Potential value-added products and uses

Marketable coconut products and summary of representative project

profiles/opportunity
T. K. G. Ranasinghe
UNIDO Consultant and Managing Director, Techno Consult (PVT) Ltd, Colombo Sri Lanka
Introduction
The main commercial product from the coconut palm is copra. Coconut oil which is
derived from copra, has fetched poor prices in the international market during the past
two decades, owing to the gradual decline in vegetable oil prices in real terms. There
has been rapid increases in productivity in oil palm and soybean production, whilst
productivity in coconut production has stagnated or declined. This situation has
seriously affected the viability of coconut production. For those in remote islands of the
major coconut producers in Asia, and those in the Pacific, rising transport costs to
marketing centers have further eroded farm gate prices, and their economic survival is a
matter of great concern.
One way to overcome this problem is to diversify the coconut industry and process
other products for both the domestic and export markets. Products for the domestic
market would serve a useful purpose, as it could be an affordable source of food and
nutrition intake, or other non-food uses for the population. Products meant for the
export market would be able to generate high unit prices, due to their high value-added
properties.
Marketable coconut products
There are two broad categories of marketable products; value-added products from
existing major products, and newly emerging value-added products from basic
components of the fruit and other parts. These are listed below.
Products from existing major products
From coconut oil
Soap perfumed with locally extracted fragrances
Body oil perfumed with locally extracted fragrances
Hair oil perfumed with locally extracted fragrances
Such products are already commercially available in several Asian and Pacific countries.
The market is for hotels, tourists and local population. The industry is of small-scale and
simple technology, not warranting further consideration in this paper.
From desiccated coconut
Desiccated coconut in consumer packs
Sweetened coconut
Toasted coconut
Creamed coconut
The first product above does not need any further consideration as this is simple for the
manufacturer of desiccated coconut. Filling the consumer pack is done immediately after
processing, instead of filling the bulk pack. The next three products were originally
processed in the UK and USA from desiccated coconut imported in bulk packs. Some of the
desiccated coconut manufacturers (large and small-scale) in the Philippines and Sri Lanka
process these products in a separate unit adjacent to the main process area. A high level of
hygiene and professional management is necessary to meet the food standards of the
confectionery and bakery industry. Profiles/ opportunities for these latter three products are
given in Annex 1.
Newly emerging products
Kernel-based products
Coconut chips
Coconut chips or thin slices are a snack item. Originally, this snack item was made from
special cuts of desiccated coconut by toasting, salting and vacuum packing in cans. This is
still being done by desiccated coconut manufacturers for the local and export markets. They
are sold in tourist areas such as in Hawaii, and in the Caribbean. Annex 2 provides a profile
for coconut chips manufacture at the household level, which can be upgraded to a small-
scale industry. This scale of manufacture is appropriate for countries that do not have
desiccated coconut factories.
Coconut cream
This is being produced on a commercial scale since the early 1980s in several Asian and
Pacific countries. The local market in any coconut producing country is limited because of
the ready availability of fresh coconuts, and hence, this is mainly an export item. There are
several techniques developed for the manufacture of cream, and various capacities too.
The author has selected for this paper, a simple process without secondary extraction, but
with commercially existing unit operations. Annex 3 has the profile for coconut cream
manufacture. Five other commercially operating processes are described in the UNIDO/
APCC Coconut Processing Technology Information Documents (1980) - Part 5 titled,
'Domestic Coconut Food Processes'.
Coconut milk powder
This is a spray dried instant coconut milk powder, similar to dairy milk powder. It is packed
in triple laminate pouches and has a shelf life of 12 to 24 months. This product is being
made in the Philippines, Sri Lanka and Malaysia, and plans are underway to produce it in
Singapore and Indonesia. The extraction of coconut milk for conversion into powder is the
same as for coconut cream (milk). After adding certain ingredients, the coconut milk is
concentrated and spray dried as in dairy industry. Annex 4 provides a profile of the product
made in Sri Lanka by Nestle under the brand name 'Maggi'.
White soft coconut cheese
White soft cheese has been made using skim cow milk extended with coconut milk, at the
Institute of Food Science and Technology, University of Philippines, Los Baos, Laguna.
This is an important development as it is a new use for coconut, and the importation of cow
milk for making white soft cheese can be reduced. Finally, a low cost nutritious food can be
made available in rural coconut producing areas. Commercial production of this product
should be investigated and commenced if found viable. Annex 5 provides a profile for this
product.
Coconut yoghurt
Similarly, yoghurt has been made using skim cow milk extended with coconut milk, at the
Institute of Food Science and Technology, University of Philippines, Los Baos, Laguna.
This is a significant development as it is a new use for coconut, and the importation of cow
milk for making yoghurt can be reduced. Finally, a low cost nutritious food can be made
available in rural coconut producing areas. Commercial production of this product should be
investigated and commenced if found viable. Annex 6 provides a profile for this product.
Wet processing
Coconut oil is commercially obtained by crushing copra whereas, the traditional method still
existing in rural areas is to gently heat coconut milk to evaporate the water. Based on this
traditional wet process (starting with wet kernel), several technically feasible processes
have been developed since the 1920s. High quality oil and residue (or residue further
processed into protein and flour) are of edible grade, whilst copra cake is of animal food
grade. With the adverse effects of malnutrition from protein deficiency, and the worsening
food situation in developing countries, diversification of the coconut industry for high quality
oil, protein and other by-products for edible purposes has become increasingly more
important.
Since the 1970s, there have been five major developments in wet processing. These are
the processes by TPI, Hagenmaier, Alfa Laval, Fairchild and Biotropic. No
commercialization has taken place mainly for want of appropriate markets for the new
products. Markets need to be established. Critical factors that facilitate commercial viability
at selected locations need to be identified. Thereafter, prefeasibility and feasibility studies
have to be carried out before investments are made. All these activities have not taken
place. There appear to be too many uncertainties. An alternative approach is to put together
whatever technical information that is available, evaluate and select an appropriate
technology, and then set up a pilot plant at a suitable location with a view to giving the wet
process the last chance to diversify the coconut industry. This naturally requires grant funds
for the studies involved, investment and operating costs for about five years. I would like
this workshop to consider this idea. Annex 7 provides brief profiles for the five major wet
processes developed during the last 25 years.
Conclusions
The marketable coconut products derived from major products such as coconut oil and
desiccated coconut are already commercially produced in various countries. They can be
established in other areas if found to be viable. Some newly emerging products (chips,
cream, milk powder) have also been manufactured commercially in the last few years, and
can be established elsewhere if found to be viable. Other newly emerging products (soft
cheese, yoghurt, wet processing products - high quality oil, protein, flour, etc.) require
establishment of markets, and identification of favourable factors at various locations for
viability. These altogether need a new approach, by setting up pilot plants possibly with
grant funds.
References
Alfa Laval. 1990. Opportunities for future diversification of the coconut industry, by Leufstedt
G. Olagineux 45(11):505-510.
Banzon, J. A. 1978. Reconstitution of milk, using coconut milk and non-fat dry milk. PJCS
3(2):l-8.
Dulay, T. A. 1980. Laboratory Manual in Dairy Science, 135. Dairy Training and Research
Institute, U.P. Los Baos College, Laguna, Philippines. 99 pp.
Hagenmaier. 1980. Coconut Aqueous Processing. Revised 2
nd
edition. University of San
Carlos Publications, Cebu City, Philippines.
Kosikowski, F. 1971. Cheese and Fermented Cheese Products. 2
nd
edition. Edwards
Brothers Inc, Ann Arbor, Michigan, USA.
Sanchez, P. C. and E. Rasco. 1983. Coconut in white soft cheese. PJCS 8(1&2):18-24.
Sanchez, P. C. and E. Rasco. 1984. Coconut milk in yoghurt manufacture. PJCS 9(1&2):42-
50.
TPI. 1973. Development of a Wet Coconut Process Designed to Extract Protein and Oil
from Fresh Coconut (G 78). Natural Resources Institute, UK.
UNIDO/APCC. 1980. Coconut Processing Technology Information Documents - Part 5
"Domestic Coconut Food Processes". United Nations Industrial Development Organisation,
Vienna, Austria.
Woodroof, J. G. 1979. Coconuts: Production, Processing Products, 2
nd
edition. The AVI
Publishing Co. Inc., Westport, Connecticut.
Annex 1. Profiles/opportunities for sweetened coconut, toasted coconut and creamed
coconut
Source: Woodroof J. G. (1979)
Desiccated Sweetened Toasted Creamed
1 Product specifications (percent composition compared-with dc)
Moisture 2.5 11.5 0.5 1.5
Fat 66.0 39.0 46.5 65.8
coco solids not
fat
31.5 20.0 22.5 na
Added sugars 0 27.7 30.0 0
Propylerie
glycol
0 2.0 0 0
Salt 0 0.5 0.5 0
Stabilizer 0 0 0 3.0
2 Pack size 50 kg
100 lb 50,25,10 lb 50 lb na
3 Packing
material
4 ply kraft paper bag +
polyliner
corrugated box +
polyliner
corrugated box +
polyliner
na
4 Main uses topping marshmallows
chocolate pieces
biscuit sandwich filling cookie
dough

