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Value addition through Digitalization Production by Coconut Producer Companies in Pollachi District



Several Philippine proverbs demonstrate the usefulness of coconut species: "If you could count the stars, then you could count all the ways the coconut serves us". Coconut is crop having multiplicity of products with multifarious uses to mankind it plays a major role in the economic and social lives of the people of more than eighty countries in the tropics. Coconut has been known as kalpavriksha- heaven giving tree. As successfully grown in tropics, it is also known as king of tropical palms. Coconut is truly royal, not in its grace and stature, but in its boundless generosity to mankind. India stands first in productivity (8936 nuts/ha) and production (16943 million nuts) and third in area under coconut cultivation in the world. The crop contributes more than Rs. 8000 crore annually to the GDP and earns valuable foreign exchange to the tune of Rs. 2000 crore by way of export of coconut products. The crop sustains 10 million people in the country through cultivation, procurement, processing, marketing and trade related activities. Thus, the crop is of immense social and economic value in the Indian economy.

 But, the farmers are still in pathetic condition, their produces does not earn as intermediaries does, hence Coconut Producer Companies has been formed to protect the coconut growers. In this context, this article wants to study the coconut producer companies in Pollachi District and their activities, production process/ value addition of coconut and their importance to farmers.

Coconut Producer Companies

Coconut Producer Companies are organizations “for the farmers, by the farmers and of the farmers”. They have to further emerge as commercial organizations running a business

 ICSSR-Post Doctoral Fellow, Gandhigram Rural Institute – Deemed to be University, Dindigul, [email protected], (Funded by ICSSR-New Delhi)     

 Professor, Department of Cooperation, Gandhigram Rural Institute-Deemed University, Dindigul,

professionally with a profit motive. The member farmers are all small and marginal and they have to be groomed to keep their eyes and ears open to the slight changes in the market, capitalize on the avenues that come on their way and take the risk of venturing into newer areas.

The following figure shows the organizational structure of the Coconut Producer company

Fig. 1 Organizational Structure

At least 8 CPSs registered under Coconut Development Board (CDB) working under the same block Panchayat is needed to form a CPF. Each CPS under CPF should have at least 40000 yielding coconut palms. A Federation can have a maximum of 20 -25 CPSs as its members and have a maximum of 1 lakh yielding coconut palms. The CPFs are affiliated to CPC.

CDB have two pronged approach for this grooming; organizing the farmers and converting them into professionals.

The process organizing connected group activities creating value producing goods or service the basic raw materials for purchase by the consumer. The basic objective of employing value chain management in a business is to integrate communication and increase cooperation between production chain members in order decrease delivery time, reduce inventories increase customer satisfaction.

The retailer began implementation strategy complete value chain management, going the all way back to the factories are now able to produce on demand, to shipping channels and warehouse facilities, in order to study and how the coconut producers manage supplies,  case of five coconut producer companies were studied and details are given below

I- Coimbatore Coconut Producer Company

Coimbatore Producers Company is private limited company incorporated on 4/11/2015 and is 1year 5 months 17 days old. It is classified as India Non-Government Company and is registered at Coimbatore. Its authorized share capital is Rs.10, 00,000.00/- and its paid up capital is Rs.10, 00,000/-.


    To build a prosperous and sustainable coconut sector forming a farmer–owned producer company that enables farmers to enhance productivity through efficient cost.


• To carry operation of primary agricultural and animal production, harvest operations, procurement, grading, handling, pooling, packaging and marketing.

• To manufacture, sell or supply machinery equipment's or consumables.

Table 1

Production Details of Coimbatore Coconut Producer Company  

Year Organic coconut oil Virgin coconut oil Coconut milk  powder Coconut milk cream Tender coconut

2015-2016 2.70 2.88 2.630 2.665 2.800

2016-2017 17.265 17.00 13..70 12.90 15.25

Source: Companies Audit statement.      (in tones)

    Table 2

Sales details Coimbatore Coconut Producer Company

S.No Year Sales Percentage

1 2015-2016 17,67,910 -

2 2016-2017 18,26,513 96.79

Source: Companies Audit statement.     (Amount in lakhs)

It is understood from the table that the production and sales of the producer company has improvement in the year 2016-17 that is Rs.18, 265 lakhs. The production and sales of other products i.e. value added products like coconut milk, powder, jiggery, sugar showed increase in the year 2016-17.

Value added products produced by Coimbatore Coconut Producer Company are

• Organic Coconut Oil

• Virgin Coconut Oil

• Coconut Power,

• Milk,

• Jaggery.

II- Kottur Malayandipattinam Coconut Producer Company

Kottur Malayandipattinam Producer Company is a Non-Governmental Company registered under the producer company act, which was incorporated in the year 18/9/2015, the authorized capital is Rs.1000000/- and the paid up capital of the company is Rs. 100000/-. Main business is coconut trading, manufacturing organic coconut oil, virgin coconut oil, powder, tender water and chips.


