The Technical Efficiency of Sago and Starch Industry Cluster

By : E. Bhaskaran

Page No: 377-390

Abstract
Salem District of Tamil Nadu manufacturer’s Sago and Starch is India’s fastest growing market. For inclusive growth and sustainable development, Sago and Starch Industries (SSI) in Salem have adopted the Cluster Development Approach (CDA). The objective is to study the valuechain analysis, correlation analysis and data envelopment analysis by finding technical efficiency (Ø), peer weights (λi), input slacks (S- ) and output slacks (S+) of Sago and Starch Industry Cluster (SSIC). The methodology adopted is using data envelopment analysis of output oriented Banker Charnes Cooper (BCC) model by taking the number of bags produced in lakhs and sales value in lakhs, as inputs, and revenue of state government in lakhs and net profit in lakhs, as outputs. The non-zero λi represents the weights for efficient clusters. The S > 0 obtained reveals the excess number of bags or sales value (S- ) and shortage in Government revenue or net profit (S+). To conclude, the variables are highly correlated and for inclusive growth and sustainable development, the inefficient SSI should increase their net profit or decrease the number of bags or sales value. Moreover, for sustainable development, the SSIC should strengthen infrastructure, technology, procurement, production and marketing interrelationships to decrease costs, and to increase productivity and efficiency to compete in the indigenous and export markets.

Author :
E. Bhaskaran : Joint Director (Engineering), Department of Industries and Commerce, Government of Tamil Nadu, Guindy, Chennai.
 

DOI: https://doi.org/10.32381/PROD.2020.60.04.3