food processeing - august 2013

7/29/2019 Food Processeing - August 2013

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2nd largest arable land

in the world

India holds 2nd largest arable land in the world. With 20 agri-climatic regions, all 15 major

climates in the world exist in India. The country also possesses 46 of the 60 soil types in

the world

Largest producer of

pulses, milk, tea etc.

India is the largest producer of pulses, milk, tea, cashew and mangoes, buffalo meat; and

the second largest producer of tea, wheat, sugarcane and rice

Largest livestock

population

Globally, India has the largest livestock population of 470 million, which includes 205

million cattle and 90 million buffaloes

Rising consumption

expenditure

Consumption expenditure is likely to reach USD3.6 trillion by 2020, up from an estimated

USD1.0 trillion in 2010.

Source: World Travel and Tourism Council, Aranca Research

Favourable location for

exports

Strategic geographic and proximity to food importing nations, makes India favourable for

export of processed foods


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The engineering sector is delicensed;100 per cent FDI is allowed in thesector

Due to policy support, there wascumulative FDI of USD14.0 billion intothe sector over April 2000 February2012, making up 8.6 per cent of totalFDI into the country in that period

Growing demand

Notes: 2020E Estimate for 2020; Estimates are from Flavours of Incredible India (Ernst & Young, 2009)

FDI Foreign Direct Investment

Strong demand growth

Demand growth for processed foodhas been rising with growingdisposable income, urbanisation, ayoung population and nuclearfamilies

Household consumption is set todouble by 2020

Changing lifestyle and increasingspend on health and nutritionalfoods

Food processing hub

India benefits from a largeagriculture sector, abundantlivestock, and cost competitiveness

Investment opportunities will arisein agriculture, food infrastructure,and contract farming

Diverse agro-climatic conditionsmaking it suitable for practicingdifferent crops

Policy support

Sops to private sector participation;100 per cent FDI under automatic

route Agri Export Zones have been set up;

under the governments Vision 2015plan, mega food parks to beestablished

Approval of National Mission on FoodProcessing

Increasing investments

Government expects USD21.9billion of investments in food

processing infrastructure by 2015 Investments, including FDI, will rise

with strengthening demand andsupply fundamentals

Launch of InfrastructureDevelopment scheme to increaseinvestments in food processinginfrastructure

2009

Domestic

food

spending:

USD181

billion

2020E

Domestic

food

spending:

USD318

billion

Advantage

India


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Source: Indiabusiness.nic.in, Ministry of Agriculture, APEDA,

Meat & Poultry Processing Board, FAOSTATNote: FY Indian Financial Year (April March)

MT - Million Tonnes, * - Data mentioned is for FY12

Foodprocessing

Fruits and vegetables

Milk and milk products

Meat and poultry*

Marine products

Grain processing

Consumer food

India is the worlds second largest producer of fruits and

vegetables

With 127.3 MT in FY12, India is the largest producer of milk in the

world

India is the largest producer of buffalo meat (1.5 MT*) and thesecond largest producer of goat meat (0.6 MT*)

With 8.9 MT production in FY12, India is the second largest

producer of fish in the world

India produced about 259.3 MT of food grains in FY12

Among the fastest growing segments in India; it includes

Packaged

food

Aerated soft

drinks

Packaged

drinking

water

Alcoholic

beverages


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Contribution of food processing industry in

manufacturing (FY12)

Source: Ministry of Food Processing Industries ( MOFPI),

Annual Report MOFPI (2012-13), Aranca Research

The food processing industry is among one of the largest industries in India and ranks 5th in terms of production,

consumption and exports

With an estimated value of USD121 billion in FY12, Indias food processing industry accounts for 32 per cent of the total

food market

Food processing segment and market

share (FY12)

9%

91%

Food Processing

Other

40%

5%11%

20%

25%

Meat, Fish, Fruits,Vegetables and Oils

Dairy products

Grain Mill products

Beverages

Other food products


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Source: Ministry of Food Processing Industries ( MOFPI), Aranca Research.

