Where to Squeeze the Pineapple: A Fruit-Processing Location Decision
A cooperative federation plans a 20-tonne-per-day pineapple processing plant producing juice concentrate and slices. Three sites are shortlisted. Site A, Nalkata in Tripura, is 25 km from 4,000 ha of pineapple farms and 180 km from Agartala, with no rail link. Site B, Guwahati in Assam, is 520 km from the farms but close to a national highway, cold storage and an export container depot. Site C, Silchar in Assam, is 150 km from the farms and 320 km from Guwahati. Ripe pineapple loses about 3% of usable weight per day at ambient temperature and cannot be held for more than 48 hours. The finished product loses 65% of weight and is non-perishable. Farm-gate price is ₹12/kg; freight is ₹3.2 per tonne-km. Capital subsidy is 30% in Tripura and 15% in Assam; power costs ₹6.10/unit in Tripura and ₹7.40/unit in Assam; unskilled labour costs ₹350/day in Tripura and ₹420/day in Assam. The plant needs 250 workers. Guwahati accounts for 60% of the regional processed-fruit market.
1. Calculate the approximate raw-material assembly cost per tonne at each site and use it to compare raw-material orientation with market orientation.
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Assembly cost per tonne of raw fruit:
- Site A: 25 km × ₹3.2 = ₹80
- Site B: 520 km × ₹3.2 = ₹1,664
- Site C: 150 km × ₹3.2 = ₹480
Add weight loss. Pineapple loses 3% per day. A is same-day (about 0% loss), C is about one day (3%), B is two days (6%). To get 20 tonnes of usable fruit, B must load about 21.3 tonnes and C about 20.6 tonnes. The extra raw material at ₹12/kg adds roughly ₹15,600/day at B and ₹7,200/day at C; over 200 days this is large. The finished product is only 35% of raw weight, so the plant is strongly raw-material oriented: it is cheaper to move concentrate than fruit. That favours A or C. But B has the container depot and 60% of the market, which matters for a product that is non-perishable. The correct comparison is therefore not freight alone but freight plus loss plus market access.
2. Recommend a site and specify two safeguards that would make the choice work.
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Recommendation: Site A (Nalkata), with a marketing tie-up. Reasons:
- Perishability dominates: A avoids the 6% loss at B and the daily extra raw-material cost.
- A has the 30% capital subsidy, cheaper power and cheaper labour; the plant is labour-intensive (250 workers).
- The finished product is non-perishable and loses 65% of weight, so it can bear the 180 km road haul to Agartala and then to Guwahati or Bangladesh.
Safeguards: (i) contract farming with a minimum farm-gate price so growers do not switch when fresh-fruit prices spike; (ii) a same-day collection or cold-chain schedule, because the 48-hour limit is the binding constraint.
If the export market is the main target, Site C is the fallback: it is 150 km from farms and 320 km from Guwahati, with lower loss than B and better road access than A. Site B should be rejected for raw processing; it would make sense only for a reconstitution or packaging plant using concentrate.