sector profile: food processing• located in the south-western part of the country; shoreline along...

GIM Brochure (Food Processing) Size: A3 Open Dt: 01. 06. 2010

S E C T O R P R O F I L E : F O O D P R O C E S S I N G

Welcome to Karnataka - The Knowledge Hub of AsiaWelcome to Karnataka - The Knowledge Hub of AsiaDEPARTMENT OF INDUSTRIES & COMMERCEGovernment of KarnatakaE-mail: [email protected]: www.karnatakaindustry.gov.in

KARNATAKA UDYOG MITRA(A Government of Karnataka Organisation)E-mail: [email protected]: www.kumbangalore.com

Associate partners:

“Karnataka’s capital Bangalore is a brand the world identifies India with. It is also the single biggest reason why India has become such a hot investment destination.”

Manmohan Singh Prime Minister of India

MESSAGE

Welcome to Karnataka, the Knowledge Hub of Asia. It gives me immense pleasure and pride to

showcase Karnataka’s potential at the Global Investors Meet 2010. The State’s entrepreneurial spirit in

innovations and R&D has given us recognition world over. Our rich natural resources, proactive

Government policies, talented workforce and a strong economy have propelled the State to become a

preferred investment destination.

I have a dream, a vision for this one State with many opportunities. Vision 2020 for Karnataka seeks to

propel a holistic growth by promoting equitable development of sectors and districts, by providing

employment to all sections of people and regions of the State. It will also focus on ensuring excellent

infrastructure, quality education, decent living conditions and life security for all our citizens. This vision,

combined with our passion for excellence will drive the economy to greater heights.

Karnataka is a State of action. We have witnessed rapid and unparalleled growth across our

knowledge-based sectors. Each of our 30 districts is unique in its own right, offering investment

potential like no other State in the country. Over 700 MNCs are already reaping the advantages of

making Karnataka their home. One new global company moves into our State every week and a new

industrial unit is approved every day. Supported by rich natural resources and progressive policies, the

State presents its investors with the right blend of strengths and opportunities.

We would like to assure all investors that the State Government would extend the fullest cooperation

and support for the timely implementation of their projects.

I would like to congratulate the investors for choosing our State and wish them grand success

in their ventures.

With best wishes,

B. S. Yeddyurappa

Chief Minister of Karnataka


SRI B. S. YEDDYURAPPAHon'ble Chief Minister


KARNATAKA: LAND OF PLENTY

Snapshot 06

Economic Growth 07 Agriculture 07

Manufacturing 08

Services 08

Karnataka’s contribution to India’s economy 08

Infrastructure and resources 09

Skilled manpower 11

Karnataka Policies: Calling investors 12

AN ENTERPRISING STATE The Global scenario 14 The Indian scenario 15

Advantage Karnataka 18

Skilled manpower 21

Policy and proposed investment 24 Strength and opportunities 26 Success stories 29

LAND BANK 31

ANNEXURE 32

APPENDIX 34

Contact us 34 References 35 Websites 35

C O N T E N T S

0706

Karnataka: Land of Plenty


0

10000

20000

30000

40000

50000

60000

2009-102008-092007-082006-072005-06

Per Capita Income (Rs.) at Current Prices

Source: CSO Directorate of Economics and Statistics, Bangalore

Karnataka

India

3282529678

3632733684

41902

37969

46731

42749

50974

‘Industrialise or perish’– Sir M Visvesvaraya,

Karnataka’s world-famous engineer

Industrial Revolution alone can spur economic growth of India.

This, in turn, will impact literacy rate, lifestyle and income

levels for our future generatrion. The Government of

Karnataka, therefore, has organised the Global Investors Meet

in Bangalore on June 3-4, 2010, showcasing the investment

opportunities in the State.

Karnataka is one of India’s fastest-growing States, with a vast and

diversified industrial base. Apart from nurturing the globally

recognised Silicon Valley of India – Bangalore – the State has

emerged a prized destination for not only Information

Technology, but also Aerospace, Biotechnology, Heavy Construction

Machinery and Equipment, Sericulture and Floriculture.

Capital Bangalore

Area 191,791 sq. km.

Population (Census 2001) 52,850,562

Population density (per sq. km.) 276

Per capita income Rs. 40,309

Percentage of urban population 35%

Literacy rate 66.6%

Number of districts 30

Number of towns 270

Number of villages 27,028

Prominent cities Ankola, Bangalore, Bagalkot, Belgaum, Bidar, Bijapur, Chikmagalur, Chitradurga, Dandeli, Hubli-Dharwad, Davangere, Gadad-Betageri, Gulbarga, Harihar, Kolar, Mandya, Mangalore, Mysore, Raichur, Shimoga, Tumkur and Udupi

Prominent airports Bangalore, Mangalore

Prominent ports New Mangalore, Karwar

Karnataka: Snapshot

Gold and Renewable Energy. The entrepreneurs here have

already ventured into these sectors, the result of which has seen

the emergence of Karnataka as the ‘Knowledge Hub of Asia’.

Further, salubrious climate, vast natural resources, proactive and

growth-intensive Government policies lend the State an edge.

• Eighth-largest State in the Union of India.• Located in the South-Western part of the country; shoreline along the Arabian Sea.• Situated on the convergence of the Western and Eastern Ghat ranges, between 74° E and 78° E longitudes, and 11° N and 18° N latitudes. • Area: 191,976 km2.• 5.8% of India’s land area and is home to 5.1% of the population (around 52 million). • Borders Goa (N-W), Maharashtra (North), Andhra Pradesh (East), Tamil Nadu (S-E) and Kerala (S-W).