Note: NCMSL - National Collateral Management Services Limited

Farmers,cooperatives and

Private

companies

Warehouses,cold storage and

silos

Retail shops,malls, cash and

carry

Farmers, Amul,

ITC, Pepsi,

Hindustan

Unilever Lever Ltd

Food Corporation

of India, NCMSL,

Arshiya

International

Kirana shops,

Bharti-Walmart,

Future Retail,

Aditya Birla RetailLimited

Inputs ProductionProcurementand storage

Processing Retailing

Seeds, Fertilizersand Farm

equipments

Grading, sorting,milling and

packing

National Seeds

Corporation

Limited, Cargill

and Advanta IndiaLtd

ITC ltd, Cargill,

Adani Enterprises,

Olam International

Key

activities

Major

p

layers


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GDP (USD billion) and growth of food processing

industry in India



During FY06-11, the food processing industry expanded at

a CAGR of 4.8 per cent; in FY11 alone, the industry grew

7.1 per cent

Food processing is an important segment in terms of

contribution to GDP, and share in the agriculture and

manufacturing sectors

In FY11, India had as many as 35,838 registered food

processing units with total capital investment of

approximately USD52.1 billion

According to MOFPI in FY11, capital investments in Indias

food processing sector have increased a significant 28.6 per

cent over the last year

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

10.0

11.0

12.0

13.0

14.0

FY07 FY08 FY09 FY10 FY11

GDP- Food processing industry Growth - right axis


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Annual growth of food products and beverages

from IIP (%)

Notes: ASI Annual Survey of Industries

IIP Index of Industrial Production

Although figures for output of food products and beverages

from ASI are not available post FY10, data from the Index of

Industrial Production (IIP) suggest strengthening growth

momentum in food products and beverages in FY11-12

Growth for food products and beverages shot up to 14.8

per cent in FY12 from 8.9% in FY11; the sector was the

second-fastest growing sub-segment within manufacturing

in FY12 and its growth far outpaced that of the overallmanufacturing sector in the fiscal year

Source: Ministry of Statistics and Programme Implementation

(MOSPI), Aranca Research-10

-5

0

5

10

15

20

FY06 FY07 FY08 FY09 FY10 FY11 FY12

Annual growth of Food products & beverages as per IIP

Annual growth of overall manufacturing sector as per IIP


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Unorganised sector has the largest share in the

sector (FY11)



The unorganised sector accounts for 42 per cent of Indias

food processing industry

The sizeable presence of small scale industries points to

the sectors role in employment generation

42%

25%

33%

Unorganised sector

Organised sector

Small scaleindustries


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Shares in production by value and volume (FY11)

Source: Ministry of Food Processing Industries, Aranca Research

Rice mills account for the largest share of processing units

in the organised sector

The governments focus on infrastructure is likely to see a

sharp rise in the number of cold storage units in the years

ahead

70%

50%

30%

50%

By Volume By Value

Unorganised sector Organised sector


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Healthy contribution to employment generation

(FY09)

Source: Ministry of Food Processing Industries,

Aranca Research

In FY09, the sector employed 48 million people

Policymakers have identified the food processing sector as

a key one in encouraging labour movement from agriculture

to manufacturing

Notes: FY Indian financial year (April March) Food processing

industry

Directemployment

(13 million)

Indirectemployment

(35 million)


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Changing consumer

tastes

Wide array of products, coupled with increasing global connectivity has led to a change in

the tastes and preference of domestic consumers

This trend has been bolstered by rising incomes, increasing urbanisation, a young

population, and the emergence of nuclear families

Entry of international

companies

Liberalisation and growth of organised retail have made the Indian market more attractive

for global players

With a large agriculture sector, abundant livestock, and cost competitiveness India is fastemerging as a sourcing hub of processed food

Rising business and

product innovation

Companies have been moving up the value chain; for example, cooperatives are

transitioning from being pure producers of milk to offering a wide range of dairy products

Firms, both domestic and global, have been focussing on product innovation to cater to

domestic tastes, while also introducing international flavours

Notes: FY Indian Financial Year (April March)

Rising demand on

Indian products in

international market

Strategic geographic location and continuous increase in production of raw materials helps

India to supply cheaper products to other countries

Indias exports of processed food and related items rose at a CAGR of 27.3 per centduring FY0812


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Source: Company Website, Aranca Research

