4.

1 HISTORICAL BACKGROUND OF EDIBLE OIL INDUSTRIES

IN VIRUDHUNAGAR DISTRICT

Virudhunagar is the head quarters of the Virudhunagar district which is an

important trading centre for cotton, chillies, groundnut, sesame oil, coriander seeds
and grains etc. There are wholesalers in sesame, groundnut oil, chillies etc. There is a
regulated market for cotton, chillies, groundnut and food grains. Earlier, the
manufacturers of oil had purchased the raw materials like groundnut kernels, sesame
seeds, neem seeds from the villages in and around Virudhunagar district and also
from other districts and other states.

In the early days of 20th century, Shri. Parangiri Nadar in Virudhunagar

installed “Nattu Chekku” (Village Ghanis) by which he extracted sesame oil. In due
course, he installed nearly 40 Nattu Chekkus to produce sesame oil and he marketed
the same in the nearby towns. In 1940, V.V.V. firm started the production of sesame
oil as a sole trader. Within three years, this firm had grown like a banyan tree and it
had earned name and fame in and around Virudhunagar. Regarding the production of
groundnut oil, in 1936, Shri. T.M.M. Rajakani Nadar for the first time in the history
of edible oil established one power driven rotary for the production of groundnut oil
under the brand name “Elephant”. Later he introduced two expellers with five
rotaries. These expellers were imported from Germany and England. The “Kurup”
brand expeller was very famous in those days.

In 1943, this firm VVV was split into two concerns namely VVS, and
V.V.Vanniaperumal Nadar and Sons. In 1986, V.V.Vanniaperumal Nadar and Sons
launched the sale of sesame oil under the brand name of “Idhayam”. These two
concerns flourished well and this induced other business people at Virudhunagar to
start the edible oil industry.

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 Regarding the form of organization, in Virudhunagar, most of the oil mill
owners are running their business on the basis of partnership, right from 1948. Very
rarely, some people are running their business as sole proprietorship. They have
started their business either by their own initiative or by inheriting the mill from the
ancestors. The reasons for converting sole trading concerns into partnership firm are
specially done in order to get tax benefit.

At present, in Virudhunagar district there are 166 oil mills. Out of which, 145
mills are producing non edible oils (castor, cotton seed, neem seed) and only 21 mills
are producing edible oils. Out of 21 edible oil mills, 250 units are rotaries, 16 units
are expeller and 7 units are refinery. Virudhunagar district comprises four main
towns in which edible oil mills are effectively functioning i.e., Virudhunagar,
Aruppukottai, Sattur and Rajapalayam. When compared to other towns,
Virudhunagar is the leading producing centre for edible oils. Edible oil mill owners
achieved a tremendous success with their popular brand. The famous brand names in
Virudhunagar district are Gopuram, Chavi, Hanuman, Venpura, VVS, Vanaj, Mantra,
Sugantham, Royal, Sekar & Sekar, Singaram and NSSS for groundnut oil, Idhayam,
Anantham, Pasumark, Kaveri, OMS super and VVS are very famous brands of
sesame oil. Chavi, Vanaj, Gopuram brand are also famous refined sunflower oil.
Yentop (MMN) PRS, Kalaiman, CM, Royal brands are very popular for refined palm
oil.

4.2 EDIBLE OIL MILLS IN VIRUDHUNAGAR DISTRICT

The profile of edible oil mills in Virudhunagar district are given in Table 4.1.

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 TABLE 4.1

CENTREWISE DISTRIBUTION OF EDIBLE OIL MILLS IN

VIRUDHUNAGAR DISTRICT

No. of Village Rotary Expeller Refinery

edible Ghanis (in units) (in units) (in units)
oil mills (in units)
Virudhunagar 11 10 170 12 6

Sattur 1 2 15 1 -

Aruppukottai 4 10 40 1 -

Rajapalayam 5 20 25 2 1

Total 21 42 250 16 7

Source: Primary data

Of the total of 21 oil mills in Virudhunagar district, there are 11 oil mills in
Virudhunagar, 1 oil mill in Sattur, 4 oil mills in Aruppukottai and 5 in Rajapalayam.
Out of the 42 village ghanis in the Virudhunagar district, 2 village ghains are in
Sattur, 10 are in Aruppukottai, 10 are in Virudhunagar and 20 are in Rajapalayam. Of
the total 250 rotaries in Virudhunagar district, there are 170 rotaries in Virudhunagar,
15 in Sattur, 40 in Aruppukottai and 25 in Rajapalayam. As far as expellers are
concerned, out of 16 in Virudhunagar district, 12 expellers are in Virudhunagar,
Aruppukottai and Sattur have one each and 2 in Rajapalayam. Out of the total 7
refineries in Virudhunagar district, there are 6 refinery units are functioning in
Virudhunagar and one in Rajapalayam.

To make the study more effective, all the 21 edible oil mill owners in
Virudhunagar district are interviewed. Information regarding processing technique

143
followed in the production of edible oil, methods of crushing edible oil, cost of
production involved in the production of edible oil etc. are gathered.

4.3 PRODUCTION OF OIL

4.3.1 Procurement of oil seeds

Since oil seeds production in Virudhunagar district is very limited compared

to the total requirements, the mill owners procure their requirements from outside the
districts like Tanjore, Salem, Madurai etc. At times, they procure from other states
like Andhra, Gujarat, Maharastra, Rajasthan, Karnataka etc.