Economic growth • One of India’s fastest-growing States, Karnataka has a strong industrial base and a vibrant service sector. • Software is State’s star performer; software exports form 35% plus of country’s software exports.• Secondary sector contributes more than a quarter of GSDP• State contributes 5% of national income. • Since 2003-04, the State growth has pushed the levels of per capita income higher than the national average.

Agriculture • Sustains about 63% of the population.• The State is pushing to diversify agricultural activity; horticulture and agro-processing are important activities being encouraged by State Government.• Karnataka is one of the country’s largest producers of fruits and vegetables and No. 2 in floriculture.• Karnataka is the second-largest producer of milk in India.• The State has the largest sericulture in the country.

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• Second in area and third in production of plantation crops in the country. • Second-largest producer of tobacco in the country. • Largest producer of spices, aromatic and medicinal crops. • Fourth among States in foreign technology transfer approvals. • Third-highest FDI inflows among States in India with 6.5% of all FDI inflows into the country. • Capital Bangalore is the world’s fourth-largest technology cluster. • Popular tourist destination, has second-largest number of protected monuments in India.

Infrastructure and resourcesIt’s the goal of State to double investment from the present 4.5% of GSDP in infrastructure to meet the needs of a fast growing economy. Private sector partnership actively sought by an investor-friendly Government – more than 88 projects worthRs. 87,000 crore are in various stages of implementation.

Power

Karnataka’s three areas of concentration are: Energy Sufficiency;

Energy Efficiency; Green and Clean Power. The first hydel power

station in India was set up in Sivasamudram in 1902 and the

longest transmission line at the then highest voltage in the world,

was constructed to meet the needs of Kolar Gold Fields. With a

transmission network of 36,542 CKMs and 1205 stations, the

State distributes power to 1.7 crore consumers. As the demand

for power rises with the groth of the economy, Karnataka intends

to meet the projected demand and make the State power-surplus

by 2014 through a rapid expansion of power schemes.

Manufacturing • It is well-diversified. • Main industries are engineering, chemicals, electrical, automobilie, textile, aeronautics and food processing.• Industrial growth up from 6.2% in the Nineties to 8.9% per annum since 2000.

Services • The engine of growth in the State.• Bangalore, the State Capital, the powerhouse of IT in the country.• State was the first in India to set up a Software Technology Park in 1991. • Karnataka is the first State to bring the private sector into higher education.• State has the highest number of medical colleges in the country and is a hub of medical tourism.• Karnataka leads in biotechnology and nanotechnology.

The Karnataka Government’s Vision 2020 seeks to remove the sectoral and regional disparities by encouraging diversified economic activity in all regions of the State, and by raising upgrading skills in the labour force through vocational training.

State’s contribution to India’s economy• No. 1 Investment Destination. • One of India’s most progressive states.• Contributes 8% to India’s industrial income. • Contributes 9.8% of India’s product exports. • More than a third of India’s software exports from State. • State has the second-largest iron ore reserves in India. • More than half of India’s biotech companies in State. • State’s Hutti mines are the only primary-gold producing source in the country. • Third-largest producer of steel in the country. • Seventh-largest producer of cement in the country, 6.5 % of India’s production. • Third-largest producer of fruits and fifth-largest producer of vegetables in the country, produces 12% of fruits and 8% of vegetables grown in India. • Contributes 70% of India’s coffee production. • Largest area under horticulture, third-largest production in the country.

Karnataka: Third Highest FDI Inflows(in USD million)

Source: DIPP (inflow from April 2000 to February 2010)

5369.62

6397.63

6850.95

22101.96

38476.33

Sectoral Composition Of Income

Source: CSO

1993-1994

2008-2009

38%

56%

25%

28%

36%

16%

Share Of Employment

Source: NSSO

1993-1994

2006-2007

23%

26.3%

10.6%

17.9%

66%

55.9%

Status of Infrastructure Projects (as on May 2010)

Sector Number Value of Projects (Rs. Cr)

Transport logistics 52 35,432Urban and Municipal Infrastructure 6 253Tourism 8 1,224Energy 4 8,400

Industrial Infrastructure 10 41,231

Agri-Infrastructure 8 854

Total 88 87,394

Source: IDD, Govt. of Karnataka

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Water • Seven river systems – Krishna, Godavari, Cauvery and their

tributaries, North Pennar, South Pennar, Palar and the West flowing rivers in the Western Ghats: Kali, Gangavali (Bedthi), Aganashini, Sharavathy & Netravati.

• River systems together yield on an average 3475 TMC.• About 50% of this water is available to the State. • Hydel constitutes one-third power generation of the State.

Mineral resources• Geological setting for the State from Precambrian to recent

formations provide 40,000 sq.km. of green stone belts. • Minerals found: Gold, silver, copper, iron, manganese, limestone,

dolomite, chromite, magnesite, granite etc.• 174 mining leases have been issued by the Government for

iron ore covering 18,670 hectares.• A progressive State with a forward-looking mineral policy since

2000, which was later revamped in 2008. • Policy emphasis on modern technology, transparency in

granting mineral concessions, emphasis on value addition, sustainable development in eco-sensitive areas, like the Western Ghats.

Skilled manpower• Third-largest pool of engineering graduates; Karnataka’s share

of engineering degree and diploma holders is 10% in the country after Andhra Pradesh and Maharashtra.

• Globally recognised higher-education centres. • Leading hub of research and development institutes.• Low-cost skilled manpower makes value-added manufacturing

almost 60% cheaper than in Western Europe and the USA.• Educational atmosphere in the State enhanced by institutes like

the only 100-year-old Indian Institute of Science (IISc) and the Indian Space Research Organisation (ISRO).

• With 1,162 ITIs, Karnataka has 15% or the largest number of such institutes in the country.

