market assess men report

7/30/2019 Market Assess Men Report

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Development of Special Economic Zone

for Agro & Agro Based Products at

Umariya-Dungariya, Dist. Jabalpur,

Madhya Pradesh on PPP Basis

Abridged Market Assessment Report

M.P. AUDYOGIK KENDRA VIKAS NIGAM (JABALPUR) LTD.

(A Government of M.P. Undertaking)

April 2010

Deloitte Touche Tohmatsu India Pvt. Ltd.


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II

DISCLAIMER

This Report is subject to the Disclaimer as contained in the Request for Qualification (RFQ) dated 20th

September 2010 issued by M.P. Audyogik Kendra Vikas Nigam (Jabalpur) Ltd. for invitation of RFQApplications for Development of Special Economic Zone for Agro & Agro Based Products at Umariya -Dungariya, District Jabalpur, Madhya Pradesh on Public Private Parternship.

The information contained in this Report is provided to Applicant(s) on the terms and conditions set out

in the RFQ and such other terms and conditions subject to which such information is provided.

The purpose of this Report is to provide interested parties with information that may be useful to them

in the formulation of their application for qualification pursuant to this RFQ (the Application). This

Report includes statements, which reflect various assumptions and assessments arrived at by the

Authority in relation to the Project. Such assumptions, assessments and statements do not purport to

contain all the information that each Applicant may require. This Report may not be appropriate for all

persons, and it is not possible for the Authority, its employees or advisors to consider the investment

objectives, financial situation and particular needs of any Applicant who reads or uses this Report. The

assumptions, assessments, statements and information contained in this Report may not be complete,

accurate, adequate or correct. Each Applicant should therefore, conduct its own investigations and

analysis and should check the accuracy, adequacy, correctness, reliability and completeness of the

assumptions, assessments, statements and information contained in this Report and obtain independent

advice from appropriate sources.

The Authority accepts no responsibility for the accuracy or otherwise for any interpretation or opinion on

law expressed herein.

The Authority, its employees and advisors make no representation or warranty and shall have no liability

to any person, including any Applicant or Bidder, under any law, statute, rules or regulations or tort,

principles of restitution or unjust enrichment or otherwise for any loss, damages, cost or expense which

may arise from or be incurred or suffered on account of anything contained in this Report or otherwise,

including the accuracy, adequacy, correctness, completeness or reliability of the Report and any

assessment, assumption, statement or information contained therein or deemed to form part of this

Report or arising in any way with pre-qualification of Applicants for participation in the Bidding Process.

The Authority and its advisors also accept no liability of any nature whether resulting from negligence or

otherwise howsoever caused arising from reliance of any Applicant upon the statements contained in

this Report.

The Authority may, in its absolute discretion but without being under any obligation to do so, update,

amend or supplement the information, assessment or assumptions contained in this Report.


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Table of Contents

TABLE OF CONTENTS ................................................................ ................................................................. ... IILIST OF ABBREVIATIONS ................................................................... ........................................................... 4CHAPTER 1: INTRODUCTION AND BACKGROUND ................................................................ ................ 5

1.1 INTRODUCTION ......................................................................................................................................... 51.2 BACKDROP................................................................................................................................................ 5

CHAPTER 2: AGRO-PROCESSING INDUSTRIES IN INDIA ................................................................. .... 62.1 INTRODUCTION ......................................................................................................................................... 62.2 CLASSIFICATION OF AGRO PROCESSING INDUSTRIES................................................................................ 62.3 AGRO PROCESSING INDUSTRIES IN INDIA ................................................................................................. 72.4 EXPORTS OF AGRICULTURAL &FOOD PRODUCTS .................................................................................... 82.5 SWOT ANALYSIS OF AGRO PROCESSING INDUSTRY IN INDIA.................................................................. 10

CHAPTER 3: AGRICULTURE SECTOR IN MADHYA PRADESH ......................................................... 113.1 AGRICULTURAL SECTOR IN MADHYA PRADESH ..................................................................................... 113.2 MAJOR CROP/CROP GROUP GROWN IN MP ........................................................................................... 113.3 SOIL TYPES ............................................................................................................................................. 123.4 AGRO CLIMATIC ZONES IN MADHYA PRADESH ...................................................................................... 133.5 CROP ZONES IN MADHYA PRADESH ....................................................................................................... 133.6 RECENT DEVELOPMENTS IN AGRICULTURE SECTOR IN MADHYA PRADESH ........................................... 14

CHAPTER 4: PROFILE OF JABALPUR ......................................................... .............................................. 164.1 INTRODUCTION ....................................................................................................................................... 164.2 AGRICULTURE PROFILE OF JABALPUR .................................................................................................... 194.3 LOCATION ANALYSISPROPOSED AGRO & AGRO BASED PRODUCTS SEZ ................................................ 21

CHAPTER 5: SECTOR ASSESSMENT AGRO & AGRO BASED PRODUCTS ................................... 235.1 CONCEPTUAL FRAMEWORK .................................................................................................................... 235.2 EVALUATION .......................................................................................................................................... 235.3 CATEGORIZATION ................................................................................................................................... 245.4 AREA REQUIREMENTDEMAND POTENTIAL &CORRESPONDING OFF-TAKE......................................... 255.5 PHASING OF OFF-TAKE POTENTIAL......................................................................................................... 265.6 UTILITIES (WATER AND POWER)REQUIREMENT FOR THE PROPOSED SEZ .............................................. 285.7 EMPLOYMENT GENERATION ................................................................................................................... 28


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LIST OF ABBREVIATIONS

AKVN Audyogik Kendra Vikas Nigam

Bn. Billion

CAGR Compounded Annual Growth Rate

Cr. Crore (s)