The oil producers obtain their raw materials either directly from the farmers or
through market committees or from commission merchants. Most of the oil
manufacturers are purchasing the oil seeds just for their daily requirements and some
of them stock the oil seeds for one or two week requirements. While buying, they
consider the oil contents of the raw materials.

4.3.2 Processing of oil

The oil extraction process involves different sequential operations like

preparation of seeds, blending, crushing and lastly filtering and storing. The
development of refining and the procedure for purifying the pressed oil have helped
to produce odourless edible oil with a natural taste.

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4.3.3 Cleaning of seeds

Oil seeds undergo a number of processes before it is issued for crushing. In

order to bring uniformity in terms of quality of oil seeds, “Kalasal” process is carried
on. The seeds are dried and shifted by the specialized machine called “BUHLER”
which removes foreign materials, removes dust by pneumatic suction method and
separate stones, mud and chaff. Then it passes through as de-stoner which completely
removes the small stones in the seeds. Then the cleaned seeds pass through electro
static rollers which separate immatured seeds that contain sub standard oil. This helps
to reduce free fatty acid in the oil and also improve the taste and quality of the oil.
This also helps to avoid frothing of oil while cooking.

4.3.4 Crushing of seeds

In ancient days, people crushed oil seeds by “KALCHEKKU’ (village

Ghanis). Afterwards, with the result of technological development, the “ROTARY”
came into existence and later it gave way to the “EXPELLER”. But today, crushing
work is mainly done by modern expellers. In case of sesame oil, Palm Jaggery is
added for improving the quality and self life and also to avoid the bitter taste of the
oil. Generally, sesame oil producers add molasses (water fluid obtained from sugar
mill) in their process because palm jaggery is costlier than molasses. Boiler is used in
the expeller machine for cooking the oil seeds. With help of expellers, oil is squeezed
out and deposited in the tank which is placed in underground. Oil cake is the by-
product at the end of this process, and it is finally despatched for sale.

Oil deposited in the tank is unfiltered oil. This unfiltered oil is brought for
filtering through pipelines to obtain refined golden yellow oil.

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4.3.5 FFA Testing

Next to filtering, oil is brought for FFA (Free Fatty Acid) testing. As far as
Indian Sesame Bureau is concerned, the standard of FFA in edible oil is 3%. But
edible oil mill owners are maintaining 1.5%. If the fatty acid is more than 1.5%, it
will be sent for reprocessing. Later, it will be sent for packing. The packing may be
in pouch, bottle, cans in 1 liter, 5 liters, 500 ml, 200 ml and 50 ml, etc. After packing
process is over (fully automatic), labels will be pasted on the cans and bottles. The
label consists of company name, address, brand name, date, month of manufacturing,
price, batch number, expiry date of the product. After labelling and packing, oils will
be placed in boxes and finally it will be despatched as per orders received.

Figure 4.1 shows the manufacturing process of edible oils.

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 FIGURE 4.1

PROCESS FLOW CHART

Raw material receiving

Unloading of godown

Seed sample taken

Sand

Kalasal list Kalasal

Cleaned seeds
Fire Expeller
wood Boiler section
for crushing Palm
jaggery

Unfiltered oil Crushing wastage

FFA Off filtering

Reprocessing Packing

Pouches filling Bottle filling Tin, can filling

Labelling

Carton box packing

Going to godown

Order
Despatch receiving 147
4.4 EDIBLE OIL REFINING

Today, the oil extracted is again refined through established refinery

machinery. The process of edible oil refining in general comprises of degumming,
neutralisation, bleaching and deodorisation and winterisation. Chemical refining is
the traditional method, where by the free fatty acid of the crude oils are neutralised
with caustic soda. The resultant sodium soaps are removed by batch settling or by
means of centrifugal separators. The neutral oils are subsequently bleached and
deodorised. Refining is usually accomplished with the addition of sodium hydroxide
and temperature around 450 degrees. The refined oil is not considered edible without
further processing such as filtration, deodorisation and bleaching.

Refined oils are low in colour thinner and more susceptible to rancidity. The
degenerative diseases caused by rancid oils are undoubtedly brought about by the
destruction of vitamins E, P and A both in the oil itself and in the body. Oil
processing is so effective at making the end result free of odour and flavour that it is
possible for rancid oil to be “reclaimed” and sold for human consumption. One drop
on the tongue is sufficient to tell the story-rancidity is so bitingly, bitterly sharp as to
be unmistakable.

Virudhunagar district is very famous for edible oil refining. However, oil
production has slightly decreased due to the advent of various other oils like
sunflower oil, palm oil, rice bran oil and other varieties.

4.5 COMPARATIVE STUDY OF ROTARY AND EXPELLER

The edible oil is extracted by crushing oil seeds either by rotary or expellers.
The rotaries and expellers are established owing to different reasons. Using village

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ghanis is a highly time consuming process. Further the output in village ghanis is
rather less when compared to rotaries and expellers. Besides the oil produced by
village ghanis cannot be preserved for a long time. The cost of rotary varies from Rs.
40,000 to Rs. 50,000 and the cost of the expeller is Rs. 5,00,000 (including boiler).
By rotary, mill owners crush 10 bags of groundnut, sesame seed (80 kilogram per bag
per day). The power consumption of rotary (10 units per bag) is higher than expeller
(4 units per bag). Besides, the labour charges in rotary are 2.5 times greater than
expeller. Rotary is suitable only for small oil mill operators because they crush only
in small quantities.

