Extending the Agro-industry map of India to the North East Region: The Fruit Processing Plant at Punanamei-Mao, set up by Exotic Juices Limited
A breakthrough has been made in the establishment of the fruit processing plant which will bring about economic prosperity to the passion fruit farmers of the two border states of Manipur and Nagaland. This path breaking era, as in every similar situation, has been brought about by visionary leadership and tenacity of one person – L. Dikho Mao, the Managing Director of the Exotic Juices Limited and also presently Member of the National Horticulture Board.
The man and his vision
Dikho had a dream to do something extraordinary to bring development and progress to his villagers, the majority of which toiled in the paddy fields all year through without advancement in life. His mother, an illiterate but industrious mother of 9 and a progressive farmer was his inspiration. She looked after the children and their education from the income she got from raising vegetables and fruits.
While pursuing studies in Shillong, Mumbai and Delhi, the desire to bring changes in the lives of his people persistently haunted him. Reflecting on the situation back home in his native place, he pondered over how many of the youths could be absorbed in government jobs. He saw unemployment looming large in the days ahead for the youths who were in schools and colleges.
An optimist and a dreamer to the core, Dikho continued to nurture the seeds of the possible alternative. As a visionary, he became convinced that the alternative would lie in the field of self employment and entrepreneurship related to horticulture, which was lying unexploited. This spark of brilliance was in vast contrast to the all encompassing environment of backwardness that was the hallmark of the area and the tribal people of the region in general and of the state in particular.
When he finished his studies in 1987, he returned home and to get himself occupied, started to experiment with piggery, small scale units for candle making and manufacturing of ball pen refills. The problems faced in all these tentative ventures were great lessons for him – linkages, market, marketability, superior competitions, infrastructure, cost of production etc were found to be the disenabling factors. He continued exploring various avenues for exploiting the tremendous potential of the area and to enable the farmers to be able to stand on their own feet.
In order to carry the people along with him, Dikho organized youths of the area into a Society and got registered as the Good Samaritan Social Service Society on May 25, 1990 under the Registration of Societies Act 1860.
As he matured in the field, he embarked upon a plan to bring Tea cultivation to the area. Records of soil tests indicated that the land would yield high quality tea and the vast sloppy land in the Mao-Maram Sub-division could very well be converted into lush green tea garden. He started mobilizing the people of the area and organized them into an association called the Small Tea Growers Association. The next step was to obtain financial support and the Tea Board was approached.
Then came the bottleneck which refused to give way. Farmers were not willing to change. They were insecure about new things. Because of their fears they would not start before finance gets into their secure hands. The concern for immediate sustenance and consumption did not allow them to replace their traditional activity with a new one, even though the benefits were painstakingly made clear to them. Dikho also realized that without the tradition of tea cultivation among the people, the chances of failure could be high even if other inputs were made adequately available. Importing labour also was not practical for a new venture like this. Thus the plan for Tea had to be shelved. But this activity still remains in Dikho’s mind as a project for diversification, when it comes of age in the minds of the people.
The choice of passion fruit
Having learnt the hard way that his produce and products have to be unique in that there should not be stiff competition from other developed regions and the crop should not be a new one of which the people had no experience nor tradition, the eyes of the visionary strayed upon the hitherto unnoticed passion fruit – edulis passiflora, the purple variety. This fruit locally called “staball” obviously a corruption of a name given by an outsider and now christened with the indigenous name “liboshii” had been virtually a part of the wild vegetation of the area and its fruit had been casually plucked and savoured in the past. Some few people, who had exposures outside started making fruit juices by extracting the pulp from the rind and separating the seeds with a cloth strainer. They added sugar both for sweetening and as a preservative. They were bottled and used as household drinks.
With the years of tentative albeit uninformed choices behind him, which he took as learnings, Dikho applied his mind on the fruit. And the more thought he gave to it, he became all the more fascinated and chose it finally because of its exotic taste and appealing aroma which ensured its marketability. So in 1990 he initiated the organized cultivation of Passion Fruit by propagating from the indigenous plants.
He visited places that were growing other variety of passion fruit and compared the aroma, flavour and sugar content. He found that the purple variety had better aroma and flavour and suited his area the best. He found that a plant of passion fruit could very easily gives 10 kgs of fruit in a single season. With scientific and commercial cultivation, it could very well give double. He therefore started organic cultivation of passion fruit in 20 acres of land leased from villagers with support from the APEDA. He experimented planting the passion fruit plants on narrow contours of hill slopes and constructing trellis with G.I wires to support the plant and maximize sunshine and found the yield and quality improved considerably.