EU European Union

FAO Food and Agriculture Organization of United Nations

GoI Government of India

GoMP Government of Madhya Pradesh

Ha Hectares

HP Horse Power

JnPT Jawaharlal Nehru Port Trust

KIADB Karnataka Industrial Areas Development Board

KL Kilo Litres

km Kilo Meters

KW Kilo Watt

KWH Kilo Watt Hour

Ltrs. Litres

LMI Large and Medium IndustriesME Middle East Countries

Mn. Million

MoFPI Ministry of Food Processing Industries

MP Madhya Pradesh

MP SEZ Madhya Pradesh Special Economic Zone

MPSIDC M.P. State Industrial Development Corporation

MT Metric Tonnes

MW Mega Watt

SEZ Special Economic Zone

Sq.Ft. Square Feet

Sq.Mt. Square Meter

SSI Small Scale Industries

TPA Tonnes per Annum

TPD Tonnes per Day

USD US Dollar


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CHAPTER 1:INTRODUCTION AND BACKGROUND

1.1 INTRODUCTION

Deloitte Touche Tohmatsu India Pvt. Ltd. (Deloitte) has been engaged by M P Audyogik Kendra

Vikas Nigam (Jabalpur) Ltd, a Government of M.P. Undertaking (AKVN) , to act as a Transaction

Advisor for the development of an Agro and Agro Based Products SEZ, proposed at Umariya -

Dungariya, District Jabalpur, Madhya Pradesh on Public-Private Partnership basis.

This abridged report presents Conceptualization and Market Feasibility Analysis of the Proposed

Development of agro and agro based product SEZ at Jabalpur. The key highlights of this report are:

Assessment of agro processing industries in India

Agriculture climate and agro based industries in Madhya Pradesh in general and specific to

the Jabalpur region

Assessment of agro and agro based products industries, which have the potential to come

up in the proposed SEZ and also the potential in terms of exploiting existing agricultural raw

materials of the region

1.2 BACKDROP

M.P. Audyogik Kendra Vikas Nigam (Jabalpur) Ltd, one of the subsidiaries of M.P. State Industrial

Development Corporation Ltd. (MPSIDC), is engaged in sustained and balanced industrial

development in its selected area of jurisdiction. It also has the focus for infrastructure development to

attract and promote industries, both domestic and foreign, hence boosting employment opportunities

in the region. Some of the ongoing projects (as of April 2010) of MP AKVN Jabalpur includedevelopment of Food Parks, development of Stone Park, etc. The Nigam also manages Industrial

Growth Center (IGC) at Borgaon and Maneri in the state of Madhya Pradesh.

To further boost industrial development in the region, MP AKVN has proposed to set up Agro and

Agro based products SEZ in Jabalpur district. This proposed SEZ with the plot size of 101.21 Ha is

situated 28 km from Jabalpur city and 12 km from NH 7 (Varanasi to Kanyakumari).

AGRICULTURE CLIMATE IN JABALPUR REGION

Jabalpur falls under the Central Narmada valley climactic zone. In terms of land use, more than 50%

of the land is used for agricultural production (i.e. sown area). 15% of the land is under forest cover.

Some of the agricultural land in the region is extremely fertile and hence boosting the agriculturalproductivity of the region

NEED FOR AN AGRO& AGRO BASED PRODUCT SEZ

Agriculture is predominant in the state, with around 75% of the rural population highly dependent on

it. Madhya Pradesh also has a significant contribution in the agriculture GDP of the country and also

in the agriculture produce of the country.

Development of the proposed SEZ would act as a catalyst in the sustainable development of the

agriculture economy of the region in particular and the state in general. The SEZ would also support

the objective of creating employment opportunities and diversifying the economy. The SEZ would

also have a positive impact on the farming community of the region as the units in the SEZ would

procure most of their raw material produce from the region itself.

.


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CHAPTER 2:AGRO-PROCESSING INDUSTRIES IN INDIA

2.1 INTRODUCTION

Agro-processing is defined as a set of techno-economic activities, applied to all the produces,

originating from agricultural farm, livestock, aquacultural sources and forests for their conservation,

handling and value-addition to make them usable as food, feed, fibre, fuel or industrial raw materials.1

The processing of agriculture produce to obtain edible products is called as Food Processing

Industry. Since most food items are perishable, the post harvest management is crucial in the food

processing industry.

The various food processing industries are:

Marine Products

Bakery and Confectionery

Ready To Eat Food

Drinks and Beverages

Foodgrain Milling

Edible Oil

Medicinal products

Some of the agriculture processing sectors that fall under non-food processing are:

Fibres

Feeds

Fuels

The various processes in the agro-processing industry are shown below:

2.2 CLASSIFICATION OF AGRO PROCESSING INDUSTRIES

The Agro-processing industry can be classified based on raw material or final product. Classification

of Agro-Processing industry based on raw material is shown in the Exhibit 1 below:

(This space has been intentionally left blank)

1Source:Article on Agro Processing Industries in India Growth, Status & Prospectus, R.P. Kachru, Asstt.

Director General, ICAR, New Delhi; Department of Agriculture and Cooperation, Ministry of Agriculture

Raw materials areprimarilyagriculture produce

such as: Cereals Pulses Dairy Fisheries Forestry Vegetables and

Fruits Spices Cotton, etc

Raw material isthen processed -processing can be

primary orsecondaryprocessing

Some of theprocesses are: Cutting Milling Moulding Fermenting, etc

Raw material isthen packed

Food products

generally require tobe stored atspecifiedtemperatures

Many productssuch as frozenfruits andvegetables requirecoldstorage

Some of thefinished productsare:

Wheat Flour Dairy Products

Milk Powder,Ghee, etc

Bakery andConfectionaryItems

Ready to eatsnacks, etc

Raw MaterialProcurement

Processing of RawMaterial

Packing and Storage Finished ProductShipment
http://www.mofpi.nic.in/ContentPage.aspx?CategoryId=179http://www.mofpi.nic.in/ContentPage.aspx?CategoryId=184http://www.mofpi.nic.in/ContentPage.aspx?CategoryId=186http://www.mofpi.nic.in/ContentPage.aspx?CategoryId=187http://www.mofpi.nic.in/ContentPage.aspx?CategoryId=550http://www.mofpi.nic.in/ContentPage.aspx?CategoryId=687http://www.mofpi.nic.in/ContentPage.aspx?CategoryId=687http://www.mofpi.nic.in/ContentPage.aspx?CategoryId=550http://www.mofpi.nic.in/ContentPage.aspx?CategoryId=187http://www.mofpi.nic.in/ContentPage.aspx?CategoryId=186http://www.mofpi.nic.in/ContentPage.aspx?CategoryId=184http://www.mofpi.nic.in/ContentPage.aspx?CategoryId=179


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Exhibit 1: Categorization of Agro Processing Industry

Sl.