Regarding the oil content in rotary, the oil content is higher and oil quality is
also better because it is not over heated. As far as expeller is concerned, it is
economical, but it is applied only to large size business. The initial investment in the
expeller is relatively higher when compared to village ghanis and rotaries. Because of
the greater production capacity, more investment is to be necessarily made in
providing higher drying yards, procurement of boilers, generators and other
necessaries. In most cases, the owners of expellers have to provide godown facilities
also. These are all additional expenditures for the owners of expellers. This is not to
give the impression that the expellers are relatively costlier because additional cost is
incurred only for increased volume of production.

4.6 OUT TURN OF OIL SEEDS

While crushing the oil seeds, the oil producers cannot expect the entire
product in the form of oil. There is some invisible loss while the seeds go through the
process. It is evident that the out turn of oil seed (oil and oil cake) does not remain
the same. It varies from one oil seed to other. The present study exhibits the out turn

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of three important oil seeds, which is widely used in Virudhunagar district to extract
edible oils.

4.6.1 Groundnut oil

While one crush groundnut kernels (80 kg bag) through expeller, they can get
out turn of groundnut oil of 31 kg to 33kg (say 39% to 41%). From 80 kg of
groundnut kernels, one can get 45 kg to 47 kg of oil cake. At the same time, while
one crush groundnut through rotary, he can get 30 kg to 32 kg (say 37 ½ % to 40%)
of groundnut oil as out turn, in which he obtains 46 kg to 48 kg of oil cake. Most
probably groundnut oil is used for cooking purpose either directly or refined.
Groundnut cake is a very fine natural manure for cultivable lands. Since the value of
the oil cake is comparatively very high, the farmers do not prefer groundnut cake as
manure.

4.6.2 Sesame oil

While extracting sesame oil through expeller, one can get 28 kg to 33 kg (say
37% to 44%) of sesame oil. Out of 75 kg of sesame seed, 35 kg to 40 kg represent
sesame oil cake. Through rotary crushing, one can get 27 ½ kg to 32 ½ kg of sesame
oil, in which oil seed out turn is 47 kg to 49 kg. Sesame oil is used for cooking
purpose, bathing and medicinal purposes. The sesame cake is mostly used as cattle
feed. This sesame oil cake is far better and more advisable as an agriculture manure,
than other chemical composite manures.

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4.6.3 Sunflower oil

Nearly 31 kg to 33 kg (say 31% to 34%) of sun flower oil is being extracted

through expellers, out of 100 kg of sun flower seed and nearly 64 kg to 66 kg of sun
flower cake is obtained as an out turn. The sun flower oil is well refined and
afterwards it is used as edible purposes. The sunflower oil cake is largely used in
poultry feed and cattle feed after solvent extraction process is over.

4.7 FACTORS INFLUENCING THE GROWTH OF EDIBLE OIL

MILLS IN VIRUDHUNAGAR DISTRICT

There are many factors which led to the growth of edible oil mills in
Virudhunagar district and the are discussed below:

4.7.1 Land

In the case of location of any business unit, various factors like land, labour,
finance, market and materials play an important role. Land required for erecting
rotary or expeller is limited, but it is available in plenty in Virudhunagar district. The
mill owners have access to any amount of vacant land for drying the kernels.

4.7.2 Labour

Oil mill owners require mainly unskilled labourers for oil extraction. The
supply of unskilled labour for oil extraction at Virudhunagar district is abundant. As
such the oil mill owners are flourishing in Virudhunagar District.

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4.7.3 Finance

Finance is the life blood of any business. As far as edible oil industry is
concerned, it is the capital intensive in the sense that it requires both block (fixed)
capital and working capital. In case of urgent needs to meet their working capital
requirements, they get their financial assistance from the bankers and financial
institutions.

4.7.4 Power

With regard to power, the oil mills are utilising only electricty power for
running their machines and a very few (Idhayam and Anantham brand sesame oil) in
Virudhunagar use wind mills from which they generate electricity.

4.7.5 Storage facilities

Usually in Virudhunagar, the oil merchants produce the oil in anticipation of

demand. Most of the mill owners are having their own godowns for stocking the raw
materials as well as finished products.

4.7.6 Transport facilities

The products from the oil extraction units are necessarily to be marketed
outside the place of production. The mode of transport is mainly through road and the
business people do prefer the lorries due to economy of time, quick and safe delivery
at cheaper freight. Many oil mill owners use their own vehicles for distribution.

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4.7.7 Tax exemption

Very recently, the Tamilnadu Government had announced the tax exemption
for edible oils. It is due to the tireless efforts taken by the oil merchants Association
throughout Tamilnadu to remove the tax on all edible oils.

4.7.8 Entrepreneurial skills

Of all the factors of production, entrepreneurship assumes greater importance.

The natural resources, infrastructural facilities, Government policies and
programmes, the location of any industries are influenced by the quality and
availability of human resources, particularly entrepreneurial skills. Virudhunagar
people are known for their entrepreneurial skills.

4.8 COST OF PRODUCTION OF EDIBLE OILS

The following cost sheet clearly indicates the average cost of production of
groundnut and sesame oil. From the cost, the oil producers add certain percentage of
margin and they finally set the selling price. The market rate of oil is fluctuating due
to non-availability of raw materials, import of palm oil at cheaper rate, Government
policy, changes in customs duty etc. Table 4.2 shows the cost of production of
sesame oil.

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 TABLE 4.2

STATEMENT SHOWING

COST OF PRODUCTION OF SESAME OIL

Particulars Amount Amount

(Rs.) (Rs.)