Karnataka is well connected with rest of the world; while the existing air, road, rail and sea connections already cater to high volumes of traffic in passengers and freight, they are in the process of expansion and upgradation.

Air traffic• International airports at Bangalore and Mangalore.• Bangalore International Airport Limited can handle 3,000

passengers per hour and is the first private airport in the country. • Airports at Hubli and Belgaum cater to North Karnataka.• Mysore airport has been upgraded for commercial traffic.• Hubli, Belgaum and Mangalore airports being upgraded. • Airports planned at Hassan, Shimoga, Bellary, Bijapur & Gulbarga.• Karwar and Bidar defence airports being opened for civil traffic.• A helipad each is planed for all 30 districts.

Shipping • Long shoreline of 300 km. • Major port in New Mangalore handled more than 36.02 MT.

traffic in 2007-08 or 7% of the country’s total traffic in major ports.• 10 minor ports in Karwar, Belekeri, Tadri, Honnavar, Bhatkal,

Kundapur, Hangarkatta, Malpe, Padubidri and Old Mangalore; handled 8,893.64 MT of cargo in 2007-08 or 4% of India’s traffic in minor ports.

• Tadadi and Haldipur ports set for expansion on PPP basis.

Roadways• More than 150,000 km road network in State.• Targetted to add another 10,000 km. • 96 projects, under various stages of implementation.• Monorail projects in Bangalore.

Railways• 3,300 km railway line across State.• Konkan Railway links Mangalore with Financial Capital of India,

Mumbai, and Northern States.• High-speed rail link to the Bangalore airport on the cards.• Two mono rail projects in State Capital to decongest city traffic.

Communication• 27.7 million wireless subscribers in the State, adds more than a

million new subscribers each year. • State possesses the fourth largest Internet subscriber base in

the country.• Mobile towers in the State will go up from 3,000 to 6,000

towers by September. • 3G services mean greater convergence between mobile and

Internet services in the future, ushering mobile TV, online gaming, video call, movie on demand, faster downloads and other services.

Karnataka Technical Skill Development

Number of institutions

Engineering Colleges 172

Medical, Dental, Ayurvedic and Unani Colleges

114

Polytechnics 273

Pharmacy Colleges 69

Industrial Training Institutes 1162

R&D Centres 103

Karnataka Non-Technical Skill Development

Number ofinstitutions

Universities 22

National Institutes 25

International Schools 13

Law Colleges 83

Foreign Language Training 9

Nursing Schools/ Colleges 350

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KARNATAKA POLICIES: CALLING INVESTORS

The Government has targeted a balanced regional growth by creating development corridors in the State, linking major industrial areas by national highways and rail links, and matching natural resource capabilities. Every part of the State is set to be supported with infrastructure projects to boost growth and employment.

Steel Zone: Bellary, Koppal, Bagalkot, Haveri, Gadag & RaichurCement Zone: Gulbarga, Bagalkot, Chitradurga, Belgaum & OthersFood Processing Zone: Bangalore Rural, Kolar, Belgaum, Gadag, Koppal, Shimoga, Bagalkot, Bijapur, Davangere, Mandya & DharwadIT/BT Zone: Mysore, Mangalore, Hubli-Dharwad, Belgaum, Shimoga, Gulbarga, Kolar & MandyaAutomobile Zone: Ramanagara, Shimoga, Dharwad & KolarReadymade Garments Zone: Bangalore Rural, Tumkur, Kolar, Mandya, Belgaum, Bidar, Dharwad & OthersSugar and Co-gen, Power Zone: Bidar, Belgaum, Bagalkot, Shimoga & MandyaPharmaceutical/BT Zone: Bangalore, Mysore & HassanPower Generation Zone: Raichur, Bellary, Bijapur & Chitradurga Media & Entertainment Zone: Bangalore Rural & Ramanagara

Karnataka State Government Policy 2009-14

Karnataka’s investor-friendly and responsive administration has worked towards easing administrative procedures and implementing policy measures for faster and smoother industrial growth. • An investor-friendly responsive administration includes the

Karnataka Udyog Mitra, set up more than a decade ago.KUM is a single contact point for all investors – from receiving a proposal to ensuring its implementation.

• The State-level Single Window Clearance Committee and the State High Level Clearance Committee facilitate clearance of proposals in a speedy manner.

• Karnataka State Industrial Policy 2009-14 enhance all such previous policies for a comprehensive, investor-friendly approach.

• Land Bank – More than 3,000 acres in each district acquired by the Karnataka Industries Areas Development Board (KIADB) for industrial development, ironing out difficulties in creating the basic infrastructure before operationalising production facilities.

• Suvarna Karnataka Development Corridor programme connects most of the Tier II cities through a network of highways, with cluster development in designated zones.

• Under the SKDC programme, 25 km on both sides of the corridor will be developed for industrial clusters, townships, satellite towns and sector-specific industrial zones.

• The planned four major industrial corridors, connected by eight-lane roads, are:

* Bidar-Bangalore via Chitradurga * Tumkur-Honnavar via Shimoga * Chitradurga-Mangalore via Shimoga-Udupi * Bangalore-Belgaum along National Highway 4 * Bidar-Gulbarga-Bellary-Hiriyur * Chitradurga-Hospet-Bagalkot-Bijapur• Sector-specific industrial zones and SEZs that match the natural

resources and capabilities of a region with the industry requirements.

• Special focus on skill development to enhance generation of technical manpower.

• Creation of world-class ready-to-use infrastructure through investments in power, roads, water, warehouse and logistic facilities, connectivity through rails and ports etc.

• The State Government’s packages of incentives and concessions for new industrial investments, include:

- 75% to 100% stamp duty exemption on land sale deeds and loan documents registration.