Alcoholic beverages

Aerated soft drinks andpackaged drinking water

Packaged food

Fruits, vegetables,processed grain

Milk and milk products

Meat, poultry and marineproducts

Consumer food


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Source: Ministry of Agriculture, Aranca Research

Strong

government

support

Large domestic

market

Growing demandStrong domesticdemand Supply-side advantagesRising exportopportunities

Rising disposable

incomes

Growing middle

class, urbanisation,

a young population

Changing lifestyles

and food habits

Indias greater

integration with theglobal economy

Increasing exportswith advantage ofproximity to key

export destinations

Expected spike in

global demand as

emerging markets

grow at a fast pace

Favourable

climate for

agriculture; wide

variety of crops

Large livestock baseaids dairy and meatprocessing sector

Inland water

bodies, long

coastline help

marine products

Policy support

Vision 2015 plan

targets trebling of

food processing

sector

Mega food parks,Agri Export Zones to

attract FDI and aidinfrastructure

Approval of

National Mission on

Food Processing


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Rising disposable incomes

Strong growth in per-capita income has resulted in

greater demand for food items

Incomes have risen at a brisk pace in India and will

continue rising given the countrys strong economic

growth prospects. Nominal per capita income is

estimated (IMF) to have recorded a CAGR of 11.2 percent over 200012

There has also been a shift in demand

From carbohydrates to meat products (in line

with the various phases of economic growth)

To convenience foods, organic and diet foods

Rising per-capita income in India

Source: IMF, Aranca Research

Note: E - Estimate, F - Forecast

-5%

0%

5%

10%

15%

20%

25%

30%

300

600

900

1,200

1,500

1,800

2,100

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011F

2012F

2013F

2014F

2015F

2016F

2017F

Gross domestic product per capita, current prices Growth


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Growing middle class, urbanisation

Strong economic growth since the 1990s has led to

Rapid urbanisation and a growing middle class

Nuclear families and dual income households

Coupled with a young population and increasing media

penetration, this has led to a surge in demand for

packaged food, alcoholic and non-alcoholicbeverages, snacks, savouries, etc

Changing wealth dynamics of Indias population

Source: McKinsey Quarterly, Aranca Research

1% 3% 7%2%6%

17%12%

25%

29%35%

40%

32%50%

26%15%

Globals (>22065.3) Strivers (11032.7 - 22065.3)Seekers (4413.1 - 11032.7) Aspirers (1985.9 - 4413.1)

Deprived (


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Fruit Juices and Concentrates (USD millions)

Source: Ministry of Food Processing Industries, Aranca Research.

Note MT is Metric Tonnes

Confectioner items (USD millions)

495529 558

588

750

FY07 FY08 FY09 FY10 FY15E

121 131143

154

227


Dairy whiteners/creamers (MT)Soft and aerated drinks (million cases)

359373

388403

479


243

263 284307

450



19/44

Exports of processed food and related items

(USD millions)

Source: Ministry of Food Processing Industries, Aranca Research;


During FY08-12, India's exports of processed food and

related products increased at a CAGR of 27.3 per cent to

USD24.0 billion

Main export destinations for food products have been the

Middle East and South East Asia

10.9 10.7 10.7

14.0

24.0

FY08 FY09 FY10 FY11 FY12

CAGR: 27.3%


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Rising demand from rest of the word

Share of exports in total output of processed food stood at 19.8 per cent in FY12

This has primarily resulted from

Greater exports to advanced economies

More demand from emerging/ developing economies as they experience strong growth

Exports of key processed products (USD millions)

Source: Ministry of Agriculture, APEDA, Aranca Research


244

2,329

1,253

78

659305

50

682

2,6282,300

53

858

505 488

3,456 3,234 3,226

1,915

1,154 1,106 746

Guargum Basmati rice Buffalo meat Non basmati rice Other cereals Groundnuts Jaggery andConfectionery

FY10 FY11 FY12


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Supply-side advantages

Growth in food product exports has been aided by

Significant improvements in product and

packaging quality

Greater private sector participation

India has a location advantage it is geographically

close to key export destinations (Middle East, SouthEast Asia)