Building up an army of young people who were willing to accompany him on an unknown trail seemingly fraught with hazards, he began to create awareness among the farmers in the district. Through the support of the SFAC he conducted workshops and awareness camps on the benefit of cultivation of passion fruit with inputs on proper cultivation learnt from hands on experience. So much was his fascination with the idea that had finally crystallized into a programme, that he knew the names of farmers and locations of their small passion farms that were being taken up for the first time in distant villages.
The SFAC was approached and a pilot plant with a seed separator, boiler and plastic bottle blowing machine was sanctioned and installed. However the crushing of the rind (cover) had to be done manually and the pulp had again to be scooped out manually with spoons. This was tedious, time consuming and limited the volume that could be processed. The result was the rot of large quantity of fruits purchased from farmers that could be processed in time.
Dikho was now definite that a high capacity processing plant for passion fruit and citrus fruits would be a viable proposition. The prevailing international prices of passion fruit concentrates of 50 brix were very encouraging and there were very few countries in Latin America producing the fruit. Thus he started exploring ways and means to obtain finance for installation of a high tech and high capacity processing plant.
Installation of the Fruit Processing Plant
After a lot of groundwork, in March 2002, he was able to obtain the approval of the Small Farmers’ Agri-Business Consortium (SFAC) for supporting the setting up a state of the art fruit processing plant. Different Ministries and departments were then approached for jointly financing the project as an export oriented unit. The Plant was finally sanctioned with equity contribution from the SFAC, NEDFI and the Ministry of Food Processing Industries (MFPI) and Farmer’s contribution. The EXIM Bank of India, for the first time in the North East came forward with a term loan.
Despite the sanction, smooth Fund flow was something that was never to be in the entire course of the installation of the plant. It became the proverbial crying baby and there were tempting times when he could have thrown away the baby with the bath water. Dikho mobilized temporary resources to fill in financial gaps during critical times and relentlessly bulldozed the path for the import of plants and machineries from Italy and for its successful installation. The Machines were finally shipped from Italy and installed by engineers of the Penwalt India Limited, Mumbai, who traveled to distant Punanamei-Mao.
Due to the compulsion of statutory requirements relating to an industrial unit of such a scale and also to run the business on professional lines, a company was registered under the Companies Act in the name and style of the Exotic Juices Limited in January 2004. There are now 1261 farmers who are share holders of the Company. Thus from an NGO, the movement Dikho built up over the years graduated into a registered company.
After the installation of the Plant and Machinery and successful trial run, the plant was commissioned in October 2004 and has gone through the first processing season of during the period 21st June 2005 to 24 October 2005. The operation of the plant was commenced under the supervision of M/s Penwalt India Limited, Mumbai, the Indian Associate of M/S Bertuzzi, Italy and is now manned by 32 unemployed local youths, of which 8 in the skilled and technical category have been trained at Penwalt India Limited, Mumbai.
The processing plant has the capacity to process 2 tonnes of passion fruit per hour and given a minimum operation of 8 hours in a day and 200 working days annually, the total requirement of fruits is 3200 MT. The Company has signed an agreement with international export houses for buying concentrates produced by the plant.
The buying price of fruit from the farmers at the Factory is Rs 8/- per kg. This will ensure farmers assured income. To ensure adequate supply of raw materials for the plant, intensive promotional campaigns have been carried out in the past years in Senapati, Tamenglong, Ukhrul, Kohima and Phek Districts.
Ensuring adequate supply of raw materials
However due to delay in the completion of installation and commissioning of the plant which was earlier scheduled to be completed by March 2003, many passion fruit farmers incurred heavy losses in the season of 2003 as Dikho was not able to buy their produce owing to his heavy engagement with the installation work. A fruit processing unit run by the Nagaland State Government at the commercial centre of Dimapur could not absorb the fruits produced in his own farm leave alone the fruits of farmers who had taken up the activity under his guidance. The retailing price on highway outlet dipped down to Rs 3-4 and during the peak harvest period lots of fruits were spoilt before they could be disposed off. In the following year many farmers had discontinued tending their passion fruit farms as a result of which the production dropped down. In the season of 2005 when everything, manpower, machinery and market were in place, there was not enough fruit and only 150 MT could be procured and processed by the factory.
However from the meagre procurement of the first year, 7500 kgs of concentrates were extracted. As the total volume of concentrates was too low for export, Dikho took a decision to market it in the domestic market after concerting them to Ready to Serve (RTS) product. So the concentrates were sent to Baramati, Pune for conversion into Ready to Serve (RTS) products with Tetra Pak packaging. Air India and other institutions were contacted for market and positive responses were received.
While being totally immersed in the plant installation work and also the processing of fruit of the first ever fruit season of the plant, Dikho was aware that farmers would be temporarily discouraged due to his inability to buy whatever amount of fruits being produced by them for the time being pending completion of the installation works. This meant a reversal of the momentum for passion fruit cultivation that had slowly picked up under his initiative. Adequate availability of raw materials was most vital for the viable operation of the plant and in spite of his focus on the present ongoing installation works, Dikho made and gave time to encourage and facilitate extensive cultivation of the fruit.