Raw materials

Cost of oil seeds at Rs. 50 per kg for 80 kg 4,000.00

Cost of palm jaggery at Rs. 30 per kg for 4 kg 120.00

Total 4,120.00

(ADD) Crushing charges 40.00

Labour 36.00

Depreciation for Machinery and buildings 6.00

Administrative expenses 6.00

Interest on capital 15.00

Sub total 103.00

Total 4,223.00

(LESS) Sale proceeds from oil cake Rs. 18 per 8,28.00

kg for 46 kg

Net cost of 32 kg oil 3,395.00

Therefore, the cost of 1 kg of oil is 3,395 / 32 = Rs. 106.09

Source: Secondary data

Administrative expenses like supervision, clerical expenses etc and rent for
the premises are not included because in almost all cases these operations are

154
managed by the proprietor or by his own people. Mostly, all the mill owners have
their business in their own premise. So rent for land and building is not taken into
account. Table 4.3 shows the cost of production of groundnut oil.

TABLE 4.3
STATEMENT SHOWING
COST OF PRODUCTION OF GROUNDNUT OIL
Particulars Amount Amount
(Rs.) (Rs.)
Cost of kernels at Rs. 32.50 for 80 kg 2,600.00

(ADD) Crushing charges 40.00

Labour 36.00

Depreciation for Machinery and buildings 3.00

Sub total 79.00

Total cost 2,679.00

Output

Out of 80 kg (2 kg goes to wastage only 32 kg of

oil is extracted, remaining 46 kg is oil cake)

(LESS) Sale proceeds from oil cake Rs. 18 per 8,28.00

kg for 46 kg (18 x 46)

Net cost of 32 kg oil 1,851.00

Therefore, the cost of 1 kg of oil is 1,851 / 32 = Rs. 57.84

Source: Secondary data

Virudhunagar district is famous for crushing groundnut and sesame oil. But as
far as the sunflower oil is concerned, the oil mill owners simply purchase sunflower
raw oil in parels from other states and they simply refine and bleach it and they pack
it into their own pouches at times and sell it in their own brands as refined sunflower

155
oil. So the crushing work of sunflower oil is not carried out in Virudhunagar district
because of two reasons.

The oil mill owners here are not very much interested in crushing the
sunflower seed since the oil content in sunflower is very less (31% to
34%) whereas the other seeds like sesame, groundnut possess 40 to
45% of oil.

Because of low oil content in sunflower seed and high crushing

charges, crushing is not remunerative to the oil mill owners. So they do
not prefer crushing sunflower.

The same is applied to palm oil. Virudhunagar district is not producing palm
oil because there is no production of palm seed. All the loose palm oil is imported
from Indonesia and Malaysia at Chennai and Tuticorin ports in tankers and they
refine it in the own mill and market it as refined palm oil in many places in and
around Virudhunagar. MMN, PRS, Kalaiman are the famous brands for palm oil in
Virudhunagar district.

So, in Virudhunagar district, mainly oil mill owners concentrate on production

of groundnut and sesame oil and other oils like sunflower, palm oil are refined in
their mills.

4.9 FRAMEWORK OF ANALYSIS

The trend and compound growth are computed for the production of edible
oils in Virudhunagar District by adopting the linear and semi-log trend models and
they are as given below:

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 Linear Trend Model

Y=a+bt

Semi-log Trend

Log Y= a+bt

Where,

Y = Variable

T= time variable and

a and b are parameters

Method of Least Squares has been followed. The compound growth rate was
calculated by using the following formula:

Compound Growth Rate (%) = (antilog b-1) x 100

Correlation is computed to find out the relationship between production and

trend values.

4.10 PRODUCTION OF SESAME OIL IN VIRUDHUNAGAR

Virudhunagar is famous for production of sesame oil. The popular sesame oil
manufacturing companies are Idhayam sesame oil, VVS sesame oil, Anandam
sesame oil, Pasumark sesame oil, Kaveri sesame oil and OMS super sesame oil.
Table 4.4 exhibits the production and trend values of sesame oil in Virudhunagar.

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 TABLE 4.4

PRODUCTION AND TREND VALUES OF SESAME OIL IN VIRUDHUNAGAR

Idhayam VVS Anantham Pasumark Kaveri OMS super

sesame oil sesame oil sesame oil sesame oil sesame oil sesame oil
Year Production Trend Production Trend
Production Trend Production Trend Production Trend Production Trend
(in tonnes) value (in tonnes) value
(in tonnes) value (in tonnes) value (in tonnes) value (in tonnes) value

1998-99 5500 6113.04 2200 2057.25 4800 5587.54 527 528.97 2230 2849.68 420 452.16
1999-00 6200 7032.52 2160 2065.55 5600 6346.42 540 558.91 2290 2792.64 400 429.68
2000-01 7050 7952 1860 2073.85 6700 7105.3 517 588.95 3900 2735.6 400 407.2
2001-02 8050 8871.48 1972 2082.15 7400 7864.18 620 618.79 3650 2678.56 390 384.72
2002-03 13260 9790.96 1854 2090.45 10410 8623.06 717 648.73 2200 2621.52 430 362.24
2003-04 12870 10710.44 2340 2098.75 11560 9381.94 726 678.67 1920 2564.48 370 339.76
2004-05 11760 11629.92 2250 2107.05 11575 10140.82 740 708.61 2400 2507.44 350 317.28
2005-06 11457 12544.40 2100 2115.35 9760 10899.7 778 738.5 2680 2450.4 300 294.8
2006-07 12700 13468.88 2060 2123.65 10670 11658.58 730 768.49 2560 2393.36 250 272.32
2007-08 13660 14388.36 2150 2131.95 11550 12714.46 742 798.43 2100 2336.32 200 249.84
Source: Primary data

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Idhayam sesame oil

There is a remarkable increase in the production of Idhayam brand sesame oil

during the period under study. The production was 5500 tonnes in the year 1998-99
and it was increased to 13660 tonnes in the year 2007-08. The production level is
almost doubled during the study period because of advertisement campaign given by
the company.