The US and the UAE are the top destinations for

Indias exports of processed food and agriculture-

related products, followed by Vietnam and Saudi

Arabia

Top ten destination countries of Indias exports of

processed food and agriculture related products in

FY12 (USD million)

Source: Ministry of Food Processing Industries,

APEDA, Aranca Research

3,061

1,490 1,4021,171

852 795 734 576

406 396

USA

UAE

Viietnam

S

audiArabia

Malasiya

Indonesia

Iran

Bangladesh

Kuwait

Nigeria


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Shares in APEDA exports (FY12)

Source: APEDA, Aranca Research

In FY11, APEDA products had 41.6 per cent share in total exports; non-APEDA products made up the rest

Within APEDA products, cereals had the highest share (36 per cent) while for non-APEDA products marine products

dominated with a share of about 21 per cent

Shares in non - APEDA exports (FY11)

21%

20%

20%

14%

11%

14%Marine Products

Sugar &Mollasses

Oil Meals

Spices

Tea & Coffee

Others

36%

17%5%

35%

6%

1%

Cereals

Animal products

Processed Fruits& Vegetables

Other processedfoods

Fresh Fruits &Vegetables

Floriculture &Seeds

Source: APEDA, Aranca Research


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Notes: * Data for Global share is taken from different sources

Indias comparative advantage lies in its favourable climate,

large agriculture sector and livestock base, long coastline,

and inland water resources

India also has an edge in cost of production compared to its

competitors in Asia and the developed world

Units Global rank

Arable land

(million hectares)157.9 2*

Area under

Irrigation (million

hectares)

63.1 1*

Coast line ('000

kilometers) 7.5 18**

Cattle (million) 205.0 1**

Source: World bank, FAOSTAT, CIA World Fact book, Aranca Research

Notes: * - For the year 2009; ** - For the year 2012

Production

(million tonnes)FY12

Global

Share*(%)Global rank

Milk (Cow &

Buffalo)127.3 16.9% 1

Pulses (nes) 7 19.7% 1

Buffalo meat 3.4 42.8% 1

Bananas 29.6 27.8% 1

Mangoes and

Guavas15.18 39.0% 1

Tea 0.96 23.0% 2

Rice (Paddy) 155.7 23.6% 2

Sugarcane 277.7 ~24.0% 2

Wheat 93.9 ~10.0% 2


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Encouragement to

private sector

100 per cent export-oriented units are allowed to sell up to 50 per cent of their produce in

the domestic market

Export earnings are exempted from corporate taxes

Tax incentives and

other sops

Import duty scrapped on capital goods and raw materials for 100 per cent export-oriented

units

100 per cent tax exemption for 5 years followed by 25 per cent tax exemption for the next5 years for new agro-processing industries

Full excise duty exemption for goods that are used in installation of cold storage facilities

Relaxed FDI norms 100 per cent FDI under automatic route (except for alcohol, beer, and sectors reserved for

small scale industries)

Repatriation of capital and profits permitted

Source: Ministry of Food Processing Industries, APEDA, Aranca Research

Notes: FDI Foreign Direct Investment


25/44

Focus on infrastructure

Assigned priority sector for bank credit

60 Agri Export Zones (AEZ) have been set up across the country

According to Vision 2015, formulated by MoFPI, the government plans to establish 30

mega food parks in public-private partnership mode across the country; out of these 10

have already been approved in the first phase

Government has also announced setting up of 15 Mega Food Parks in its FY12 Budget,

as part of the third phase of Mega Food Park Scheme

Incentives for

development of storage

facilities

Investment-linked tax incentive of 100 per cent deduction of capital expenditure for setting

up and operating cold chain facilities (for specified products), and for setting up andoperating warehousing facilities (for storage of agricultural produce)

Source: Ministry of Food Processing Industries, APEDA, Aranca Research

Focus on R&D and

mordenisation

The government launched initiatives such as for the Setting Up/Upgradation of Quality

Control/Food Testing Laboratory, R&D and Promotional Activity scheme and the

Technology Upgradation/Setting Up/Modernisation/Expansion of Food ProcessingIndustries Scheme