5 Process mix with powdered sugar,
propylene glycol
mix with powdered
sugar, dextrose salt
milled, stabilized chilled,
whipped with nitrogen

salt & moisture
6 Equipment tumbling mixer tumbling mixer,
endless belt oven
na
7 Equipment
cost
na na na
8 Capacity na na na
9 Project cost na na na
10 Return on
investment
na na na

Annex 2. Profile/opportunity for coconut chips
Source: UNIDO/APCC (1980)
1 Product
specifications
Made from pure coconut with added flavours. Moisture content 3.0% max
2 Pack size na
3 Packing
material
Cans or triple laminated pouches
4 Main uses Snack item
5 Process The coconuts are cracked and water drained out. The halves are baked in an oven at
176C for 15 to 30 minutes until the kernel is easily released from the shell. After
cooling, the kernel halves are pared to remove the testa, sliced with a potato peeler
and then soaked in solution of the desired flavour. The concentration and soaking time
for the flavours are; salt-2% solution for 2 hours, barbecue 4% solution for 2 hours,
and sugar-50% solution for 4 minutes. The proportion by weight of soaking solution to
sliced kernel is 2:1. After soaking, the solution is allowed to drain in a colander for 20
minutes. The slices are thinly spread on trays and placed in an oven preheated to
300C. Drying and toasting is about 30 minutes, when the chips turn golden brown
colour. After cooling for 10 minutes, it is packed warm inside triple laminated packs,
sealed and labelled.
6 Equipment Baking oven, potato peeler, mixing bowl, colander, ladle, baking trays.
7 Equipment
cost
US$ 600 (approx.)
8 Capacity 6 coconuts per batch of 1 kg chips
9 Project cost na
10 Return on
investment
na

Annex 3. Profile/opportunity for coconut cream
Source: Process selected by author based on commercially operating unit operations. Five
other processes described in UNIDO/APCC (1980).
1 Product
specifications
Made from pure coconut, with added water for processing, and approved emulsifier.
Fat content 18% minimum. (Products in the market have 10 to 80% whereas undiluted
cream has about 38%)
2 Pack size 400 ml
3 Packing
material
Cans internally lacquered or enamelled, usually 6 months shelf life for export.
4 Main uses Traditional food preparations such as meat, chicken, fish, seafood, sauces, salads,
curries, island baking, desserts, ice cream, cakes, candies, cookies, and cocktails etc.
5 Process Mature freshly husked coconuts are hatcheted, pared and cut open to release water,
and washed. The kernel is sterilized in a boiling water bath for 90 seconds, and
conveyed to a grinder/disintegrator. The ground kernel is placed in woven plastic bags
and pressed hydraulically to collect the cream in stainless steel vessels. The cream is
filtered and pumped into the pasteurization vessel and an approved
emulsifier/stabilizer is gradually added. Water is added (1:1) and stirred thoroughly
whilst heating with steam. Pasteurizing is done at 80C for 6 minutes, homogenized,
and filled into cans by machine, while still hot. Seamed cans are retorted at 121C (11
psi steam pressure) for 45 minutes, and cooled with water.
6 Equipment Wet section equipment, sterilizer, grinder, hydraulic press, pasteurizer, homogenizer,
filling machine, seamer, autoclave, etc.
7 Equipment
cost
US$ 400 000 (approx)
8 Capacity 14 000 coconuts per 8 hours - 8600 cans
9 Project cost US$ 600 000 (approx)
10 Return on
investment
30 to 40%

Annex 4. Profile/opportunity for coconut milk powder
Source: Specifications as appearing on the product.
1 Product
specifications (per
cent average
composition)
Varies but following applies to Maggi brand made in Sri Lanka by Nestle.
Ingredients: coconut milk solids, malto-dextrin, sodium caseinate, trisodium
phosphate. No preservatives and artificial flavours).
Coconut fat 64.8
Carbohydrates 25.2
Protein 6.8
Minerals (ash) 1.7
Moisture 1.5
Energy value 711 kcal/100 g
2 Pack size 300 g, equivalent to 7 coconuts
3 Packing material Triple laminated pouch with outer paper carton, 24 months shelf life.
4 Main uses Export and domestic (urban) market for traditional food preparations as with
coconut milk or cream (see Annex 3)
5 Process The extraction of coconut milk is as in coconut cream (milk) processing. To the
milk are added malto-dextrin, sodium caseinate and trisodium phosphate. These
additives, particularly sodium caseinate holds the fat when dried or else, fat
globules will be formed due to the very high fat content. The milk is spray dried
as in the dairy industry.
6 Equipment Wet section equipment, sterilizer grinder, hydraulic press, blending vessels,
spray drier, form fill and seal machine.
7 Equipment cost na
8 Capacity na
9 Project cost na
10 Return on
investment
na

Annex 5. Profile/opportunity for white soft coconut cheese
Sources: Banzon, J. A. (1978); Dulay, T. A. (1980); Sanchez and Rasco (1983)
1 Product
specifications
na (could be as for ordinary cheese)
2 Pack size na (could be as for ordinary cheese)
3 Packing material na (could be as for ordinary cheese)
4 Main uses Low-cost cheese (highly nutritious food) in rural coconut producing areas.
5 Process Husked coconuts were submerged in a 500 ppm solution of sodium hypochlorite for
1 hour and drained, split open, and grated. Grated kernel was hand pressed through
cheese cloth, without addition of water. Reconstitution of skim milk with coconut milk
was based on the beverage type formulation of Banzon (1978). The reconstituted
milk was processed into white soft cheese according to the method of Dulay (1980).
Previously boiled and cooled water (84%) at 72C is added to coconut milk with
constant stirring. At 60C, skim milk is added in small quantities, and cooled to 40C,
after which, 10% by weight of starter, and 0.1% by weight of aqueous solution of
25% calcium chloride are added. This is allowed to stand for 15 minutes and 3% by
weight of salt is added, filtered through cheese cloth, pasteurized at 72C for 5
minutes and cooled immediately to 10C using ice cold water. Now, 3% by weight of
rennet is added, stirred, and left undisturbed for 30 minutes for coagulation. Cut the
curd, mix for 5 minutes and pour into cheese moulds. The cheese is allowed to
remain overnight at 5C, and packed. This was developed by Sanchez and Rasco
(1983).
6 Equipment na
7 Equipment cost
and other
information
na

Annex 6. Profile/opportunity for coconut yoghurt
Sources: Banzon, J. A. (1978); Kosikowski, F. (1971); Sanchez and Rasco (1984)
1 Product
specifications
na (important parameters such as pH, acidity as % lactic acid, and viscosity are
considered comparable to high quality yoghurt).
2 Pack size na (could be as for ordinary yoghurt)
3 Packing
material
na (could be as for ordinary yoghurt)
4 Main uses Low cost yoghurt (highly nutritious food) in rural coconut producing areas.
5 Process Reconstitution of non-fat dry milk was based on the beverage type reconstituted milk
formula of Banzon (1978). In this formulation, coconut milk provides 100% of fat and
the main source of protein is non-fat dry milk. The coconut milk contributes 7.0% of the
weight of the reconstituted milk, the non-fat dry milk 9.0%, and the balance of 84% is
water. In the preparation of yoghurt, the method of Kosikowski (1971) was modified by
substituting coconut milk in the formulation as above. The milk base was pasteurized
at 85C for 20 minutes, and innoculated with 1.5% S. thermophilus culture 30 minutes
prior to the addition of 1.5% L. bulgaricus. This development for the manufacture of
yoghurt is based on the work of Sanchez and Rasco (1984).
6 Equipment na
7 Equipment
cost
na
8 Capacity na
9 Project cost na
10 Return on
investment
na

