chief advisor to principal advisor · new markets . new pricing . the largest producer of milk (133...
TRANSCRIPT
Principal Advisor Chief Advisor to
Globalisation
Process Integration.
Bilateral trade.
Diminishing world, singular demands.
Right-Cost Country optimisation.
Business friendly Global Banking.
Borderless consumer.
Growth in initial areas extends parity.
Parity feeds demand; new consumption.
Demand outpaces development.
Lack of development creates bottlenecks.
Bottlenecks raise costs.
High costs restricts; feeds aspirations.
Aspirations provide further scope.
Enduring Scope is Unending Opportunity.
Enduring Scope is Unending Opportunity.
Chain of business
Chain of transactions. Chain of information. Chain of operations. Chain of processes. Chain of policies. Chain of people. Value chain.
Demographics, National Priorities, Sustainability, Technology,
Information, Affiliation.
Uneven, non-holistic development of resources!
Cold-chain requires integration across total activity chain!
Changing priorities, impatient populace – short cuts!
Fear of missing the bus – short term strategy for long term solutions!
Integrated infrastructure development. Reverse haulage – capacity utilisation. Market capture – barriers and tariffs. Training and Skilled deployment. Rapid demo-graphic changes. Changing global strategies. Technology adaption. Investment inertia.
FSMA / FSSAI / Others
Trend is to move from post-facto control mode to first mile preventive mode.
Impacts independent development agendas; changed deployment of resources.
Benefits stakeholders from early compliance; lowered rejects, opens strategic options.
More inclusion among stakeholders.
Prevent
Controls
Inspect
Compliance
Recall
Response
Partner
Administer
Resource
Labs
Skills
Costs
Fees
Procurement
Onus
Distrust
Sharing
Business
New markets
New pricing
The largest producer of milk (133 million tonnes). Largest producer of mangoes (15 million tonnes). Largest producer of bananas (29 million tonnes).
Largest exporter of beef (1.52 million tons), largest buffalo livestock (105 million). Second in fruit (80 mlllion tonnes) and vegetable production (160 million tonnes). Third-largest producer of fish (8.3 million tonnes).
Third largest pharmaceutical producer, 8% of global production.
Human population of 1.22 billion. with a GDP of USD 1.94 Trillion. Post harvest value loss ~18-40% of farm produce. Foreign Trade USD 795 billion.
Coastline is more than 7,500 km long. Interspersed with more than 200 ports. International cargo: 95% by volume and 75% by value is carried by sea. Ports capacity 1,247 million tonnes, doubling by 2017. Railways: 87,087 km, across 7,083 stations and operates more than 18,000 trains every day. 4.2 million km Roads : National Highways - 76,818 km, State Highways - 154,522 km, District Roads - 2,577,396 km, Rural Roads - 1,433,577 km.
not a single perishables gateway! only ~8000 reefer trucks. limited reefer rail options. Containerisation at 20%.
4th largest electricity consumer, fifth largest installed capacity (246 GW) with 11.5% renewable capacity. 300 clear days, Solar radiation 4 to 7 kWh/m2; area 3.287 million sqkms. Solar reception 5000 Petawatt-hours per year. Fifth largest in wind power; 18,634MW in 2013. Among lowest ecological footprints of 0.9 gha/person. Starkly different, tightly clustered; six major climatic zones.
DTR: (Tmax) – (Tmin) of 20°C Shortfall of power, reliance on diesel gensets. Insulation and energy efficiency standards. Portability options min.
24.0
25.0
26.0
27.0
28.0
29.0
30.0
31.0
32.0
800850900950
100010501100115012001250
% o
f tot
al
mill
ions
Urban population % Total population million
0.0
0.5
1.0
1.5
2.0
2.5
800850900950
100010501100115012001250
% G
row
th
mill
ions
Total population million Population annual % change
Indian Economy: growing at more than 8% for last decade, population growing @ 1.5% annually for last two decades.
Continuous urbanisation of India due to expanding development.
Projections: on-going Key socio-economic changes and four fold growth in the size of middle to rich class Indian households; resulting doubling household consumptions by 2020.
Young populace, aspirations overreached and to stay stretched.
GDP USD 1.94 trill in 2012 from 1.25 trill in 2006 (+56% in 6 years).
Spending growth: $991 billion in 2010 to $3.6 trillion by 2020 (5.8% of global consumption, doubling from 2.7%).
1,870,000 Consumer Food outlets (2012).
Source: Boston Consulting & CII, IRIS, MoSPI- Govt of India.
474
593
785
1003
354 444
565
735
FY05 FY07 FY09 FY11
Domestic spend (USD from ₹) 31-Jan-2012
Per Capita Disposable Income Per Capita Disposable Spending
>2 x from 2005
60% 17%
10%
6% 4%
3% India Spends on
Food and Grocery
Others
Clothing and Fashion
Electronics
Beauty and Welness
Furniture and Fixtures
Increased Demand for (Cold Chain)
Quality Foods
Increase in consumer class pop.