1. Goal self-sustainable coconut plantation, attitudinal change strategy.

2. Organizational support in planning, implementation for ongoing management.


1. Encourage the coconut farmers for the better cultivation production and marketing. So that farmers can get maximum price for the coconut.

2. The encourage production of organic coconut.

3. To export value added organic coconut product.

Table 3

Production Details of Kottur Malayandipattinam Coconut Producer Company

Year Organic coconut oil Virgin coconut oil Coconut milk  powder Coconut chips Coconut water

2015-2016 25.70 2.65 22.00 2.60 2.800

2016-2017 18.00 1600 15.00 12.90 19.25

Source: Companies Audit statement.      (in tones)    

Table 4

Sales details Kottur Malayandipattinam Coconut Producer Company

S.No Year Sales Percentage

1 2015-2016 17694793 -

2 2016-2017 20981950 84.33

Source: Companies Audit statement.     (Amount in lakhs)

It is understand from the table 3 and 4, the production and sales of the company has showed improvement in the year 2016-17, that is 84.33 per cent growth. The production and sales of other products i.e. value added products like coconut milk, powder, jiggery, sugar showed increase in the year 2016-17.

III- Karpaga Vruksham Coconut Producer Company

The company Karpaga Vruksham coconut producer company limited is Indian Non-Government Company, the authorized share capital of Karpaga Vruksham Coconut Producer Company is Rs. 1000000/-. The paid up capital for Karpaga Vruksham coconut producer company is Rs.160000/- and incorporated in the year 23/11/2015. The company produces Coconut oil, coconut milk and Coconut cookies etc.


   The mission of the company aims to support farmers by extending assistance for planting, production, marketing and export of coconut and its value added products like coconut oil coconut milk, coconut cookies etc.  Members will be encouraged for adoption of new coconut processing methods.


• Encourage production of tender coconut and also production of coconut seeding.

• Increase the coconut production.

• Production of value added products from coconut husk coir pith, coconut shell and timber take up research activities in pest disease control and hybridization of coconut etc.

Table 5

Production Details of Karpaga Vruksham Coconut Producer Company

Year Organic Coconut oil Coconut Milk Coconut Cookies Coconut oil Cake Coconut Neera

2015-2016 20.21 11.25 20.56 22.65 22.65

2016-2017 22.25 11.55 18.25 12.90 19.25

    Source: Companies Audit statement.      (in tones)

Table 6

Sales details Karpaga Vruksham Coconut Producer Company

S.No Year Sales Percentage

1 2014-2015 17,318,349 -

2 2015-2016 19,552,231 88.57

  Source: Companies Audit statement.     (Amount in lakhs)

It is interpreted from the table 5 and 6 that the production and sales of the company has showed improvement in the year 2016-17, that is 88.57 per cent growth. The production and sales of other products i.e. value added products like coconut milk, powder, jiggery, sugar showed increase in year 2016-17.

Value added products of Karpaga Vruksham Producer Company

• Coconut oil

• Coconut milk

• Coconut cookies

VI- Vinayaga Coconut Producer Company

Vinayaga Coconut Producer Company is coconut farmers of Coimbatore district it is 5th Company registered in Coimbatore district and 10th company registered under coconut Development board in Tami Nadu the company headquarters at Coimbatore.


To carry out producing, harvesting, branding, marketing and exporting. The value added products from the coconut, to practice cost effective and sustainable for agriculture and help the farmers to get premium price for their production and value addition to coconut.


• To carry on the business of producing farming harvesting procuring distribution

• Marketing selling handing branding export of all types of agricultural products and

• Allied of business of the members and buying from the members and non-members.  

Table 7

Vinayaga Coconut Producer Company Production details

Year Organic coconut oil Coconut milk Coconut chips Coconut water Coconut bath shop

2015-2016 20.21 16.25 20.56 22.65 22.65

2016-2017 22.25 24.25 18.25 19.25 20.25

  Source: Companies Audit statement.    (in tones)

Table 8

Sales details of Vinayaga Coconut Producer Company

S.No Year Sales Growth Percentage

1 2015-2016 17,345,245 -

2 2016-2017 19,875,889 87.27

Source: Companies Audit statement.     (Amount in lakhs)

It is interpreted from the table 7 and 8 that the production and sales of the company has showed improvement in the year 2016-17, that is 87.27 per cent growth. The production and sales of other products i.e. value added products like coconut milk, powder, jiggery, sugar showed increase in year 2016-17.

