A 22-worker cashew plant shut within two months for lack of raw nuts
A cashew processor in Ishwardi, Pabna, with 250 kg/day capacity had to stop production two months after opening because he could not find raw nuts; with limited capital he could not stock a year's supply.
In 2021 an entrepreneur set up a cashew processing plant in Ishwardi, Pabna. With 22 skilled workers, the plant had the capacity to prepare 250 kg of cashew a day. But just two months after it opened, he had to stop production because there was no supply of raw cashew.
He told The Daily Star that his capital is limited; he cannot buy raw cashew and keep a whole year's stock, and at that time raw cashew simply could not be found in the domestic market. Even with the plant shut, he still has to pay his permanent workers' wages and the plant's rent, so he is running at a loss.
At the same time, several other plants in Bandarban, Gazipur and Nilphamari closed or were on the way to closing. The report gave the reasons: exporters were sending raw cashew to India and Vietnam to get a 20 percent cash incentive, and because of the 37.5 percent import duty, bringing in raw cashew from abroad costs nearly twice as much per kg as the local nut. It takes 6 to 7 kg of raw nuts to make one kg of processed cashew, so the price of the raw material is the core calculation of this business.
Lessons
- 1.If you cannot fund a year's raw material during the harvest, a seasonal-input plant will sit idle much of the year.
- 2.Rent and permanent wages continue even when you are shut — keep cash to carry fixed costs for several months.
- 3.Policies like export incentives and import duties can drain your raw-material supply; check them before you start.
We published this with the person's permission, without revealing who they are.
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