begin with, and attempts to
derive greater value from the collected material by utilizing
not only the husk but also the shell. In addition to deriving
greater value, this aspect addresses the need for an additional
source of income through skill diversification. Also,
30
 demonstration of process efficiencies throughout the chain by
taking in two defibring units on a pilot basis and linking them
with cooperatives.

3.4. PROPOSED INTERVENTIONS

The one-year project interventions in this sector are designed
to address the initial part of the process: collection, defibring
and risk-offsetting through skill diversification.

Efficiencies in collection are likely to be achieved in the one-

year project period with greater value being obtained from the
resource through product diversification. The subsequent
parts of the coir processing value chain are planned to be
addressed in the 5-year Growth Pole Programme with a
parallel scaling up of this initiative.

The overarching objective is to revive Kollam as a preferred

production centre with a concurrent strategy of skill
diversification to reduce dependence on a single source. Along
with this, to achieve improved incomes through resource
maximization (from the collected nuts, using the husk towards
yarn and making shell-based products from the previously-
discarded shell, ensuring two sets of value addition)

3.4.1. Project Components

• Improved collection of locally available husk: Setting up
groups and systems with adequate supply of materials
(collection bins), and transport facilities. [Details of
incomes from collection and the process components are
included at Annex 4C-3, in a spread sheet]
• Upgradation and installation of new defibring unit and
linking it to existing cooperatives to demonstrate
efficiencies along the value chain.
• Expanding to shell based products: Re-skilling coir
workers to work with coconut shell product manufacture
as a strategy to diversify risk, get an additional source of
income, and reduce dependence on one industry
o In addition to linking the existing R&D on shell-
based products, training will be provided to
31
 interested groups. This is intended to focus on coir
workers but others may also join, after forming
groups
o Forward links to markets willing to procure the
shell-based products through buyer-seller meets,
participation in fairs and direct interactions

32