26/44

Source:APEDA, Aranca Research

Jammu & Kashmir: Apples,

walnuts

Punjab: Basmati rice,

vegetables

Himachal Pradesh: Apples

Rajasthan: Coriander,

cumin

Gujarat: Mangoes,

vegetables, sesame seeds

Andhra Pradesh: vegetables,

mango pulp, grapes, gherkins

Maharashtra: Grapes, grapewine, mangoes, flowers, onion

West Bengal: Pineapple, litchi,

Darjeeling tea, vegetables

Uttar Pradesh: Basmati rice,

potatoes, mangoes, vegetables

Uttaranchal: Basmati rice,

aromatic and medicinal plants

Madhya Pradesh: Onions,

garlic, seed spices, lentils

Karnataka: Gherkins, rose, onions,

flowers, vanilla

Tamil Nadu: Flowers,

mangoes, cashew nuts

Assam: Ginger


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Cumulative FDI inflows (Apr 2000Jan 2013)

into the food and agriculture sector (USD million)

Source: Department of Industrial Policy & Promotion, Aranca Research

Between April 2000 and January 2013, FDI in agriculture

and food processing in India stood at USD5.2 billion

Demand growth, supply advantages, and policy support

have been instrumental in attracting FDI

Notes: FDI Foreign Direct Investment,

1,489

1,801

1,135

385

223101 52

0

400

800

1,200

1,600

2,000

Agriservices

Foo

dprocessing

Fermentation

Vegetableoil

Agrimachinery

Te

aandCoffee

Sugar

0%

10%

20%

30%

40%

Cumulative FDI inflow (USD million)

Share of total FDI inflow (%) - right axis


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12th Five Year Plan (2012-17) outlay shares: Food

Processing

Source: Ministry of Food Processing Industries

(2009-10 Annual Report), Aranca Research

The governments main focus is on supply-chain related

infrastructure like cold storage, abattoirs and food parks

Notes: GOI Government of India

36.3%

45.4%

11.5%

5.5%

1.3% Infrastructuredevelopment

National Mission on FoodProcessing

Strengthening ofinstitutions

Food Safety, R&D andPromotional Activities

Innovation Fund Scheme

Plan allocation to the Food Processing

sector: USD2.9 billion


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Source: Thompson ONE Banker, Assorted News Articles,

Aranca Research

PE investments in the food and agriculture totaled USD229 million during 2011-12

Company Investor Type of business Deal value (USD million)

Godrej Agrovet Temasek Agribusiness 105.0

Nuziveedu Seeds Blackstone Group Floriculture 80.0

Nilgiris Dairy Actis Private Equity Dairy 65.0

Prakash Snacks Pvt Ltd Sequoia Capital Snacks 30.0

Parag Milk & Milk Products IDFC Dairy 29.0

Amalgamated Beans Coffee

Trading CoDarby Asia Investors

Non-citrous fruit

farming25.0

Bush Foods Overseas Pvt Ltd Standard Chartered Pvt Eq Ltd Rice milling 25.0

Tirumala Milk Products Carlyle Group Milk production 22.0

The CREMICA Group Motilal Oswal Private Equity Advisors General food products 15.0

Nashik Vinters Verlinvest SA Wine and liquor 15.0

Parag Milk & Milk Products Motilal Oswal Private Equity Advisors Dairy products 14.1

Godrej Tea IL&FS Investment Managers Coffee Coffee and tea 13.5

MajorPEdeals

Jan2010M

ar2013


30/44

Source: Thompson One Banker, Aranca Research

Notes: M&A Mergers and Acquisitions

M&A activity

Target company Acquirer company Type of business Deal value (USD million)

United Spirits Ltd Relay BV Liquor 2,045

GMR Industries Ltd EID Parry Sugar 114.8

Jay Mahesh Sugar Industries NSL Sugars Ltd Sugar 51.99

Olam International Ltd Hemarus Industries Ltd Sugar 73.8

Eastern Condiments McCormick & Co Seasonings, sauces 35.0

Krishidhan Seeds Summit Partners Agricultural seeds 30.0

Bajaj Hindustan Sugar & Ind Bajaj Hindusthan Sugar, ethanol 14.1

Associated Distilleries Globus Spirits Liquor 14.0

Taraori Rice Mills Pvt Ltd Ebro Foods SA Food and Beverage 14.0

Candico India Keventer Agro Candy items 11.2

M&Adeals

Jan2010M

ar

2013


31/44

Source: Thompson ONE Banker, Aranca Research

Note: JV Joint Venture

Players like McCormick had identified India as a strategic market way back in the 1990s

