2010

Shreekant Nair

Synthite Industries Limited

27/10/2010

DEHYDRATED ONION PROJECT

I. Preliminary Report

Introduction:

Onion is one of the important vegetable crops grown in India. Onion is produced in several states

in India, with Maharashtra being the leading producer accounting for about one-fourth of the

country’s onion production. India largely produces red onions used as fresh produce in the

domestic market. White onions (used for dehydration) are grown on commercial scale only in the

states of Maharashtra and Gujarat and that too only in a few districts

Overview of onion production in country1 as on 19th July 2010

YearArea in '000

HA

Production in 1000

MT

2001-02 495.8 5252.1

2002-03 424.7 4209.5

2003-04 553.8 6267.6

2004-05 613.8 7760.6

2005-06 703.6 9432.5

2006-07 768 10847

2007-08 821 13900

2008-09 834 13565

STATE/UTs ONION

  A P

MAHARASHTRA 200.0 3146.0

KARNATAKA 141.3 2266.2

MADHYA PRADESH 57.3 952.3

BIHAR 53.0 972.0

RAJASTHAN 45.0 742.5

GUJARAT 43.4 1078.6

ANDHRA PRADESH 39.0 662.6

1http://www.nhb.gov.in/statistics/area-production-statistics.html

TAMIL NADU 35.3 339.7

The production trend of onion from 1991 to 2009 is:

In India, only fresh market onions are grown and that too mostly red onions. White onions are

grown on commercial scale in few states - Maharashtra, Gujarat, that too restricted too few

districts. Red onion is not suitable for dehydration and export primarily due to poor quality, low

productivity, low solids, low pungency level and high reducing sugars. Dehydrator onions are

mostly white, having high solids > 17%; even upto 22-26% total soluble solids (T.S.S.) in some

hybrids; comparatively low moisture content < 84%, globe shaped, having small root base with a

minimum 70 mm diameter. These onions usually have longer shelf-life, free from diseases.

Many white varieties and hybrids suitable for dehydration are cultivated in Europe and North-

America. But they are mostly long-day ones suitable for temperate and sub-tropical long-day

conditions. The white varieties grown in the state is approx 10% of the area under onions. Hence

the total area covered for the production of onion as of 2008-2009 is 83400 HA.

Application of dehydrated onion product:

1.Onion Flakes

Widely used in varied food preparations wherever alongwith onion flavor & taste, onion's appearance & texture is desired and can be easily used in salads & other preparations / servings after re-dehydration.2.Onion Chopped (Size: 3.0 - 5.0 mm)

Used in dry soups, mixes, specialty ethnic food preparations, canned/dried/frozen vegetable mixes, dry casserole mixes, stuffing mixes, food service & fast food and particularly when large onion pieces are desired.3.Onion Minced (Size: 1.0 - 3.0 mm)

Mainly used in preparation of soups, sauces, canned/dried/frozen foods, salad dressings, meat products and other food products whenever onion flavor or taste is required.4.Onion Granules (Size: 0.1 - 0.5 mm & 0.5 to 1.0 mm)

Particularly applied in Vegetables & Meat preparations, gravies, sauces, seasoning salad dressings, cheese, crackers etc.

5. OnionPowder

Free flowering powder is used in soups, sauces, seasoning, and meat products and suitable for varied

food preparations, particularly when strong onion flavor and taste is desired.

Major Market :

UK, Canada, Germany, Poland, Finland, Denmark, Australia, Spain, Italy, Greece, UAE, France,

Belgium, Netherlands, South Africa, Latvia, Brazil, Colombia, Chile, Argentina, Saudi Arabia,

Bahrain, Philippines, Korea, New Zealand, Japan, Singapore, Israel, South Africa, Russia, East

European countries and many more are the major countries where dehydrated onion products are

exported. According to Maharashtra State Agriculture Marketing Board the export value of onion

from last five years are :

Sr.

No.

Year Onion export from India (Qty. in Lakh

M.T.)

Export value in croresRs.