Value Chain Process of Vinayaga Coconut Producer Company

Company Products

• Coconut oil

• Coconut milk

• Coconut chips

• Coconut water

Membership Position, Share capital, Profit And Loss and Working Capital of the CPC

Table 9

Membership Position

YEAR Coimbatore



Company Vinayaga



company Kottur



company Karpaga




2015-2016 1800 1006 680 740

2016-2017 2125 1010 780 800

Source: Companies Audit statement.    (Amount in lakhs)

It is found from the above table that the membership shows increasing trend in membership over the years. The compound growth rate also witnessed a positive trend over the years.

Table 10

Share Capital

YEAR Coimbatore



Company Vinayaga



company Kottur



company Karpaga




2014-2015 5.80 6.04 4.84 5.80

2015-2016 6.30 5.80 4.80 6.25

Source: Companies Audit statement.     (Amount in lakhs)

It is noticed from the above table that share capital of Coimbatore and Karpaga coconut producer company has increased and for Vinayaga coconut producer company it has been decreased and for Kottur CPC there is no increase or decrease in their share value.

Table 11

Profit And Loss

YEAR Coimbatore



Company Vinayaga



company Kottur



company Karpaga




2015-2016 -444.45

(-50.75) 364

(1294.45) 55.32

109.61 43.33


2016-2017 -1041

(1294.45) 786.93

(1949.74) 664.75

(1144.94) 224.00


Source: Companies Audit statement.     (Amount in lakhs)

Profit is one of the main of development profit depends on various factors. Higher proportion of funds in the capital structure (786.93), expenditure is at lower level (55.32) and it  is for their operating and for establishment of the company.

It is understand that the asset position of the companies showed improvement in the year 2016-17 and the growth rate is 51.70 per cent. The total current assets have increased to its 83.39 lakhs.

Process of value addition of Coconut Products by the producer companies

Chart. 2

Process involved in the value chain of Coconut Products

Farming of Coconut:

Farming of coconut includes all the inputs that are essential for the proper cultivation of coconut. In this case, seedlings, pesticides, fertilisers, labour and irrigation are the major inputs fed at the stage of input supply. The farmers collect the seedlings from the Agriculture Office, private nurseries and these Coconut Producer Companies. The fertilisers applied are cow dung and other organic matters which are collected from their own field and from the fellow farmers. The irrigation facility is from the wells and ponds. Labourers are hired from the local area itself.

Production is the major part of the value chain where the cultivation of the coconut being carried out. Coconut is a crop which doesn't need much fertiliser application. Fertiliser application is done usually once in a year. Coconuts fall from the tree when they are fully mature and are easily collected from the ground. However, coconut is to be plucked at an interval of 45 days.

Processing is the main task carried out by the company.

Organic coconut oil

   Organic coconut oil is highly nutritious and contains a superior disease fighting fatty acid called Laura acid. It is also rich in fiber vitamins and minerals. The product is certified by Indian organic standards and contains no added chemicals or genetically modified additives.


• Copra Cutter

• Bucket elevator

• Steam jacketed kettle

• Oil expeller

• Screw conveyor

• Crude coconut oil storage tanks

• Filter press

• Micro filter

• Filtered oil storage tanks

• Volumetric filling machine

• Baby boiler

• Wooden storage drums


Raw material 5 tonnes of copra

Coconut oil 3 tonnes

Coconut flavored milk

    Coconut milk is a healthy, vegan and environment friendly alternative to dairy milk, which has several nutritional advantages and serves as superior source coconut milk serves as a much richer source of niacin, also called vitamin b-3 compared to regular milk which has Niacin along with b-complex vitamins.


Milk is extracted from freshly grated coconut of 9-10 months old. Extracted milk is clarified to remove suspended solids which are present in the milk. Coconut milk is then mixed with coconut water and diluted by adding purified drinking water until it is appropriate for flavoured coconut milk production. It is then mixed with 10-12% sugar, 2% stabilizers, emulsifiers and flavours. The flavoured coconut milk is then UHT sterilized at 138-140°C for about 15 seconds, which is then packed in sterilized PP bottles.

With pasteurization, coconut milk is heated to 80-85°C with a holding time of 10 minutes before it is cooled. Along with correct cooling, and chilled distribution, pasteurized milk has a shelf life of five to 15 days. In UHT treatment, milk is exposed to brief, intense heating to temperatures in the range of 138-140°C for about 15 seconds. Most importantly, UHT treatment is a continuous process which takes place in a closed system that prevents the product from being contaminated by airborne micro-organisms. The UHT coconut milk passes through heating and cooling stages in quick succession, then is immediately put into a sterile packing material. This process avoids any re-infection. The end result is a product that lasts up to six months without refrigeration or preservatives.

Coconut chips

 Coconut chips is like any other chips, ready to eat snack food. Dehydrated mature coconut kernel slicers are dipped in osmotic medium like sugar syrup is called coconut chips.

