TAMIL NADU NATIONAL LAW UNIVERSITY

( A State University Established by Act No.9 of 2012 )

Navalurkuttapattu, Srirangam, Tiruchirappalli - 620 009. Tamil Nadu

AN ECONOMIC PROFILE ON MANGO MARKET OF KRISHNAGIRI – AS

OBSERVED IN PAIYUR FOOD PRODUCTS (P) LTD, KRISHNAGIRI

Subject –ECONOMICS

Manimozhi.B (BC0180030)
Thvija.S (BC0180055)
Course: B.Com LLB (HONS.)

Signature of the team members:

Submitted to:

K. Balachandran Sathyan
Assistant Professor of Economics
Tamil Nadu national Law University
Trichy – 620 027
Marks Awarded-
Project:
Presentation and Viva-Voce:
Total:
 Declaration
We, Manimozhi.B and Thvija.S, pursuing B.Com LLB(HONS.), do hereby declare that
the project entitled “AN ECONOMIC PROFILE ON MANGO MARKET OF KRISHNAGIRI – AS
OBSERVED IN PAIYUR FOOD PRODUCTS (P) LTD, KRISHNAGIRI ” submitted to Tamil
Nadu National law University (TNNLU), Trichy, in partial fulfillment of requirement of
award of degree in undergraduate in law is a record of original work done by us under the
guidance of, Balachandran Sathyan .K Assistant Professor of Economics, TNNLU, and has
not formed basis for award of any degree or diploma or fellowship or any other title to any
other candidate of any university.

Date:23/03/2019
Place: Trichy

Signature with Names and Register Numbers

AN ECONOMIC PROFILE ON MANGO MARKET OF KRISHNAGIRI – AS
OBSERVED IN PAIYUR FOOD PRODUCTS (P) LTD, KRISHNAGIRI

TABLE OF CONTENTS

INTRODUCTION ...................................................................................................................2
LITERATURE REVIEW .......................................................................................................... 3
OBJECTIVES OF THE STUDY................................................................................................3
METHODOLOGY .....................................................................................................................3
PROFILE -AREA OF STUDY .................................................................................................. 4
ANALYSIS AND DISCUSSION.............................................................................................. 6
FINDINGS AND CONCLUSION .......................................................................................... 12
REFERENCES.........................................................................................................................13

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ABSTRACT

Purpose: The project is done primarily to apply our theoretical principles of economics i.e., to
understand how the principles of economics are practiced in the business world by adopting a
selective industry, Mango market of krishnagiri.

Methodology: The project comprises of information from both primary sources and
secondary sources. Field work has been carried out on 8 March, 2019.
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Probable outcome of the project: At the end the project would bring us a good understanding
of the commercial status of mango pulp units (collectively mango market of krishnagiri) on
overall growth of the economy.

Keywords: mango market, food pulp manufacturers, krishnagiri, mango pulp exports, India’s
exports, pulping process, supporting schemes, profitability, mango cultivation.

INTRODUCTION TO THE PROJECT

The project attempts to disclose all the relevant information on the topic ‘Mango Market of
Krishnagiri’ that are gathered during field visit to Paiyur food products (p) ltd. The factors
that induces a business performance is focused with a special reference to pulp industry.

As we all know next to Chittor of Andhra Pradesh, Krishnagiri of Tamil Nadu tops in the
contribution for over all export of mango exacts by India. By taking this into account, we
planned to visit the firm in krishnagiri to look into the matter in detail.

Firstly, Krishnagiri district not only contributes for Mango pulp production but Granite
manufacturing, other fruit extracts as well. The project covers those things we observed both
in the Mango Cultivation area and the paiyur factory.

The paper is inclusive of various economic factors that influences the day to day process of a
firm. Production process, employment level, wage rate policy, government support schemes,
minimum support schemes, warehouse facility, taxation and insurance policy, profits earned,
sales and export of Paiyur Food Products (p) ltd will be dealt in detail in the upcoming pages.

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LITERATURE REVIEW

BUSINESS PERFORMANCE ANALYSIS OF FRUIT PROCESSING–A CASE OF

PAIYUR FRUIT PRODUCTS Pvt. Ltd. IN KRISHNAGIRI DISTRICT OF TAMIL NADU
(2009) - This is a Project report by Ashoka. N. In this paper, the data from management
records, balance sheets, profit & loss account and trading account were obtained for a period
of 9 years and the growth and business performance of the unit was accessed through
financial / ratio analysis and compound annual growth rate.