VVS sesame oil

There are ups and downs in the production of VVS brand sesame oil during
the period of study due to increase in the price of sesame. The highest production
(2340 tonnes) is depicted in the year 2003-04 and 1854 tonnes is a lowest production
in the year 2002-03. The trend projection indicates the increasing trend.

Anantham sesame oil

There is a remarkable increase in the production of Anantham sesame oil

during the period for 1998-99 to 2007-08 due to channels of distribution method
adopted by the company. But in the year 2005-06, the production was 9760 tonnes.
Afterwards, there is an increasing trend in the year 2006-07 and 2007-08. The steady
increasing trend is shown in trend projection.

Pasumark sesame oil

The production level of Pasumark sesame oil brand is 527 tonnes in the year
1998-99 and now it is increased to 742 tonnes in the year 2007-08. There are ups and
downs in the production level due to heavy competition from other oil companies.
The trend values showed a increasing trend of Pasumark sesame oil production.

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Kaveri sesame oil

The Kaveri brand sesame oil reflects a fluctuating trend in the production level
because of improper advertising methods. The trend values declined from each and
every year from 1998-99 to 2007-08. The highest trend (2849.68 tonnes) was
exhibited in the year 1998-99 and the trend has been declined in the year 2007-08.
(236.72 tonnes).

OMS Super sesame oil

There has been declined in the production of OMS super brand sesame oil
during the period form 1998-99 to 2007-08. The production was 420 tonnes in the
year 1997-98 and it was reduced to 200 tonnes in the year 2007-08. The main reason
for the decline is outdated production techniques. But in the year 2003-04, there is a
slight increase of 430 tonnes form 390 tonnes in the year 2001-02. The trend values
showed a decreasing trend of OMS super brand sesame oil production.

Table 4.5 presents the details about the compound growth rate of sesame oil in
Virudhunagar.

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 TABLE 4.5

COMPOUND GROWTH RATE OF SESAME OIL IN VIRUDHUNAGAR

(Linear Trend Idhayam VVS Sesame Anantham Pasumark Kaveri OMS super
coefficient) sesame oil oil sesame oil sesame oil sesame oil sesame oil

a 10250.7 2095 9002.5 66.37 2593 351

b 459.74 * 4.15 * 379.44 * 14.97 * 28.52 * -11.24 *

Correlation (r) 0.89 0.87 0.87 0.88 0.16 0.26

Adjusted R square 0.76 0.74 0.73 0.76 -0.097 -0.05

Compound Growth Rate 9.7 6.5 5.2 3.5 0.21 -0.9

Source: Primary data

*
indicates that the trend coefficient are significant at 5% level

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 Table 4.5 reveals that the trend coefficient of production of all sesame oil is
statistically significant at 5 per cent level. There is a high degree of positive
correlation between actual production line and estimated trend values. It implies that
on an average production of Idhayam sesame oil is high (459.74 tonnes) and OMS
super sesame oil is low (-11.24 tonnes). The compound growth rate is found to be
high at 9.7 tonnes (Idhayam sesame oil) per annum followed by VVS sesame oil
company (6.5 tonnes), Anantham sesame oil (5.2 tonnes), Pasumark sesame oil (3.5
tonnes), Kaveri sesame oil (0.21 tonnes) and OMS super sesame oil (0.21 tonnes).

4.11 PRODUCTION OF GROUNDNUT OIL IN VIRUDHUNAGAR

Like sesame oil, groundnut oil production is also famous in Virudhunagar. In

Virudhunagar, the popular groundnut oil manufacturing companies are Hanuman
groundnut oil, Gopuram groundnut oil, Chavi groundnut oil, Rojappu groundnut oil,
Vanaj groundnut oil and Mantra groundnut oil. Table 4.6 shows the production and
trend values of groundnut oil in Virudhunagar.

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 TABLE 4.6

PRODUCTION AND TREND VALUES OF GROUNDNUT OIL IN VIRUDHUNAGAR

Hanuman Gopuram Chavi Rojappu Vanaj Mantra

groundnut oil Groundnut oil groundnut oil groundnut oil groundnut oil groundnut oil
Year Production Trend Production Trend
Production Trend Production Trend Production Trend Production Trend
value value value value (in tonnes) values (in tonnes) values
(in tonnes) (in tonnes) (in tonnes) (in tonnes)

1998-99 216 530.45 200 215.31 380 335.26 240 183.6 370 398.43 - -
1999-00 459 513.55 210 194.93 195 324.98 195 211.18 410 370.89 - -
2000-01 510 496.65 162 174.55 342 314.7 197 238.7 345 343.35 - -
2001-02 607 479.75 157 154.17 362 304.42 218 266.22 315 315.81 - -
2002-03 750 462.85 148 133.79 274 294.14 30 293.74 290 288.27 - -
2003-04 327 445.95 160 113.41 315 283.86 310 321.26 280 260.73 300 33.94
2004-05 416 429.05 55 93.03 246 273.58 400 348.78 190 233.19 460 441.82
2005-06 329 412.15 48 72.65 327 263.3 405 376.3 195 205.65 510 545.70
2006-07 310 395.25 46 52.27 285 253.02 410 403.82 180 178.11 700 649.58
2007-08 260 378.35 50 30.89 164 242.74 400 431.34 170 150.57 890 73.46
Source: Primary data

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Hanuman groundnut oil

From 1998-99 to 2002-03, there was an increase in the production and from
2003-04 to 2007-08, the production has declined except in the year 2004-2005. In the
year 2002-03, there was a highest production of 750 tonnes and the lowest production
was shown in 260 tonnes in the year 2007-08. There is a decreasing trend in trend
projection because of high production cost.

