Download PDF The Pre-feasibility Study of Potato Chips Industry Investment in Uzbekistan

 

1. Summary

Uzbekistan as a developing country with a population of over 30 million, is one of the important potential markets in Central Asia for potato chips. With the structure of Uzbekistan’s economy is changing as the shares of industry and services in GDP increase, the snack food market is on the rise. The proposed project involves setting up a potato chips industry in Uzbekistan which is equipped with automatic potato chips machines that can produce chips efficiently. In this paper, it mainly analysis the current snack food market, the potato market, the potato chips market, and the opportunities to set up a potato chips plant, and all these contribute to the whole overview of the food market of Uzbekistan.

2. Introduction to Potato Chips Industry

potato chips processing

Potato chips are the most popular savory snacks food in the world. And potatoes are a world food and second to rice in the world. Potato chips are one potato product loved by most people around the world because of their special crispy, flavor, smell, and taste.
The potato chips industry is a plant producing potato chips, frozen French fries, fried French fries with automatic potato chips machinery. The production of potato chips is of high efficiency and can save labor and reduce material and energy waste. For large-scale production, the factory is equipped with an automatic potato chips plant. And for small and middle scale production of potato chips, the factory is equipped with semi-automatic potato chips plant.

Uzbekistan is a Central Asia country, its climate is suitable for planting potatoes. Every year, it produces quantities of potatoes for local consumption and in the future, the government plans to enlarge the potato planting area. Besides that, Uzbekistan can also import fresh potatoes from neighboring countries, such as Russia at low prices as now Russia is in inflation.

Year
Area
(000ha)
Production
(000t)
Yield
(t/ha)
Prod’n at dehkan farms and households (%)
1991
40.0
351
8.7
45
1994
567
55
1995
45.8
440
9.6
67
1997
57.6
691
12.0
80
1998
54.6
691
12.6
72
1999
48.0
650
12.4
82
2000
51.3
731
14.2
80
2001
50.8
744
14.6
85
2002
48.9
777
14.3
88

3. Crucial Factors & Steps in Decision Making for Investment

3.1 SWOT Analysis

SWOT analysis mainly gives out the general situation of the whole potato chips market in Uzbekistan. It is quite important for the decision-making of investment.
STRENGTHS

  • The plentiful raw material, fresh potatoes
  • Cheap labor force
  • High automatic potato chips line
  • Government support for industry building
  • Less competition in the potato chips market

WEAKNESSES

  • Lack of storage facility.
  • The economy remains less developed.

OPPORTUNITIES

  • Market vacancy for potato chips
  • Increasing people’s income
  • The food processing industry is on the rise
  • People’s passion for western snacks food
  • The development of globalization

THREATS

  • Competition from increasing new brands launches into Uzbekistan.
  • Less developed technology.

3.2 Key Success Factors

A new brand entering a market always faces lots of uncertain factors. In order to gain success, some key success factors should be referred to. When a new brand enters a market, a heavy budget for promotion activities should be allocated. The marketing plan and promotion and advertisement are all needed.
The Key Success Factors are as follows:

  • Utmost care should be taken when selecting fresh materials
  • Reduce the waste during the production
  • Innovate new flavor potato chips to meet the market demand. Combine the diet style of Uzbekistan and western.
  • Keep the good quality of the products all the time.
  • Increase the production efficiency and increase the utilization of the raw material.

4. Uzbekistan Potato Production

fresh potatoesPotato is an important crop worldwide and potato is the third cash crop in Uzbekistan after cotton and wheat. Before independence, the consumed potatoes were imported from Russia and Belarus. In nowadays, potato production is increasing rapidly which can meet domestic consumption, as in Uzbekistan, there is about 4.3 billion ha of irrigated land, out of which 4.9% are occupied by potato, vegetable, and melon crops and the potato planting area will increase in the future.

In 2010, potato production increased by about 2 million tons with the increase in land area of potato planting. In January 2015, Uzbekistan said, the government made a plan that to optimize the cotton planting area, and set aside some farmland for planting vegetables and potatoes. With the planting area increasing and the introduction of good potato seeds, potato production will increase fast. Uzbekistan also plans to implement 391 food industry investments and build 2000 cold storage to increase the total amount of cold storage to 2 million tons.

