Apple Cider Vinegar
The global apple cider vinegar market has been projected to grow both invalue and volume during the next 10 years. India is ranked fifth in the worldin terms of production of ACV with a production of 2,872,000 MT duringthe year 2017. But, due to increasing demand it imported about 3.5 lakh MTACV valued at US$7,76,549 indicating large untapped potential forproduction of ACV. Himachal Pradesh has congenial environment for itsproduction as indicated by abundant raw material availability and gooddemand at state and national level. There exists a huge gap in the market asfar as processing and value addition is concerned.
The farm produce whensold afresh without any processing yields much less returns as compared toa processed, value added product. The harvest season in HP is short theperishable nature of the produce puts pressure on the producers to sell off their produce as soon as possible.
Salient Features
❖ Apple is main cash crop and nearly accounts for 77% total fruit production in state
❖ Average Area under apple production is 1.13 lakh Ha with average production of 4.5 MT
❖ Apple is sold 75 — 8o % as fresh, 15-18 % is processed and 2-3% gets wasted
Business Model
❖ Procurement from catchment Area: Focus on Block/Tehsil,catering 10 km radius for freshness and better quality withlower cost.
❖ Alternate procurement source from HPMC or HIMFED
❖ Dilution: 5% water to 15% ACV (for 10K Ltrs)
❖ Land requirement 2000 sq. ft
❖ Processing of apples at centre,6o,000L of 5% ACV (30,0o0Lfrom fresh apples and 30,000 L from apple juice concentrate)
❖ Alternate marketing channels - Exploring direct to homechannel, clubbing with small businesses having farm to forkmodel.
❖ Marketing will be done online, retail stores
Suitable Location
Business Plan for average ticket size
Investment (Approximate)
❖ Capacity: 6o,000 Liters of 5% Vinegar
❖ Total Investment Rs. 3,415,000
❖ Working Capital Rs.2,559,927
❖ Retail price Rs. 25o per ltr
Returns (Approximate)
❖ Profit Rs. 21,07,752
❖ IRR: 67.5%
❖ DSCR : 3.2
❖ Breakeven 31,552 Liters in around 1 year
Appricot & Wallnut Oil Extration
The consumer health and wellness literacy are on the rise. Burgeoning literate middle-and high-class families with relatively high disposable income have started exploringspecialized wellness sectors like spas, massage centers and dietary supplements.Especially people are increasingly adopting alternative medical treatments likearomatherapy and nutraceuticals for their general physiological wellbeing to cope upwith a relatively fast and strenuous lifestyle.
High perishability of apricot, lack offarmer surplus, lack of any systematic collection of waste kernels from apricot pulpindustries and labor-intensive operations in traditional extraction of apricot oil aresome of the constraints restricting the market potential of apricot oil from reaching itszenith.
Salient Features
❖ Himachal Pradesh's Chulli (dried apricot) oil has received first GI tag
❖ The demand of apricot oil is high especially in the massage andpharmaceutical sector
❖ Nearly 8o-9o% of annual produce is either sold fresh or dried andonly a meagre portion is processed further for oil extraction.
❖ Apricot pits yield 22-38 % kernels and kernels yield 45-55% oil.
❖ The oil is composed of 94.4% unsaturated fatty acids with 66.2% oleicacid and 28.2% linoleic acid
❖ The production of apricot is 4635 MT and for walnut is 2872 MT inthe state
Business Model
❖ Focus on health and wellness food available in the hills of Himachal
❖ Technology guidance and product development support from educational & research institutes like NIFTEM.
❖ Branding and packaging for distance market in addition to local consumption
❖ Adoption of modern processing steps increasing yield of oil by 10-15% from traditional methods.
❖ Land requirement 1100 sq. ft
❖ Cycle of 18o days with 120 liters per day production capacity
❖ Packaging of oil in 25o ml and 50o ml bottles/pack
Suitable Location
Business Plan for average ticket size
Investment (Approximate)
Capacity : 120 liters per day output
❖ Total Investment Rs. 1,630,000/-
❖ Working Capital Rs.1,161,474/-
❖ Retail price Rs. 58o per half ltrs and Rs.32o per 250 m
Returns (Approximate)
❖ Profit in the first year Rs. 992,114/-
❖ IRR: 65.6%+ DSCR : 3.1
❖ Breakeven in 1.2 years
Honey Processing
Beekeeping has been one of the oldest practices inIndia. The honey market in India was worth INR15,579 Million in 2018, registering a CAGR of 10.9%during 2012-2018. The market is further projected toreach a value of INR 28,057 Million by 2024, at aCAGR of 10.2% during 2019-2024. As per APEDA,the country has exported 61,333.88 MT worth Rs.732.16 crore/ USD105.48 million during the year2018-19. Exports this year saw a growth of around19% over previous year's export of 51,547 MT. Themajor export destinations were USA, UAE, SaudiArab, Moroco and Qatar.Himachal Pradesh is unique in having different agro-climatic zones with varying bee flora. There are 2000 commercial bee keepers registered in Himachal Pradeshrearing close to 70,000 colonies producing 1500 MT of honey annually. Currently 20,000-25,000 coloniesarerented out for pollination annually though there is a potential of 1 lakh colonies for pollination.There is demand for honey in domestic as well asinternational market, because of its popularity as asweetener and the immense health benefits.