Global players like Hershey are now keen on entering the increasingly attractive Indian market

Established players like Nestle and Coke are extending their global JVs to India

Foreign Players Indian Partner Type of business Stake ratio Year

Molson Coors Cobra India Brewing NA 2011

Dan Cake Phadnis Group Cake and biscuits 66:34 2011

McCormick Kohinoor Foods Ltd Basmati and food products 85:15 2011

McCormick Eastern Condiments Seasonings 26:74 2010

Nestle, Coca Cola -- Beverage 50:50 2010

Hershey Godrej Chocolates 51:49 2007

McCormick AVT Spices 50:50 1994


32/44

Source: National Dairy Development Board,

GCMMF (www.amul.com), Aranca Research

Operation Flood was initiated in 1970 by the National Dairy Development Board to achieve national self sufficiency in milk

production by creating nationwide milk grids; under Operation Flood

Indias milk production rose to 127.3 million metric tonnes (mmt) in FY12 from 21.2 mmt in FY1969

India retained its position as the worlds largest milk producer in 2011-12

Dairy cooperatives offer employment opportunities to about 12 million farm families


33/44

Source: GCMMF (www.amul.com), Aranca Research

Dairy cooperative

societies (000)

Members (million)

Milk procurement

(million kg/ day)

Liquid milk marketing

(million litres/ day)

Milk drying capacity

(million tonnes/ day) 261

2.9

2.6

1.8

13.3

842

10.0

11.0

9.3

72.5

507.5

5.0

5.8

3.6

34.5

PHASE I

(Jul-1970 to

Mar-1981)

PHASE II

(Oct-1979 to

Mar-1985)

PHASE III

(Jul-1985 to

Mar-1996)


34/44

0.9

1.3

1.5

1.7

2.1

2.4

FY07 FY08 FY09 FY10 FY11 FY12

GCMMF (Amul) sales (USD billion)


Notes: CAGR Compound Annual Growth Rate

FY Indian Financial Year (April March)

Gujarat Cooperative Milk Marketing Federation (GCMMF) is

the largest food products marketing organisation in India

Set up in 1967, it is Indias largest exporter of dairy products

and has been accorded tradinghouse status CAGR: 20.8%


35/44


Main brand: Amul

Products: milk (including flavoured), butter, margarine, cheese, curd, desserts, infant food

Facts and Features

Producer members (million) 3.18

Village societies 16,117

Milk handling capacity (million litres/ day) 13.67

Total milk collection (FY12, billion litres) 3.88

Daily milk collection (FY12, million litres) 10.6

Milk drying capacity (million tonnes/ day) 647

NOTABLE AWARDS Authority

Excellent performance in dairy productexports for 11 consecutive years

APEDA

CIO International IT Excellence Award

(2003) for positive business performance

through resourceful IT management and

best practices

IDGs CIO

Magazine

(USA)

International Dairy Federation Marketing

Award (2007) forAmuls pro-biotic ice

cream launch

International

Dairy

Federation


36/44

Primary focus on crushing andtrading activities

Expansion of extraction andrefining capacity; focus on

branded products

Focus on developing upstreambusiness; secured access to

185,000 hectares of palmplantation; major expansion of

refining capacity

Source: Ruchi Soya website, Aranca Research

Top edible

oil producer in India with

market share of 18.2 per cent

Strong presence in

Edible oil and meal market

Sales growth at a CAGR of 25

per cent Over FY01-12

Market capitalisation of

USD473.05 million

Revenue base of over

USD6,375 million

Organic growth

phase

Strong brands like

Nutrela and Vansapati

and Sunrich

Focus on R&D

Acquisitions of

companies and

plats facilities

2001-04 2005-08 2008-12

One of the worlds

fastest growingFMCG company

Aggressiveacquisitions of lands

for soya and palm

plantations


37/44

Source: Company Annual Report, Aranca Research

Note: KRBL - Khushi Ram and Behari Lal

Salient characteristics

KRBL is worlds largest rice miller and basmati rice exporter

It has strong brand presence through global retail giants like Carrefour, Bharti-Walmart, Spencer and Future Group