Variety of Potatoes in Uzbekistan & Mineral Compositions of Potatoes
Variety
Iron (Fe mg/100g FW)
Zinc(Zn mg/100g FW)
Calcium(Ca mg/100g FW)
Phosphorus(P MG/100g FW)
Tuimli
0.31
0.38
5.59
68.00
Nevskiy
0.40
0.41
8.26
58.00
Umid
0.28
0.27
4.71
45.00
Picasso
0.37
0.31
8.85
53.00
Kondor
0.26
0.35
4.10
52.00
Diamant
0.24
0.42
6.00
54.50
Mondial
0.26
0.26
6.82
39.00
Kuroda
0.28
0.40
4.29
55.00
Arinda
0.38
0.44
5.51
47.00
Sante
0.33
0.38
9.26
50.00
Mean
0.31
0.36
6.34
52.15
CD
(P<0.05)
0.10
0.10
0.80
0.73
CV %
3.56
0.91
3.87
0.43

 

5. Potato Chips Market in Uzbekistan

5.1 Uzbekistan & Snack Food Industry

The food processing industry is one of the fastest developing fields of the economy in Uzbekistan. If the agricultural sector is reformed and trade barriers are eliminated, the market for potato chips will expand and Uzbekistan will have the potential to develop into a major food exporter to Central Asia, Russia, Eastern Europe.

5.2 Potato Chips Market

Uzbekistan as a developing country has a rising snacks food market. As for the potato chips market, there is a market vacancy as there are still few potato chips/crisps producers in Uzbekistan. With the development of globalization and the increasing of people’s living standards, and the passion for the western snacks food of Uzbekistan people, more and more people begin to try western snacks food. The potato chips begin to rise in Uzbekistan.
In 2007, a Russian company launched shacks production in Tashkent mainly producing a popular salted baked bread snack, potato chips, as Sibrisky Bereg is the manufacturer of the popular brands of baked bread snacks, potato chips, sunflower seeds. This launch of the company in Uzbekistan reduced at least 20% of the company’s cost.

5.3 Target Customers

uzbekistan_population_pyramidIn Uzbekistan, sweet snacks and savory snacks foods have different target customers according to people’s events. Potato chips/crisps are always eaten outside, such as cinema, going out, or as a school lunch. So potato chips/crisps are sold around streets, restaurants, cinema,s etc. As market research shows that 50% of kids, teens, and 18-24s people say they eat salty snack foods about fives times each week and some may eat more. Adults say they eat salty snacks 4.8 times each week. Therefore the target customers of potato chips/crisps can be as follows.

  • Young people
  • School children
  • Middle people who have a busy life

6. Potato chips production

The technological process flow is as follow:

  • Material Selection: Select fresh potatoes of high dry matter content, pure varieties, light eyes, regular shape, free from mildew rot, sprouting and insect infestations, and other phenomena, 50~70mm in diameter.
  • Potato Washing and Peeling: Use potato washing and peeling machine to remove the dirt, sand, and other debris. Feed 30~40kg each time, the peeling time is determined by the degree of freshness of material, usually 3~8min.Peeling time should not be too long or the potatoes will be excessively peeled.
  • Potato Slicing: Feed the material into the potato chips machine, feeding at a constant speed, the thickness should be 1~2mm.
  • Potato Chips Blanching: Use potato chips blanching machine. The potato slices should be immersed into water to blanch, in order to prevent browning in the air, and wash away the free starch of the surface to avoid the starch dissolving into the oil and shorten the life of frying oil.
  • Potato Chips De-watering: Use potato chips dehydration machine. Remove surface water, to avoid increasing the frying time and increase the oil content of the final product.
  • Potato Chips Frying: Use potato chips frying machine. The potato slices should be put into the oil at a constant speed. The oil temperature should be at 180~200℃. The chips should pass the frying pan in 2min. Palm oil is usually used in this process.
  • Fried Potato Chips De-oiling: Use potato chips de-oiling machine. After frying, use the de-oiling machine to remove the oil from the surface, and it can extend the shelf life of the product.
  • Potato Chips Flavoring: Use potato chips seasoning machine. After being flavored by the seasoning machine, different flavor of potato chips is made.
  • Potato Chips Weighing and Packaging: Use Nitrogen-Filled Potato Chips Packaging Machine. The product needs quantitative packaging, net content error <±10%. To extend the shelf life, it needs the use of aluminum-plastic composite bag vacuum-nitrogen packaging.

7. Conclusion

In Uzbekistan, the snacks food market is on the rise. With the development of globalization and people’s tendency to foreign diet, the potato chips market is increasing rapidly and full of potential. A new producer entering this market has a great chance of success.

 

Click to rate this product!
[Total: 7 Average: 5]