No.

Category

(Based on Raw Material)Finished Products

1 Cereals Based Industrya) Wheat Flour

b) Biscuit Manufacturing

c) Confectionary and Bakery Items

d) Rice (puffed and flaked)

e) Rice Bran and Rice Bran Oil

f) Corn flakes

g) Canned Baby Corn

h) Starch Material

2 Pulses Based Industry

a) Gram Flour (Basen)

b) Namkeens (ready to eat snacks)

c) Papad

d) Whole or Split Dal

3 Oilseed Based Industrya) Edible Oil

b) Animal Feed

c) Processed Seed (Sesame)

4 Fruits & Vegetables Based

Industry

a) Frozen fruits & Vegetables

b) Chips & Wafers (Ready to Eat snacks)

c) French Fries (Ready to Eat snacks)

d) Dehydrated Vegetables

e) Ketchups, Purees & Concentrates

f) Juicesg) Pickles

5 Spices Based Industrya) Pastes & Powders

b) Oleoresins

c) Aromatic Extractions

6 Dairy Based Industrya) Skimmed Milk Powder, Ghee, Curd ,etc

7 Floriculture Based Industrya) Fresh & Dried Flowers

8 Fisheries Industrya) Fish Processing

b) Fish meal

c) Fish / Prawn Pickle

9 Livestock & Poultrya) Processed Poultry Products

b) Meat Gravy Concentrates

c) Mutton & Lamb Processing

10 Medicinal Herbs Based Industrya) Medicinal Products

11 Cotton & Jute Based Industryb) Fibres processing

12 Sugarcane Based Industrya) Jaggery

b) Confectionary & Bakery Products

13 Plantation Crops based Industrya) Tea Powder

b) Coffee Powder

14 Othersa) Honey

b) Mushrooms

2.3 AGRO PROCESSING INDUSTRIES IN INDIA

Agriculture is an important sector in the Indian economy. Worldwide India ranks second in farm

output. Agriculture and allied sectors like forestry and logging accounts for nearly 1/5th

of the GDP.

The sector employs ~60% of the total workforce. Although the share of agriculture in GDP has been

declining, it is still an important economic sector and plays a significant role in the economic

development of India.


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Although India is one of the largest producers of Agricultural products, the processing of these

produce is extremely low. The level of processing in sectors such as Fruits and Vegetables is as low

as 2% - the level of processing in developed countries in Fruits and Vegetables is well over 50%. The

level of processing for some of the products is given in the Exhibit 2 below:

Exhibit 2: Level of Processing in various Sectors

Items Level of Processing

Dairy products 37.0%

Meat 21.0%

Marine Fish 10.7%

Poultry 6.0%

Fruits & Veg. 1.8%

(Source: Ministry of Food Processing Industries (MoFPI)

Some of the facts about the Indian agro processing industries are:

According to some estimates, output of the food processing industry was ~Rs. 460,000 Cr

in 2003-04.

The output of primary processing was around Rs. ~280,000 Cr; the output of value added

products was around Rs. 180,000 Cr

Organized players account for ~25% of output in terms of volume, while the unorganized

and small scale industries account for ~75%

The industry grew at a rate ~7% from 1998-99 to 2003-04 (MOFPI annual report 2005-06)

The wastage of food products is estimated to be worth ~Rs. 60,000 Cr

The ministry of Food Processing Industries in its Vision 2015 document wants to treble the

size of the food processing sector by 2015

2.4 EXPORTS OF AGRICULTURAL &FOOD PRODUCTS

Indias exports of agricultural & food products are about ~USD 8.3 billion - which is ~1.6% of the

global trade of ~USD 520 billion. Although exports of agriculture & food products grew at 15%

annually from 1993-94 to 2003-04, the share of agriculture & food products in total exports has

decreased from 19% to 13% in the same period. The Ministry of Food Processing Industries wants to

increase Indias share in global trade to 3% by 2015 from current ~1.5%.

Among the products, Marine products and Rice were the largest export category in 2003-04. Some of

the Indias major export categories are shown in Exhibit 3 below.

Exhibit 3: Indias Export of Agricultural Products

(Source: Ministry of Food Processing Vision Document 2015)


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The food processing industry does face a number of constraints in exports. Some of them are: low

product quality, lack of economies of scale, deficient technology, insufficient market and brand

building.

Keeping in mind the drawbacks faced by the Indian food processing industry, a number of measuresare being taken by the central and state governments to boost the. Considering the potential existing

in the sector, the Ministry of Food Processing in its Vision 2015 document envisages an increase in

Indias share of global trade from current 1.5% to 3%.

SPECIAL ECONOMIC ZONES AGRO& FOOD PROCESSING

There are 8 agro and food processing SEZs that have been notified as of April 2010 across India.

The location of the 8 SEZs are shown in Exhibit 4 below:

Exhibit 4: Location of Notified Agro & Food Processing SEZ in India*

Demapur, Nagaland

Nagaland Industrial Development

Corporation Limited

Area 50.7 Ha

Date of Notification: 9th July 2009

Status: Not Operational

Jabalpur, MP

M. P. AKVN (J)

Area 101 Ha

Date of Notification: 25thAug 2009


Latur, Maharashtra

Maharashtra Industrial DevelopmentCorporation

Area 200 Ha

Date of Notif ication: 15th Jan 2007


Akola, Maharashtra

Maharashtra Industrial

Development Corporation

Area 100 Ha

Date of Notif ication: 17th June 2008


Tuticorn, Tamil Nadu

CCCL Infrastructure

Limited

Area 120 Ha

Date of Notification: 23rdApril 2009

Status: To be operational by Q1 CY10

Kakinada, Andhra Pradesh

Parry Infrastructure

Company Private Limited

Area 101 Ha

Date of Notification: 20th Dec 2007

Status: OperationalHassan, Karnataka

M/s Karnataka Industrial Area

Development Board

Area 160 Ha

Date of Notification: 12thApril 2007


Calicut, Kerala

Kerala Industrial Infrastructure Dev.