It is the largest producer of contract farming basmati rice in the world

The company accounts for 25 per cent ofIndias total exports of branded basmati rice

KRBL is well-integrated in terms of farming, rice processing, oil production and power generation

Sales (USD million) Exports (USD million

140.5

178.2

FY11 FY12

247.6

285.7

333.1 339.0 340.3

292.4

FY08 FY09 FY10 FY11 FY12 9M FY13

CAGR: 33.4%


38/44

Notes: PPP Public Private Partnership, AEZ Agri Export Zones, FDI Foreign Direct Investment

Untapped market with strong

growth potential

Fragmented market leads

to lower processing levels

and value addition

The government plans to

raise value addition to 35

per cent by 2015 (from 20

per cent in 2005)

PPP modules ideal for the

private sector

Strong demand growth

household consumption set

to double by 2020

Potential global outsourcing

hub

Global supermarket majors

are looking at India as a

major outsourcing hub

India enjoys favourable

supply-side fundamentals

(abundant raw materials

supply, cost advantages)

The government has

helped by investing in

AEZs, mega food parks,

easier credit

Supply chain infrastructure

and contract farming

Both firms and the

government are eager to

boost efficiency and access

to markets

Investment potential of

USD22 billion in food

processing infrastructure;100 per cent FDI in this

area

Firms increasingly taking

recourse to contract

farming in order to secure

supply


39/44

37.5

544.4

1,088.5

10th Five Year Plan 11th Five Year Plan 12th Five Year Plan

Fund allocated for infrastructure development

in food processing industry (USD million)

Notes: PPP Public Private Partnership, AEZ Agri Export Zones, FDI Foreign Direct Investment

Governments focus and launch of various schemes to provide excellent infrastructure facility in food processing sector

opens up various opportunity for private investors

Various schemes launched by government provides capital grant, subsidy, duty free export of products and tax incentives

to the investors

Project wise fund allocated in 12th Five

Year Plan (USD million)

CAGR: 27.2%

677.0

349.0

58.1 Mega Food ParksScheme

Scheme forIntegarted ColdChain

Scheme forModernsiation of

Abattoirs


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Agricultural and Processed Food Products Export Development

Authority (APEDA)

NCUI Building 3, Siri Institutional Area,

August Kranti Marg, New Delhi 110 016

Phone: 9111 26513204, 26514572, 26534186

Fax: 91 11 26526187

E-mail: [email protected]

Marine Products Export Development Authority (MPEDA)

MPEDA House, Panampilly Avenue

PB No 4272, Cochin-682 036

Phone: 91 484 2311979/2311803

Fax: 91 484 2313361

e-mail: [email protected], [email protected]


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AEZ: Agri Exports Zones

MFP: Mega Food Parks

CAGR: Compound Annual Growth Rate

FDI: Foreign Direct Investment

MT: Million Tonnes

IIP: Index of Industrial Production

FY: Indian Financial Year (April to March)

So FY12 implies April 2011 to March 2012

GOI: Government of India

INR: Indian Rupee

PPP: It could denote two things (mentioned in the presentation accordingly)

Purchasing Power Parity (used in calculating per-capita GDP)

Public Private Partnership (a type of joint venture between the public and private sectors)


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PE: Private Equity

APEDA: Agriculture & Processed food products Export Development Authority

GCMMF: Gujarat Cooperative Milk Marketing Federation

USD: US Dollar

Wherever applicable, numbers have been rounded off to the nearest whole number


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Year INR equivalent of one USD

2004-05 44.95

2005-06 44.28

2006-07 45.28

2007-08 40.24

2008-09 45.91

2009-10 47.41

2010-11 45.57

2011-12 47.94

2012-13 54.31

Exchange Rates (Fiscal Year)

Year INR equivalent of one USD

2005 45.55

2006 44.34

2007 39.45

2008 49.21

2009 46.76

2010 45.32

2011 45.64

2012 54.69

2013 54.45

Exchange Rates (Calendar Year)

Average for the year


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food processeing - august 2013

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