- Land-conversion fine reimbursement of 75% to 100% for converting agricultural land to industrial use.

- 100% exemption on entry tax on plant and machineries for 3 years during implementation of the project.

- 100% 5-year exemption on entry tax on raw materials, inputs, components etc. during operation period.

- 50% limited to Rs.1 crore subsidy for effluent treatment plants. - Interest-free loan to an extent of 50% of the value of fixed

assets at 25% of the assessed gross VAT for a period of 7 years extendable to 12 years.

- A State Policy for Special Economic Zones formulated as per Central SEZ Act 2005 & Rules 2006, with a view to provide a hassle-free environment for export production and to attract FDI. The objectives of this policy are to set up a single-point clearance to SEZ developers and units, to facilitate and expedite establishing of SEZs, to delegate the powers of the Labour Commissioner to the Development Commissioner of SEZs and to extend incentives as below:

• Exemption from State Taxes for all purchases from Domestic Tariff Area

• Exemption from Stamp Duty • Exemption from Electricity Duty • Capital subsidy for common effluent treatment plant

(maximum Rs. 1crore per SEZ)

Yadgir


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Private Final Consumption Expenditure ($ 181 billion) 2008

Source: CSO

Meat and Marine

Milk and Milk Products

Agri Products

The global scenario

The global food processing industry has been growing at a rapid rate with rising population and incomes and changing tastes and preferences with globalisation. The industry is actively promoted in developing countries; with its strong backward and forward linkages providing employment and income opportunities. The food processing industry benefits the majority in rural areas, a truly inclusive growth strategy.

The food processing industry is quite possibly the world’s biggest industry, comprising as it does, all activity geared at processing agricultural and livestock produce, a large part of it unaccounted for in the unorganised sector. According to ILO estimates, 60% of agro-industrial workers in developing countries belong to the informal sector. With rising population and incomes, urbanisation and globalisation, new tastes are developing around the globe, creating an ever-growing market that feeds directly into the food processing industry. In recent years, there has been a marked increased in imports of foodstuffs into developing countries, more than two-thirds in the form of processed products.

The food processing industry sources inputs from threemain categories:• Agri products – including grains and cereals, oils and oilseeds,

fruits and vegetables and beverages• Milk and milk products• Meat, poultry and marine products

In low-income countries, this industry contributes about half of the manufacturing sector. UNIDO has estimated the added value of agro-industries at around 4.5 percent of the GDP of developing countries. The ‘non-traditional sector’ (vegetables, fruit and fish products), currently the most dynamic in terms of exports from developing countries, is characterised by high levels of female employment, ranging from 50 percent to 90 percent of total employment.

The benefits of a vibrant food processing industry• Generating growth and diversifying income opportunities.• Inducting productivity gains by small farmers and integrating

them into local, national and international markets.• Reducing food costs and supply uncertainties.• Improving diets of urban and rural poor.• Reducing wate by 30-40% during various stages.

The Indian scenario

India’s strengths as one of the largest producers and consumers of food products offers significant potential for growth of the food processing industry. With low levels of processing of primary produce, India’s share in world trade is a mere 1.5%. However, significant policy initiatives and investment has placed this industry on a high growth path. Estimated to grow from the presentUS$ 181 billion to US$ 318 billion by 2020, the sector is set to absorb huge investments.

With the world’s largest irrigated area under cultivation in the world, largest livestock population and largely agrarian population, India is one of the world’s largest producers of food products. At the same time, the market of more than a billion people forms a huge domestic market for food produce. • 161 million hectares of arable land, second-largest in the world.• 55 million hectares of irrigated area, highest in the world.• 15 million hectares of freshwater reserves.• 46 out of 60 soil types and 26 types of climatic zones.• 8041 kilometres of coastline, nineteenth longest in the world.• World’s largest producer of milk, 104.8 million tonnes in

2007-08. • 9% of the world’s production of fruits, 11% of the world’s

vegetable production. • 7th amongst fish producing countries, with production from

marine and inland sources at around 3.9 million tonnes and 4.5 million tonnes respectively.

• 5th in shrimp production and second largest after Chinain aquaculture.

• Huge domestic market: More than a billion people, spending more than a quarter of their expenditure on food andrelated items.

Present Status The Indian consumer spends 31% of total expenditure on food items, resulting in the food market estimated at US$ 181 billion in 2008. However, only 26% of the food market is from tertiary processed output, mostly driven by beverages and oils.

The food processing industry ranks fifth in India in terms of production and export. More than 1.6 million workers are employed in this industry, comprising 15% of the total workers engaged in the industrial sector. Accounting for 10% of the total invested capital in industries, the output from foods and beverages is 12% of the total industrial output value.

Food Processing Segment

Source: MOFPI

Other food products

Dairy products

Grain mill products

Beverages

Meat, fish, fruit,vegetables and oils

Food for inclusive Growth

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FDI in Food Processing - The food processing sector in India has attracted US$ 809 million from April 2000 to July 2009 accounting for 0.87% of the total FDI in the country.

Special Economic Zones: There are four notified Special Economic Zones for the food processing sector, formal approval has been given to five SEZs and in-principle approval has been granted for two zones.

Though India has a strong raw material base, it has been unable to tap the potential for processing and value addition in perishables like fruits and vegetables. With inadequate facilities for storage and warehousing, there are high levels of wastage: 10-25% of fruits and vegetables and 2-5% of grains and cereals are lost in transit and storage.

42% of the food processing units are in the unorganised sector, 33% in the small scale units, just 25% come under the organised sector with easier access to credit and other facilities.

Only about 2% of the fruits and vegetables in India are processed, which is much lower compared to countries like USA (65%), Philippines (78%) and China (23%).As a result, India’s share in exports of processed food in global trade is only 1.5%.