Corpn. (KINFRA)

Area 12 Ha

Date of Notification: 13th June 2007

Status: Land ready f or allotment

Out of the 8 zones, 6 of the zones are located in Maharashtra and the Southern states. Currently,

only the SEZ in Kakinada is operational; the SEZ at Tuticorin is expected to be operational by first

quarter end of 2010. In the Kakinada SEZ, a sugar refinery has been set up and in the Hassan SEZ,

a unit for processing Gherkin has been commissioned. Apart from Food Processing specific SEZs, a

multi-product SEZ at Dabra (being developed by Gwalior Agriculture Company) has identified Agro

Products as one of the possible industries that can come up in the SEZ.


* As of April 2010


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2.5 SWOT ANALYSIS OF AGRO PROCESSING INDUSTRY IN INDIA

The Exhibit 5 below shows the highlights of the SWOT analysis of Agro-processing industry in India.

Exhibit 5: Agro Processing Industry in India SWOT Analysis

Strengths

Availability of raw materials

Recognition of agro-processing as

an important sector

Vast network of manufacturing

facilities all over the country

Vast domestic market

Weakness

Lack of scale of operations

Inadequate automation w.r.t.

information management

Inability to attract young talent

Inadequately developed linkages

between R&D labs and Industry

Lack of adequate marketing

Opportunities

Wide variety of crop availability

Integration of developments in

contemporary technologies such

as electronics, material science

Branding of agro-products

Availability of labourers

Threats

Competition from global players

Loss of trained manpower to other

industries and other professions

better pay in other sectors


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CHAPTER 3:AGRICULTURE SECTOR IN MADHYA PRADESH

3.1 AGRICULTURAL SECTOR IN MADHYA PRADESHMadhya Pradesh is the second largest state in India with an area of about 308 Lakh Ha. Total land

under cultivation is around 150 Lakh Ha or ~49% of the net area. Around 31% of the state is under

forest cover with a largely unexploited species of rare, valuable medicinal - herbal plants.

Agriculture is predominant in the state with ~75% of rural population largely dependent on it.

Agriculture sector forms almost one-third of the GSDP (Gross State Domestic Product) (State GSDP

at current price for 2007-08: Rs 1,232.3 bn) and hence, is the backbone of MPs economy. Being

majorly an agrarian economy, the presence of industrial centers specifically based on agro

processing like SEZ, AEZ or Food Parks, would act as an advantage to the growth of agriculture

economy in the state.

The state has 5 crop zones, 11 agro climatic regions and 4 soil types, which add to its biodiversity

and acts favourable for the production of various crop types.

The Exhibit 6 below shows the cropped area and cropping intensity for Madhya Pradesh. Out of the

total gross cropped area, 59% is sown in the Kharif season and 41% in the Rabi season.

Exhibit 6: Cropped Area and Cropping Intensity

Parameter Figure

(Year 2002-03)

Net area sown (in Lakh Ha) 146.21

Double cropped area (in Lakh Ha) 35.6

Total cropped area (in Lakh Ha) 181.81

a) Area under Kharif 108.28

b) Area under Rabi 74.53

Gross irrigated area (in Lakh Ha) 46.31

Cropping intensity 132%

(Source: Commissioner, Land Records, MP; Deptt. of Economics & Statistics, MP)

3.2 MAJOR CROP/CROP GROUP GROWN IN MP

Major agricultural and horticultural crops grown in Madhya Pradesh are as shown in the Exhibit 7

below.

Exhibit 7: Major Agriculture & Horticultural Crops grown in MP

Cereals Wheat, Sorghum (Jowar), Maize, Paddy

Oilseeds Soybean, Mustard, Linseed

Pulses Gram, Pigeon Pea (Tur), Lentil (Masoor)

VegetablesGreen Peas, Cauliflower, Okra, Tomato,

Onion, Potato

Fruits Mango, Guava, Orange, Papaya, Banana


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Spices Chillies, Garlic, Coriander, Ginger, Turmeric

(Source: MP Agro Industries Development Corporation Ltd.; MP Mandi Board)

Madhya Pradesh leads in spices production with the largest production of garlic, accounting for ~37%

of the total production in India. The state is the second largest producer of coriander in the country.

Malwa potato grown in the western part of the state (Malwa region) is used for potato chips

processing. MP is also a leading producer of peas and contributes ~15% to the national production.

Madhya Pradesh is the largest producer of pulses and oilseeds in the country. About 22% of pulses

and 40% of grams are grown in the state. The State is also the largest producer of soya bean and

second largest producer of Jowar and Masoor in the country.

The statistical data about the position of MP with respect to the major crops in comparison to the

other states is shown in Exhibit 8. The percentage share refers to the contribution of the state

towards the total national production of the respective commodity.

Exhibit 8: Crop/ Crop Group grown in MP and their share in Indias Production

Crop/ Crop

Group

First

Position% Share

Second

Position% Share

Third

Position% Share

Total PulsesMadhya

Pradesh21.38 Uttar Pradesh 19.77 Maharashtra 18.51

Total

Oilseeds

Gujarat 22.42Madhya

Pradesh

22.10 Rajasthan 15.82

Jowar Maharashtra 46.09Madhya

Pradesh14.11 Karnataka 11.03

MaizeAndhra

Pradesh16.61 Rajasthan 13.86

Madhya

Pradesh12.39

Arhar Maharashtra 29.11 Uttar Pradesh 17.30Madhya

Pradesh11.39

Gram MadhyaPradesh

40.33 Uttar Pradesh 18.40 Maharashtra 10.61

Masoor Uttar Pradesh 48.54Madhya

Pradesh23.30 Bihar 15.53

Soya beanMadhya

Pradesh59.92 Maharashtra 28.14 Rajasthan 8.78

(Source: MP Agro Industries Development Corporation Ltd.; MP Mandi Board)

3.3 SOIL TYPES

The state has 4 different soil types available in four distinct parts. The western and central regions are

covered by medium and deep soils constituting 53% of the soil area. The eastern part of the state is

primarily covered by black soils which comprises of 25-26% of the total geographical area.