Annex 7. Profile/opportunity for coconut wet processing
Sources: TPI (1973); Hagenmaier (1980); Alfa Laval (1990)
PROCESS
TPI Hagenmaier Alfalaval Fairchild
1
Biotropic
2

1 Products oil protein or
other
oil protein skim milk c
water ORS
3

oil cream c
water
oil meal
products
oil other
2 Main uses Direct use of high quality oil in food applications without refining saves costs and saves
vitamin E. Protein to enrich bread and other food, particularly in rural areas.
3 Equipment Food grade (stainless steel) typically dairy standard, and continuous processing. Some
have aseptic packaging and UHT.
4 Equipment
cost
About US$ 400 000 to 1 000 000
5 Capacity na
6 Project cost na
7 Return on
investment
na
1
E Bradley Fairchild Ltd. P O Box 21252, Seattle, WA 98111-3252, USA.
2
Biotropic, Parc Agropolis - Bat 1 et. 2, 2214 bd de la Lironde, 34980 Montferrier - sur - Lez,
France.
3
Oral rehydration solution.
On-farm production and utilization of coconut products
P.K. Thampan
President, Peekay Tree Crops Development Foundation, Kerala, India
Introduction
Conversion of coconut into copra is the most popular on-farm processing activity in the
coconut growing countries. While it is possible to produce diverse products from coconut,
the farmers, in general, have not adopted the known technologies at the farm level. The
small size of coconut farms, lack of appropriate technologies for small-scale processing and
inadequate marketing support are the major factors which stand in the way of efficient
utilization of coconut products at the primary level. Nevertheless, it is possible to promote
on-farm utilization of selected products, the processing of which does not require the
application of complex technologies.
Among the varied products of coconut palm, a few need no processing but only marketing
support whereas the others have to be processed before reaching the consumers. As most
of the products and by-products are amenable to primary processing at the farm level, it is
feasible even for small farmers to undertake the required processing. When such activities
become popular, the coconut-based economy of millions of small-scale farmers as well as
the competitive strength of the coconut industry would show perceptible improvement.
In some coconut growing countries the on-farm utilization of products like husk, midribs,
inflorescence sap etc. has become very popular in which the family members are directly
involved in deriving socioeconomic benefits through cooperative endeavour. Institutional
support is provided in some countries to promote the marketing of tender coconut. Similar
support is also available in the production and marketing of edible quality dried kernel and
other miscellaneous products of daily use. In this paper the discussion is focused on
products other than milling copra which are amenable to on-farm processing and local
marketing both at the individual and community levels as demonstrated in some of the
major coconut growing countries.
Utilization of husk
The utilization of coconut husk for conversion into coir and coir products is yet to develop on
a commercial scale in many coconut growing countries. In India and Sri Lanka the
production of coir and coir products is well developed and the related industrial activities
provide income and employment to coconut farmers and others. In Kerala, India, coir
industry sustains the livelihood security of nearly half a million people with women workers
forming the predominant group. The coir products enjoy both domestic and export demand
and in most cases the coconut farmers are directly involved in the processing at the primary
stage. With proper utilization of coconut husk, the coconut farmers in all the producing
countries could augment the farm level income and employment.
In Kerala both the farmers and private processors are associated with the coir industry. The
farmers make use of the husks becoming available at each harvest for retting and fibre
extraction. It is also a practice to dispose of the husks to private processors either before or
after retting. Likewise, some farmers have on-farm facilities for spinning the fibre into yarn
while others dispose of the fibre extracted after retting to private processors who in turn
produce coir yarn in yards maintained by them. The coir yarn produced in the villages is
procured by private traders for selling at terminal markets within and outside the state. The
coir yarn as well as fibre traded at different levels are further processed into different coir
products in the industrial units operating mainly in the private sector.
To safeguard the interests of the workers and to sustain a viable coir industry, cooperative
endeavour has been promoted in Kerala. A large number of coir cooperatives has been
organized at the primary level with facilities for retting husk, fibre extraction and spinning.
The primary coir cooperatives are affiliated to state level Federation which has marketing
network for domestic marketing and for export trade. In the state, 14 important varieties of
coir yarn are being produced for further processing and marketing. The principal end uses
of coir yarn are for the manufacture of mattings, rugs, carpets, cordages, ropes, fishing
nets, etc. The fibre, especially that obtained from unretted husk, finds many uses in the
making of utility articles and in the transport industry.
In places where labour is scarce, it is possible to introduce mechanical devices for the
extraction of fibre and for the spinning of coir yarn. While retted husks are used for manual
extraction of fibre, both unretted and partially retted husks are utilized in mechanical
extraction. Likewise, spinning of coir yarn is done both manually and mechanically. Hand
spinning is the most common method of manual operation which is done at the household
level by women during their leisure time. One worker produces 2 to 2.5 kg of 2-ply yarn per
day with each piece measuring 6 to 18 m long. The hand spun yarn is soft and has
uniformity of twist and thickness. Wheel spinning and machine spinning are the mechanical
methods adopted for the making of coir yarn. In the traditional mechanical spinning three
workers are required to operate the spinning unit at a time. The normal output is 1500 m to
1600 m of coir yarn per day. The motorized spinning device is more efficient which requires
only one operator with an output of 2400m of coir yarn in a shift of 8 hours. Depending on
the local situation any spinning method could be adopted.
The production of coir fibre and other coir products offers possibilities for augmenting the
income of coconut farmers. Products such as fibre, coir yarn, ropes, etc. could be made at
the household and community levels, and marketed locally. When coir products are
manufactured and marketed on an organized scale, the coconut based economy of the
producing countries will show improvement and stability.
Consumer articles from mid-ribs of coconut leaflets
The mid-ribs of coconut leaflets are being utilized on a commercial scale for making brooms
and toothpicks in some parts of India. While the preliminary processing is done as a
household activity of coconut farmers, the final shaping and marketing of the products are
handled at the community level. The products are brought to the assembling markets,
shaped to serve the different purposes and marketed through established channels by
farmers' cooperatives or other local organizations. Though the utilization of mid-ribs is not a
widespread commercial activity, some of the traditional centres of production are reputed for
the bulk supplies of brooms in the country.
In India, the demand for brooms made from mid-ribs of coconut leaflets is on the increase
especially for the regular sweeping and cleaning work in cities and other municipal areas. At
present, these brooms are in short supply mainly because the production in households is
usually meant for the domestic purpose only. The only alternative to coconut brooms for
large-scale cleaning purpose is rattan and/or bamboo-based brooms. The alternatives are
now not preferred because of the dwindling natural resources as a result of habitat
destruction and over exploitation. In this situation the utilization of the midribs of coconut
leaflets on a commercial scale is an attractive proposition to augment the farm level
economy of coconut farmers. The farm level production has to be supported at the
community level by creating facilities like assembling centres and marketing networks for
local as well as external sales. Coconut-based brooms and tooth picks have the potential to
become preferred consumer products globally.
Coconut sugar
The production of coconut sugar is a traditional processing activity involving no
sophisticated technology. In countries where it has developed, the production an d
marketing are well organized in the cooperative sector. In India the processing is
concentrated in some parts of Tamil Nadu state where it is a household activity. In most
cases, the gardens are leased out for tapping to self-employed workers who along with their
families reside in the respective farms during the lease period which normally does not
exceed one year. One tapper usually covers 50-60 short and medium statured palms daily
both in the morning and evening. The processing of sap into sugar is handled and
controlled by women members of the respective families up to the marketing stage. The
sugar produced in each family is procured by the primary sugar marketing societies which
operate in the area. The primary societies market the produce through the cooperative
marketing Federation to which they are affiliated. The produce is sold by the Federation in
public auction at regular intervals.
Apart from the solid palm sugar, another useful product that is produced at the farm level in
some parts of India is treacle or sugar syrup. The syrup, a golden coloured product, is a
delicacy and is in demand for use as a bread spread in place of fruit jam and as a
sweetening agent for special breakfast dishes.
Sugar production from coconut palm is labour intensive requiring not much of capital
investment. At the community and household levels it could generate additional income and
employment to a sizeable section of the rural population in the coconut growing countries. It
is possible to provide training facilities to selected village youth for palm climbing, tapping
and manufacture of sugar. When the production is organized in the cooperative sector,
adequate quality control could be enforced at different stages such as collection of sap,
assembling, boiling and conversion into pellets, cubes, crystalline sugar, etc. Apex
organizations may undertake procurement of sugar from the production centres and its
packaging and marketing in the domestic and export markets.
The experience in countries like India, Indonesia, Thailand, etc. is that assigning palms for
sugar production is much more profitable to the farmers than allowing to yield nuts. In
Indonesia farmers are encouraged to leave 30% of the palms for sugar production. It is
possible to assign trees both for tapping and nut production. This is done by tapping only
alternate spathes or by restricting tapping to six months so that fruit production is possible
during the remaining months of the year. In the Philippines, it has been shown that the
same spathe could be used for the production of both sap and nut by tapping only half the
length and leaving the lower half for nut production. The observations made in India and
other countries show that 20-25% of the palms in each garden could be earmarked for
tapping without causing significant reduction in the annual production of coconut from such
gardens.
On-farm production of sugar from coconut sap has both social and economic advantages.
Under normal farming conditions, 50-60 coconut palms do not require more than 90 man-
days for annual maintenance. On the other hand, the same number of palms when utilized
for tapping and sugar production will provide full time employment to one tapper and one or
two women members of the family. Economically, palms assigned to tapping generate 20-
25% more income than when they are maintained for nut production besides producing
higher yield during the post tapping period. In general, the farmers set apart only medium
yielding palms for tapping. In India, the average yield of toddy from such palms is around
300 litres over a tapping period of six months. There are palms which have the intrinsic
ability to yield much more quantity of toddy giving an average sugar recovery of 15-16%.
Such palms could be identified and utilized for evolving special types for tapping purposes.
Utilization of coconut water
In all the coconut growing countries vinegar is commonly used as a food preservative. In
many household food preparations, vinegar forms an essential additive. As such, it has an
expanding consumer demand. In the households, as well as in the organized food sector,
the preference is for natural vinegar. Utilization of coconut water for vinegar production,
therefore, has potential for development as a profitable processing venture.
The processing could be promoted both at the household and community levels. Low cost
technology for the quick processing of coconut water into vinegar is readily available. There
will also be no difficulty in marketing the product in the local as well as external markets. At
the community level the processing could be linked with copra making so that the coconut
water becoming available in bulk is made use of without being wasted. Apart from
marketing the vinegar produced at the community level, infrastructure could also be created
to extend marketing support to the individual farmers who have set up on-farm processing
units. By making use of coconut water to produce vinegar, the farm level economy of the
farmers will show significant improvement.
Another processing activity that offers promise is the production of nata-de-coco from
coconut water and/or coconut milk. The processing could be organized at the community
level with the individual farmers producing raw nata and the community level organization
undertaking the procurement and its marketing in the local and external markets. As both
raw and processed nata enjoy a growing demand, organized production and marketing
under the aegis of farmers' cooperatives or other forms of organization are dependable
means of increasing household income and employment of coconut farmers.
Utilization of tender coconut
Promoting the use of tender coconut as a source of health drink and nutritious food will
open up new opportunities for improving the profitability of coconut farming. People in both
the coconut producing and non-producing countries are becoming more and more health
conscious and are inclined towards consuming natural products instead of synthetic ones.
This changing outlook of the consumers is a positive feature to be taken advantage of by
coconut farmers. The experience in India is that harvesting at tendernut stage induces
higher productivity of palms. This is due to the surplus assimilates becoming available for
new fruit bunches. Apart from the higher production, the farmers get better income from the
practice than when harvests are restricted to mature nuts. Not only is the price of tender
coconut more or less the same as that of mature nut but the harvesting is also possible at
shorter intervals.
The handling and marketing of tendernuts could be organized at the community level under
the aegis of farmers' organizations. It is possible to collect tender coconut from individual
gardens for organized marketing in the local and distant markets. While fresh nuts could be
marketed locally without quality deterioration, for distant markets it would be necessary to
introduce special storage and transporting arrangements in order to maintain the freshness.
One method to popularize the local consumption of fresh tender coconut is to encourage
individuals as well as organizations to open tender coconut stalls similar to fruit stalls. Fresh
tender coconut, when made available in such stalls, will attract potential consumers and the
demand would slowly increase. Along with tender coconut, it is also possible to introduce a
special health drink prepared by blend mixing the gelatinous kernel and nut water. This is a
very tasty and wholesome drink with a whitish appearance, viscous consistency and a nutty
flavour and could be served either as such or after sweetening. The availability of large
number of tender coconut stalls at different centres in the coconut producing countries
would encourage the consumption of natural drink and food among the local people,
thereby, creating a steady demand for tender coconut benefiting the coconut farmers.
As the water and gelatinous kernel of tender coconut are to be consumed in the natural
form, the enlightened consumers may show preference to nuts produced organically. It is
not difficult to maintain coconut palms set apart for tendernut production without using
inorganic inputs. There will be no decline in productivity under organic management as is
evident from the performance of gardens maintained by enterprising farmers in some states
in India.
The quality of water and kernel of tender coconut show wide intercultivar variation. Some
cultivars are known to produce good quality tender coconut characterized by having a high
content of total sugars in the water and tasty kernel. Such cultivars could be identified and
multiplied for raising gardens as source of good quality tendernuts.
Utilization of ripe kernel
Among the different kernel products, one product that could be produced at the farm level is
edible copra in the forms of ball and cup. In some states in India, the farmers produce ball
copra by storing fully ripe whole nuts at each harvest on raised platform erected within the
house or in a separate shed until the nut water is completely absorbed and the kernel
becomes dry and detaches itself from the shell. At this stage, the nut is dehusked and the
