Coconut-based Food Processing Plant

KSIDC

PROJECT PROFILE

ON

COCONUT-BASED FOOD PROCESSING PLANT

Prepared by:

Kerala State Industrial Development Corporation

Coconut-based Food Processing Plant

KSIDC

PROJECT PROFILE FOR COCONUT-BASED

FOOD PROCESSING PLANT

INTRODUCTION
India is the third largest coconut producing country in the world. Copra and coconut oil are
the two major products of the coconut processing industry. Nearly 60% of the total
production of nuts is utilized for food purposes and the rest goes for oil extraction. In spite of
the fact that our country has the necessary raw material to launch new product lines,
minimal progress has taken place in the application of modern technology for full utilisation
of various coconut products such as desiccated coconut and its powder, packed coconut
milk, coconut cream, coconut milk powder, tender coconut water, vinegar, nata-de-coco, etc.
Institutions like the Coconut Development Board, Kochi, have developed the required
technologies for production of value-added food products from coconut, which have good
commercial potential, both in domestic as well as export market. The Coconut-based Food
Processing Plant would be an integrated type delivering multiple products having great
export potential.
The following products are proposed to be manufactured in the Plant:
i)
ii)
iii)
iv)
v)

Virgin Coconut Oil

Spray Dried Coconut Milk Powder
Desiccated Coconut Powder
Coconut Vinegar
Nata-de-coco

Besides, the same plant is also capable of processing other coconut-based food products as
per demand, like Coconut Milk Cream, Packed Tender Coconut Water and Ordinary
Coconut Oil with no further addition of machinery.
MARKET
Being mass consumption items worldwide, the products listed above have a good export
market. For instance, about 40000 tonnes of desiccated coconut is manufactured annually
and used mainly by confectionery and biscuit industry. Similarly Virgin Coconut Oil (both
ordinary as well as organic) has a large global market in multiple sectors like food industry,
healthcare & cosmetics industry, etc. Similarly, being a non-synthetic food product, Coconut
Vinegar is widely preferred as table seasoning, or as ingredient in food processing.

Coconut-based Food Processing Plant

KSIDC

Nata-de-coco is most commonly sweetened as a candy or dessert, and can accompany many
things including pickles, drinks, ice cream, puddings and fruit mixes. Spray Dried Coconut
Milk Powder, though not very familiar to the Indian consumers, is a premium product in the
world market. It is used in place of fresh coconut milk for food preparation / beverages in
household and food industries. It can be reconstituted into coconut milk by diluting with
water.
Besides their nutritional qualities and multiple-usability, all the above products offer
additional advantages such as enhanced shelf life, less storage space and reduced packaging
costs.
MANUFACTURING PROCESS
1) Virgin Coconut Oil
Virgin Coconut Oil (VCO), said to be the mother of all oils, is extracted from fresh coconut
meat without any chemical processing. Coconut kernels are first disintegrated into small
pieces in a Disintegrator and then fed into a screw press for milk extraction. The oil is then
separated from the water using a mechanical centrifuge. The result is a clear coconut oil that
retains the distinct scent and taste of coconuts. Laboratory tests show that VCO is a very high
quality coconut oil, with a Lauric acid (having qualities similar to mothers milk) content of
47 - 52%. Besides, it is also rich in minerals, vitamins, antioxidants and is an excellent
nutraceutical.
2) Spray Dried Coconut Milk Powder
Coconuts are first de-husked and broken into halves. The split nuts are de-shelled to separate
the kernel. These two operations usually are done manually. Kernel is washed and then
blanched by immersing in hot water at 80C for 10 minutes. The next step is comminuting of
kernel into small gratings using a hammer mill. The gratings are subjected to pressing using
continuous screw press to extract the milk. The coconut milk thus obtained is filtered by
passing through a vibrating screen. The milk is then homogenised and mixed with
maltodextrins and other emulsifiers in an additive mixing tank. The resultant mixture is then
spray dried into a fine milk powder using a spray drier. The product is then packed in
Aluminum foil packets in various sizes as per customer requirement.
3) Desiccated Coconut Powder
The coconuts are de-husked and de-shelled. The brown portion of nuts, called Testa, is
removed by scrapping it off. About 10-15% of the kernel goes as paring by this process. The
de-shelled coconuts are then broken into pieces, washed properly and disintegrated into
powders of various grades. The powder is then dried in a drier. When powder is dried, it is
cooled and passed through a vibratory screen of various sieve sizes. The segregated material

Coconut-based Food Processing Plant

KSIDC

is packed in oil-proof, moisture-proof polythene lined plywood boxes of 25 Kg or packed in

