DIAGNOSTIC STUDY
SME
THE SAGO & STARCH INDUSTRY CLUSTER
BY
C.SUDHANDHIRAN
Project Co-ordinator,PROJECT UPTECH
STATE BANK OF
DEVELOPED UNDER
THE CLUSTER DEVELOPMENT AGENT TRAINING PROGRAMME,
ORGANISED BY UNIDO CDP,
&
THE ENTREPRENEURSHIP DEVELOPMENT INSTITUTE OF
(EDII), AHMEDABAD
YEAR 2001
1. INTRODUCTION
1.1 THE GLOBAL SCENARIO
Tapioca Cassava (Manihot Esculenta Crantz) was introduced in
century by the Portuguese living in the state of Kerala.
production of tapioca. The other important tapioca producing countries are
human and animal food consumption but also as a raw material for various industrial products. Each day
about 500 million people consume tapioca world over and derive 300 kilo calories of energy (
1999).
Globally cassava is grown in about 95 countries with major contributions coming from
followed by
withstand biotic and non-biotic stresses have made it a crop of primary importance for the weaker
sections of the society, especially in the developing countrie s of Africa,
Tapioca is one of the most important subsistence food and industrial crop for the developing countries.
Globally, about 158 million tons of tapioca is produced from an area of 15.7 million hectares with an
average productivity of 10 tons/ha. As mentioned earlier, among the tapioca producing continents in the
world, Asia ranks next only to
million tons respectively (anon., 1993).
1.2 THE NATIONAL PRODUCTIVITY
In
Although cassava is cultivated in about 13 states of
states of
of gulf money, availability of grains through public distribution system and a shift in cultivation pattern
favouring plantation crops, the areas in Tamil Nadu and Andhra Pradesh showed a gradual increase in
cassava production over the years.
While the total production of Kerala came down to 2.58 million tons in 1996-97 from 4.2 million tons in
1967-68, the same rose to 3.04 million tone from 0.42 million tons during the corresponding periods in
Tamil Nadu. This remarkable increase in production in Tamil Nadu was the result of adopting high
yielding cultivators like H 226 and H 165. A survey conducted by CTCRI has indicated that more than
three fourth of the cassava area in
seeds.
The huge shift in the focus of cassava production from Kerala to Tamil Nadu is clearly evident from the
following table:
CASSAVA PRODUCTION KERALA TAMIL NADU
1967-68
a. Area under cultivation
b. Percentage of national
production
86%
91%
13%
9%
1996-97
a. Area under cultivation
b. Percentage of national
production
61%
45%
29%
52%
Tapioca is cultivated predominantly in Kerala as a staple food crop while it is more of an industrial crop
in Tamil Nadu. Tapioca root is valued for its starch content and mainly used by sago industries. The
tapioca root contains 30 to 40 per cent of dry matters, which is principally carbohydrate. It has acceptable
levels of B vitamins and provides other minerals too. In Tamil Nadu, tapioca is being grown in an area of
85,412 ha accounting for an annual production of 32.22 lac tons. Around 80 per cent of the total tapioca
production is utilised by the sago and starch based industries in the state (According to Thamburaj and
Kannan, 1997; Vikas Singhal, 1999).
Based on the statistical projection, the production of cassava is expected to reach 6.08, 6.76 and 7.44
million tons respectively by 2000, 2010 and 2020. But considering the population growth rate, the
country should aim to produce cassava tubes to the tune of 12 million tons by the year 2020, which would
call for extensive R&D strategies in the field. The present productivity of 22.5 t/ha is projected to rise to
26.95, 32.57 and 38.20 t/ha by 2000, 2010 and 2020 respectively.
1.3 USES OF TAPIOCA
· Tapioca as a food security
Tapioca can serve as a nucleus for many industries with the application of biotechnology, especially
in the fermentation industries (Balagopalan et al., 1992). On the other hand, tapioca has emerged as a
cash crop in Tamil Nadu, Andhra Pradesh and
The crop fulfills the need of the massive starch and sago industries in these states. In order to
maintain the supply of food materials and to keep pace with the ever-increasing population, tapioca
has to be retained well within the cropping system of marginal farmers.
· Tapioca based agro industries
Globally 58 percent of tapioca produced is used as human food, 28 per cent as animal feed, 4 percent
in alcohol and starch based industries and only 10 per cent is spoiled (Mandal, 1993). While more
than one fourth of the total tubers produced (158 million tons) in the world is in Asia,
for only 6.5 per cent and
animal feed in western countries. In
increasing the productivity further and compete in the export of chips and pellets in the international
market.
Tapioca can be used as a raw material for a number of value added industrial products such as starch,
sago, glucose, dextrin, gums and fructose syrup. Most of the items mentioned are industrial products
which can be categorised as “growth industries”. The industrial tapioca starch finds its application in
various fields. The major consumers are cotton and jute textile, and paper and hard board industries.
Liquid glucose and dextrose are widely used in food and pharmaceutical industries. Both these sectors
are in a rapidly growing stage. The Government of India has included liquid glucose and dextrose in
the list of items where there is likely to be a sustained demand and scope for investment. Since there
is substantial growth in the food and pharmaceutical industries, naturally the demand for liquid
glucose and dextrose is bound to go up in future. As tapioca starch possesses the advantageous
physio-chemical and structural properties it can be easily converted to liquid glucose and dextrose.
Many factories have been established recently with this objective.
· Cassava-chips and flour
White chips are used for the preparation of cassava flour, which is consumed in the same manner as
rice flour. It also forms a major component in many animal feeds. In industry it serves as a raw
material for manufacturing starch, dextrin, glucose and ethyl.