Gopuram groundnut oil

There was a decrease in the production level from 2001-2007. From the year
2004-2005, the production level was reduced to below 100 tonnes because of labour
strikes and inefficient production techniques. The highest production was 210 tonnes
in the year 1999-00 and the lowest production was 46 tonnes in the year 2006-07.
The trend values showed a decreasing trend of production of Gopuram brand
groundnut oil.

Chavi groundnut oil

There is a fluctuating production of Chavi groundnut oil brand. The highest

production of 380 tonnes was exhibited in the year 1998-99 and the lowest
production was depicted in 164 tonnes in the year 2007-08 because supply is limited
only in local regions. The trend values of production indicate a decreasing trend of
Chavi groundnut oil brand.

Rojappu groundnut oil

There is remarkable increase in the production of Rojappu groundnut oil

during the period of study. The production was 240 tonnes in the year 1998-99 and it
was increased to 400 tonnes in the year 2007-08. When compared to 2006-07, the

164
production level was reduced by to 10 units. The increasing trend is shown in the
results i.e., the production level is doubled during the study period.

Vanaj groundut oil

The production level of Vanaj brand has been reduced from 1999-00. The
highest production of 410 tonnes was shown in the year 1999-00 an in the year 2007-
08, the production was 170 tonnes. In each and every year, the production level was
declined due to high transportation costs. The trend values show a decreasing trend
form 398.43 to 150.57.

Mantra groundnut oil

The production level of Mantra groundnut brand was increasing from 300
tonnes in the year 2003-04 to 890 tonnes in the year 2007-08. The increasing trend is
shown in the results i.e., the production level was doubled during the study period.
The main reason for the increasing trend is advertisement and publicity.

The computed results of trend and growth rates of the production of groundnut
oil in Virudhunagar during the period from 1998-99 to 2007-08 are tabulated in
Table 4.7.

165
 TABLE 4.7

COMPOUND GROWTH RATE OF GROUNDNUT OIL IN VIRUDHUNAGAR

Hanuman Gopuram Chavi Rojappu Vanaj Mantra

(Linear Trend
groundnut groundnut groundnut groundnut groundnut groundnut
coefficient) oil
oil oil oil oil oil

a 454.4 123.6 2.89 307.5 274.5 286

b -8.45 * -10.19* -5.139* 13.76* -13.77* 51.94*

Correlation (r) 0.306 0.929 0.44 0.915 0.96 0.93

Adjusted R square -0.02 0.85 0.09 0.817 0.92 0.89

Compound Growth Rate 4.04 3.78 6.28 6.09 5.48 4.95

Source: Primary data

*
indicates that the trend coefficients are significant at 5% level

166
 Table 4.7 reveals that the trend coefficient of production of all groundnut oil is
statistically significant at 5 per cent level. There is a high degree of positive
correlation between actual production and estimated trend values. It implies that on
an average production of Mantra groundnut oil is high (51.94 tonnes) and Gopuram
groundnut oil is low (-10.19 tonnes). The compound growth rate is found to be high
at 6.28 tonnes (Chavi groundnut oil) per annum followed by Rojappu groundnut oil
company (6.09 tonnes), Vanaj groundnut oil (5.48 tonnes), Mantra groundnut oil
(4.95 tonnes), Hanuman groundnut oil (4.04 tonnes) and Gopuram groundnut oil
(3.78 tonnes).

4.12 PRODUCTION OF GROUNDNUT OIL IN RAJAPALAYAM

The groundnut oil manufacturing companies in Rajapalayam are PSN brand,

Singaram brand, Sugantham brand, Royal brand and PTK brand. Table 4.8 shows the
production and trend values of groundnut oil in Rajapalayam.

167
 TABLE 4.8
PRODUCTION AND TREND VALUES OF GROUNDNUT OIL IN RAJAPALAYAM
PSN Singaram groundnut Sugantham Royal PTK
groundnut oil oil groundnut oil groundnut oil groundnut oil
Year
Production Production Production Production Production Trend
Trend Trend Trend Trend
(in tonnes) value (in tonnes) value (in tonnes) value (in tonnes) value (in tonnes) values

1998-99 800 669.97 725 684.7 120 129.61 675 660.2 650 643.78
1999-00 750 737.31 680 731.1 140 136.63 690 392.6 675 696.94
2000-01 850 804.65 850 777.5 160 143.65 875 735 820 750.1
2001-02 880 871.99 810 823.9 170 150.67 935 772.4 835 803.26
2002-03 900 939.33 840 870.3 167 157.69 800 809.8 850 856.42
2003-04 910 1006.67 970 916.7 185 164.71 925 847.2 900 909.58
2004-05 980 1074.01 825 963.1 190 171.73 735 884.6 850 962.74
2005-06 860 1141.35 975 1009.5 160 178.75 1025 922 900 1015.9
2006-07 1500 1208.69 1100 1055.9 170 185.77 1050 959.4 1150 1069.06
2007-08 1460 1276.03 1160 1102.3 200 192.79 1250 996.4 1200 1122.22
Source: Primary data

168
PSN groundnut oil

There are fluctuations in the production of groundnut oil by PSN brand. The
highest production was shown in the year 2006-07 (1500 tonnes) and the lowest
production was revealed in the year 1999-2000 (750 tonnes). The trend value of
production indicates an increasing trend of PSN groundnut oil brand due to good
administration and proper material control.