Vision 2015 on Food Processing Industries

The Government of India is giving the food processing sector a huge boost with a vision plan that aims to increase by 2015:• Level of processing of perishable food from 6% to 20%.• Value addition from 20% to 35%. • Share in global food trade from 1.6% to 3%.An estimated investment of Rs. 100,000 crore is required to achieve the above vision of which Rs. 45,000 crore is expected to come from the private sector, Rs. 45,000 crore from financial institutions and Rs. 10,000 crore from the Government.

Prospects

According to Ernst and Young estimates, the food market is expected to grow 40% of its current size by 2015, the key drivers for growth being:• Rising incomes - a movement of population from lower

income classes to higher income classes; middle class and rich households increasing from 14.5 million in 2005 to 100 million by 2020.

• Growing consumption levels, household consumption expected to double by 2020.

• Growing youth population in India, 24.2 million by 2015.• Urbanisation with more than a third living in cities in the next

decade.• The emergence of nuclear families.• A rising incidence of lifestyle diseases such as diabetes and

obesity leading to changed diets.• Changing tastes and preferences as awareness increases

through media penetration and travel both within and outside the country.

Mckinsey and Co. estimate that the retail food sector in India is likely to grow from around US$ 70 billion in 2008 toUS$ 150 billion by 2025.

Top Food Processing Companies in India

Company Name Products 2008 Sales (Rs. crore)

Ruchi Soya Inds. Ltd. Soya bean oil 11020.46

Nestle India Ltd. Dairy products 4472.04

Adani Wilmar Ltd. Edible oils 3402.45

Allanasons Ltd. Meat preparations 2927.71

Pepsico India Holdings Pvt. Ltd. Soft drinks 2803.83

Britannia Industries Ltd. Biscuits 2678.64

Gokul Refoils & Solvent Ltd. Edible oils 2056.71

K S Oils Ltd. Mustard oil 2045.11

Suguna Poultry Farm Ltd. Poultry 2029.3

Marico Ltd. Edible oils 1923.92

Bajaj Hindusthan Ltd. Sugar 1890.75

Shree Renuka Sugars Ltd. Sugar 1871.76

Rei Agro Ltd. Rice 1853.77

Gujarat Ambuja Exports Ltd. Soyabean oil cake 1838.73

Cadbury India Ltd. Chocolate confectionery 1751.24

Source: CMIE

Source: Eleventh Five Years Plan, Planning Commision

Percentage of Fruits and Vegetables Processed

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ADVANTAGE KARNATAKA

Karnataka has substantial potential in raising the level of the food processing industry, given its strengths in primary production, storage infrastructure and connectivity.

Karnataka has a large resource base to satisfy the requirements of a well-diversified and vibrant food processing industry. While 64.60% of its total geographical area is under agriculture cultivation, it ranks 5th rank in India in area and production of vegetable crops. It is India’s largest producer in floriculture, spices, aromatic and medicinal crops and tropical fruits. In fact, it supplies 12% of total fruits and 8% of total vegetables grown in the country and it is the only State in the country where all varieties of fruits are available. 70% of India’s coffee production comes from this State, with its large coffee plantations.

In the recent years, the State has also emerged a leader in spices, especially cardamom and pepper. In fact, Karnataka is the second highest producer of pepper.

Karnataka ranks third in the country’s total sugar production, and fourth in the country in the cultivation of sugarcane, providing a good base not only for sugar factories but for all produce that uses sugar as inputs e.g., biscuits, beverages etc. With a 320 km long coastline, marine production worth around 4.25 lakh M.T. per annum is extracted. There are 276 fishes in the marine and estuarine waters along the Karnataka coast, also known as the mackerel coast

Karnataka has a vibrant food processing industry that draws its strength from the State’s large agricultural produce and strong manufacturing capabilities. The State has attracted significant investments in this sector – the number of new industrial units registered in the State have been highest in this sector compared to the others in the last two years – in 2008-09, 55 units were registered (32 units in Chemicals industry, the second highest sector that year) and till November 2009, 91 units were registered (56 in Chemicals industry). One of the main reasons for this high growth is the proactive stance of the Government in promoting the food processing industry, by leveraging the strengths in the State to full potential. Exports: The State has also seen tremendous growth in the exports of agricultural products in the past few years(see Graph), with coffee products showing the highest growth in exports, doubling in value from Rs. 705 crore in 2004-05 toRs. 1,475 crore in 2006-07 and then dipping to Rs. 965 crore in 2009-10, following the global financial crisis. Food processing products, however, has shown steady growth in last fiscal year.

Animal Husbandry in KarnatakaThe State also has a large resource base in livestock, producing milk, meat, poultry and eggs and providing a livelihood to many in the primary sector. According to provisional estimates from the 2007 Livestock Census, there were 32.8 million livestock in the State, compared to 24.9 million in 1990.

Poultry: Presently 74 primary poultry co-operative societies are affiliated to the Karnataka Co-operative Poultry Federation. The Poultry Feed Act has come into force to maintain the quality of poultry feed; 24 poultry farms are functioning in the State. The major developmental activities are breeding and rearing of Giriraja parent stock and supplying chicks to the farmers and rearing centers of the department. In 2007-08 and 2008-09, 1,480 and 3,166 persons were trained in poultry rearing and 1.07 lakh and 1.17 lakh Giriraja chicks were produced respectively. Over the period April-November 2009, 0.67 lakh chicks were reared and 1,107 persons were trained.