Very fine cassava chips or crisps are deep fried in edible oil, packed in polythene bags and sold as
snack food commercially in various parts of Kerala, Tamil Nadu and Andhra Pradesh. Gold fingers,
wafers, sago pappads and tapioca pappads are some of the other snack food items produced in home
and cottage industries and are available in the market for sale.
· Sago
Sago (sabot-dana or pearls) is used as a snack food in preparation of porridge. It is also popular as an
infant food. About 35 industries from Andhra Pradesh and many from Tamil Nadu are engaged in
manufacturing sago from cassava tubers.
· Starch
Cassava finds a major industrial utilisation in the production of starch. Starch and sago are produced
from cassava tubers in more than 900 small and medium scale factories and at least two large-scale
industries in Tamil Nadu. In Andhra Pradesh one large scale and about 35 small-scale industries
process cassava tubers for starch and sago production.
The cassava starch is used in paper industries (at beater stage, as calendar sizing, for paper coating, as
wet and additive), Textile industries (as wrap sizing agent, in fabric finishing), Food industries and
Adhesives. Gum and laundry starch is produced in cottage industry near Trivandram for marketing
and sales on a regular basis.
· Modified Starches
Two firms in Tamil Nadu namely, M/s SPAC Tapioca Products (
Starch industries Ltd,
derivatives such as corrugated gum starch, carboxyl methyl starch, acid modified starch, cationic
starch and pregelatinised starch.
Another firm in Andhra Pradesh, M/s Vensa Biotek Ltd of Samalkot is expected to commence
production of cold-water soluble cassava starch using CTCRI technology. And a firm in Kerala
named M/s National Chemicals and Adhesives of Quilon manufactures and markets carboxyl methyl
starch using cassava starch as animal feed material. This firm is also involved in large-scale
manufacture and marketing of Dextrin, which is derived from cassava starch.
· Dextrin
A good number of small-scale industries are engaged in producing dextrin from cassava starch, which
is relatively a simple process.
· Sweeteners
Liquid Glucose is being manufactured by M/s. Vensa Biotek Ltd., Samalkot, AP from cassava starch
and/or flour. M/s. Varalakshmi Starch Industries Ltd.,
and monosodium glutamate from cassava starch. M/s. jayant Vitamins, Vadodara,
ventured in producing sorbitol as a sweetener and a precursor to manufacturing of Vitamin C.
· Ethanol
The CTCRI technology for the process of manufacturing ethyl alcohol using cassava chips, flour or
starch has been procured by M/s. Superstar Distilleries,
Chennai. The former licensee had commenced commercial production and limited marketing
· Starch-based biodegradable plastics
The CTCRI technology for manufacturing of starch-based biodegradable plastics has been licensed to
4 parties in the states of
Products, Parwanoo, HP has already commenced commercial production. The unit at
Karnataka is expected to commence production shortly using cassava starch.
2. THE
2.1 ABOUT THE REGION
Second World War when imports from the far-east were rendered impossible. The
good raw material base, cheap labour and good sunshine throughout the year. All these factors provide a
congenial environment for growth of tapioca based products and have made this place famous for the
same even at an international level.
The productivity of tapioca is about 25-30 t/ha in this area, which is known to be the highest in the world.
The national average is 19 t/ha while the world average production stands at 10 t/ha only.
2.2 THE GROWTH OF SAGO AND STARCH INDUSTRIES IN
In the year 1943, Mr. Manickam Chettiar an adventurous entrepreneur went to Kerala and found tapioca
flour to be a good substitute for American corn flour. He tried various ways and means to improve the
production and marketing of this flour. To meet the growing demand of sago and starch, Mr. Manickam
with the help of a genius mechanic Mr. Venkatachalam Gounder, improved the method and machineries
for production. In their efforts, they were able to increase the production of Sago flour from 20 to 25 bags
per day.
The sago and tapioca starch industry was born during the Second World war but the end of war posed a
threat to its existence because of the changes in the import policies. As a result of the successful
representations made by the sago and starch manufacturers, and at the instance of the then Governor
General of
The industry heaved a sigh of relief temporarily before they were made to confront with the import of
maize starch under P.L.480, which again came to an end in 1965.
The sago industry in the
last 60 years, as shown below:
Year No of Units Production (in tons)
1945 7
1949 45 7000
1957 125 23000
1960 200 50000
1970 650 1.5 lac tons
As on date there are more than 750 sago and starch units in
districts, registering an awesome growth! It is but appropriate to name this grand growth as the “Sago
Revolution”.
2.3 THE ROLE OF 'SAGOSERVE' IN THE CLUSTER'S GROWTH
Prior to the formation of SAGOSERVE, an industrial cooperative service society, the manufacturers of
starch and sago in this district faced a lot of problems such as lack of financial assistance, warehousing
and marketing facilities for tapioca products. The merchants used to offer low prices for their goods and
exploited the manufacturers due to an absence of organised marketing and warehousing facilities.
To overcome these problems, the sago/starch manufacturers in 1981 formed the Salem Starch and Sago
Manufacturers Service Industrial Co-operative Society Ltd., popularly known as the SAGOSERVE under
the Tamil Nadu Co-operative Societies Act 1961. This society is functioning under the administrative
control of the Director of Industries and Commerce, Government of Tamil Nadu.
After the emergence of SAGOSERVE, the bargaining power of manufacturers has substantially increased
and the menace of middlemen in this trade has been completely eliminated. Owing to the sustained efforts
of the society, sago/starch industry has now become the backbone of
providing employment to more than 5 lac people both in agriculture as well as factories.
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