Purchasing power, Rise in
income
Changed consumer mindset
Easy consumer
credit
Quality & Hygiene
consciousness
28.6
43.0 50.9
65.6 68.5 71.5 74.9 81.0
58.5
88.6
101.2
128.4 129.1
134.1 146.6
155.0
0
20
40
60
80
100
120
140
160
180
Million Metric Tons
Horticulture Production
Fruits Vegetables Plantation Crops Others
x 2.6
x 2.8
Others: includes Spices, Loose Flowers, Nuts, Mushroom, Aromatic/medicinal and Honey . Source: Horticulture Division, Ministry of Agriculture and CrossTree Analysis
Agriculture cultivated area: 150 million hectares • Area under
Horticulture: 23 million hectares (15%)
$260 billion to Indian GDP by Agriculture • 35% of this is from
Horticulture. Within Horticulture, perishable commodities trends higher
& drives growing demand for perishable handling.
Inflationary trend (40 years) shows Food as prime driver with perishables contributing highest.
Despite producers showing robust response by increasing supply, yet inflationary pressure exists.
This may indicate that demand for perishable products continues to outstrip supply.
This also indicates a lack of efficient supply systems which continues to feed inflation in food items. 1971-72 to
1981-821982-83 to
1993-941995-96 to
2004-052005-06 to
2011-12
All Commodity 10.2 7.9 5.9 6.6
Primary Food 8.5 9.2 5.9 9.9
F & V 9.0 10.6 7.5 9.2
Milk 7.1 9.0 5.7 10.1
Eggs, Meat, Fish 11.0 9.4 6.4 11.8
10.2
7.9
5.9
6.6
8.5
9.2
5.9
9.9
5.5
6.5
7.5
8.5
9.5
10.5
11.5
Infla
tion
%
Trends - Annual Average WPI Inflation (from 1970 to 2012)
Continual demand for food distribution and cold chain is foreseen over coming decade.
Source: RBI, Office of Economic Adviser, MoCI, Govt of India
• Global Cold chain logistics spend from $5.2 billion in 2008 to $6.9 billion in 2012.
• Growth in Asia outstripped all regions.
• Asia & India continue to grow into a major hub for Bio-Pharma, cold chain demand from the sector continues to rise.
Notes : Figures exclude clinical trials which is separate specialised logistics. Sources: Cold-Chain BioPharma Logistics Sourcebook 2011 & UN Comptrade database, Orkash and CrossTree Analysis
2.1 2.5 2.7 3.2
1.5 1.7 1.9
2.3 1.0 1.2
1.5
2.2
0.6 0.6
0.8
1.1
0
2
4
6
8
10
2008 2009 2012e 2015e
BioPharma Logistics Spending (USD Billion)
North America Europe Asia Rest of World
0 0.5 1 1.5 2 2.5 3
NorthAmerica
Europe
Asia
Rest of World Cold Logistics Growth USD Billion
2012e2008
$0.6 to 0.8 billion (33% Growth)
$1.0 to 1.5 billion (50% Growth)
$1.5 to 1.9 billion (27% Growth)
$2.1to 2.7billion (29% Growth)
Higher-than-average growth in vaccines & specialty pharmaceuticals and heightened regulatory requirements continues to drive cold chain for pharma.
3.7 4.9 4.9 6.1 7.2 8.3 10.5
13.5 16.7
11.5 13.4 15.6
18.4 21.5
24.7 28.4
32.4 36.7
0
10
20
30
40
2007 2008 2009 2010 2011 2012F 2013F 2014F 2015F
Indian Pharmaceutical USD Billion
Exports
Total
Cold chain shipment growth by region
Note : Total Food Service Outlets is a sum of Standalone , Leisure and Retail outlets Source : Euromonitor, IBEF, IRIS and CrossTree Analysis
India is 5th largest retail market worldwide.
1,968,000 Consumer Food outlets by 2015.
Organised Retail Market is growing despite FDI. This feeds demand for cold chain. Simultaneous growth in the
food service sector accelerates need for the cold-chain.
0
20
40
60
80
100
120
140
160
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E 2015E
Food Service Outlets (‘000)
Standalone (LHS) Leisure (RHS) Retail (RHS)
27.8 41.4 88.6
396.1
486.4
780.5
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
2010 2012 2015P
Size of Retail Market (USD Billion)
Modern Retail
Traditional
Food &Grocery
Furniture &Furnishings
Electronics
Beauty &Wellness
Clothing &Fashion
Others
99%
77%
96%
88%
89%
90%
Traditional Modern
Notes: 2009 and 2010 numbers only for NHB and NHM assisted cold storages. Numbers as of Dec 2012 Source: NHB, NHM, Directorate of Marketing and Inspection 2009, Orkash & Crosstree Analysis
0
5000
10000
15000
20000
25000
30000
35000
0
1000
2000
3000
4000
5000
6000
7000
1955 1960 1965 1970 1975 1979 1986 2004 2007 2009 2010 2011 2012#
(‘000
) ton
s
Num
ber
Cold Storage Availability
Number of Cold Storages
Installed Capacity in '000 tons (Cumulative)
In the Last Decade 1955-1986
As of last recorded national level data , India has 6488 cold storage with a cumulative installed capacity of approximately 30 million Metric Tons .