ASSESSING THE ROLE OF CREDIT ON MANGO PRODUCTION IN KRISHNAGIRI

DISTRICT OF TAMILNADU (2013) - This paper by B. Kavitha analyses the existing
pattern of mango production in Krishnagiri district, the economics of Mango production with
credit and without credit in conventional and Good Agricultural Practices system and suggest
appropriate policy options for better Mango Production.

PROGRESS AND POTENTIAL OF MANGO PULP INDUSTRY IN INDIA – This is a

report by Laxmi Prasanna and Sant Kumar from National Center for Agricultural Economics
and Policy. The paper discusses India’s share in global food trade and investment in mango
pulp processing. The paper has involved data that speaks the increased volume of export by
India cited from APITCO report 1990 which covers the determinants of export as well.
Structural features of mango pulp industries in India, is discussed here.

OBJECTIVES OF THE STUDY

1. To identify and record the role of mango market of krishnagiri.

2. To learn the practicability of principles of economics.

METHODOLOGY

The information disclosed throughout the project report are partly collected from field work
in Paiyur Food Products (p) Ltd which was carried out on 8 march of this year and partly
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through secondary sources such as newspaper reports, online journals, etc.

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PROFILE -AREA OF STUDY

OUR JOURNEY……. Starts from Trichy to Salem; from Salem to Thoppur of Dharmapuri
district and from there to karimangalam which also belongs to Dharmapuri district, 7-8
kilometres from karimangalam we can reach ‘Sappanipatti of Krishnagiri district’ where our
fieldwork actually took place.

DHARMAPURI-KRISHNAGIRI….one can observe many Manthoppu (mango trees

collection in one farm) in the Salem to Bangalore highway which also connects Dharmapuri
and Krishnagiri. To say, even the gap between one farm and another reduces radically when
we were near to Krishnagiri. Throughout the highway connecting Krishnagiri and
Dharmapuri, not only mangoes are cultivated but coconut cultivation also plays an equal role.
Other than this there are many Granite manufacturing firms are located.

About KRISHNAGIRI

Krishna meant for ‘black’ and giri meant for ‘hills’, hence a city covered with black colored
hillocks got the name ‘Krishnagiri’. On 9 February, 2004 Krishnagiri was deemed to be the
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30 district of Tamil Nadu which was earlier considered to be the Dharmapuri district. E-
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Governance was first introduced in krishnagiri. The place known for various commercial
activities and contributes to the overall industrial developments of the country, also lacks
railway facility for more than seventy years3
happens through roads and in case of international exports shipping will be carried out
coupled with road transport. Dr.S.Prabhakar is serving as the present collector of
krishnagiri4. Agricultural products are highly cultivated in krishnagiri and marketed across
Tamil Nadu. As per the census data, population of krishnagiri district was 18,79,809
individuals in total5. The sex ratio was almost in par i.e., 956/1000 in 20116. An agricultural
university under state government functions in kaveripattinam7. India is the major exporter of

1
https://krishnagiri.nic.in/
2
https://www.thehindu.com/archive/
3
https://www.youtube.com/watch?v=RU7TXOTPwjs
4
http://www.tn.gov.in/collectors#11
5
https://krishnagiri.nic.in/about-district/district-at-a-glance/
6
ibid
7
Ibid pg4
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mango pulp and Krishnagiri district became the second largest exporter after chittoor, Andhra
Pradesh8.

About PAIYUR FOOD PRODUCTS (P) LTD

The chosen Processing Plant is Paiyur Fruit Products Private Limited. Paiyur Fruits was
founded in 1996 by E. Madhavan, with the vision of providing high quality mango products
to consumers, especially abroad.

The pulp processing plant is situated at the Sappanipatti, a small village in the
Kaveripattinam Block of Krishnagiri District. Paiyur Group of companies, initially facing a
lot of issues in its starting stage, gradually developed with its successful business and
progressively started other units -

1. Anandam Agro in 2005

2. Maha foods in 2007

3. Devadharshan Foods in 2008

4. Pavithran Asceptic in 2011

5. Amudha Asceptic in 2014

The company has always been diligent in maintaining the standards of the products as
expected by the consumers, especially those from abroad who always hope for best and
hygienic quality products. All the units of the company are certified by FSSC 22000,
HACCP and ISO 22000. They have also been inspected and certified by SAI Global,
Australia, SGF Germany, Hala, Kosher, SEDEX, Etc. These certifications act as their catalyst
to make many buyers stick to Paiyur Fruits as their brand.

