NEW ISSUES OF CASHEW MARKET IN TAMILNADU (INDIA): PROCESS(2)

IMPORTANT SURFACE REQUIRED

The erection of a processing unit can require a very important surface to install all working sections and storage facilities.
• For a 5,000 tons processing unit:
• Storage capacities for the raw nuts = 2,500 – 3,000 m2
• Surface required for working section = 5,000 m2

The constitution of the stock of raw nuts and its financial implications
A cashew processing unit is supposed to be run on a whole year basis (although this assumption can be discussed).
A processor should buy a stock of raw nuts during the harvest season, from March to June, and is going to process it for at least 10-11 months. Each year, this processor must have a large amount of money for this stock purchase.
He can take the money on its own resources but, more often, he is going to look for banking facilities.
The credit line or revolving obtained from a local bank (or more probably from an international bank) is going to generate high financial costs.
For instance, the CFA 1 billion necessary for a 5,000 tons unit (with a unit price of CFA 200 / kg of raw nuts) can cost CFA 10 to 30 / kg of nuts or 50 to 150 millions for the whole year campaign.
Indian processors have not similar problems as they used to work on three different stocks, the nuts bought in India, then the nuts purchased in Western Africa and finally the stocks they acquire in Eastern Africa.