Coconut chips, as any other chips, are a ready to eat snack food. Dehydrated mature coconut kernel slicers are dipped in osmotic medium like sugar syrup is called Coconut Chips. The major characteristics of coconut chips are as follows:

1. It is a ready to eat snack

2. Not fried in oil

3. No preservatives

4. No loss of flavor or nutrient in the kernel

Desiccated coconut powder

Coconut powder is simple dried ground up coconut powder.

Coconut Palm sugar

    The coconut palm syrup or jiggery can be crystallized to produce fine granules of sugar. Transition of coconut jiggery into a ground granule sweetener is more accepted by global markets .the recovery of palm sugar from coconut palm jiggery 15 percent the application of this sugar is tremendous and offers huge potential owing to its most important health attributes.

Coconut palm jiggery

   The strained unfermented coconut sap is boiled, crystallized and transferred into suitable mounds to prepare jiggery. The semisolid jiggery solidifies gradually by the cooling effect of the Atmosphere into crystallized hard substance. The recovery of jiggery from syrup is 15 per cent it is used in sweetening agent for the preparation of dishes and is superior to cane jiggery.

Coconut water

The select young coconut with no cracks holes or other defects .wash the nuts with tap water sanitize with chlorinated water (1tspcom-mercial chlorine bleach per liter of water). Cut nuts and collect water in clam containers. Scoop meat with spoon and wash with po table water to remove fibers test and other dirt particles.

Tender coconut

    The tender coconut can be harvested in the 10th month moreover if the coconuts are harvested tender stage, the incidence of pest and disease can also be reduced and the production will increase proportionally.

Coconut cookies

    The coconut macaroon cookies by forming a cookie dough with 14 ounces each of sweetened Shredded coconut and sweetened condensed milk,1 teaspoon pure vanilla ,2 extra large  Egg whites and ¼ teaspoon kosher salt a mixer bake this cookie dough at 325 degrees Fahrenheit for 25 to 30 minutes, or unit the cookie golden brown.

Coconut oil cake

   Bring milk just to a small heavy saucepan. Remove from heat and stir in coconut. Cover and let stand 30 minutes. Puree in a blender. Preheat oven to 350 f. butter 2(9-by2-inch) round cake pans and dust with flour, knocking out baking powder and salt. In a large bowl with an electric mixer.

Coconut neera

Neera the sweet sap of the coconut palm is becoming a popular drink. It is obtained by tapping the unopened inflorescence of the coconut palm its non-alcoholic and nutritious drink. Neera is a rich source of sugars, minerals, vitamins. It is sweet and oyster white in color and product. Treated neera can be preserved in cans upto 2 months at room temperature. It can be packed in glass bottles.

Marketing of the products is done by these Coconut Producer Companies. The products are sold through supermarkets and organic products outlets by their own in Pollachi district.

• The company sells the coconut oil to wholesaler at rate of Rs.172 per litre. The wholesaler sells to the retailers at the rate of Rs.177. The company also directly sells to the consumers at the rate of Rs.178 per 1 litre. There are no special promotional activities undertaken by the company for the product. The product is also taken by the producer societies and sold through their offices.

• The company sells the other products like neera, vinegar, jaggary, powder, milk, cookies and chips etc. to wholesalers and to the consumers and also purchase directly from the companies retail outlet.

• All the CPC have their own websites in which they market their products and they display their products in Melas, Exhibitions and trade fairs held in and around Pollachi and Coimbatore Districts.

Consumption: Coconut oil and Coconut vinegar are used as organic products, health products and in cooking. Consumers use Neera and milk as a health drink and a soft drink. The consumers use the product and are satisfied with all the bye products of coconut.


Value added products are marketed in place like Delhi, Bangalore, in side Tamil Nadu it is intended to bring in more area under coconut in the potential belts thereby increasing the production potential in the country. For this, the small and marginal farmers are given incentive assistance for undertaking new planting of coconut and its further maintenance.  The coconut producer company performs and adopts value addition in production concept. The product produced is coconut and by product are coconut jiggery, coconut sugar, organic soap, coconut chips and neera. These CPC are procuring the coconut from the farmers at higher rate than the market rate. They help them from cultivation to marketing of the coconut. It is evident that the CPC are successful in value addition and improving/benefitting the farmers of Pollachi District. The CPC discussed are different from other companies either they are innovative or follow best practices. This ultimately helps the owner members/farmers to use the benefit out of the operations. The growth of the CPC is the result of better services provided to its members; hence, there are social and economic development among the members. The CPC directly work for the upliftment of the members who are in the rural areas. The development of these CPC and growth of such members results in the rural development.

Acronyms and Abbreviation:

CDP. Coconut Delvopment board

CPC: Coconut Producer Company


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