The factory unit is well equipped with suitable machineries and equipments for processing
and packing various types of fruit and vegetable products under the most hygienic and
sanitary conditions.

The current processing unit, the main one, has around 250 permanent employees, skilled and
semi-skilled workmen, and supervisors, technical and managerial staff and employs around

8
https://www.niir.org/blog/blog/914/project-opportunities-in-mango-pulp-processing-industry-food-
agriculture-sector.html
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4000 casual labours during the season when the processes take place. The company highly
values its employees, both temporary and the permanent ones. In the processing plant,
employees are provided with a secure working environment. The employees are properly
trained before being placed in the job. The management is greatly concerned about the tenure
of employment and the loyalty of employees.

The production facilities are fully backed by well equipped quality control testing laboratory
managed by qualified and experienced food technologists. Quality control checks are
maintained at different stages of manufacturing process, right from the selection of raw
material to the final packing of the finished product.

The major customer of Paiyur Fruit Products is Parle Agro's Frooti, Mumbai to whom 50% of
the Domestic sales take place, supplying their 60% of mango pulp. Daily fresh is a company
procuring mango pulp from Paiyur Fruits, with its juice manufacturing unit in the premises of
Paiyur fruits. There are around 100 customers in Indian Local Markets. Around 80% of the
productions are exported every year. Gulf countries are an important destination for export,
UAE, the highest importer. The other importers include UK, Singapore, Malaysia, Poland,
Germany, France, Bangladesh, etc. More than 1000 containers are exported every year
directly or through Merchant exporters.

ANALYSIS AND DISCUSSION:

1. Production process:
Pulp Processing at Paiyur Fruits:
Mangoes are generally procured from different villages, from more than 3000 farmers in and
around Krishnagiri / Dharmapuri District and other places like Salem, Dindigul, Theni, Bodi,
Kambam, Natham, Periyakulam, Madurai, Pollachi, and sometimes from Chittor,
Srinivasapur, etc., At times, they are also brought from the adjoining places as per
requirement.

The mangoes are measured in terms of quantity in the weighing bridge at the entrance of the
godown and then unloaded and placed inside the godown.
The mangoes are then safely piled up in neatly arranged baskets/ Plastic Crates in Ripening
Chambers. Here the Ethylene gas is let in through the pipes for better ripening. The
temperature inside this chamber is maintained appropriately with the help of cooling pad
system and huge exhaust fans. It is a natural ripening process approved by APEDA /MOFPI.
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After three to four days the supervisors visit the ripening chamber to ensure that the mangoes
have started ripening and are ready for the next process.

SORTING and CONVERYOR BELT:

The ripened fruits from the chamber are picked up, carried and fed to the conveyor belt from
where the mangoes reach the washing machine. The unripened fruits are kept aside and left to
ripen. On each side of the conveyor belt, workers stand and remove any decayed or unripened
mangoes and ensure that only desirable mangoes reach the next step. This double checks the
quality of mangoes before they reach the washing machine for getting washed.

WASHING:
In this step, the mangoes are first washed in chlorine water to remove the bacteria from its
skin and then completely cleansed with normal water.

CUTTING CONVEYOR
In this step too the mangoes pass through the conveyor belt. Workers stand on either side of
the conveyor belt that cut off the tip/ stem attached to the mangoes. Once again, if any
damaged fruits are found they will be taken out.

DE- STONER
Inside the De-stoner machine, the outer skin and the hard seed are separated from the fruits.
The pulp from the fruits get reaches the pulper.

PULPER
In the pulper wooden, nylon filters are fitted for filtration and purification of the pulp. Fruit
fibres and other dross in the pulp are removed at this stage. Sugar, lemon juice and Potassium
Bisulphite (preservative and anti oxidant) are added to the pulp at this stage.
Pure fruit pulp, also known as the cold pulp, is then collected in the finisher tank.

PRE–HEATINGandDE-CANTING:
In the pre-heater tank, the pulp is heated at 60- 70 centigrade heat.
This pulp is then transferred to the De-Canter machine for removing black or brown specs in
the pulp. This pure mango pulp is then sterilized in the steriliser by being heated at up to 110
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Degree Centigrade. After this the pulp is collected in large tanks and is cooled by being
placed in huge cold water tank. The pulp is further purified in the aseptic units supervised by
technicians.