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Exhibit 9: Soil Types in Madhya Pradesh

(Source: MP Agro Industries Development Corporation Ltd.)

Most of MPs potential in agriculture lies in the central and western zones which are rich in

medium and deep soil.

3.4 AGRO CLIMATIC ZONES IN MADHYA PRADESH

Madhya Pradesh is divided into 11 Agro Climatic zones depending on the climatic variability and

diverse soil types, as show in the Exhibit 10 below. These Agro Climatic Zones add to the

biodiversity of the state and acts favorably towards the production of various agriculture and

horticulture crops.

Exhibit 10: Agro Climatic Zones in Madhya Pradesh


3.5 CROP ZONES IN MADHYA PRADESH

The 5 crop zones in Madhya Pradesh are suitable for the production of a variety of crops in different

parts of the state during different seasons, thereby sustaining agricultural activities throughout the

year.

MalwaPlateau

JhabuaH ills

NimarPlainsSatpura Plateau

Chattisgarh

Plain Balaghat

Grid Region

Bundelkhand

Vindhya Plateau

Central

Narmada Valley

North Hill

Region of

Chattisgarh

KymorePlateau

Satpura Hills


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Exhibit 11: Crop Zones of MP


Cotton/ Jowar

Cotton/ Jowar crops can be grown in the western, north-western and south-western part of MP. Such

crops are grown in regions having medium & deep soils.

Wheat/ Jowar

Wheat/ Jowar crop zones are grown predominantly in the northern part of the State. Some southern

areas of the State can also be tapped for such commodities.

Rice Zone

This zone is confined to the eastern part of the State where black soil type present. Only five districts/

centers produce this crop.

Wheat/ Rice Zone

These crop zones are present in the eastern part of MP, where the soil type is black soil.

Wheat Zone

This crop zone is in the central part of the state. Again it is evident that these crops have the potential

to grow in diverse soil types.

3.6 RECENT DEVELOPMENTS IN AGRICULTURE SECTOR IN MADHYA PRADESH

Some of the steps which have been taken by the GoI and MP Government for giving thrust to the

agriculture sector in Madhya Pradesh are as follows.

To facilitate promotion and development of specific products, five AEZs (Agri Export Zones) have

been identified in Madhya Pradesh. These zones have been set up for facilitating export of specific

products from a geographically contiguous area. The AEZs are present at such a location that it is

easy to source the raw materials and hence to develop the final product. The commodities that havepotential are potato, spices (in the western parts), pulses (in the central part of the State), wheat (in

the western and central regions) and oranges (southern districts).

Other than Agri Export Zone, the state government has given sanction for setting up 6 Food Parks

for the state. These food parks are located in Mandsaur, Khargone (formerly West Nimar),

Hoshangabad, Chhindwara, Mandla and Bhind. The main objective of the state and central

government in setting up these parks is to help establishment of food processing industrial estates/

infrastructures by providing assistance for the common facilities such as research laboratories, cold

storages, warehousing facilities etc.


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Besides establishments of Agri Export Zones and Food parks, government has also initiated

development of Special Economic Zones (SEZ) focusing on agro and agro based products. The

sector specific SEZs would provide various incentives to the investors, attracting investment,

supporting overall growth of the agricultural economy of the region. These largely export focused

units in the SEZs would be instrumental in creating foreign exchange reserves for the country through

exports and would establish global foot print in the agriculture export market.

Detailed review on SEZ is provided in subsequent chapters.


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CHAPTER 4:PROFILE OF JABALPUR

4.1 INTRODUCTIONJabalpur District is located in the centre of the state of Madhya Pradesh, India, along the Narmada

River. The city of Jabalpur is the headquarters of the district. The city is also the headquarters of the

Jabalpur division.

Exhibit 12: Location of Jabalpur

Bhopal

Mumbai

Kolkata

Delhi

Chennai

Jabalpur

Jabalpur is an important district in the region. Jabalpur is the second most populous district in the

state and is an important educational center with a high literacy rate of 75%. It also has a number of

industries such as the ordinance factories, steel structural works, etc. The soil of Jabalpur and

surrounding region is fertile and is suitable for growing a number of crops. Jabalpur is also home to

one of the countrys largest Poultry and Hatcheries farm.



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The snapshot of Jabalpur district is shown in the Exhibit 13 below:

Exhibit 13: Snapshot of Jabalpur District

Parameter Figure Comments

Area 5,211 Sq. km Is ranked as the 33rd

largest district in MP (50 districts)

Population 2.1 million It is the second most populous district in MP

Literacy Rate 75% Literacy rate is higher than state average of 64% andnational average of 65%

Industrial Activity Large & Medium ScaleIndustries (LMI) -10Nos.

Small Scale Industries(SSI) 14,423 Nos.

There is one Mineral and Mineral Based SEZ beingdeveloped at Jabalpur

There are 4 Ordinance / defense equipment factories

Some of the other major industries are

Bidi Manufacturing

Ready Made Garments

Steel Structural Works

Food processing

Education Engineering Colleges 17 Nos.

Universities - 2 Nos.

Jabalpur is an important educational centre in theregion

There are over 1,300 engineering students and doctorsgraduating each year

There is an agricultural university in the city

Hotels 6 Luxury Hotels There is a shortage of luxury hotel rooms as there areonly 226 luxury rooms

Hospitals 393 health centers Population per health centre in Jabalpur is 6,173; whichis lower than state average of 6,645

Airport Domestic There are flights connecting Jabalpur to Delhi andGwalior



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PREVAILINGLAND AND OTHER RATES

The Exhibit 14 provides the prevailing land rates in the Industrial Zones of MP.

Exhibit 14: Land Rates in Industrial Zones of MP

Sl.

No.

