§1What this business is

Fresh tapioca (cassava) roots are washed, peeled and crushed in raspers. The milk is sieved and the starch is left to settle in tanks. Part of the wet starch is granulated in a globulator, sieved to size, roasted and dried into sago (sabudana); the rest is dried and sold as tapioca starch. The DPR notes that about 5,000 litres of water are needed to process one tonne of tubers.

Capacity: At 100%: 225 tons of sago at ₹38,000 a ton and 675 tons of tapioca starch at ₹32,000 a ton — 900 tons worth ₹301.50 L a year. 300 working days, single shift of 8 hours. Planned at 40%, 50%, 60%, 65% and 70% of capacity in years 1–5.

§2Is it right for you?

Who it is for

An entrepreneur in a tapioca belt such as Salem (Tamil Nadu), Kerala or East Godavari with water and effluent arrangements.

Who it is not for

Anyone outside tapioca-growing districts or without enough water and drainage.

Advantages

  • Sabudana has steady demand for fasting foods, papad and snacks
  • Two products — sago and starch — from the same roots
  • Modest, realistic profit figures in the DPR
  • Starch also sells to textile, paper and adhesive units

Drawbacks

  • Needs a lot of water and creates foul starch effluent
  • Roots must be processed within 1–2 days of harvest
  • Only practical near tapioca fields — the DPR names Tamil Nadu, Kerala and Andhra Pradesh
  • Labour heavy: 23 people

Skills you need

  • Buying roots by starch content
  • Starch settling and sago granulation
  • Effluent treatment and water management
  • Selling through sago traders and wholesalers

Why difficulty 4/5: Wet starch processing needs water, effluent control, many workers and fresh roots every day.

§3Market

Who buys

  • Sago wholesalers and commission agents
  • Papad, snack and namkeen makers
  • Textile, paper and adhesive units (for starch)

How it sells

  • Sago trade markets and cooperative sales
  • Wholesale grain and grocery markets
  • Direct supply to food and industrial users

Good to know

  • The DPR takes sago at ₹38,000 a ton and tapioca starch at ₹32,000 a ton.
  • The DPR notes that about 200 kg of sago is obtained from one tonne of tapioca tubers.

§4Raw material & machinery

ItemQtyCost
Roots washing machine1₹3.75 lakh
Rasper with blades3₹2.25 lakh
Sieves (4' × 8')6₹1.80 lakh
Stokes1₹0.30 lakh
Pulleys15₹0.45 lakh
Belt (100')1₹0.15 lakh
Flour roller (spike mill)1₹0.75 lakh
Globulator set1₹1.20 lakh
Sago sieves1₹1.50 lakh
Electric motor1₹1.80 lakh
Stitching machine1₹1.50 lakh
Weighing machine1₹0.60 lakh
Storage racks1₹0.75 lakh
Material handling trolleys1₹1.00 lakh
Misc. tools and tackles1 set₹0.30 lakh
Standby generator set (32 kVA)1₹3.25 lakh

From: NIFTEM-Thanjavur (IIFPT) PMFME model DPR — Sago

  • Fresh tapioca (cassava) rootsprocessed within 1–2 days of harvest; raw materials taken at 60% of sales value
  • Waterabout 5,000 litres for each tonne of tubers
  • Bags, stitching thread and markerspacking material

From: NIFTEM-Thanjavur (IIFPT) PMFME model DPR — Sago

§5Licences & registration

  1. Udyam registration
  2. GST registration
  3. FSSAI licence or registration
  4. Factory licence
  5. State Pollution Control Board consent (starch effluent)
  6. Legal Metrology registration for packaged goods

We can do this registration for you

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§6Schemes & subsidies

The DPR itself counts a PMFME grant of ₹10.00 L against a term loan of ₹22.78 L; at ₹36.43 lakh the project is also within PMEGP's ₹50 lakh manufacturing ceiling — take only one subsidy. A CGTMSE-backed loan avoids collateral.

§7Money

How the investment is worked out: Machinery and equipment ₹21.72 L (machines ₹18.10 L + installation, taxes, freight and insurance at 20% ₹3.62 L) + miscellaneous fixed assets ₹6.75 L (32 kVA generator ₹3.25 L, electrification ₹1.00 L, furniture ₹0.75 L, fire and safety ₹1.25 L, misc. ₹0.50 L) + preliminary and pre-operative ₹0.23 L + security deposits ₹0.28 L + working capital margin ₹7.45 L = ₹36.43 L. Premises are taken as owned, so land and building are not in the total.

Working capital: Recurring expenses ₹21.20 L in year 1, of which bank finance ₹13.75 L and margin money ₹7.45 L; margin rises to ₹12.81 L by year 5.

Year not printed on the DPR (the PMFME scheme began in 2020) — check current machinery prices.

How to prepare a loan file

§8Export potential

Export council / board: APEDA

  • The DPR prints no HS code — look up the exact code in the DGFT ITC-HS schedule before you quote to a foreign buyer.

§9Risks — where people fail

  • Pollution board action over untreated effluent
  • Root price and supply swings by season
  • Discoloured sago fetching a lower price
  • Water shortage in summer

§1030 / 60 / 90-day plan

A general plan that applies to any business. A plan for this business will be added after research.

  1. Days 1–30: Visit a working sago (sabudana) and tapioca starch unit unit, ask 10 buyers about price and quantity, and get quotations from 3 suppliers.
  2. Days 31–60: Udyam and the licences you need (Udyam registration, GST registration), a project report (DPR), and the scheme or loan file.
  3. Days 61–90: Space and machines, trial production, and first deliveries to 10 customers.

§11Who to connect with

§12Watch

There is no episode on this business yet. Shows are coming soon on the Podcast page.

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Sources

  1. NIFTEM-Thanjavur (IIFPT) PMFME model DPR — Sago

Data review: 6 October 2026. Spotted a mistake? Report it. For information only — not legal or financial advice.