Milk: The State produces 4% of India’s milk output and the Karnataka Milk Federation is the State level co-operative organisation implementing dairy development activities in the State under ‘Operation Flood’. This organisation has the responsibility of providing remunerative price and market to the rural milk producers of the State and of supplying pure milk and milk products to the consumers. The Federation has 22 dairy processing plants with a capacity of 32.25 lakh litres a day, 42 chilling centres with 15.15 lakh litres of chilling capacity and 5 product dairies equipped to produce 92 MTs of milk powder per day. ISO 9001/2000 Certification in respect of 4 cattle feed plants is renewed and the quality is being maintained as per requisite standards. In 2009-10, there are 10,087 dairy co-operative societies functioning with 20.38 lakh farmers enrolled as members. Milk procurement has risen from 11. 07 lakh tonnes in 2007-08 to 13.24 lakh tonnes in 2009-10.

Share of Karnataka in India’s produce:Some important crops

Source: Eleventh Five Years Plan, Planning Commision

0%

10%

20%

30%

40%

50%

Nine-Oil SeedsTotal PulsesGroundnutsSugarcaneCoarse CerealsSun Flower

Livestock in Karnataka(in thousand)

0

10000

20000

30000

40000

2007(p)19971990

Exports from Karnataka (Rs. crore)

2004-2005 2005-2006 2006-2007 2009-2010

Coffee Products 705.65 1103.94 1476.65 965.16

Cashew and Cashew Kernels 518.35 521.81 552.78 421.38

Agriculture and Processed Food Products

362.41 384.11 395.61 493.70

Spices 109.54 169.98 219.72 236.90

Marine Products 91.65 98.22 136.13 266.28

Source: Visvesvaraya Industrial Trade Centre

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Fisheries: Karnataka has rich fishing resources with a continental shelf of 27,000 sq.kms. with about 300 kms of coastline and 5.20 lakh hectares of inland water spread area. In addition, 8,000 hectares of brackish water area provides good scope for shrimp farming. The total fisher folk population of the State is 7.67 lakh comprising 2.76 lakh marine and 4.91 lakh inland area. It is anticipated that in 2009-10, fish production will reach 3.70 lakh metric tonnes, 2.20 lakh metric tonnes from the marine and 1.50 metric tonnes from the inland fish production. There are six minor fishing harbours in the State, located at Karwar, Honnavar, Tadri, Malpe, Gangolli and Mangalore, besides 25 fish landing centres at intervening centres. For the last three years, exports of marine products totalled 85,878 metric tonnes with a foreign exchange earning of Rs. 576.10 crore. Under the National Fisheries Development Board, assistance for renovation of Karwar Fishing Harbour has been taken up at an estimated cost of Rs.103.75 lakh. The fish landing center at Alevekodi is nearing completion. Construction of fishing harbour at Gangolli in Udupi district has been taken up while the proposal for expansion of Mangalore, Malpe and Honnavar fishing harbour is under consideration.

An industry profile

Food processing is a vibrant industry in the State, given the rich resources in primary inputs, and the following is a brief summary of the district-wise profiles, covering NIC 151, 152, 153, 154 and 155, estimating the manufacturing activity in the following products:Meat, fish, fruits, vegetables, oils and fats & other food products, dairy products, grain, starch products and animal feedsand Beverages.

There are in all about 177,850 units engaged in the agro and food processing industry in Karnataka. The total production value is estimated at Rs. 348.9 billion in 2008-09. Employing more than 8 lakh workers, the industry consumed total inputs valued atRs. 293.7 billion. Details of large and medium size companies operating in this sector are given in the Appendix.

Skilled manpower and R&D support

Karnataka has a long tradition for research and training in the food sector. Add to this the large pool of skilled graduates and technicians produced in its colleges and institutes dedicated to agricultural and food technology, the State provides comprehensive support to the food processing industry.

The State has always led in educational infrastructure and fostering a conducive atmosphere for research and development in cutting edge technologies. The State also has a long tradition that has started many reputed specialised centres creating the capabilities required by the food processing industry. The State boasts of 3 agricultural universities, 1 horticultural and more than 7 national level research institutes in agricultural & horticultural sectors.

University of Agricultural Sciences (UAS) was established in 1964 and owed its beginnings to an experimental farm in the 19th Century in Hebbal on the outskirts of Bangalore. The Wodeyars, the rules of the erstwhile kingdom of Mysore, donated about 30 acres for an Experimental Agricultural Station for research and training at Hebbal in 1899.The agricultural school set up in this centre in 1913 is the main research station of the UAS today. With six colleges across the State, the university runs undergraduate and postgraduate programmes covering all aspects of agricultural sciences, non-diploma courses in baking and other training courses in mushroom cultivation, nursery management etc.

Unit 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 (A)

Livestock Farms No. 11 11 11 11 11 11

Poultry Farms No. 26 26 24 24 24 24

Fodder Produced Tonnes 7198 5712 2483 14155 6612 NA

Milk Produced 000 Tonnes 3917 4022 4124 4313 4538 4719

Eggs Produced Millions 17719 18348 19498 20385 23746 26121

Meat Produced 000 Tonnes 98.52 99.7 106.59 110 114 119

Note: A - Anticipated.Source: Planning, Programme Monitoring and Statistics Department, Govt. of Karnataka.

Development of Fisheries (Numbers)

2006-07 2007-08 2008-09(A)

1. Mechanised boats

i. Purse Seines 338 291 350

ii. Gill Netters 5,127 5,819 5,350

iii. Shrimp Trawlers 2,777 2,734 2,800

iv. Others 50 55 60

2. Purse Seine nets 629 636 630

3. Capacity of Ice Plants per day (MTs.) 2,725 2,721 3,200

4. Storage Capacity (MT) 3,315 2,365.5 3,350

A: Anticipated Source: Directorate of Economics and Statistics, Government of Karnataka, Directorate of Fisheries

2322


The Agricultural Agricultural College in Dharwad too owes its birth to the Experimental Agricultural Station at Hebbal in 1899. The station led to the foundation of the Mysore Agricultural College, affiliated to the Mysore University, in 1946 and was was soon followed by the college in Dharwad in 1947. In 1958, a Veterinary College was also started in Hebbal.