loosened kernel is taken out in the ball form after carefully breaking and removing the shell.
This practice is prevalent among the different categories of farmers, whether small or large,
as it is possible to store any number of nuts at a time depending on availability of space and
facility for storing in the household. The farmers take the edible ball copra at frequent
intervals to the nearby regulated market centres where the produce is disposed of in
recognized grades at prices determined in public auction for each grade. Edible cup copra
is also produced by following careful drying methods.
In India edible copra enjoys a price premium of 10-15% over the milling quality copra. It
enjoys good market demand for edible uses in households and organized food sector.
There are also processing units where the edible copra is converted into chips for special
end uses. The production of edible forms of copra could also be encouraged in other
coconut growing countries where it has not yet become popular among the farmers. One
advantage with this line of activity is that even very small farmers can adopt it without
incurring expenditure on processing. For erecting raised platform for storing the nuts, the
materials available on the farm itself would be adequate. When the production is supported
at the community level by creating facilities for collecting the product from the participating
farmers and its grading and marketing from a central place, the farmers will benefit from
remunerative prices and a steady consumer demand. At the community level, it is also
possible to produce value-added products such as chips, ground flour, etc. tailored to
special end use requirement.
In some countries kernel chips are produced by slicing the wet kernel into thin, even sized
pieces and toasting under controlled temperature. Both salted and sweetened chips are
produced depending on local demand for use as snack food. The product is marketed in
moisture proof containers. It is not difficult to organize this as a household activity under the
aegis of farmers' cooperatives. The edible ball copra is also a good material for producing
kernel chips.
Conclusion
Coconut palm offers many possibilities which can be utilized for augmenting the farm level
income of coconut farmers. Apart from producing milling copra, other diverse products could
be produced by the farmers by adopting simple technologies. The on-farm utilization of
coconut for such purposes will be effective when organized under the aegis of farmers'
cooperatives or other forms of organizational set up. This approach is essential to provide
marketing support and other essential services to the farmers which alone will sustain their
interest in the activities undertaken. Research and development efforts are also needed to
identify and popularize coconut cultivars for specific purposes.
Potential of value-added products from coconut for the South Pacific
Priscilla C, Sanchez
Professor, Institute of Food Science and Technology, University of the Philippines, Laguna,
Philippines
Introduction
Research and development efforts in the diversified utilization of coconut during the past
decades achieved numerous viable processing technologies. In spite of these
achievements, the coconut industry in the producing countries is still highly dependent on
the production and marketing of traditional products such as copra and coconut oil
(Banzon et al. 1990). This situation contributed to the main problem of the coconut industry,
that is the low returns from coconut farming. Continuous effort must therefore be directed to
new sources of income through product diversification and improved product quality with
emphasis on market-oriented technologies. Complementary to this is the need to focus
attention on sustained efforts for enhancing coconut production coupled with aggressive
marketing strategies. When these activities are realized then positive growth of the coconut-
producing areas can be achieved thus improving the livelihood of the many small farm
holders, the main component of the coconut sector.
It is timely that coconut producing areas in the South Pacific concentrate in product
improvement, development and diversification through the introduction of value-added
products and market promotion of these products.
Industry situation
Coconut remains to be a subsistence crop in the South Pacific. It is part of their daily life
such that every inhabitant practically grew up with it. Coconut production is dominantly
based on smallholdings and beset with problems of low productivity and steady decline in
hectarage (Banzon and Velasco 1982). In spite of these problems, the coconut industry still
remains and plays an important role as source of foreign exchange, income and
employment and play an influential part in their social and cultural heritage.
Coconut is mostly consumed domestically as tendernuts for drinking and mature nuts for
culinary, social and religious purposes. A small percentage of the production is converted
into commercial products such as copra and coconut oil.
Product diversification have been attempted in some Pacific countries. For instance, in Fiji
and Papua New Guinea, soap, detergents, activated carbon (from shell), coir, desiccated
coconut, coconut cream and frozen coconut meat have been produced (De Silva 1989).
However, due to lack of organized promotion and marketing of the products, high cost of
production and poor quality, they were not able to compete with other producing countries.
Strategy for diversification
The high dependence on copra as the single main product can be attributed to the lack of
skills and technical know-how in processing non-traditional coconut products in a production
scale suited for the conditions in the South Pacific countries. Furthermore, the potential for
production and marketing of high-value coconut products in the South Pacific is hindered by
political and institutional problems, lack of information on market opportunities, poorly
packaged and substandard products and lack of promotion programmes (De Silva 1989;
Ilala 1989; Nanpei 1989; Nganga 1989; Opio 1989; Deo 1991).
Due to the nature of the coconut industry, village-level production of non-traditional coconut
products is deemed well suited for in the South Pacific. This will offer new opportunities in
terms of value-added products, livelihood generation, expanded markets, more nutritious
food in the coconut farming communities as well as for general domestic consumption.
Most of the non-traditional products that can be considered are relatively new and some are
already existing in the market (Sanchez 1993). Therefore, tapping the full economic
potentials of these products need careful study.
First, suitable and appropriate technologies that have the potential of developing into viable
industries for each country must be selected, taking into consideration the better
exploitation of the coconut resources to meet particular market needs. A marketing,
technical, financial and management pre-feasibility appraisal should be undertaken to come
up with a short list of viable products prioritized according to profitability and market size.
Specifically, the information needed should consist of project pre-feasibilities of selected
commercially viable, non-traditional coconut products that will identify the markets, define
the processes, and other technical requirements. It should prescribe the type of
management/operation appropriate for each product and determine the investment
requirements and profitability of each product. It is also essential that detailed consumer
surveys be carried out to identify consumer preference on specific product. Domestic
consumption must first be taken into consideration before embarking on the export market
where competition is already quite high.
Secondly, the next phase of the activity should involve the actual implementation of the
production of prioritized products. Implementation in this case may come in the form of pilot-
testing or extensive implementation by coconut farming communities and organizations.
In order to operationalize these strategies, there should be effective technology transfer
wherein the cooperatives or farmers' organizations would be the ultimate beneficiaries.
Efforts must therefore be geared on the formation of cooperatives/organizations that will
harness and motivate the direct involvement of the farmers themselves. Utilization of the
farmers' time through product diversification and by-product processing will bring down
product cost thus contributing significantly towards price competitiveness.
The proposed concept is shown in Fig. 1. Several farmers' cooperatives/organizations will
be established and be located in the coconut production areas for accessibility of the raw
materials and lessening the transport cost (Chinte 1996).
Members of cooperatives/organizations will undergo rigid training on value formation,
cooperativism and processing of the desired products. These aspects on training will be
coordinated by the Federation of Cooperatives whose members are the primary
cooperatives in the area. The technology generators from outside the South Pacific Region
will be tapped for effective transfer of technology. Likewise, the Federation will be
responsible for the financial aspects by facilitating loans or grants from the banks and other
financial sources; for the quality control of the product to satisfy the specifications of the
market; for packaging the products to have attractive representation and longer shelf-life;
and finally take charge of the market promotion and trading aspects.
Upgrading existing technologies and adoption of new processes for coconut diversification
are faced with numerous difficulties (Patterson and Hyman 1991). The coconut producing
areas in the South Pacific need to establish strong bonds of cooperation to strengthen their
bargaining power against producers in other countries. They should encourage research
and development as well as information sharing, enhance market development and
promotion and make special agreement for raw material sourcing and trading. The ultimate
objective of all these is to improve the productivity of the coconut farms that will translate to
income and employment opportunities.
Village-level production
Non-traditional products derived from coconut have been developed to diversify its
utilization and produce high-value products as shown in Table 1 (Sanchez 1992). Some of
these products could be manufactured at village-level requiring less sophisticated and
relatively cheap equipment.
Some viable products from the wet processing of coconut have been selected to illustrate
the full utilization of the mature nut. The coconut milk extracted from the meat is converted
either into nata de coco, coconut-filled white soft cheese, coco yoghurt, and coco jam. The
residue is manufactured into coco brittle or coco flour that can be used as replacement for
wheat flour (10-20%) in bakery products. The coconut water on the other hand, is
processed either into carbonated and non-carbonated beverages, vinegar and alcoholic
beverages. The husk and shell can be simply used as fuel during the processing of the
different products.
Nata de coco is a popular product worldwide due to its food and industrial applications. It is
the cellulosic substance form by Acetobacter aceti subsp. xylinum on the surface of coconut
milk or coconut water medium supplemented with nutrients (Sanchez 1990c). Coco-filled
white soft cheese is a nutritious product used as filling for bread or as snack food. It is made
from 60% pure coconut milk and 40% non-fat dry milk (NFDM) through the action of
selected strains of lactic acid bacteria (Sanchez 1990b). The product is comparable to the
soft cheese made from 100% cow's milk in chemical composition, flavour, aroma, texture
and general acceptability. Coco yoghurt is a healthful product consisting of 3.21% protein,
2.50% fat and 6.30% solid non-fat (SNF) (Sanchez 1990d). It is easily digested and
assimilated by the body. It is produced through lactic acid fermentation on the mixture
containing 50% pure coconut milk and 50% NFDM. Coco water beverage can be processed
into carbonated or non-carbonated drinks. It contains the essential nutrients present in the
coconut water. Coco water vinegar is a natural product resulting from the alcoholic and
acetous fermentation of sugar-enriched coconut water. It contains 3-4% acetic acid and is
used as an indispensable commodity in any household (Sanchez 1990a). Coco brittle is a
product from fresh coconut residue. It is a popular snack food among school children due to
its sweet taste and crunchy texture.
Based on the data obtained by actual processing of these products by cooperatives and
family business in the Philippines, the economic return analysis at village-level was made in
the manner that the same number of coconut was used in the processing of the different
products for comparison purposes (Sanchez 1993). Furthermore, the assumption in the
calculation of the cost of production is that the facilities and equipment are existing.
The cost of production of the different selected products are presented as follows: nata de
coco in Table 2 and its expected net income based on percentage recovery (Table 3);
coconut-filled white soft cheese in Table 4; coco yoghurt in Table 5; coco water beverage in
Table 6; coco brittle in Table 7; coco water vinegar in Table 8; and coco jam in Table 9. The
economic analysis indicated that processing of all the products were profitable.
The cost and return analysis of the different products produced from the same number of
nuts (4368 pcs.) showed that the net income (US$ 3211.24) obtained from nata de coco
was the highest (Table 10). This is followed by processing nuts into coco-filled white soft
cheese (US$ 1360.58), coco yoghurt (US$ 952.64), coco water beverage (US$ 411.62),
coco brittle (US$ 336.87), coco water vinegar (US$ 314.44) and coco jam (US$ 252.21).
In order to realize the full benefits from the utilization of the coconut, an integrated
processing system is highly recommended. This approach will also maximize the use of the
facilities, result in the full utilization of farm labour, production of varied products and solve
the environmental problems that could be brought about by the waste by-products if not
utilized fully.
Table 11 shows the benefits derived from the integrated processing of coconut. The net
income ranges from US$ 903.52 (Scheme VIII, coco jam + coco water vinegar + coco
brittle) to US$ 3959.73 (Scheme I, nata de coco + coco water beverages + coco brittle).
Finally, with the new range of coconut products available for adoption, the challenge lies
with the South Pacific countries to translate this into the diversified value-added products
from coconut that should help improve the economic life of their people.
References
Banzon, J. A. and J. Velasco. 1982. Coconut Production and Utilization. Philippine Coconut
Research and Development Foundation, Inc. Publication, Manila, Philippines.
Banzon, J. A., O.N. Gonzalez, S.Y. De Leon and PC. Sanchez. 1990. Coconut as Food.
Philippine Coconut Research and Development Foundation, Inc. Publication, Manila,
Philippines.
Chinte, C. T. 1996. Technology transfer and entrepreneurship - The cooperative way.
Presented at the Philippine Coconut Authority In-house Review, June 17-19, 1992, San
Ramon Research Center, Zamboanga City.
De Silva, N. T. M. H. 1989. Coconut Industry in Papua New Guinea. Asian and Pacific
Coconut Community Publication, Jakarta, Indonesia.
Deo, I. 1991. Coconut Industry in Fiji. Asian and Pacific Coconut Community Publication,
Jakarta, Indonesia.
Ilala, S. 1989. Coconut Industry in Solomon Islands. Asian and Pacific Coconut Community
Publication, Jakarta, Indonesia.
Nanpei, N.O. 1989. Coconut Industry in Federated States of Micronesia. Asian and Pacific
Coconut Community Publication, Jakarta, Indonesia.
Nganga, M. 1989. Coconut Industry in Vanuatu. Asian and Pacific Coconut Community
Publication, Jakarta, Indonesia.
Opio, F. 1989. Coconut Industry in Western Samoa. Asian and Pacific Coconut Community
Publication, Jakarta, Indonesia.
Patterson, G. W. and E. L. Hyman. 1991. New approaches for developing small and
medium scale coconut processing enterprises: Experience in the Philippines and the South
Pacific. Presented at COCOTECH Meeting/Conference of the Asian and Pacific Coconut
Community, July 22-26, 1991, Suva, Fiji.
Sanchez, PC. 1990a. Vinegar. Pp. 151-161 in Coconut as Food, Philippine Coconut
Research and Development Foundation, Inc. Publication, Manila, Philippines.
Sanchez, P.C. 1990b. Cheese. Pp. 162-184 in Coconut as Food, Philippine Coconut
Research and Development Foundation, Inc. Publication, Manila, Philippines.
Sanchez, P.C. 1990c. Nata de coco. Pp. 185-199 in Coconut as Food, Philippine Coconut
Research and Development Foundation, Inc. Publication, Manila, Philippines.
Sanchez, P.C. 1990d. Fermented milks. Pp. 200-217 in Coconut as Food, Philippine
Coconut Research and Development Foundation, Inc. Publication, Manila, Philippines.
Sanchez, P.C. 1992. Quality standards for edible coconut products. Presented at the Joint
XXIX Permanent Panel on Coconut Technology and the 4th Meeting of Coconut Products
Exporters, August 3-7, 1992, Colombo, Sri Lanka.
Sanchez, P.C. 1993. Barangay-level coconut wet processing: Non-oil production. Pp. 117-
136 in Proc. Village, Small and Medium Scale Processing of Fresh Coconut, (M.B. Frias
and D.B. Masa, eds.). Koninklijk Instituut Voor de Tropen Publication, Amsterdam, The
Netherlands.
Sanchez, P.C. 1993. Challenges and Opportunities in Commercial Production and
Marketing of Non-traditional Coconut Food Products and By-products. Asian and Pacific
Coconut Community Publication, Jakarta, Indonesia. Pp. 147-266.
Fig. 1. Concept for the transfer of processing technology, production and marketing
of value-added product at village-level production.