1 2004-2005 9.44 817.49

2 2005-2006 7.70 620.27

3 2006-2007 11.61 1135.42

4 2007-2008 11.01 1285.82

5 2008-2009 16.71 1816.14

Source: www.msamb.com

Companies in onion dehydration business.

Name State

Nature Exports Gujarat

Jain Irrigation Systems Ltd Maharashtra

Murutuza foods pvt ltd Gujarat

Pardes Dehydration Company Gujarat

ABS food technologies Gujarat

PoojaDehy Foods Pvt Ltd GujaratNatural Dehydrated Veg Pvt Ltd Gujarat

Indo Agro Dehy Foods Gujarat

Indraprastha Processing Limited Gujarat

Omega Green Foods Ltd Gujarat

Nilkanth Dehydration Pvt Ltd Gujarat

Darshan Foods Gujarat

KhanjooDheyFoodsPvt Ltd Gujarat

Janak Dehydration pvt limited Gujarat

MegharamPurkharam ltd Gujarat

Agarwal& company Gujarat

Balaji Food Products Nagpur

Horizon Dehyfoods Inc Gujarat

Raj food exporters Gujarat

R.K Dehydration Gujarat

Sagar Foods Private Ltd Gujarat

Ganesh Exports Gujarat

M.D Exports Gujarat

Haricon Exports Gujarat

Twin leaf foods Pvt Ltd Maharashtra

Valaki Exports Ltd Gujarat

Unique Dehydrates Limited Gujarat

AnugrahaImpex Gujarat

Jalram Group Of Industries Gujarat

Anmol dehydration pvt ltd Gujarat

A.B Enterprise Gujarat

Venus Trading Co Gujarat

Dolphin tradelinkpvt ltd Gujarat

General Corporation Gujarat

P.S Agro Products Gujarat

Sunrise International Gujarat

Harsh Food Quality Gujarat

Kisan dehydration Gujarat

Chhatariya Veg Expo Pvt Ltd Gujarat

Jupiter Trading Gujarat

Nurani Dehydration Pvt Ltd Gujarat

PanjetaniDehydtare Exports Gujarat

Orion Quality Foods Gujarat

Ocean Dehydration Gujarat

Natraj Agro & spices M.P

CEDEX Exporters Gujarat

Rahul Malt Pvt Ltd Rajasthan

Marvel Dehydrates Pvt Limited Gujarat

Jagdamba Dehydration Industries Gujarat

Rajdhani Dehydration Gujarat

All most 90 % of dehydrated onion business is carried out in Gujarat (Mahuva). There are approx. 47

onion dehydration companies in Mahuva which makes it India's number one town for De-hydration,

secondly it has a vast growth of onion, exported to other states of India, it is second largest in

production of onion in India after Pune in Maharashtra

Main competitor:

The leading company in dehydration business is Jain Systems Limited based in Jalgaon. The annual

turnover of this company for 2008-2009 was US $ 820 million in which agri-business contribution

was 400 Crores. Jain irrigation system accounts for 40% of dehydrated onion export from India.

They have presence all over the world with their agents and sales offices in U.K, Australia, Taiwan,

and Israel etc.

Process Flow of onion and garlic dehydration

Market Potential Analysis of dehydrated onion: U.S.A, Canada & European market

Consumption of Dehydrated Onion In

1. USA market:

In terms of both farm value and per person domestic consumption, onions are one of the top five

vegetables in the United States. In 2008, the average American consumed approximately 20

pounds of onions. Libya has the highest average consumption rate with approximately 66.8

pounds per year. The demand rapidly increased during the 1970s as the popularity of fast food

hamburger chains featuring onions on burgers and onion rings as side orders increased. In the

1980s, the booming popularity of salad bars increased onion demand. By the end of the decade,

demand continued to moderately increase as the growing popularity of pizza, pasta, salsa and

other ethnic cuisines increased. The booming economy of the 1990s propelled demand for away-

from-home foods, many of which feature onions.