The Karnataka Veterinary, Animal and Fisheries Sciences University (KVAFSU) in Bidar, formed in 2004, is an autonomous academic institution which imparts education in veterinary and animal sciences, dairy sciences, fisheries and other allied sciences. It is also a mandate to furthering the advancement of learning and research in these fields.

The Central Food Technological Research Institute (CFTRI) set up in Mysore in 1950 has made path-breaking research enabling significant leaps in the food processing industry of India. With ISO 9001 certification, the CFTRI has also established the International Food Training Technology Centre in collaboration with the FAO and the International School of Milling Technology, an Indo-Swiss venture.

The Defence Food Research Laboratory (DFRL) in Mysore is a specialised institute involed in food R&D. It has, to its credit packaged food for zero-gravity environs of a spaceship - DFRL prepared and packed food for Rakesh Sharma, the first Indian to go into space in 1984 on a Soyuz mission. Recently DFRL has been in the use for having begun work on the technology to prepare food for India’s first astronauts who will lift off into space in 2015.

The Imperial Institute of Animal Husbandry and Dairying was established in Bangalore in 1923, the forerunner in dairy education programmes in India. This became the National Dairy Research Institute (NDRI), whose headquarters were shifted to Karnal in 1955, the centre at Bangalore continued as the Southern Regional Station of the NDRI. Apart from basic research to support the dairy livestock, its technological achievements include increasing the shelf life of dairy products like Palada Payasam, creating new products like Gulab Jamun Mix and Palada Payasam Mix etc.

Institute of Horticultural Research is India’s premier institute dedicated to increasing horticultural productivity in the country. Started in 1967 in Delhi, the institute moved within a year to Hessaraghatta, Bangalore, where it has concentrated on research, training and consultancy and extension services. The institute has developed several indigenous technologies e.g., grape rootstocks, high-density planting in bananas and pineapples.

As seen from the table above, the number of veterinary institutions, including artificial insemination centres and mobile clinics has steadily risen in the past few years to accommodate the growing demand of livestock in the State.

Some of the other agro-related education/ training institutes in Karnataka • Regional Research Station of Sugarcane Breeding Institute,

Jamkhandi• Directorate of Biological Control, Bangalore • National Research Centre For Cashew, Dakshina Kannada• National Institute of Animal Poultry (NIANP), Bangalore• Indian Veterinary Research Institute, Bangalore • Division of Oil Seeds Research Station, Raichur • Centre For Reproductive Biology, Indian Institute of Science,

Bangalore • College of Agricultural Engineering, Raichur • College of Fisheries, Magya Nagar, Mangalore• Department of Veterinary Training, Keesargatta, Bangalore• College of Agriculture and Regional Research Station,

Krishinagar, Dharwad

Other important institutions fostering skills relevant to agro processing industry and providing high-quality post graduate research and training• National Institute of Technology (formerly REC), Suratkal• Indian Institute of Science• Indian Institute of Management• Vishweshwaraiah Industrial Trade Centre

Karnataka also has the largest number, 1162, of Industrial Training Institutes in India, making up 15% of the country’s total. These institutes provide a valuable resource in skilled technicians. According to an ILO study of these institutes in Karnataka and Tamil Nadu, ‘The standards at the Karnataka institutes appear to be higher than those in Tamil Nadu, with more up-to-date equipment and better training’.

2004-05 2005-06 2006-07 2007-08 2008-09 (A)Veterinary Institutions(Including ArtificialInsemination Centers andMobile Veterinary Clinics) No. 3774 3774 3947 4110 4110

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Policies and proposed investment

As per the Karnataka Industrial Policy 2009-14, food processing and agro industries have been accorded high priority with a number of important relieves and incentives. Some of the important policy changes towards food processing industry are as follows• FDI up to 100% is permitted under the automatic route in the

food infrastructure like food park, cold chain and warehousing• FDI up to 100% is permitted on the automatic route for

distillation and brewing of alcohol subject to licensing by the appropriate authority.

• No industrial license is required for almost all of the food and agro processing industries.

• Use of foreign brand names is now freely permittedthe Government.

• Capital goods are freely importable, including second hand ones in the food-processing sector.

• Reduction in custom duty rates on food processing plant and equipments, as well as on raw materials and intermediates, especially for export production.

• Excise rates have been reduced substantially. Many processed food items are totally exempt from excise duty.

• Free Trade Zones (FTZ) and Export Processing Zones (EPZ) have been set up with all infrastructure.

• These sector specific zones will be developed on timebound manner and are expected to create ample employment opportunities for local people at all levels. Efforts will be made to attract industrial giants to invest in these zones by offering structured incentivesand concessions.

• Formulation of the National Food Processing Policy.• Food Parks: As part of the Vision Document 2015, food parks

are envisioned across the country to bridge the gap between producers and processors – each park includes basic facilities for sorting, grading, packaging and quality control, research and development laboratories, cold storage facility etc. i.e a location with full infrastructure to enable smooth production processes. The Eleventh Five Year Plan has given shape to the idea of Mega Food Parks, which would provide the complete infrastructure for farm level primary processing centre-cum-cold chain in identified clusters, processing of intermediate products, collection centre cum cold chains, centralised infrastructure to take care of processing activities, which require cutting edge technologies and testing facilities, besides the basic infrastructure for water supply, power, environmental protection systems, communication etc.