Table 1. Some value-added products from coconut
Raw material Product
I. Coconut meat
1. Desiccated coconut
2. Coco Flour
3. Sweetened/preserved products
4. Dried buko - chips, leather
5. Buko juice
II. Coconut milk/skim milk
1. Canned coconut milk
2. Powdered coconut milk
3. Coco jam - high fat, low fat and protein-enriched
4. Coco syrup
5. Coco honey
6. Coco candy
7. Cheeses - soft, processed, Cheddar, blue and others
8. Sweetened condensed milk
9. Coco yoghurt
10. Filled milk products - beverage, evaporated and sweetened
11. Coco cultured skim milk
12. Coco skim milk powder
13. TVP from coco skim milk
14. Coco cereal weaning flakes
15. Food preparations
16. Nata de coco
III. Coconut water
1. Vinegar
2. Beverages - non-carbonated and carbonated
3. Wine and Champagne-type
4. Culture media
5. Source of hormone
6. Nata de coco
IV. Coconut residue
1. Flour
2. Food preparations - baked products, macaroons, brittle, sweetened bars, pretzels, etc.
V. Coconut oil
1. Food preparations and confectioneries
2. Oleochemicals
3. Beauty and health products
4. Detergents, soaps, etc.
VI. Coconut husk and shell
1. Fibre
2. Coir dust
3. Activated carbon
4. Fuel
5. Organic fertilizer
6. Handicraft
VII. Coconut sap
1. Vinegar
2. Alcoholic beverages - tuba and lambanog
3. Sugar
4. Honey

