How to Start a Potato Chips Making Business

How to Start a Potato Chips Making Business 

Potato chips are one of the most popular ready to eat snacks item in India. And any individual can start a small-scale manufacturing project with small capital investment. Additionally, from the same unit, you can produce french fries and banana wafers also. Definitely, it will increase the overall profitability of your unit.

Currently, the potato chips are available in different tastes and flavors. The list includes salty, sour, sweet, hot sauce, ketchup, light salted, red hot, etc.,

The object of crafting this article is to provide a detailed guide on how to start the potato chips manufacturing business. Additionally, the article consists of the project cost, registration & licensing requirements, machinery, manufacturing process, raw materials etc.

Potato Chips Market Potential & Opportunity

Potato chips are the most popular salted snacks item globally. Additionally, the demand is increasing day by day. The global potato chips market is expected to grow at a CAGR of 4.3%, during the period 2017-2022, to reach a market value of USD 40.3 billion by 2022.

Basically, there are several aspects that are directly and indirectly responsible for the rapid growth. The reasons include easy affordability and availability, increasing young population, growing disposable incomes and changing lifestyles. Additionally, the introduction of healthier alternatives, like the low-fat and low-sodium chips, in the emerging markets also supports the growth of this industry.

Potato chips in the pouch packets are the most popular in the market. Additionally, hotels, restaurants, and caterers are the major institutional buyers of this item. Also, the product has a great export potential. Some of the most popular potato chips brands are Lay’s, Pringles, Uncle Chipps, Haldiram’s, Ruffles, Bingo, Tastilo etc.

Create a Business Plan

In starting the business, you must have a business plan or project report in your hand. And according to your investment capacity, you will need to craft the project report. Additionally, the project report is a mandatory tool for applying for a bank loan. Generally, a project report has two parts. One is mechanical and another is financial. It is advisable to ask an expert for preparing the project report for your proposed unit.

Potato Chips Manufacturing Plant Cost

Generally, the cost of the project depends on the several aspects. These are production quantity, business size etc. However, the fixed capital consists of plant, building, machinery, and other preliminary expenses. And the working capital cost consists of raw materials, labor, utilities etc.

Licensing & Registration of Potato Chips Making Business

In starting this business, you will need to obtain several registrations and licenses from the Govt. authority. First of all, you have to register the business with ROC. However, you can also start a mini plant as a proprietorship company. Apply for Trade License and MSME Udyog Aadhaar registration. Also, you have to get the permission from FSSAI.

This type of production unit doesn’t demand pollution clearance. However, it is better to have a NOC from the Pollution Control Board of your location.

Definitely, you will establish a brand in the market. Hence, you can protect the brand name through Trademark registration. Consult with a tax consultant about the upcoming compliance liabilities. You will need to get the GST registration too.

Potato Chips Making Machine & Unit Setup

Obviously, you will need to have a space for the unit operation. Generally, an 800 Sq Ft space is good enough for starting a small scale unit. However, it depends on the business size. Additionally, you will need to have electricity and water supply.

Carefully, select the factory location. There are some important aspects that you must consider before selecting a location for the unit. You can start the unit by two ways. Either as semi-automatic or as the fully-automatic basis. However, procure the machinery carefully from the reliable suppliers. Some of the basic machinery requirements are

• Potato washing and peeling machine
• Slicing machine
• De-watering machine
• Batch fryer
• Spice coating machine
• Sealing machine with inert gas flushing unit
• Stainless steel working tools
• Weighing scales, dispensers, and fillers
• Plastic trays

Raw Materials for Potato Chips Making Unit

The major required raw material is the potato.  However, you have to procure potatoes carefully. You will need to collect large oval shape free from disease and fully matured potatoes. Additionally, it must have the minimum number of eyes to cut down the losses by trimming.

Additional required raw materials are oil, salt, and spices, preservatives etc. Also, you will need to procure the packaging consumables. For primary packaging, you will need to have poly pouches. In addition to that, for outer packing, you have to arrange corrugated boxes.

Potato Chips Manufacturing Process with Flow Chart

First of all, wash the potatoes thoroughly and peel them. You can peel the potatoes by manually with stainless steel knife or by means of an abrasive potato peeling machine.

Then wash the peeled potatoes with sprays of water. Then trim them and place in water to prevent browning. After that, cut them into slices from 0.4 to 0.5 cm thick on a slicing machine. Again place the slices in cold water.

Whenever there is considerable delay in the subsequent operations of blanching, you can keep the slices in water containing 0.05% Potassium metabisulphite to avoid oxidation.

Then blanch the slices for 3 to 5 minutes in boiling water and spread on trays at the rate of 4.88 kg. to 7.30 kg. per square meter of tray surface. The blanched chips are then subjected to hydro-extracting machine (centrifugal) to remove excess of water and fried at 1900°c for 3-4 minutes. fried potato wafers are then

Finally, keep the fried potato wafers on the sieve to remove excess of oil. After cooling, mix the other ingredients like salts, the spicy mixture as per required taste. And finally, pack the potato chips in polythene bags and seal.

Quality Specification for Potato Chips

During the production, you will need to maintain some of the quality specifications for the potato chips. First of all, you have to maintain the moisture in chips 2% maximum. Additionally, you must use F.F.A of oil as oleic acid up to 0.1% maximum. The oil must contain nil Peroxide value. Finally, the potato chips must free from coliforms, salmonella and streptococci bacteria.

Potato Chips Making Project  Cost Synopsis

Plant Capacity: 2000 kgs per day	Plant & machinery: Rupees 137 Lakhs
Working Capital: Rupees 91 Lakhs	Total capital investment: Rupees 271 Lakhs
Return: 39.21%	Breakeven: 40.17%

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