Salient Features
❖ As per APEDA, the country has exported 61,333.88 MT worth Rs. 732.16 crore during the year 2018-19
❖ The honey market is planned to grow at a CAGR of 10.2% during 2019-2024.
❖ Unique characteristic of honey due to wild flora and fauna in Himachal Pradesh
❖ Average production of honey 594o MT (organized and unorganized sector
❖ Diverse bee flora for about 7 months available in Himachal Pradesh
❖ Apple is sold 75 — 8o % as fresh, 15-18 % is processed and 2-3% gets wasted
Business Model
❖ Promotion as Himachal honey: the rich natural flora available in the state are favourably suited
❖ Market as natural honey / quality honey from the mountains
❖ Lead Farmers model for procurement of raw materials for the processing unit on a regular basis. The leadfarmers to approach the producer network to negotiate and finalize the good quality produce/ regular supply.
•:• Collection centers model: Network with honey famers to supply collection centers
❖ Adoption of advance mechanical model for honey processing+ Land requirement 1100 sq. ft
❖ Packaging with Himachal honey branding, online sales, superstores and retail sales
Suitable Location
Business Plan for average ticket size
Investment (Approximate)
❖ Capacity : Per day processing - 2ookg honey
❖ Total Investment Rs. 31,00,800
❖ Working Capital Rs. 19,34,953
❖ Retail price Rs. 23o per kg
Returns (Approximate)
❖ Profit Rs. 1,159,545
❖ IRR: 38.4%
❖ DSCR:2.3
❖ Breakeven 60.98 MT in 1 .45 years
Temperate Nursery
Himachal Pradesh, the land of fruits had a total fruit production of 495,362MT during the year2018-19 in which almost79% comes under appleproduction. In apple around 40% area are at senile stage, producing lowerreturn as compared to HDP. Initiation of innovative projects (e.g. HPHDP)has planned, introducing 8,000 ha of High Density Plantation in the state.Besides, Horticulture Dept. has been promoting to replace senile orchards toHDP for better productivity. Many progressive farmers have been replacedtheir old orchards to initiate HDP. These developments led to high demandfor HDP planting material in the state.
This business proposition encompasses developing planting materials for sixfruits viz. apple, peach, plum, apricot, pomegranate and cherry. The selectionof fruits is based on analysis of the local demand and is anticipated to caterto planting material demand in temperate region of the state
Salient Features
❖ In Himachal Pradesh area under temperate fruit 1.31 Lakh Ha.
❖ Around 79% of total fruit produced in HP are apple production and the apple area is almost half of the total areaunder fruit crops. Most of these plantations i.e. around 40% in apple area are senile and needs to be replaced withhigh density plantations.
❖ There is a demand of more than 50 lakh temperate fruit plants each year in the state alone, excluding demand fromother states
❖ Lower investment in fruit nursery set-up in the state has enormous opportunity in the sector.
Business Model
❖ Mother plants nursery development will be done with the current planting stock development
❖ Provision of consultations & advice for the farmers in the nursery besides sale of planting material.
❖ Infrastructure like poly-house, shade-nets and irrigation infrastructure is considered for nursery development.
❖ The Horticulture Department and other State Govt. Departments will be the major purchasers.
❖ Other players for direct sale within state are orchardists and private players
Suitable Location
Business Plan (small fruit nursery)
Investment (Approximate)
❖ Capacity of nursery: mother plants -500 nos., root stock nursery — 5500 sq mt, poly house — 10000 plants
❖ Total Investment Rs. 48,85,000
❖ Retail price Rs. 200 for grafted apple sapling
Returns (Approximate)
❖ Net Income in 3rd year 33.05 lakh and cumulative profit Rs. 1,152,000 in 4th Year
❖ IRR: 33% (consideration for 7-year business plan)
❖ Benefit Cost ratio — 1 : 1.41
Pomegranate and Plum Processing Unit
In lower and mid hills of HP, recent trend is to cultivate fruits,such as pomegranate and kiwi, and vegetables, such astomato, peas and cauliflower, a shift from traditional applecultivation focusing the crops that require lesser chillinghours. One of the key factors contributing to greatercultivation of pomegranate in HP, is the prevalence of highertemperatures, especially in the Low and mid- altitude regionsof Kullu, Shimla and Mandi districts. Warmer temperaturesduring winters have reduced the chilling hours for apple trees.
Since plums have a limited shelf life, it has been observed that 40-45% of fresh produce was lost due to limited post-harvestintervention. Plum growers are well aware of this fact. This has made procurement of B and C grade plums from blocks likeNaggar, Kullu, Banjar and Sadar very easy and thus, has become a readily available source for processing
Business Model
❖ Discussions and meetings with growers and lead farmers and development of farmer's network for procurement.
