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Food processing – an evergreen sector

M.Radhakrishnan, entrepreneur from  Kannur, Kerala talks about food processing business.

 

Food Processing is one of the fastest growing sectors of the Indian economy. This sector employs 13 percent of the total workers of the registered factory sector. The sector is growing at a rate of 8.4 percent.

In India Agro and food processing sector has got all the required elements for further growth such as entrepreneurship, raw materials, manpower and capital. And food industry can thrive in any environment, be it hostile political or policy climate or even in recessionary times.

Take the case of M. Radhakrishnan from Kannur, founder of Western Food Products, who built this brand which is now a household name in Kerala in just 5 years time,  the district where communist movement has deep roots.

He started Western food products at  Mathamangalam,  Kannur,  in 2010. His initial investment was INR 700,000, raised from different sources. Out of 7 lakh INR 3.8 lakh came from North Malabar Gramin Bank, which is now known as Kerala Gramin Bank.

Kannur is one of the highly urbanized districts of Kerala. Food habits of people are fast changing. Potential of food processing sector comes in this context. Most of the products of Western foods cater to the needs of this urbanized consumer segments.  Radhakrishnan’s unit brings out a number of packaged food items that are very commonly used in Kerala homes for   cooking. Western funnel cake powder; Western steam cake powder; Maida; Rice powder; Idly/Dosa powder are just few of the products that are processed and packaged in his unit.
Radhakrishan says that it was difficult to raise the required capital initially. Also, he found it difficult to arrange money for buying raw materials as the loan did not cover  raw material cost but only the expenses of machines. More over interests that he had to pay was 14 percent.

There were several initial hiccups, when he started in 2010. Though, the loan was sanctioned, “we could start the business only after three months .Green channel certificate was approved much earlier, but, it took three months for the electricity department to give us power connection”.

“Now I give employment to five people. In addition to that few others get casual and many indirect employment opportunities. If industry department gives us more help, we can give employment to several more people”.

At present we arrange personal loans to raise needed money to run this venture. In order to develop a good distribution network,  we have to make investment to development appropriate supply chain network. When we attempt for vehicle loans, we couldn’t get it from any bank.” To reach out to the market, vehicles are so important.

If entrepreneurs like Radhakrishnan could make it big in Kannur, where politics and social activism gets priority over work, employment, business and entrepreneurship, he would have done much better in a favorable business climate.

M.Radhakrishnan

Western food products,

Near-Eramam village office,

Mathamangalam,kannur 670306

 

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