Table 2. Cost of production of raw nata de coco per month operation
Raw material Quantity Unit cost (US$) Total cost (US$)
Coconut (pc) 4368 0.20 873.60
Sugar (kg) 2184 0.70 1550.64
Glacial acetic acid (L) 546 1.15 630.00
Mother liqour (L) 5460 0.11 600.00
Labour cost 1440.00
Water & energy cost 211.54
Total cost of production (COP) 5305.78

Table 3. Expected net income per month based on percent recovery of raw nata de
coco
Recovery
(%)
Expected yield
(kg)
Price/ kg
(US$)
Total sales
(US$)
Total COP
(US$)
Net income
(US$)
50 16 380 0.40 6552.00 5306.36 1245.64
60 19 656 0.40 7862.40 5306.36 2556.04
65
1
21 294 0.40 8517.60 5306.36 3211.24
70 22 932 0.40 9172.80 5306.36 3866.44
75 24 570 0.40 9828.00 5306.36 4521.64
1
Average actual recovery yield obtained by Coop members
Table 4. Cost of production of coconut-filled white soft cheese
Raw material Quantity Unit cost (US$) Total cost (US$)
Coconut (pc)
1
4368.00 0.20 873.60
NFDM (kg)
2
1092.00 3.07 3352.40
Salt (kg) 109.20 0.38 41.50
Rennet (L) 131.04 0.96 125.80
Starter (L) 698.90 0.38 265.58
Packaging (pc)
3
21190.00 0.004 84.76
Labour cost 1440.00
Water & energy cost 931.78
Total cost of production (COP) 7115.42
1
Yield 546 litres of pure coconut milk
2
Non-fat dry milk or skim milk
3
Plastic wrapper and label
Analysis:
Yield/output(kg) = 2119
No. of pieces (100 g/pc) = 21 190
Unit cost (US$) - 0.40
Total sales (US$) = 8476.00
Total COP (US$) = 7115.42
Net income (US$) = 1360.58

Table 5. Cost of production of coco yoghurt
Raw material Quantity Unit cost (US$) Total cost (US$)
Coconut (pc) 4368.00 0.20 873.60
NFDM (kg) 639.00 3.07 1961.73
Sugar (kg) 522.16 0.77 403.60
Starter Culture (L) 131.04 0.38 49.80
Sanitizer (L) 21.84 0.77 16.82
Packaging (pc)
1
29120.00 0.02 582.40
Labour cost 600.00
Water & energy cost 383.41
Total cost of production (COP) 4871.36

1
Plastic cups and label
Analysis:
Yield/output (kg) = 4368
No. of package (150 g/pkg) = 29 120
Unit cost (US$) = 0.20
Total sales (US$) = 5824.00
Total COP (US$) = 4871.36
Net income (US$) = 952.64

Table 6. Cost of production of coconut water beverage
Raw material Quantity Unit cost (US$) Total cost (US$)
Coconut water (L)
1
873.60 0.02 17.47
Ascorbic acid (kg) 1.31 2.69 25.19
Citric acid (kg) 1.31 2.69 3.52
Sodium citrate (g) 873.60 0.003 2.62
Sugar (kg) 87.36 0.77 67.27
Sodium benzoate (g) 436.80 0.003 1.31
Packaging (pc)
2
3495.00 0.2 699.00
Labour cost 70.00
Water & energy cost 100.00
Total cost of production (COP) 986.38
1
From 4368 nuts
2
Bottle, cap and label
Analysis:
Yield/output (L) = 873.75
No. of bottles (250 ml/bottle) = 3495
Unit cost (US$) = 0.40
Total sales (US$) = 1398.00
Total COP (US$) = 986.38
Net income (US$) = 411.62