The 100% purified pulp is filled into cans each of 3.1 Kilogram and kept in cartons, each
with 6 cans. The cans will arrive as cut metals and is shaped during the mango pulp
processing. In the entire process, the pulp is never touched with human hands, conforming to
international standards.

2. Period of production :
The production period of mango pulp processing unit will be from May to July of every year.
The pulps that are produced during these months would be the total production for the whole
year and would be sold and exported throughout the year. This is because as we all know that
mango is a seasonal product which will not be cultivated during all the months.

3. Sales and Export :

• As per the information collected, approximately 20% from the total production
will be used for Domestic sales and the remaining 80% will be exported.
• As said by the sales and export department, the proposition might vary in case
of changes in export level. They also added that this fluctuation happens
because the importing countries’ orders are obtained before commencing the
production which wouldn’t be constant and for domestic consumption the left
(non-exported) pulps will be sold.
• Major Importing countries of Mango pulp extracts from Paiyur food products
(p) ltd, Krishnagiri – Arabic countries, European countries, Singapore and
Malaysia
• Average annual Foreign Revenue earned is USD 30,00,000 or Rs. 25 crore
approximately.
• They also added that the firm directly deals with its8 domestic clients and no
intermediaries are involved for domestic sales and for export, merchant
exporters are involved around 50% of the times.

4. Employment level and Wage rate policy:

• May – July: more than 4000 individuals will be employed

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 On rest of the months i.e., non seasonal time: 250 – 300 members will be working.
Permanent employees include CEO, office staffs, clerks, cleaners, and security staffs.
• As said by them, presently the capital intensive form of production is higher
than the labour intensive form of production which was previously not like
this.
• When we asked about the recruitment method for employing temporary
labourers, the answer was – there is a middle man acting as a labour
contractor, who supplies labourers in and around the district as and when
demanded by the firm. This mostly takes place during the period of
production.
• Comparatively female labourers are more than male labourers both in the
factory and cultivation area.
• Wage rate for workers in cultivation area:
Male workers: 350-400 per day
Female workers: 200 per day
The difference in wage rate between male and female is due to the nature of work
they are employed with.

5. Government support schemes and Minimum support price :

The state government offers upto 50 lakhs as subsidy for the newly entering firm
into the mangopulpextracting industry.
Per tin consists of 3,1 kg –
Totapuri the minimum price fixed is Rs. 500 and the maximum is Rs.800.
Alphonso the minimum price fixed is Rs. 800 and the maximum is Rs. 1200.

6.Warehousing:
Types of warehouse, the company following
(a) Fruit Ripening center – the warehouse is used to store the mangoes that are
directly collected from farmers thereby to undergo ripening process
(b) Finished goods storage center– the warehouse used to store final product that
are right after from the production process boundary and ready to sell or export.

7.Processing Industry line technology development:

• Visits to various countries like France, UAE, China, Taiwan, Germany have been
made for the purpose of upgradation in processing units in terms of latest technologies.

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Latest technology of Asceptic Pulp / Concentrate Manufacturing has been importrd from
M/s. CFT SPA, Italy and has been installed in PavithranAsceptic Fruit Product, Jagadap,
Krishnagiri and Amudha Aseptic Food Products, Karagur, Krishnagiri units.
• Around 100 Ripening chambers with capacity of 150 MT of mangoes each for better,
even and safe ripening of mangoes within 5 days.
• Regular Visits to International Trade Fairs :
a) AnugaTrade Fair, Germany
b) Gulfood Trade Fair, Dubai
c) China Trade Fair
d) Sial Exhibition, France
• Processing Sector Development Meetings:
i.Participation in annual Projects of Agricultural students of Coimbatore
Agricultural College
ii.Instructor for Agricultural Based Products at ICR, Bangalore
iii.Instructor/ Facilitator for Agricultural Products to Ministry of FoodProcessing
Industry
iv.Instructor / Speaker for Federation of Indian Export Organisations (FIEO)

8. Farmers aid for Horticulture development:

• Association with Paiyur Regional Research Station, conducting meeting with
farmers, mango growers and educating them about New Technologies and
methods for Planting, Harvesting and Pest control to improve crop cultivation and
maximise profit.
• Free distribution of 1000 units of Pest Control Trap purchased from M/s. Sun
Agro, Chennai to the farmers of Kaveripattinam, Palacode,
Penagaram, Marandahalli, Pochampalli, Kariamangalam and Uthangarai blocks.
• Supply of plastic crates to more than 500 farmers at the time of mango harvest in
Kaveripattinam, Palacode, Marandahalli, Pochampalli, Kariamangalam and
Uthangarai blocks so as to minimalise post-harvest losses due to transit damages.
• Payment in advance to the farmers for the mangoes at the stage of flowering for
pesticide purchase.
• Association with Mango farmers in Krishnagiri and Dharmapuri District and
guiding them for getting subsidies from both Central and State government.