Singaram groundnut oil

There is a fluctuating position in the production of groundnut oil by Singaram

brand. But in the last three years from 2005-06 to 2007-08, the production was
increasing. The highest production (160 tonnes) is shown in the year 2007-08 and the
lowest production (680 tonnes) is shown in the year 1999-2000. The trend value of
the production of Singaram brand is increasing from 684.7 to 1102.3 because of the
balance of demand and supply.

Sugantham groundnut oil

The production level of ground nut oil by Sugantham brand has been
increasing except in the year 2001-02 and 2005-06. In the year 1997-98, the
production level is 120 tonnes and in the year 2007-08, the production level is 200
tonnes. The trend values show an increasing trend of Sugantham brand groundnut oil
production due to efficient distribution of goods in different regions.

Royal groundnut oil

During the period of study from 1998-99 to 2007-08, the production was
reduced in the year 2002-03 and 2004-05. In the remaining years, there is an increase

169
in the production. In the year 2007-08, the production was highest (1250 tonnes) and
in the year 1997-98, the production was lowest (675 tonnes). The trend values
showed an increasing trend of royal brand groundnut oil production due to efficient
planning of material control.

PTK groundnut oil

The production level of groundnut oil by PTK brand was increasing each and
every year except in the year 2004-05 (850 tonnes). In the year 1998-99, the
production was 650 tonnes and in the year 2007-08, the production was 1200 tonnes.
The increasing trend is shown in the results (i.e.,) the production level is doubled
during the study period because of effective purchase of quality raw material.

Table 4.9 depicts the computed results of trend and growth rates of the
production of groundnut oil in Rajapalayam during the period from 1998-99 to 2007-
08.

170
 TABLE 4.9

COMPOUND GROWTH RATE OF GROUNDNUT OIL IN RAJAPALAYAM

PSN Singaram Sugantham Royal PTN

Linear trend coefficient groundnut groundnut groundnut groundnut groundnut

oil oil oil oil oil

a 973 893.5 161.2 828.5 88.3

b 33.67* 23.20* 3.51* 18.70* 26.58*

Correlation (r) 0.79 0.905 0.79 0.807 0.915

Adjusted R square 0.571 0.797 0.57 0.609 0.817

Compound growth rate 7.57 6.86 5.15 6.91 7.3

Source: Primary data

*
indicates that the trend coefficient are statistically significant at 5 percent level

171
 Table 4.9 reveals that the trend coefficient of production of all groundnut oil is
statistically significant at 5 per cent level. There is a high degree of positive
correlation between actual production line and estimated trend values. It implies that
on an average production of PSN groundnut oil is high (33.67 tonnes) and
Sugantham groundnut oil is low (3.51 tonnes). The compound growth rate is found
to be high at 7.57 tonnes (PSN groundnut oil) per annum followed by PTN (7.3
tonnes), Royal groundnut oil company (6.91 tonnes), Singaram groundnut oil (6.86
tonnes) and Sugantham groundnut oil (5.15 tonnes).

4.13 PRDOUCTION OF GROUDNUT OIL IN ARUPPUKOTTAI

In Aruppukottai, the production of groundnut oil is only done and the

groundnut production companies are RMS brand, SST brand, CMC brand and NSSC
brand.

172
 TABLE 4.10

PRODUCTION AND TREND VALUES OF GROUNDNUT OIL IN ARUPPUKOTTAI

RMS SST CMC NSSC

groundnut oil groundnut oil groundnut oil groundnut oil
Year
Production Trend Production Trend Production Trend Production Trend
(in tonnes) values (in tonnes) values (in tonnes) values (in tonnes) values

1998-1999 500 440.38 310 316.54 120 115.96 120 123.49

1999-2000 525 506.74 325 327.42 129 125.68 137 132.07
2000-2001 610 573.1 300 338.3 126 135.4 140 140.65
2001-2002 580 639.46 410 349.18 134 145.12 160 149.23
2002-2003 690 705.82 360 360.06 160 154.84 154 157.81
2003-2004 780 772.18 370 370.94 171 164.56 160 166.39
2004-2005 670 838.54 380 381.82 184 174.28 170 174.97
2005-2006 875 904.9 390 392.7 178 184 180 183.55
2006-2007 1000 971.26 400 403.58 195 193.72 190 192.13
2007-2008 1160 1037.62 410 414.46 200 203.44 210 200.71
Source: Primary data

173
RMS groundnut oil

In the year 1998-99, the production was 500 tonnes and in the year 2007-08,
the production was 1160 tonnes. In the year, 2001-02, the production was reduced
from 610 tonnes (2000-01) to 580 tonnes. Similarly, in the year 2004-05, the
production was declined from 710 tonnes (2003-04) to 670 tonnes. The trend values
show an increasing trend from 440.38 to 1037.62 due to effective sales promotion
techniques.

