Agroindustrial project analysi

4The Processing FactorTHis STUDY HAS PROGRESSEDthrough an examination of agroindustrialoutput (marketing) and input (procurement) activities and willnow assess processing, the transformative activity of an agroindustry.The processing stage is operationally central to an agroindustrialenterprise and the point at which project analysts mustmake crucial investment decisions.Primary ElementsProcessing operations for food and fiber vary widely in form andcomplexity with the kind of processing performed (for example,sorting or cleaning, mixing, milling, extraction, canning, freezing,drying, cutting, cooking, pasteurization; see table 1-1) and the kindof raw material (animal or plant) processed. (See appendix A andtables A-1 through A-3 on drying, freezing, and canning.) Despitesuch diversity, there are several common factors that should beconsidered when examining an agroindustry's processing stage.They include the following, each of which will be discussed in thesections of this chapter:* Selection of processing technology. The analyst reviews theimplications of market requirements; flexibility in processing;costs and availability of labor, capital, materials, and energy;nutritional consequences; and source considerations.* Plant location. The analyst examines considerations of rawmaterial, market, transport, labor, infrastructure, land, anddevelopmental effect.* Inventory management. The analyst assesses storage capacity,physical facilities, and financial aspects.* Supplies for processing. The analyst identifies needs for inputsother than raw material.117