Type of

area

Type of

Unit

Upfront Payment

Lease Rent

% of

Premium

(Annual)

Maintenance Charge

(Rs. Per sq Meter)

(Annual)

Land

Premium (Rs.

per sq Meter)

Development

Charges

(Rs. Per sq

Meter)

Total

1 Indore SEZ

SSICommercial Plots: 1,0001,200

Processing Plots: 800 900

800-

1200

2.5%Commercial 30 to 36

Industries 24 to 27LMI

Commercial Plots: 1,000 1,200

Processing Plots: 800 900

800-1,200

2 Hargarh

SEZ Land

Rates1

SSI 450 - 450 3% 17

LMI 500 - 500

3Industrial

Land Rates2

SSI 50 50 100 3%Refer the Exhibit 15

LMI 70 80 150

The maintenance charges for the Industrial area are given below:

Exhibit 15: Maintenance Charges for Industrial Growth Center and other Industrial Area

Particular Rate

up to 10,000 Sq Meter Rs 4.00 per Sq.M. per annum

from 10,001 to 1,00,000 Sq Meter Rs 3.50 per Sq.M. minimum Rs 40,000 per annumfrom 1,00,001 to 10,00,000 Sq Meter Rs 2.50 per Sq.M. minimum Rs 3,50,000 per annum

more than 10,00,000 Sq Meter Rs 2.00 per Sq.M. minimum Rs 25,00,000 per annum

The power rates in Madhya Pradesh are shown below:

Exhibit 16: Power Charges in MP

Sl.

No.Supply Line

Monthly Fixed

Charges (Rs/ KVA

per month)

Energy charges

Consumption up to 50%

load factor (Paise / unit)

Energy charges for

consumption in excess of

50% load factor (Paise / unit)

1 11 KV 160 400 335

2 33 KV 250 380 315

3 132 KV 340 350 300

(Source: MP State Electricity Regulatory Commission)

Water charge in Jabalpur is Rs. 20 per KL (for industrial purposes)

The daily minimum labour rates as prescribed by the MP labour department are shown below:

[1] Mineral based SEZ in Jabalpur[2] Industrial Growth Center*Source: MP AKVN (Jabalpur)

MP AKVN (Indore)


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Un-Skilled Rs 135 per Day

Semi Skilled Rs 140 per Day

Skilled Rs 146 per Say

(Source: MP Labour Department)

4.2 AGRICULTURE PROFILE OF JABALPUR

Jabalpur falls under the Central Narmada valley climactic zone. In terms of land use, more than 50%

of the land is used for agricultural production (i.e. sown area). 15% of the land is under forest cover.

The following pie-chart (Exhibit 17) shows the land use in Jabalpur district.

Exhibit 17: Land Use Classification in Jabalpur

Cereals and Foodgrains are the major crops that are produced in the district. In Horticultural crops,

Peas, Amla and Tomatoes are also grown in plenty. Wild Medicinal & Aromatic Plants are also grown

in the forest region of the district. The following Exhibit 18 gives the details of the major crop

production in the district.

Exhibit 18: Major Crop Produce in Jabalpur District

Crop Production (in 000 MT) Share in MP production

Cereals and Foodgrains 620 3%

Pulses 129 4%

Oilseeds 7.31 0.14%

(Source: MP Department of Agriculture)

Some of the horticultural crops that are grown significantly in Jabalpur district are:

Brinjal

Tomatoes

Mangoes

Guava

Musk Melon

Amla

Apart from agricultural and horticultural crops, there is significant production of poultry, livestock, milk

and fisheries. Jabalpur is home to one of Indias largest hatcheries. The following Exhibit gives the

details of production in Jabalpur:


(Source: Human Development Report 2007, MP)


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Exhibit 19: Major Animal Produce in Jabalpur District

Category Production % Share in Madhya Pradesh

Poultry (in 000 nos) 2640 23%

Fisheries (in 000 MT) 3.7 6%

Milk (in 000 MT) 177 3%

Goats (in 000 nos) 116.5 2%

Buffaloes (in 000 nos) 95.2 1%

Pigs (in 000 nos) 15.1 1%

Sheeps (in 000 nos) 4 0.7%

(Source: Secondary resources, Deloitte Research)

Food Processing Industries in Jabalpur

Currently, some of the food processing industries that exist in Jabalpur are Biscuit manufacturing,

Pickle & Ketchup manufacturing, and Papad manufacturing.

There is also a food park in the adjacent district of Mandla. The nodal agency for the 50 acre food

park is AKVN Jabalpur. Four plots in the park have already been allotted.

Potential Industries that can come up in the Jabalpur region

Considering the availability of raw materials in Jabalpur and its surrounding regions, the industries

with export potential that can come in Jabalpur are:

Paddy Basmati

Poultry Processing Industries

Mutton and Lamb Processing Industries

Dairy Products Industry

Frozen Peas Individual Quick Freezing

Frozen Vegetables (other than peas)

Soybean Based products Industries

Herbal Based Products

Biscuit Manufacturing

Ketchups / Purees / Concentrates

Pickles and Chutneys



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4.3 LOCATION ANALYSIS PROPOSED AGRO & AGRO BASED PRODUCTS SEZ

The Exhibit 20 below shows the location of the proposed SEZ on the Jabalpur map.

Exhibit 20: Location of the Proposed SEZ

Location of theProposed SEZ

(NH 7 12 Km)

(Narmada River 11 Km)

(Nearest RailwayStation 10 Km)

(Note: Map fo r illustrative purpose only, not to scale)

Narmada River

Narmada River

(Source: Google maps)

The table below gives details of some of the important parameters relating to the proposed SEZ:

Exhibit 21: Analysis of the SEZ

Parameter Jabalpur Agro SEZ

Location Umariya-Dungariya Village

Area 101 Ha (250 acres)

Distance from City 28 km (from Jabalpur)

Distance from Airport 35 km

Distance from Seaport JNPT 1,000 km

Kandla Port 1200 km

Vishakapatnam 960 km

Distance from Rail

Line

Nearest Railway Junction - Jabalpur 28 km

Nearest Station Shahpura 10 km

Road Connectivity 12 km away from NH-7

Access to Labour Labour is available from Jabalpur & surrounding areas

Power Availability Power is expected to be provided at the battery limits of the site by

the state government

Water Availability Narmada River is 11 km away from the site

Drainage and

Sewerage

Treated water to be discharged through open drainage (Nallhas) in

to the Narmada River


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Location Rating

Based on the above considerations, the SEZ location has

been rated based on certain important parameters. Based

on rating for individual parameters, the overall rating has been arrived at.