Key Trends • More than 25% of the cold storage units (~10 mill tons) have been built post 2004. • Growth (CAGR 2004-12 ) : Numbers of Cold Storage : 3.57%, Capacity : 5.19%. Growth in Transport capacity 22% • Current short fall of 4000 reefer trucks, govt states another 30+ million tons capacity needed.
The witnessed growth in the Cold Storage sector is accepted to only accelerate in the coming years
88%
12%
Segments StorageTransport
2007-08 2010-11 2014-15
2.1
3.8
6.9
0.2 0.9
1.9
CC Market U$ Billion
Storage Transport
Capacity mostly focused on single product types – a long learning curve established
Minimal outreach for foods and pharma – localised operations, earlier focus was storage.
Chain approach to counter Irregular parameters across regions and within days.
Fragmented development did not encourage holistic cool logistics for single source service.
Refrigerated systems need adaption to India specific needs in design and capacity utilisation.
Capacity mostly focused on single product types – a long learning curve established
Minimal outreach for foods and pharma – localised operations, earlier focus was storage.
Chain approach to counter Irregular parameters across regions and within days.
Fragmented development did not encourage holistic cool logistics for single source service.
Refrigerated systems need adaption to India specific needs in design and capacity utilisation.
Government as ‘Catalyst’
Encourages Investments
Agri/Foods identified as
priority sector
Encourages holistic
development
NCCD takes shape
Liberalises Marketing
Norms
Focus on Market links development
Rationalises Tax Laws
Move to uniform
VAT/GST
Credits Grants & Subsidies
PPP, Grants, Negotiable Warehouse Receipts
Liberalising FDI Inflow
100% FDI in food sector
Increasing focus to create enabling infrastructure by govt. While this support was earlier focused on static cold storages, recent developments have been to include refrigerated trucks including containers. NCCD to play pivotal role to correlate industry expectations and policies.
Subsidies available for constructing
Cold Chains by Govt. of India
Capital Investment
Subsidy / RIDF Scheme
Integrated Cold Chain Scheme
PPP-IAD
NVIUC
Public Entrepreneur
Guarantee Scheme 40.9
593.9
1187.5
0
500
1000
1500
Xth Plan XIth Plan XIIth Plan
USD
Bill
ion
Outlay Amounts for Infrastructure Development
(Five Year Plans)
Initiatives for Infrastructure Development • Mega Food Parks Scheme. • Integrated Cold Chain Scheme. • State level Initiatives. • National Horticulture Board. • National Horti and FPI Missions.
NCCD as umbrella agency to address concerns.
Central Excise Duty
• 100% exemption for specified equipments for storages or transport, self loading / unloading trailers / semi-trailers.
Customs Duty
• Full exemption from basic customs duty for manufacture of refrigerated vans/trucks; bio-polymer/bio-plastics;
• Concessional duty of 5% for initial installing or expansion of a cold storage, cold room, processing, etc.
Service Tax Exemption
• ‘Erection, Commissioning or Installation’ of Mechanized Handling Systems; Cold Storage and transport;
• Cold-chain Service of storage and transporting agriculture produce. • Technical Testing; Analysis Service and ‘Technical Inspection and Certification Service’.
Capital Investment
• Cold Chain & FDI: 100% FDI through automatic route. • Investment linked Tax deduction : 150% of capital investment deductible. • Government subsidy on investment: 40 to 55% subsidy on storage and transport
Industry, PSUs, Government, Investors, Entrepreneurs, Farming Associations & Knowledge Houses - All Working Together!
Executive Committee
2
5
3
4
1 Technical Specification,
Standards, Test Laboratory & Product
Certification Committee.
Training, HRD and R&D Committee.
Committee for Application of non-Conventional Energy
Sources in Cold Chain Infrastructure.
NCCD Members, other
Committee for Supply Chain & Logistics.
6 Liaison with other NLAs
and States
cold chain sectors
Cold Supply Chain (India): Poised for a Quantum Jump
Best practises for Sub-continent conditions, market.
Skill development & training establishments.
Appropriate & integrated Infrastructure development.
Adoption of energy efficient technology.
Partner with Indian logistics companies.
Adapting from mass storage to direct access storage.
Manage and develop Multiple markets in region.
Anticipate ahead of a developing market.
Innovators and solutions biased companies.
Technology Provision and implementation.
Cold Logistics and Supply Chain services.
Specialised Infrastructure designers and planners.
Expertise in alternate energy, environmental protection.
Scalable, Energy efficient Refrigeration technology.
Refrigerated Vehicles and last mile delivery systems.
Education, Training & Cold chain management experts.
Knowledge Managers and Integration specialists.
Food / Pharma Exports
Polio Eradicated QSR Majors
Eggs, Beef, Ice Cream
The Source and the Destination