Percent of consumers reporting onion consumption on any given day

Market Potential of dehydrated onion

Onions: Per capita availability (fresh weight equivalent)      Processed

Year Total Fresh Total Dehydrating

Pounds

1970 11.3 10.1 1.2 1.21971 12.2 10.7 1.5 1.51972 11.6 10.7 0.9 0.91973 11.4 10.2 1.2 1.21974 12.7 11.2 1.5 1.51975 12.5 10.5 2.0 2.01976 11.8 11.0 0.8 0.81977 12.4 11.1 1.3 1.31978 12.2 10.9 1.3 1.3

1979 13.4 11.4 1.9 1.91980 12.1 11.4 0.8 0.81981 11.6 10.7 0.8 0.81982 14.2 12.2 2.0 2.01983 13.8 12.2 1.7 1.71984 14.6 13.1 1.5 1.51985 15.2 13.6 1.6 1.61986 15.6 13.7 1.9 1.91987 14.9 13.4 1.5 1.51988 16.2 14.5 1.7 1.71989 16.4 14.8 1.6 1.61990 16.8 15.1 2.0 2.01991 16.6 15.7 1.6 1.61992 17.1 16.1 1.4 1.41993 18.1 17.2 2.0 2.01994 18.1 16.9 0.9 0.91995 18.2 17.8 1.3 1.31996 18.6 18.3 0.8 0.81997 19.2 18.8 0.9 0.91998 19.9 18.4 1.1 1.11999 20.7 18.5 2.3 2.32000 20.0 18.9 1.6 1.62001 19.9 18.5 1.0 1.02002 19.6 19.3 1.1 1.12003 21.2 19.5 1.8 1.82004 21.0 21.9 1.5 1.52005 23.1 20.9 1.1 1.12006 22.7 19.9 1.8 1.82007 21.0 21.6 1.0 1.02008 23.1 19.2 1.4 1.4

Source: USDA/Economic Research Service. Data last updated Feb. 1, 2010.

If we look at the per capita availability of fresh and dehydrated onion, we can clearly see that the

trend is increasing year by year. Currently the market of dehydrated onion in U.S.A in terms of

quantity is nearly 1.9 Lakh Ton and in terms of value is $ 391 Million

Per capita availability of dehydrated onion 1.4 pounds (0.63 kg)

Population of USA 310362000

Total market in terms of quantity 1.9 Lakh Tons

1 Kg FOB price of dehydrated onion (average)

$2

Total market in terms of value $ 391 Million

Market Potential

Quantity

Value

1.9 Lakh Tons

$ 391 Million

2. CANADA MARKET

The dry onion grown for processing market is

Year Production (‘000 T ) Value ( $ Dollar Million)

2004 8 2

2005 5 2

2006 X X

2007 8 2

2008 10 4

Source: Statistics Canada/ Agriculture and Agri-Food Canada Fall Survey

Dry onion import and export figures in Canada from 1995-2005

Year Import Export

 ‘000

Tons ‘000

Tons 1995 120.67 30.281996 114.86 37.891997 126.67 28.791998 127.84 491999 134.88 35.662000 133.69 36.782001 156.43 59.912002 157.53 57.382003 166.12 54.982004 150.58 61.382005 154.5 58.23

Source: UN Food & Agriculture stats.

3. Europe Market

Dry onion import and export figure in major European countries from 1995-2005

  IMPORT Volume in '000 Tons  Countries                      

Average

  1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005  

Germany303,8

40314,0

76233,6

63269,0

37256,3

50244,4

02269,5

00263,0

59276,4

97272,7

96227,4

58266,42

5

Belgium83,95

691,69

399,43

1107,1

68114,9

06117,9

81128,8

02144,4

35148,8

20158,3

33153,5

50122,64

3

France91,31

876,76

098,83

0116,0

6185,07

790,25

5122,9

05123,6

09117,5

30118,2

9395,22

6103,26

0Netherlands

92,576

84,920

70,928

106,042

118,928

101,527

82,000

107,528

83,930

84,455

87,840 92,789

Italy16,26

424,68

430,55

922,67

920,36

239,19

052,09

349,47

161,92

360,10

844,93

7 38,388

Portugal10,87

521,47

723,09

727,26

022,09

630,19

944,34

234,76

136,76

435,57

830,24

6 28,791

Sweden26,09

026,86

220,25

022,34

420,68

923,90

821,39

525,14

124,31

729,82

229,61

4 24,585

Spain30,00

823,48

433,13

642,43

519,97

226,79

335,98

135,93

020,43

550,48

027,84

8 31,500

Poland32,69

6 4,97336,95

975,82

322,24

020,78

933,70

043,82

554,93

551,06

418,45

5 35,951Austria 11,95 15,08 16,81 20,56 10,18 12,60 16,19 13,03 15,16 16,53 12,03 14,561