The following table shows the rating assigned to the various parameters.

Exhibit 22: Rating of Location based on various parameters

Parameter Rating Comments

Raw Material The region has fertile land and there is scope for a numberof food processing industries to be set up

Labour Plenty of labour available in and around Jabalpur

Water Availability Close to Narmada River

Power Availability There are no major power outages faced by the industriesat Jabalpur

Industrial

Infrastructure

(Agro related)

Food parks located in the adjoining districts

Limited cold storage facility

Drainage Treated water can be discharged to Narmada River

Connectivity Although nearest port is ~1,000 km away, Jabalpur canserve both the east & west port as it is equidistant

Social

Infrastructure

Jabalpur with a number of educational institutions andgood medical facilities provides good social infrastructure

EntrepreneurialActivity

Major industrial establishments are Government run

Few food processing companies do exist

Overall There is considerable potential for the SEZ

Based on analysis of the above parameters, the location is considered to be conducive for the

development of Agro and Agro based product SEZ.

Very

Bad

Bad Average

VeryGood

Good


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CHAPTER 5:SECTOR ASSESSMENTAGRO &AGRO BASED

PRODUCTS

5.1 CONCEPTUAL FRAMEWORK

The broad framework for carrying out the sector analysis is shown in Exhibit 23 below. A three step

process was employed to arrive at industries with potential to come up in the proposed SEZ. A

detailed industry analysis was then performed on these industries.

Exhibit 23: Conceptual Framework for Sector Assessment

5.2 EVALUATION

The elimination of the certain industries has been performed based on the following two parameters:

Raw Material Availability and Export Potential: Those industries in which raw materials

are not available in Jabalpur region (Jabalpur district and its adjacent districts) have been

eliminated

Also, those products which have been banned from export have been eliminated.

The Exhibit 24 below gives list of eliminated industries.

Exhibit 24: Elimination Criteria and Low Potential Industries

Step 1: LowPotential Industries

Based on Raw Material

Availability (in the

Jabalpur region within

150 km from Jabalpur

District) and Export

Potential of the products,

certain industries have

been classified as Low

Potential Industries

Step 2: Categorization

The industries with

potential (other than those

with low potential) are

analysed based on Raw

Material Availability,

Product Demand, and

Growth Rates of the

industry

Based on above analysis,

industries are classified as

either High or MediumPotential Industries

Step 3: Detailed SectorAssessment

High & Medium potential

industries are then

analyzed in detail

The number of units that

can come, their size and

utilities requirements are

then determined


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5.3 CATEGORIZATION

The remaining identified industries after elimination, have been categorized underHigh and Medium

Potential. The eliminated Industries are categorized under low potential. The categorization into High

and Medium Potential is done based on the following:

Raw Material Availability,

Trends in Production, and

Expected Growth Rates of the Industry over next 5-6 years.

Based on the above, the categorization is shown in the Exhibit 25 below.

Exhibit 25: List of High and Medium Potential Industries

High Potential Industry Medium Potential Industry

Paddy Basmati Rice

Frozen Vegetables Green Peas

Poultry/ Meat Processing

Poultry Processing

Sheep & Goat Meat

Meat Curry Powder

Soy bean Processing

High Protein Meal (TVP)

Animal Feed Grade Meal

Soy Milk

Apiculture Honey Processing

Mushroom

Medicinal/ Herbs

Dairy Products

Fisheries Fish Meal

Pickles & Chutneys

Tomatoes Processing Ketchup/Purees/ Concentrates

Biscuit

Namkeens

Sesame Seed Processing

Egg Powder

Frozen Vegetables Other than GreenPeas

The High and Medium Potential industries are then analyzed in detail. For every industry, the

following are analyzed:

World Market Overview

Industry in India including exports

Competitive Advantage offered by Jabalpur

Unit Size

Utilities Requirement (for a single unit)



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5.4 AREA REQUIREMENTDEMAND POTENTIAL &CORRESPONDING OFF-TAKE

This section shows the area requirements of the different industrial units (categorized under high and

medium potential) and demand potential of such units (nos.). Further, it also shows the corresponding

Off-take for the proposed SEZ.

Demand potential for a particular industry refers to the number of industrial units and the area

covered, that can come up in the region based on:

Availability of raw material

Growth in the industry

Off-take refers to the number of units that are expected to come up in the proposed SEZ based on

Demand potential for particular industry

Current set-up of the industry in the region

SUMMARY OF AREA REQUIRED BY HIGH & MEDIUM POTENTIAL INDUSTRIES DEMAND AND OFF-TAKEPOTENTIAL

The total demand potential is 81 industrial units covering 341 Acres and the Off-take potential is 46

units covering 190 Acres. The Exhibit 26 below summarizes the demand potential and the

corresponding Off-take for the industrial units categorized under High & Medium potential to come up

in the proposed SEZ.

Exhibit 26: Summary of High & Medium Potential Industries Demand & Off-take Potential

Sl.No.

Industry

Demand Potential Off-take Potential

No. of UnitsTotal Area(in Acres)


1 Paddy-Basmati 7 70 4 40

2 Poultry 3 30 2 20

3 Frozen Peas - Individual

Quick Freezing (IQF)10 20 5 10

4 Apiculture 5 25 3 15

5 Soy Milk from Raw Soy beans

& Allied products6 30 3 15

6 Mutton & Lamb Processing 2 10 2 10

7Soybean - Texturised

Vegetable Product (TVP)

(Food Grade Meal)

6 12 4 8

8 Soybean - Animal Feed Grade

Meal4 8 4 8

9 Mushrooms 4 8 2 4

10 Medicinal/ Herbs 5 10 3 6

11 Meat Curry Powder 2 4 2 4

Total of High Potential Industries 54 227 34 140


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26

Sl.No.

