Value-addition, brand development schemes bear fruit

The Kerala State Cashew Development Corporation (KSCDC) has achieved a record turnover of Rs 210 crore last fiscal.

“It is an all-time record in the history of the Corporation. The turnover during the financial year 2009-10 was Rs 178.55 crore. Even though the Corporation was started way back in 1971 it has not been able to give continuous employment except in the last two years”, Dr K. A. Retheesh, Managing Director, KSCDC, told Business Line .

But even after achieving a turnover of Rs 210 crore and cash surplus of about Rs 3 crore according to the un-audited results, the Corporation is not in a position to show profits because of its huge accumulated losses. Its loan liability is estimated at around Rs 100 crore to banks, and about Rs 210 crore to the Kerala Government.

In a bid to set things right, a proposal to convert the Government loan into equity and to reach a one-time settlement with the banks is said to be under the active consideration of the State Government now, following the optimism generated by the Corporation's successful performance in recent years, Dr Retheesh said.

During 2009 and 2010, KSCDC, functioning without any financial aid from any bank during these years, has been depending only on the financial assistance from the State Government.

Major strides

KSCDC was incorporated in July 1969. It started commercial activity in 1971 as a company fully owned by the Kerala Government. From a modest beginning, the Corporation has now grown into a large organisation playing a pivotal role in the global cashew industry.

The Corporation has, at present, 30 factories and employs more than 25,000, of which, 95 per cent are women.

But the objective of providing continuous employment could not be achieved till 2005. The situation has, however, changed since Dr Retheesh took over as the Managing Director. In an effort to bring professionalism in the cashew industry, he gave the workers statutory benefits such as minimum wages, bonus and ESI. . As a result, the Corporation has now become a model employer in the cashew industry.

Of the 30 factories run by the Corporation, 20 are owned by it and the remaining are on lease. As it was found that no modernisation was possible in the leased factories, the State Government amended the Cashew Factories Acquisition Act for acquiring the leased factories.

Even during the economic slowdown in 2008, KSCDC had managed to give work to all its employees, and that forced the private factories also to follow suit. In Kerala, even the unskilled, like construction workers, are given good wages, but the remuneration drawn by cashew workers is lamentable. The Kerala Government had, therefore, revised their minimum wages twice in the last five years.

For enhancing profitability of the Corporation, Dr Retheesh introduced a lot of innovative schemes. The brand development and value addition schemes are noteworthy. As part of developing its domestic market further, the Corporation instituted four establishments to promote its products. CDC branded cashews are available in 20 gm to 2 kg packs. In addition, it has tied up with retail chains and opened franchisees. It has also developed a nursery from where farmers can purchase high-yielding graft varieties of saplings.

Kollam is known as the cashew export town. And KSCDC, based in Kollam, offers top quality products at competitive prices. Efforts are being made to make CDC cashews available in all major super markets chains in the Gulf.

Besides cashew kernels, the Corporation offers cashew soup mix, cashew vita, cashew powder and cashew bits. And considering consumer preference, cashew noodles and chocolate-coated cashews will be launched shortly. KSCDC is also mounting a campaign to build on its market-share. Dubai will be the springboard for marketing CDC products across West Asia and North Africa. Recently, KSCDC introduced zip pouch packaging. A fully automatic packing machine for pouches and a packing system for improving shelf-life have been introduced.

For developing the cashew industry, KSCDC has tied up with different organisations — the pact with National Agricultural Innovation Project (NAIP) is one. This project aims at finding out the value chain in cashew for the domestic and export markets. As part of this project, efforts are being put in to introduce more value-added products of cashew in the international and domestic markets.

Dr Retheesh says that the various diversification and professional marketing efforts which he has initiated during past over six years has yielded remarkable results.

Workers upbeat

The workers in the KSCDC factories are upbeat as there has been a steady stream of raw nuts for processing for the past over five years giving them regular employment. This has been made possible since the Corporation entered into a tie-up with the State Trading Corporation (STC).

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