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 • Involvement in village development activities through tie up with M/s. Parle
Agro, like road development, school development, Drinking water facility
arrangement, medical camps, Etc., to the nearby villages.

8.Intermediaries and their roles:

▪ For purchasing activity: No Intermediaries involved therefore direct link with
farmers.
The farmers contact the company directly. Earlier there were Mundies and traders acting
as middlemen who got commission of 10%. But now, due to the inconveniences with the
middlemen, the farmers are contacted directly. Today, the farmers are well aware of the
prevailing market prices for their mangoes and the prices various companies in and
around Krishnagiri are ready to pay. Paiyur group of companies is most of the times
preferred by farmers because this company pays the farmers immediately after
procurement of mangoes usually by way of open cheques or even before obtaining the
mangoes as advance so as to take proper care of the mangoes.
▪ For Domestic Sales: No Intermediaries involved.
▪ For Export: For around 50% exports Merchant exporters are involved.
▪ For Recruitment purpose: Labour contractors acting as agents

9. Profits earned:
Net profits earned for the financial year 2017-18, Rs. 5.7 lakhs.
Average Annual Turnover of entire Group, Rs. 125 Crores
Average Annual Foreign Revenue, Rs. 20 Crores

10.By products of mango – production in Krishnagiri

In Krishnagiri, other than pulp extract mangoes are also used for Pickle making and
for Mango Juices.
The company has been in contract with ‘Daily fresh’ mango juice producing firm –
which runs inside the compound of the Paiyur factory. Thereby they get
finished good of Paiyur food products and use it as raw material to produce
juice.

11.Sources of Finance:
(a)The firm obtains Loan from Laxmi Vilas Bank (Long term in nature)

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 (b) The firm, also capitalize funds through shares, having more than 8
shareholders,where the CEO of the company Mr. Murugan is one among
them.
Share price ranges between 1000 and 2000.

FINDINGS AND CONCLUSION:

A quick analysis of the annual reports of the firm has shown that the company has a positive
annual growth rate in terms of raw mango procured, pulp manufactured, and sales of finished
pulp. It has to be noted that the capacity expansion and technological developments in
processing units have been a major factor paving the way for the company’s growth. And the
increasing growth in sales indicates that there is an ever increasing demand for mango pulp
from mango juice manufacturers and other industrial users. When many pulp processing
industries had shut down being unable to survive the market situation, the performance
growth of Paiyur Group of Companies had been steadily increasing, thanks to the
employment of Latest technology in the units.

Without the help or intervention of any intermediaries and without the adoption of any
marketing strategyand brand name, the company has been able to successfully sell their
produce. This is due to the continuous demand from the regular buyers who completely
‘trust’ the company for the standard of hygiene and quality of the pulp produces. This is very
advantageous for the company. However creating a brand name for the produced pulp, act as
an added incentive for the buyers to stick to the product. Hence it is suggested that the
company creates a brand name for it produced pulp.

The company has obtained financial assistance through a long term loan from Laxmi Vilas
Bank. Compared to the previous years, the company’s financial dependence on outside
sources is less. Also, the company is in a good position to manage its immediate financial
obligations comfortably.

The company have given considerable importance in the process of procurement of mangoes,
the most important stage. Paying farmers in advance, educating them, and maintaining a
decent relationship with them has given a great positive impact in this process. However,
other as there is a problem with everything, the major problem faced by the company is

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electricity issues which affect the production process often and high cost of packaging
material. The company addresses these issues by increasing its performance in other areas.

Being a huge manufacturer of mango pulp, it would be beneficial for the company if it
produces Ready to Serve Mango Beverages like Frooti, Maa, ratherthan selling all its
produces.

REFERENCES

https://www.bbc.com/tamil/india/2011/11/111113_mangopulpexportwoes.shtml

https://krishnagiri.nic.in/about-district/district-at-a-glance/

http://www.tn.gov.in/deptst/agriculture.pdf

http://wikiedit.org/India/Krishnagiri/264856/

https://krishnagiri.nic.in/

http://www.paiyurgroup.in/

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