He contacted the State Bank of India (SBI) for extending loan to passion fruit farmers under contract farming so as to enthuse the farmers to resume cultivation of the fruit. Besides, given the huge capacity of the processing plant it was felt necessary to have very extensive plantation beyond the pockets that were established on individual efforts so as to operate the machine to the optimum level. As on date around 700 farmers in Senapati district alone, covering about 800 acres have been thus financed by the SBI for cultivation of passion fruit. Similarly, 600 farmers of Peren district have also been financed by the SBI under a Memorandum of Understanding(MOU) entered into by the Indian Council of Agriculture Research, Union of Cooperative Societies, Peren district, the Exotic juices Limited and the State Bank of India, Regional Office, Dimapur. To further expand the passion fruit cultivation area in neighboring Nagaland state, 500 more farmers are being financed by the SBI in Phek (200) and Kohima (300) districts.
In order to lessen the loan burden on farmers, the Company then embarked upon sponsorship of farmers for the National Horticulture Board back-ended subsidy linked loans and has obtained letters of intent(LOIs) for more than 1000 farmers of Senapati, Tamenglong and Ukhrul District of Manipur and Phek, Kohima, Peren and Wokha districts of Nagaland. For the hill district of Ukhrul and Tamenglong, which are serviced by the United Bank of India (UBI), Dikho, representing the Exotic Juices Limited as Managing Director, has also entered into an MOU with the United Bank of India for financing of 500 farmers sponsored by the Company under the NHB subsidy linked scheme.
A Revolution through passion fruit cultivation
It may thus be seen that the initiative for promotion of passion fruit has now grown to a stage where bankers are also coming in extensive financing of a hitherto unknown activity across the two above mentioned states. Having projected the potential for employment and economic viability of the activity, Dikho was able to convince the Department of Horticulture, Government of India, to extend the Technology mission programme in 400 Ha in Senapati District alone for the cultivation of passion fruit. The Natural Resources Management Groups (NRMGs) formed under the aegis of IFAD took up passion fruit cultivation after an MOU was signed between IFAD and Dikho representing the Good Samaritan Social Service Society as the Chief Functionary, in which the NMRG were assured purchase of their passion fruits. The initiative spawned by the dreams and entrepreneurship of Dikho today has engaged thousands of educated unemployed youth and provided them with a remunerative alternative that would make agriculture/horticulture viable and respectable.
Thus going against all the negative factors of inadequate power availability, poor connectivity to market, transportation bottleneck due to isolated location, reluctance of bankers to extend loan in the area due to non admissibility of land as collateral security etc – the general condition prevailing in the area, the inherent weaknesses in terms of linkages the north east in general is disadvantaged with(in spite of the vast potential and viability of enterprises) which would normally disqualify any project proposal- the plant has now come to be. Here is a lesson that Financial Institutions, development agencies and government ministries may like to take note of. In spite of the apparent difficulties and unfavorable factors with reference to standard requirements, such enterprises are still possible in the distant north east.
Future Plans
In the current year experiment for the extraction of edible oil from passion fruit seeds and manufacturing of cattle feeds from rind (exterior cover) has been set as a priority so that no by-product goes waste. By taking up promotion of cultivation of Citrus – lemon and orange, on the lines of passion fruit, Dikho, plans in the immediate future to start the extraction of orange and lemon juices and concentrating them for packing and onward sale. Extraction of gooseberry (amla) pulp is also in the pipeline, given the abundance of raw materials in the Mao-Maram division and adjoining areas. Having gone through the whole process of extraction, conversion and packaging, the Company, with the passion for growth instilled by the Managing Director has its eyes on installation of a packaging plant in the near future which, whereby not only the factory’s product would be packed in the unit itself but also be a common facility for other similar enterprises in the Region.
Conclusion
The otherwise restless man fired by a dream saw through it all. The epitome of true entrepreneurship, the tenacity and single mindedness with which he pursued his dream bore fruit in the shape of the processing plant, the thousands of farmers now engaged in gainful self employment and the vista of other higher possibilities opening up. The epitome of true entrepreneurship. His tenacity bore fruit. Single mindedness. Risking all at times with high interest borrowings from local informal sources, daring all eventualities, accepting all temporary losses and unforeseen expenditures as part of the greater ultimate dream he went on relentlessly and achieved what, a few years earlier, could have been a wild imagination. Having disproved the notion that the North East in general and the hill areas of Manipur are not feasible for agro-industries, this success story will hopefully open the doors for similar enterprises in the region.
The article has been edited for purposes of publication
Courtesy: Exotic Juices Ltd.