❖ Lead Farmer Model: Establishment of Procurement Network by following lead farmer model. The lead farmer willbe responsible for supply of fruits to the processing unit and may charge service fee. Lead farmer will send rawmaterial to factory through Bus/pick-ups (small quantities every day)
❖ Processing Centre: processing will be done for Pomegranate Juice and Plum Pulp.
❖ Packaging as per market need and marketing will be done B2B and B2C both, supply will be done to buyers/stores
Salient Features
❖ Area under pomegranate was increasing at a rate of 15% year-on-year basis (2013-2017), and production volumestouched 3148 ton in 2017-18.
❖ Naturally Healthy Super fruit juice category was valued at INR 450.82 Crore in the year 2018, in India. This sectorwill witness a CAGR of 17.6% over five years from 2018 to 2023 and swell up to double of its current size by then.
❖ Pomegranate juice command approx. 5% of the market and the market size for pomegranate juice in India can bevalued at INR 50.6 Crore by 2023.
❖ Himachal ranked second in plum production in India, with an annual production of 20,520 MT, for 2017.In 2016-17, Kullu produced 13,665 MT of Plum and contributed to around 66% of the total Plum produced in HP.
❖ In HP total area under Plum was 8,683 ha in 2017-18. Area under plum is consistently increasing in HP.
Suitable Location
Business Plan for average ticket size
Investment (Approximate)
❖ Utilized Capacity (ist year): 2 MT pomegranate per day; 24o MT processed over 120 days and 1 MT plum per day;120 MT processed over 6o days
❖Project Cost Rs.58.20 lakh
❖ WC requirement Rs.29.3o lakh
❖ Retail price Rs. 8o/liter for pomegranate juice and Rs. 25/ liter for Plum pulp
Returns (Approximate)
❖ Profits (ist year): INR 19.78 lakh
❖ IRR: 32.7
❖ DSCR: 2.0
❖ Break-even period: 0.9 years
Soil And Leaf Analysis
Around 2.3 lakh ha area is under fruit crops in Himachal Pradesh among which apple crop is cultivatedalmost half of the total area. There are around one lakh orchardists in the state who depend on fruitcultivation & trading for livelihoods. Almost all kind of temperate & sub-tropical fruit crops are grown inthe state. Along with soil testing, leaf testing is equally important for plant nutrition of fruit crops. Atpresent, there are six leaf testing laboratories in the state & can handle only 50,000 plant sample per yearwhich is far less than the demand. Some orchardists are sending their leaf samples to other states fortesting. So, there is good opportunity to start state-of-the art plant nutrition analysis lab in HP.
Salient Features
❖ Both soil & leaf testing facilities with state-of-the-art machinery
❖ Testing results within one month (far less compared to present practices off our months) alongwith recommendation
❖ Capacity — up to 10,000 samples per year
Business Models:
❖ Sample collection from Orchardist's door step
❖ Interpretation of result along with recommendation through voice messages
❖ Service variant available — only soil testing, soil & leaf testing (NPK only), soil & comprehensiveleaf testing (including micronutrients)
❖ USP - Testing result is available within one month Year-round operations to cater both temperate & sub-tropical crop
Suitable Locations:
The plant nutrition lab for soil and leaf can be setup in the districts of Shimla, Mandi, Kull and Kangra in Himachal Pradesh.
Business Plan for average ticket size
Investments (Approximate)
❖ Utilized Capacity (1st year): 10,000 samples per year (capacity utilization in year -1 is6,000 and it will increase gradually)
❖ Project Cost Rs. 90 lakh
❖ Working Capital requirement Rs.29.30 lakh
❖ For N, P, K analysis, the price will be T 1500 per samples and for all nutrient analysis, the pricewill be T 2000 per sample in year 1.
Returns (Approximate)
❖ Gross Profit — T 20.82 lakhs in year 1+ IRR: 72%
❖ DSCR -2.05
Apple Chips
The Indian Food Services market in India (organizedand unorganized) is estimated at USD46 billion(INR 3, 37,50o crore). The business is expected togrow at a CAGR of 10% over the next 5 years to reachUSD 74 billion (INR 5, 52,000 crore-Source FICCI-PwC report). The modern-day consumers arebecoming more conscious about their eating habitsand about what they are consuming. They prefer ahealthy and nutritious diet. But, the busy lifestyleand always on the move schedule, limits theirhealthy intake options. The food services industry isalso shaping up in the same lines.
Salient Features
❖ Apple is main cash crop and nearly accounts for 77% total fruit production in the state
❖ Area under apple production is 1.13 lakh Ha with average production of 4.5 MT
❖ Apple is sold 75 — 8o % as fresh, 15-18 % is processed and 2-3% gets wasted
Business Model
❖ Lead Farmer Model for procurement: Strong backward tie-up with orchardists and traders forprocurement
❖ Procurement contracts are to be made well before the start of the harvest season for uniform availability
❖ Sourcing opportunities from J&K, as apples in J & K start coming to the market in October and last tillDecember.
❖ Land requirement 3000 sq. ft. Marketing will be B2B, B2C, online stores, and retail outlets.
❖ Packets of 25 grams and 5o grams will be sold