The Tapioca Sago and Tapioca starch industry of Tamilnadu is the result of scarcity created by the impossibility of imports of foreign sago and starch from Singapore, Malaysia, Holland, Japan and U.S.A., during the Second World War. In the year 1943, Mr. Manickam Chettiar, a dry fish merchant of Salem had the occasions to go to Kerala very often in connection with the trade. He found tapioca flour to be a good substitute for the American corn flour. Shri Popatlal G. Shah, an evacuees from Penang (Malaysia) came in touch with Shri. Manickam and taught him the technical know-how to manufacture sago out of tapioca flour. Thus tapioca was used in 1943 to manufacture both starch and sago. But the methods adopted were crude and primitive.

In order to meet the daily increasing demand for sago and starch, Mr.Manickam with the help of a genius mechanic M. Venkatachalam Gounder improved the methods and machinery of production. The productive capacity of the industry increased from 2 bags of 100 kilo to 25 bags per day. In 1944 there was a severe famine in the country as a whole, and tapioca being edible, the collector of Salem prohibited the export of tapioca from Salem District.

The Salem sago and starch manufactures though very few in number formed an association and represented their case before the Civil Supply Commissioner and got the prohibitory order of the District Collector and also that of Madras Government for the export of sago and starch to other states cancelled. In 1945 production of sago and tapioca starch increased appreciably.

The sago and tapioca starch industry was born during the Second World War. But the aftermath of the war posed a severe threat to its existence. The Second World War was over and imports of starch and sago began to increase from foreign countries under general license No. XI.

Sago and starch manufacturers made the successful representation to Sri. C. Rajagopalachari, the civil Supplies and Industries Minister in the Interim Government and it resulted in the banning of imports of sago, which was extended up to 1949.

The Tariff Board also gave protection to sago industry from time to time up to 1957 in one way or other.

In 1957, misguided by some government officers and jealous persons, the Calcutta Corporation with the help of the Enforcement Branch seized about 8000 bags of sago from the traders in Calcutta under the bogey that Salem sago was not fit for human consumption. The action of Calcutta Corporation was terrific on the sago industry, and its price came down to Rs.20 per bag from Rs.65 within one month. Many manufacturers ceased the production and the agriculturists decided to switch over to the cultivation of other crops. This was the worst crisis faced by the industry since 1943.

The Sago manufacturers association faced the crisis boldly. They filed a case before the Supreme Court, against Calcutta Corporation. The sago manufacturer successfully established, by the analytical report that there was practically no difference between the good imported sago and the Indian product. They won the case. From that time Salem sago was also brought under Processed Food Act. Sago industry was thus saved.

In 1949, there were 45 units with about 7000 tonnes production of sago and starch. In 1957, there were 125 units producing about 23000 tonnes of sago and starch.

In 1993, there were about 852 units in India out of which 725 units are located in Tamilnadu. In Salem District alone there are 649 units constituting 89.5 percent. In 2008-09 there were about 359 sago industries located in Tamilnadu. In Salem District alone 120 units are located in Attur and Gangavalli area.

Tapioca waste like Thippi (remaining after starch and sago) is extensively used as cattle feed and the powder extracted from this residue known as Thippi flour or paste flour is used for various pasting purposes.

Sago and tapioca starch industry in Salem District and Tamilnadu has had a phenomenal growth in the last 47 years. Though it is a recent industry of Tamilnadu, its role particularly in Salem economy is very great indeed. It has already affected and has vastly increased the trade potential in addition to giving scope for employment opportunities for labour.

According to FAO classification, Root and tuber crops form staple diet for three percent of the global population. Cassava is mostly used for human consumption in the African continent and South America. Industrial utilization of cassava is prominent in Thailand, Indonesia, Vietnam and India in the form of starch, sago, dried chips, flour and the like.