SST groundnut oil

The production level of SST groundnut oil brand has been increasing all years
during the period of study except in the year 2000-01 (300 tonnes) and 2002-03 (360
tonnes). The lowest production was 310 tonnes in the year (1998-99) and the highest
production was 410 tonnes) in the year (2001-02 and 2007-08). The trend values
show an increasing trend of SST groundnut oil due to proper management strategies.

CMC groundnut oil

The production of groundnut oil by CMC brand was increasing each and every
year except in the year 2000-01 (126 tonnes) and 2005-06 (178 tonnes). In the year
1998-99, the production was 200 tonnes. The trend values of production indicate an
increasing trend of CMC brand groundnut oil because of updating latest production
techniques.

174
NSSC groundnut oil

In the year 1998-99, the production was 120 tonnes and in the year 2007-08,
the production was 210 tonnes. The production level was increasing except in the
year 2002-03 (154 tonnes) because of labour strike. The trend values showed an
increasing trend of NSSC brand groundnut oil production.

The computed results of trend and growth rates of the production of groundnut
in Aruppukottai during the period from 1998-99 to 2007-08 are tabulated in Table
4.11.

175
 TABLE 4.11

COMPOUND GROWTH RATE OF GROUNDNUT OIL IN ARUPPUKOTTAI

RMS SST CMC NSSC

Linear trend co-efficient
Groundnut oil groundnut oil groundnut oil groundnut oil

a 739 365.5 159.7 162.1

b 33.18* 5.44* 4.86* 4.29*

Correlation (r) 0.933 0.806 0.97 0.97

Adjusted R square 0.854 0.606 0.838 0.94

Compound growth rate 6.4 5.2 4.51 3.9

Source: Primary data

*
indicates that the trend coefficient are statistically significant at 5% level

176
 Table 4.11 reveals that the trend coefficient of production of all groundnut oil
is statistically significant at 5 per cent level. There is a high degree of positive
correlation between actual production line and estimated trend values. It implies that
on an average production of RMS groundnut oil is high (33.18 tonnes) and NSSC
groundnut oil is low (4.29 tonnes). The compound growth rate is found to be high at
6.4 tonnes (RMS groundnut oil) per annum followed by SST (5.2 tonnes), CMC
groundnut oil company (4.51 tonnes) and NSSC groundnut oil (3.9 tonnes).

4.14 PRODUCTION OF GROUNDNUT OIL IN SATTUR

In Sattur, the groundnut oil production is alone done and only one company is
engaged in the production of groundnut oil and the company is Jothi brand groundnut
oil company.

4.14.1 Production of groundnut oil by Jothi brand

The production of groundnut oil by Jothi brand and its trend values from
1998-99 to 2007-08 are presented in Table 4.12.

177
 TABLE 4.12

PRODUCTION AND TREND VALUES OF

GROUNDNUT OIL IN SATTUR

Production
Year Trend values
(in tonnes)

1998-1999 120 130.11

1999-2000 141 138.53

2000-2001 152 146.95

2001-2002 160 155.37

2002-2003 165 163.79

2003-2004 170 172.21

2004-2005 180 180.63

2005-2006 197 189.05

2006-2007 195 197.47

2007-2008 200 205.89

Source: Primary data

Table 4.12 reveals the information that the production of Jothi brand
groundnut oil has been increasing from 1998-99 to 2005-06. In the year 2006-07, the
production has reduced to 195 tonnes from 197 tonnes due to labour turnover. But in
the year 2007-08, it has increased to 200 tonnes. The trend values shows an
increasing trend from 130.11 to 205.89.

178
 The computed results of trend and compound growth are of the production of
groundnut oil by Jothi brand during the period from 1998-99 to 2007-08 are declared
in Table 4.13.

TABLE 4.13

COMPOUND GROWTH RATE OF

GROUNDNUT OIL IN SATTUR

Jothi brand groundnut oil

Values
(Linear trend co-efficient)

a 168

b 4.21*

Correlation (r) 0.98

Adjusted R square 0.95

Compound growth rate 2.23

Source: Primary data

*
indicates that the trend coefficient

are statistically significant at 5% level

Table 4.13 shows that the trend values for the production of Jothi brand
groundnut oil are statistically significant at 5 per cent level. It shows that on an
average production of Jothi brand groundnut oil has been increasing at the rate of
4.21 tonnes per annum. The compound growth rate is found to be high at 2.23 tonnes
per annum. There is a high degree of positive correlation between actual production
and estimated production trend values.

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4.15 SUMMARY

In Virudhunagar district, Virudhunagar, Rajapalayam, Aruppukottai, Sattur

towns carry out the production of sesame oil and groundnut oil. In Virudhunagar
alone, the production of sesame oil is undertaken. The groundnut oil production is
done in four towns. In Virudhunagar, Idhayam sesame oil manufacturing company
shows a high compound growth rate of 9.7 tonnes per annum and Chavi groundnut
oil manufacturing company has a high compound growth rate of 6.28 tonnes per
annum. In Rajapalayam, PSN groundnut oil manufacturing company has a greater
compound growth rate of 7.57 tonnes per annum. In Aruppukottai, RMS brand
groundnut manufacturers have a high compound growth rate of 6.4 tonnes per
annum. In Sattur, Jothi brand has a compound growth rate of 2.23 tonnes per annum.
Among four groundnut manufacturing towns, Virudhunagar (Chavi brand groundnut
company) has a bright future as it shows high compound growth rate.

180