Table 7. Cost of production of coco brittle
Raw material Quantity Unit cost (US$) Total cost (US$)
Coco residue (kg)
1
546.00 -
2
-
Brown sugar (kg) 182.00 0.70 127.40
Salt (kg) 5.46 0.20 1.09
Margarine (kg) 18.20 19.20 349.44
Packaging
3
(pc) 2912.00 0.30 873.60
Labour cost (US$) 300.00
Water & energy cost 50.00
Total cost of production (COP) 1701.53
1
By-product in coconut milk extraction from 4368 nuts
2
No value as waste material
3
Plastic bottle, cap and label
Analysis:
Yield/output (kg) = 291.20
No. of bottles (100g/bottle) = 2912
Unit cost (US$) = 0.70
Total sales (US$) = 2038.40
Total COP (US$) = 1701.53
Net income (US$) - 336.87

Table 8. Cost of production of coconut water vinegar
Raw material Quantity Unit cost (US$) Total cost (US$)
Coconut water (L)
1
873.60 0.02 17.47
Sugar (kg) 87.36 0.70 61.15
Active dry yeast (g) 87.36 0.004 0.34
Starter culture (L) 873.60 0.11 96.10
Packaging (pc)
2
2097.00 0.20 419.40
Labour cost (US$) 161.00
Water & energy cost (US$) 20.00
Total cost of production (COP) 776.00
1
Obtained from 4368 nuts
2
Long-neck bottle, cap and label
Analysis:
Output/yield (L) = 1572.75
No. of bottles (750 ml/bottle) = 2097
Unit cost (US$) = 0.52
Total sales (US$) = 1090.44
Total COP (US$) = 776.00
Net income (US$) = 314.44

Table 9. Cost of production of coco jam manufacture
Raw material Quantity Unit cost (US$) Total cost (US$)
Coconut (pc) 4368.00 0.20 873.60
Brown sugar (kg) 11.20 0.70 7.84
Glucose (kg) 6.00 1.92 11.52
Citric acid (g) 273.00 0.002 0.55
Packaging (pc)
1
2184.00 0.20 436.80
Labour cost (US$) 55.00
Water & energy cost(US$) 66.00
Total cost of production (COP) 1451.31
1
Plastic jar, cap and label Analysis:
Yield/output (8 oz bottle) = 2184
Unit cost (US$) = 0.78 / bottle
Total sales (US$) = 1703.52
Total COP (US$) = 1451.31
Net income (US$) = 252.21