8 4 9 2 4 1 7 0 5 6 1

Slovenia 7,976 8,599 9,034 9,66724,75

218,40

2 9,758 9,45712,34

210,53

512,00

4 12,048

Hungary 385 83 8,687 7,195 1,44923,16

4 9,34410,28

522,51

513,61

310,83

1 9,777

Greece13,24

810,60

213,86

2 9,804 3,24715,32

215,86

422,91

929,63

223,09

2 9,183 15,161

Denmark 9,858 9,10211,32

9 9,96716,30

214,56

814,34

710,74

511,59

310,98

2 8,717 11,592

Finland 5,338 5,565 5,206 7,609 6,734 6,390 4,473 5,217 5,423 6,290 5,164 5,764Switzerland 7,879 3,336 3,063 8,047 5,268 4,334 6,325 7,665 5,713 9,706 3,297 5,876

Norway 3,665 1,406 1,719 4,891 4,262 4,220 5,035 5,453 4,178 3,404 3,114 3,759Luxembourg

--

--

--

--

-- 1,366 2,346 2,015 1,901 1,841 1,526 1,833

Total 82402

4. International Pricing Trend of Dry Onion Bulb

*cents/pound

                            Season Commodity

Year Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec.

average

Onions, 2006 8.53 8.19 7.60 15.20 16.30 17.80 14.90 13.30 12.40 10.40 11.40 16.60 16.10

dry bulb 2007 22.1

0 26.2

0 35.00 55.20 24.20 24.60 15.40 10.80 5.57 4.47 4.70 4.39 11.10

  2008 4.13 3.15 2.53 10.60 23.90 17.60 13.10 8.72 11.20 11.50 10.90 9.71 12.50

  2009 9.47 8.44 6.99 18.40 13.40 18.00 10.80 8.58 9.24 8.23 7.97 7.93 12.20

  2010 11.9

0 16.7

0 40.00 60.40 43.90 29.20 24.20            

The market for dehydrated vegetables is estimated at 900,000 tones. Onions and garlic account

for the biggest portion of this demand, 27% and 13%, respectively. The global market for

dehydrated onions is expected to grow at a compounded annual rate of 5% for the next four

years. The major markets for dehydrated onions are in the USA, Europe and Japan. Dehydrated

onions are widely used by manufacturers of soups, sauces, pizzas, ketchups, and fast-foods.

II. SWOT Analysis

Strengths

Established in market as quality

ingredient manufacturer

Weakness

Strong customer base, they will be

the potential customer for

dehydrated onion.

Our major strengths would lie in

producing quality products.

Opportunities

Highly untapped market hence huge

potential is there

Market is estimated at 243000 Tons

Threats

Competition faced by highly

established player Jain Irrigation

Systems Ltd whose current revenue

from this sector is 400 Cr.

Procuring raw material from the

belts of Maharashtra where Jain’s

have good control over farmers

through contract farming.

Conclusions:

The dehydrated onion market looks highly potential because the market is estimated at

243000 Tons.

There is a growing demand for dehydrated onion products in Western countries.

The dehydrated onion plant can be used for the dehydration of vegetables during off

season. Dehydrated garlic, carrot, peas, tomato are in great demand from Western

countries.

The location would be a major factor: Gujarat (Rajkot, Mahuva) and Maharashtra

(Nashik) seems to be the potential location due to easy availability of raw materials and

easy access to ports.

Source of Information:

www.jains.com

www.ers.usda.com

Horticulture board of India

NAFED: National Agriculture Cooperative Marketing Federation Of India Ltd

United Nations Food & Agriculture Stats

Maharashtra State Agriculture Marketing Board