Industry

Demand Potential Off-take Potential



12 Biscuits 3 30 1 10

13 Dairy Products 4 20 2 10

14 Egg Powder 3 15 2 10

15 Ketchups/ Purees/

Concentrates2 10 1 5

16 Namkeen 3 15 1 5

17 Frozen Other Vegetables 4 8 2 4

18 Fish Meal 2 4 1 2

19 Pickles & Chutneys 2 4 1 2

20 Seasame Seed 4 8 1 2

Total of Medium Potential Industries 27 114 12 50

Total Potential 81 341 46 190

5.5 PHASING OF OFF-TAKE POTENTIAL

The development of the proposed SEZ can take place in two phases. Phase 1 is assumed to start in

2010 and is expected to continue till 2014. Phase 2 is expected to start towards the end of phase 1 -

approximately when 80% of the land area demarcated for Phase 1 is allotted (lease/sell) to industrial

units.

The approximate year for the completion of Phase 2 would be 2016, so that whole area under both

the phases is let out towards the end of 2015.

Off-take potential for the industries in phase 1 is based on their respective immediate potential and for

phase 2 is based on the potential during the start of phase 2 period (2013) and the attractiveness ofthe proposed SEZ.

In Phase 1, 21 units covering 92 Acres and in Phase 2, 25 units covering 98 Acres are expected to be

developed.

The industry wise estimated Off-take of short-listed industries in Phase1 and Phase 2 has been

indicated in Exhibit 27.

Exhibit 27: Phasing of the Off-take Potential

Sl.

No. Industry

Phase 1(2010-2014)

Phase 2(2013-2016)

Phase 1+ Phase 2

No. ofUnits

TotalArea (inAcres)

No. ofUnits

TotalArea (inAcres)

No. ofUnits

Total Area(in Acres)

High Potential Industries

1 Paddy-Basmati 2 20 2 20 4 40

2 Poultry 1 10 1 10 2 20

3Frozen Peas - Individual Quick

2 4 3 6 5 10


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27

Sl.No.

Industry

Phase 1(2010-2014)

Phase 2(2013-2016)

Phase 1+ Phase 2

No. of

Units

TotalArea (inAcres)

No. of

Units

TotalArea (inAcres)

No. of

Units

Total Area

(in Acres)

Freezing (IQF)

4 Apiculture 1 5 2 10 3 15

5 Soy Milk from Raw Soy beans &Allied products

1 5 2 10 3 15

6 Mutton & Lamb Processing 1 5 1 5 2 10

7 Soybean - Texturised VegetableProduct (TVP) (Food Grade Meal)

2 4 2 4 4 8

8 Soybean - Animal Feed GradeMeal

2 4 2 4 4 8

9 Mushrooms 0 0 2 4 2 4

10 Medicinal/ Herbs 1 2 2 4 3 6

11 Meat Curry Powder 1 2 1 2 2 4

Total of High Potential Industries 14 61 20 79 34 140

Medium Potential Industries

12 Biscuits 1 10 0 0 1 10

13 Dairy Products 1 5 1 5 2 10

14 Egg Powder 1 5 1 5 2 10

15 Ketchups/ Purees/ Concentrates 1 5 0 0 1 5

16 Namkeen 0 0 1 5 1 5

17 Frozen Other Vegetables 1 2 1 2 2 4

18 Fish Meal 1 2 0 0 1 2

19 Pickles & Chutneys 0 0 1 2 1 2

20 Seasame Seed 1 2 0 0 1 2

Total of Medium Potential Industries 7 31 5 19 12 50

Total of High and Medium 21 92 25 98 46 190

Based on the above table, requirement of land for leasing according to the slot size in the proposed

SEZ is summarized in Exhibit 28 below.

Exhibit 28: Requirement of Land Slot Size

PhaseLand Slot

(Acres)

Off-take of the HighPotential Industries

Off-take of the MediumPotential Industries

Total Off-take for Highand Medium Potential

Industries

No. ofUnits

Total Area(Acres)

No. ofUnits

TotalArea

(Acres)No. of Units

TotalArea

(Acres)

Phase 1(2010-2014)

2 8 16 3 6 11 22

5 3 15 3 15 6 30

10 3 30 1 10 4 40


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Total of Phase 1 14 61 7 31 21 92

Phase 2(2013-2016)

2 12 24 2 4 14 28

5 5 25 3 15 8 40

10 3 30 0 0 3 30

Total of Phase 2 20 79 5 19 25 98

Total of Phase 1 and Phase 2 34 140 12 50 46 190

5.6 UTILITIES (WATER AND POWER)REQUIREMENT FOR THE PROPOSED SEZ

The daily water and power requirements for the SEZ have been determined based on the off-take

industrial units that are expected to come up in the SEZ.

Exhibit 29: Utilities Requirement for the Industrial Units in the SEZ

Sl. No. Particulars Phase 1 Phase 2 Total

1 Water (in KL) per Day 1,500 1,500 3,000

2 Power (in MW) 11 12 23

5.7 EMPLOYMENT GENERATION

The industrial units in the SEZ are expected to generate employment of nearly 4,000. Units in phase

1 are expected to generate employment of nearly 1,900 and in phase 2 are expected to generate

employment of nearly 2,100.

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and its network of member firms, each of which is a legally separate and independent entity. Please see

www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited andits member firms.

This material and the information contained herein prepared by Deloitte Touche Tohmatsu India Private Limited

(DTTIPL) is intended to provide general information on a particular subject or subjects and is not an exhaustive

treatment of such subject(s) and accordingly is not intended to constitute professional advice or services. The

information is not intended to be relied upon as the sole basis for any decision which may affect you or your

business. Before making any decision or taking any action that might affect your personal finances or business,

you should consult a qualified professional adviser.

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responsible for any loss whatsoever sustained by any person who relies on this material.

2010 Deloitte Touche Tohmatsu India Private Limited. Member of Deloitte Touche Tohmatsu Limited

market assess men report

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