Table 10. Comparative economic return analysis of some value-added products at
village-level production
Product
1
Total COP (US$) Total revenue (US$) Net income (US$)
Nata de coco 5306.36 8517.60 3211.24
Coco-filled white soft cheese 7115.42 8476.00 1360.58
Coco yoghurt 4871.36 5824.00 952.64
Coco water beverage 986.14 1398.00 411.62
Coco brittle 1701.53 2038.40 336.87
Coco water vinegar 776.00 1090.44 314.44
Coco jam 1451.44 1703.52 252.21
1
From 4368 nuts per product
Table 11. Benefits derived from integrated processing of coconut using different
schemes
Scheme Product Net income (US$)
I Nata de coco + coco water beverage + coco brittle 3959.73
II Nata de coco + coco water vinegar + coco brittle 3862.55
III Coco-filled white soft cheese + coco water beverage + coco brittle 2109.07
IV Coco-filled white soft cheese + coco water vinegar + coco brittle 2011.89
V Coco yoghurt + coco water beverage + coco brittle 1701.13
VI Coco yoghurt + coco water vinegar + coco brittle 1603.95
VII Coco jam + coco water beverage + coco brittle 1000.70
VIII Coco jam + coco water vinegar + coco brittle 903.52
Profitability of small- and medium-scale processing of coconut
products: Possible applications at farmer level and varietal
development implications
Abdullah Othman and Syed Kamaruddin Wazir
Research Officers, MARDI, Sungai Sumum, Perak, Malaysia
Introduction
Coconut is a long established crop in Malaysia and its usage in the daily Malaysian foods is
wide spread. It can be said to be part of the custom. As a result of good returns from the
crop and its intercrops, the hectarage had increased to as much as 409 000 ha in 1981.
However, it decreased to 284 000 ha in 1995 as a result of low prices of coconut and
competition from other more lucrative crops, especially oil palm and rubber. Up to the year
2000, it has been forecast that the area will decline gradually at the rate of 2.2 - 3.7% per
year (Tan 1992). The decrease so far has been mainly in the estate sector which have
converted a major portion of their coconut areas to oil palm.
Coconut plantings are found mainly in the coast of Peninsular Malaysia on marine clays and
organic clays (Inceptisoils), and in the east coast they are on marine alluvial sands
(Entisols) and riverine alluvium (Inceptisols) (Chan 1978). The distribution of coconut
hectarage by states in Malaysia has been reported by Abdullah et al.(1996). Though
coconut does not play a very significant role in the economy of Malaysia, it is still important
socioeconomically as it supports wholly or partially some 140 000 farm families. Malaysia
exports about RM 200 million worth of coconut products every year, but this is only 0.2% of
the country's total export revenue.
In general, all over the country, farmers would not easily convert their coconut planting to
other crops unless the price of coconut remains very low over a long period of time. Not all
coconut areas in Malaysia are suitable for oil palm or other commodity crops due to the
nature of soils.
The low prices of coconut and the changing life style of people have encouraged the setting
up of coconut processing factories. There are several large processing factories in Malaysia
that produce mainly desiccated coconut, 'santan' (coconut milk) and coconut milk powder.
These large factories export most of their production.
Of interest at the moment is the development and progress of small- and medium-scale
coconut processing activities. It appears that the number of small- and medium-scale
coconut processing industries is increasing lately, and some of those that were established
earlier are trying to increase their capacities. However, this may be difficult, not because of
marketing problems but mainly due to the limited supply of the raw materials. Even the large
factories are operating at around 50% capacity only.
This paper describes some of the small- and medium-scale coconut processing activities
commonly found in the major coconut areas of Malaysia.
Small- and medium-scale industries
Malaysia is now going industrial, be it related to agriculture or otherwise. Small- and
medium-scale industries (SMIs) together with the large industries are considered important
in developing the nation. The Malaysian government has defined the SMI as an operation
which involves a capital of less than RM 2.5 million (RM 2.5/US $) and employing less than
75 workers. The SMIs are given incentives by the government in the form of special tax
exemptions, eligibility to borrow certain equipment and facilities and to obtain financial loans
at rates lower than commercial rates. These incentives are not limited to activities involving
coconut only, but also other agricultural and non-agricultural SMI ventures.
The coconut-based SMIs together with the larger coconut-based industries, are important in
the sense that they increased the demand for raw coconuts, thereby increasing the farm-
gate price of coconuts. The common coconut-based SMIs observed in the major coconut
areas are the production of pared kernel, copra and shell charcoal. The production of
'kerisik', shell powder, fibres and coconut milk are less common.
Supply of coconuts
Presently, a person who goes to a coconut area could not just buy a thousand nuts at
normal price because almost all farms are booked or reserved. SMI entrepreneurs have
some kinds of unofficial contract arrangements with coconut farmers in order to be able to
get a regular supply of nuts. The entrepreneurs send their workers to harvest and husk the
coconuts, normally every 2.5 - 3 months in each easily accessible field. Farms which are
remote or having very tall palms are harvested every 4-6 months. Workers are paid RM
35.00 per 1000 nuts they harvested and RM 50.00 per 1000 nuts they husked. The coconut
farmers are paid a gate price of RM 240.00 per 1000 nuts (RM 200.00 per 1000 nuts from
the delayed harvest) less costs of harvesting and husking.
Production of pared kernel
Husked nuts brought to the collection centre are graded visually by size. Cracked and
germinated nuts, which normally constitute 20 - 30% of the total are processed to copra.
Good nuts of about 40 cm or more in circumference are sold as whole nuts at RM 0.35 per
nut to middle men who take them to sell fresh in the wet market.
The smaller nuts (20% of the total) are processed to pared kernels. Women working around
8 hr per day can easily pare 100 kg kernel and are paid RM 0.10 per kg pared kernel. The
entrepreneurs sell these pared kernels at RM 0.81 per kg to desiccated coconut factories.
To quote an example, one entrepreneur in Perak collects 8000 - 10 000 nuts per day, from
which about 20% are sold as (600 kg) pared kernel. The parings after being sundried, are
sold at RM 0.75 per kg. From this collection of nuts, he sells whole nuts, pared kernel,
parings, copra and charcoal, making an overall net profit of RM 0.01 - 0.02 per nut per day.
Production of shell charcoal
There are only four medium size ground charcoal factories in Malaysia, each costing about
RM 1 million. A factory in Bagan Datoh, Perak, burns coconut shells to charcoal in open-top
brick wall compartments, each of size 3.6m length 3.6m width 1.5m height. Each
compartment can burn 16 tons of raw shell to yield 4 tons of charcoal in one session. There
are 18 such compartments in this factory. On good days, it takes 3 days to burn the shells
to charcoal while on rainy days it requires up to 10 days. The charcoal pieces produced are
carried to the grinding machine in a nearby shed and after grinding they are sorted by mesh
screens to obtain particles of specific size as specified by the buyer. Normally charcoal of
1.5 mm size are produced and sold at RM 330.00 per ton. The remnants (30% of the total)
which are below the specified size are sold at RM 100.00 per ton. The capacity of this
particular factory is 10 tons ground charcoal per day with 8 workers employed. The cost of
production in terms of labour only is RM 60.00 per ton, while other costs (machinery,
electricity, etc.) amounts to about RM 140.00 per ton.
The other method of charcoal production from coconut shells, which is more common in
coconut areas world wide, is the 'single drum' method (Mohd Noh 1995). About 40 kg of
charcoal can be obtained from a drum after about 8 hours of burning 150 kg coconut shells.
Production of charcoal by this method is usually not on a large scale, but as a
complementary activity when plentiful coconut shells are available as by-product of other
activities. After the main job of harvesting coconut in the morning to early afternoon, the
workers are given the opportunity to make charcoal in the evening. They are paid RM 3.50
per drum charcoal (40 kg) they make. The charcoal is then sold at RM 0.45 per kg.
Production of 'kerisik'
The preparation of certain local dishes such as rendang and curry would not taste as it
really should unless kerisik is added. Kerisik, a local term, is the product of drying and
roasting grated coconut, and then grinding them finely.
There are now small kerisik producers who sell their product in local towns. The equipment
needed consists of just a large pan, a Malaysian-type grating machine and a grinder.
However, the setting up of a proper factory would be more advantageous but requires more
capital. A factory capable of producing 250 kg of 'kerisik' per day is estimated to cost about
RM 140 000 in initial capital investment. Such a factory will require a supply of about 1900
nuts a day. Assuming that the product is sold at RM 1.50 a bottle (170 g), such a project is
estimated to give a return on investment of about 20% a year. The break even point is
about 15 200 bottles a month. Although this is considered small-scale, it can be easily
upgraded when there is an increase in demand (Adinan et al. 1994).
Production of copra
Copra is now produced from nuts of generally lower quality such as nuts obtained from
delayed harvest (germinated nuts) and broken nuts. Generally, copra is made by direct heat
drying with some smoke or sundrying or a combination of both. During the dry weather (1-2
months), split nuts are sun dried on cement floors, while during other times they are dried in
simple kilns using coconut shells as fuel. Normally, 1000 nuts can yield about 250 kg copra.
Split nuts are placed on grills above fire in kilns. In Malaysia the size of kilns is around 7 m
5 m. After one day of drying the shells are removed. Workers are paid RM 10.00 for
splitting 1000 nuts and RM 0.60 per basket (of 60 cm diameter 60 cm height) of kernels
for removing the shells (kernels from 1000 nuts are equivalent to 12 baskets). The labour
cost for arranging the kernels on grills and maintaining the fire for drying is RM 6.00 per
1000 nuts. Each burning session requires 6 baskets of shell for fuel, which is equivalent to
the amount of shell from about 430 nuts. The kernels without the shells are dried again on
the grill for another 2 days/after which they are sun dried and sold. Presently, the local price
of copra is about RM 1050.00 per ton.
Other activities
There are a few factories producing shell powder, pith and fibres, and nata. The production
of coco lumber is not yet popular in Malaysia.
Varieties common in Malaysia
In Malaysia the main coconut variety planted is the local Malayan Tall. The MAWA hybrid
(MD WAT) was only planted beginning late 1977 but only to over 2000 ha, while the
Malayan Dwarfs were on a much smaller area. The Malayan Tails are late bearers, fruiting
only 6 - 1-0 years after planting and show extreme variation in number of fruit and nut
components, with a copra content ranging from 180 - 320 g/nut (Jamadon and Khadzir
1986).
Preferred varieties
Most of the coconuts in Malaysia are consumed (in the form of coconut milk or 'santan' and
desiccated coconut) as ingredients in food preparations, and oil. The use of coconuts as
young tendernuts is still comparatively less.
Since almost all coconuts planted are of the Malayan Tall variety, the small- and medium-
scale processors (other than the young tendernut processors) do not have much experience
with other varieties. When interviewed, they confirmed that they prefer nuts which are of big
size (unlike the young tender nut processors who prefer medium size nuts such as those of
the Malayan Yellow Dwarf). A similar preference for big nuts in Indonesia had been reported
by Hengky (1996). The fact that they prefer large nuts is easily understandable. They buy
the nuts through contracts with farmers regardless of size (since the palms are of one
variety i.e. Malayan Tall), but sell them at prices depending on size.
The costs of harvesting and husking, by tradition, depend only on the number of nuts,
without regard to size. Hence, farmers planting varieties of bigger nut size would save a
portion of these costs. The hybrid MAWA is now known not to be that good for the
Malaysian farmers. Besides having nuts of small size, MAWA also requires proper fertilizer
input to yield well. However, farmers normally do not fertilize their coconuts except in the
first few years.
After having experienced the planting of the varieties Malayan Tall and MAWA, the plan
now is to plant the new hybrid MATAG (Malayan Dwarf Tagnanan Tall) which is an early
bearer with large nuts. The Malaysia Department of Agriculture is now preparing this hybrid
to be distributed to farmers in stages and at the same time its performance would be
monitored. The true performance of this hybrid on different soils and environments is not
really known. It is hoped that it will yield an acceptable number of nuts that are uniformly big
in size.
Conclusion
Small- and medium-scale coconut processing is indeed a profitable venture. The numbers
of processing centres and small factories are increasing despite a decreasing hectarage of
coconut plantation. As such, the supply of nuts is becoming a limiting factor. This situation
of higher demand than supply is encouraging the price of coconut to increase further,
thereby benefiting the coconut growers.
The technologies being used in the small-scale processing of coconut are simple and
cheap, and therefore are affordable by many village people.
The main coconut variety available for the small- and medium-processors in Peninsular
Malaysia is the Malayan Tall, which is a late bearer with variable sizes of nuts. The hybrid
MAWA, though an early bearer, produces smaller nuts and demands fertilizer to realize its
high yield. Coconut varieties that yield a reasonable number of uniformly big size nuts are
preferred.
References
Abdullah, O., S. W. Syed Kamaruddin and J. Mohd Noh. 1996. Small- and medium-scale
coconut processing in Malaysia. Paper presented at XXXIII Cocotech Meeting, 15-19 July
1996, Kuala Lumpur. APCC.
Adinan, H., E. C. Chuah, and N. Siti Hasidah. 1994. Development of coconut processing
industry. Paper presented at the International Seminar on Present and Future Development
of Coconut Industry. Ministry of Agriculture, 29 May 1994, Langkawi.
Chan, Y. K. 1978. Soils under coconut in Peninsular Malaysia. Proceedings of the
International Conference on Cocoa and Coconuts, Kuala Lumpur, 21-24 June 1978. MARDI
& ISP.
Hengky, N. 1996. Coconut conservation and breeding strategy and varietal preferences for
coconut farmers in swampy and dry areas in North Sulawesi, Indonesia. Paper presented at
the XXXIII Cocotech Meeting, 15-19 July 1996, Kuala Lumpur. APCC.
Jamadon, B. and D. Khadzir. 1986. Coconut breeding and selection programme in MARDI.
Proceedings of the Plant and Animal Breeding Workshop. MARDI.
Mohd Noh, J. 1995. Processing of charcoal from coconut shell. Teknol. Koko-Kelapa, Jld 10
& 11 (1994/1995). MARDI.
Tan, J. H. 1992. Coconut Planted Area and Production in Malaysia (1960-2000): A
Forecasting Approach. Department of Agriculture, Kuala Lumpur.
Acknowledgement
The authors are grateful to the Director General of MARDI for permission to present this
paper. Thanks are also due to Dr Supaad Mohd Amin, Director of Food and Industrial Crops
Division, MARDI, for his valuable comments.