poly bags of 250 gm, 500 gm, etc for retail sale.
4) Coconut Vinegar
Mature coconut water consisting of about 3% sugar is concentrated to 10% level by fortifying
with sugar. The fortified coconut water is then fermented by inoculating the solution with
yeast -- Saccharomyces cerviseae. After alcoholic fermentation for about 4 - 5 days, the clear
liquid is siphoned off and inoculated with mother vinegar containing Acetobacter bacteria.
The alcoholic ferment obtained is then fed into a vinegar generator where the feed is
uniformly sprayed over the surface of the porous packing medium (corn cobs). Here the
alcoholic ferment is oxidized to acetic acid. The product is run out from the packing medium
by gravity flow into the receiving vat from where it is recycled into the vinegar generator
and the process of acetification is repeated until a strength of 4% is attained. This acetified
vinegar is then aged before bottling.
5) Nata-de-coco
Nata-de-coco a cellulosic white to creamy yellow substance formed by the bacteria
Xylinium (a subspecies of Acetobacter Aceti), on the surface of sugar-enriched coconut
water. Coconut water is first strained and mixed with sugar and glacial acetic acid in
stipulated proportions. It is then boiled for 10 minutes and then cooled. The culture solution
is then added and the resultant mixture distributed in wide mouthed glass or plastic jars.
The jars are covered with a paper or a thin cloth to protect from dust. It is then kept aside
undisturbed for 2 - 3 weeks. After this period, the white jelly-like thick surface growth is
harvested, washed thoroughly to remove all the acids and sliced into cubes. It is then
immersed in flavoured sugar solution, again boiled and packed in glass jars or retortable
pouches, sterilized and sealed.
PROJECT PARAMETERS
Capacity
The processing capacity of the Coconut-based Food Processing Plant would be 50,000 nuts
and 200 Litres of mature coconut water per day (15 million coconuts/year).
Land
An extent of around 1 acre of dry land is required for setting up a Coconut-based Food
Processing Plant.
Location
The project is proposed to be located at KSIDCs Industrial Growth Centre at Kinalur,
Kozhikode District.

Coconut-based Food Processing Plant

KSIDC

Raw Material & Utilities

The Raw materials for the Plant are Green coconut and mature coconut water. Since coconut
water will be available from the nuts itself, there is no need to source it separately.
Plant & Machinery
The machinery required for the Coconut-based Food Processing Plant is listed below:
Sl.
No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32

Name of Machine
Hammer mill
Storage tanks for Coconut Oil, Milk and coconut water
Additive mixing tanks
Pasteurizer
Can seaming machine
Agro waste vertical boiler
Elevators
Vibrating sieving machine
Emulsifier
Volumetric filling machine
Horizontal rotary retort
Sterilization tank
Screw press
Coconut residue mixer
Homogenizer
Exhaust box
Spray drier
Storage bins
Screw Conveyor
Micro filter
Centrifuge
Feed Trough
Vinegar Acetifier
Receiving Trough
Wooden Storage Drum
Glass vessels & Jars
Sterilised bottles
Measuring Cups
Water bath
Refrigerator
Dehusking, Deshelling & Paring tools
Washing Tank with spray

Coconut-based Food Processing Plant

33
34
35
36

KSIDC

Hot dip Blanching Tank

Disintegrator with screens & Al trays
Hot air dryer with blower
Heat Sealing Machine

The total cost of machinery for a Plant processing 15 million coconuts/year is around Rs.212
Lakhs. Besides, technology support and details of machinery manufacturers are available
from the Coconut Development Board, Kochi.
Manpower
The total manpower requirement for the Plant would be around 40 numbers, including
technical personnel.
Cost of the Project
The total cost for setting up a Coconut-based Food Processing Plant having processing
capacity of 15 million coconuts/year, would be around Rs.500 Lakhs. This includes the cost
of 1 acre land. The project implementation period would be 12 months.
Project Components

Cost (Rs. Lakhs)

Land (1 acre) & Land Devpt

Building & Civil works (10,000 sq. ft factory)
Plant & Machinery
Utilities
Technical Know how
Misc. Fixed Assets
Preliminary & Pre-operative expenses
Contingencies
Margin money
Total Project Cost

50.00
87.00
212.00
5.00
5.00
12.00
26.00
16.00
87.00
500.00

Means of Finance

The proposed means of Finance for the Project is given below:

Equity
Promoters contribution
Subsidy from CDB/other agency
Unsecured Loan
Term Loan
KSIDC/KFC/Banks/FIs
Total Project Cost

150.00
50.00
50.00
250.00
500.00

Coconut-based Food Processing Plant

KSIDC

The Debt-Equity ratio is 1:1.

Sales Turnover
The Revenue at optimum utilisation (80% from the 3rd year onwards) would be around Rs.
1541 Lakhs.
FINANCIAL INDICATORS

The Profit after Tax is Rs.89 Lakhs.

The Break Even Point (BEP) for the project is 55%.
The Debt Equity Ratio (DER) for the project is 1:1
Average Debt Service Coverage Ratio (DSCR) is 2.47
The average Internal Rate of Return (IRR) for the project is 18%.

CONCLUSION
The Indian coconut industry has not been able to unleash its true potential mainly because of
its oil driven market. However by realizing the imperative need to become competitive, the
industry is now undergoing modernization, product diversification and byproduct
utilization and restructuring process. New vistas are being opened up in value addition and
product development due to the timely interventions and concerted efforts of organizations
like Coconut Development Board, Central Plantation Crops Research Institute, Central Food
Technological Research Institute, Defence Food Research Laboratory, National Institute for
Interdisciplinary Science & Technology (formerly Regional Research Laboratory).
As a result of these interventions, consumer demands for varied high value coconut products
are tremendously increasing and hence the domestic industries have become vibrant. This in
turn would help make the industry in becoming globally competitive.

For further details please contact Kerala State Industrial Development Corporation Ltd.

Disclaimer:
The findings contained in this Project Profile are based on the initial information collated through primary and secondary
research, which is indicative in nature. Reference herein to any specific commercial product, process, service by trade name,
trademark, manufacturer, or otherwise, does not constitute or imply its endorsement, recommendation, or favoring by
KSIDC or any entities thereof.