Investments made the sector

Food processing has invited high interest in investments with more than 60 projects currently under implementation in this sector. Some prominent companies in food processing sector that have set up their base in Karnataka include MTR, Wrigley India Pvt. Ltd, Parley, Britannia, Mangaram, ITC Foods, Heinz, Nestle, Nissan, Nilgiris, Pepsi, Coca-cola. Companies that have ventured into retailing of fresh fruits and vegetables include Reliance Fresh, Farm Fresh, Field Fresh, Subiksha, Fabmall, Shub Mall etc.

Recent investment proposals in the food processing sector include:• Coca Cola plans to establish its third bottling plant in the

State at an investment of Rs. 107 crore in the Bidadi industrial area.

• Gujarat Ambuja Exports Limited will be setting up Maize Starch plant in Shiggon Taluk, Haveri District with an investment of Rs. 100 crore.

• One the biggest retail giant of India, Pantaloon Retail, plans to float a Special Purpose Vehicle (SPV) that would invest Rs. 300 crore in setting up two mega food-parks in Karnataka and Maharashtra. The Karnataka food park would be located in Kola district.

• Karnataka Government has proposed to set up a food park at Ittangihala village in Bijapur through the State-owned Food Karnataka Ltd. It is proposed to establish citrus, banana, pomegranate, grape (for wine manufacturing), sambhar-based and other processing industries in this food park. Selection of private entrepreneurs for establishing this park is under progress. The project cost is estimated to be Rs. 23.84 crore.

Approvals granted to food processing related projects (as on Jan 2010)

Approval Committees No. of cases Investment Employment in approved (Rs. crore) numbers

SHLCC approvals for foodprocessing sector (projectsabove Rs. 50.00 crore) 3 projects 214.00 750

SLSWCC approvals forfloriculture and agriculture(project investments betweenRs. 3.00 crore to 50.00 crore) 88 projects 658.00 20283

SLSWCC approvals forfood processing sector(project investments betweenRs. 3.00 crore to 50.00 crore) 322 projects 3158.00 56106

Total 413 projects 4030.00 77139

SHLCC - State High Level Clearance CommitteeSLSWCC- State Level Single Window Clearance Committee

2726


Food Parks: There are four existing food parks and another six proposed under the PPP mode in the State. One spice park is also to be set up at Belgaum.

Infrastructure: The State is well connected with road, rail, sea and air networks allowing access to other parts of the country and abroad. With 161 cold storage units and more than 150 warehouses across the State, the capacity for processing agri-produce is high.

With Bangalore International Airport upgraded and proposed expansion of the air network across the State, there will be a significant increase in the speed with which produce can reach domestic and international markets.

Strength and opportunities

India’s food processing industry is expected to rise 76% in present size by 2020. Its strengths as one of the largest producers and consumers of food products offer significant potential for the growth of the food processing industry. With low levels of processing of primary produce, India’s share in world trade is a mere 1.5%. However, significant policy initiatives and investment has placed this industry on a high growth path. Estimated to grow

from the present US$ 181 billion worth to US$ 318 billion by 2020, the sector is set to absorb huge investment.

Resources of Karnataka • 64.60% of total geographical area is under agriculture cultivation. • Second-largest milk producing State. • Third-largest producer of fruits in India.• Fifth in area and production of vegetable crops in the country. • Largest producer of spices, aromatic and medicinal crops. • Largest producer of tropical fruits in the country. • 12% of total fruits and 8% of total vegetables grown in the country. • Karnataka is the only State where all varieties of fruits are available.• 70% of India’s coffee production.• Karnataka ranks third in the country’s total sugar production, fourth in the country in the cultivation of sugarcane. • 320 km long coastline brings in marine production worth around 4.25 lakh M.T. per annum. There are 276 fishes in the marine and estuarine waters along the Karnataka coast, also known as the mackerel coast.

Karnataka has the potential to emerge as the largest hub for food processing in the country. With fertile soil and six agro climatic zones, the State has high volumes and variety of produce, while marine produce is abundant along the long coastline. The support of adequate cold chain and warehousing infrastructure, trained and skilled manpower, long tradition of research capabilities, strong connectivity with national and international markets and an investor-friendly Government provide a firm base for the agro processing industry to flourish.

The plans for growth in this industry include investments to raise infrastructure in power, connectivity and storage capacities, food processing zones under the Suvarna Karnataka Development Corridor Intiative to be located in Bangalore Rural, Kolar, Belgaum, Gadag, Koppal, Shimoga, Bagalkot, Bijapur, Davangere, Mandya and Dharwad Districts, Food Parks in six locations and a Spice Park at Belgaum.

Karnataka is bestowed with fertile soil and six agro climatic zones, has potential to merge as the largest hub for food processing in the country. The support of adequate cold chain and warehousing infrastructure, trained and skilled manpower, long tradition of research capabilities and strong connectivity with national and international markets provide a firm base for the agro processing industry to flourish.

Existing Food Parks in Karnataka

SNo. Place Project Cost Area (Rs. in Crore) (in acres)

EXISTING FOOD PARKS

1 Malur (Kolar Dist) 18.00 87

2 Navanagar (Bagalkot Dist) 18.59 100

3 Hiriyur (Chitradurga Dist) 16.39 106

4 Jewargi (Gulbarga Dist) 17.92 105

PROPOSED FOOD PARKS

1 Belgaum 44.70 100

2 Bijapur 23.84 80

3 Telagi (Davangere Dist) 11.56 100

4 Bangalore Rural 26.17 100

5 Sogane (Shimoga Dist) 17.02 100

6 Tumkur 21.82 100

PROPOSED SPICE PARKS

1 Belgaum 44.70 100

Warehouses Cold storages

State Warehouses Central Warehouses

Total Capacity in million tonnes

Total Capacity in million tonnes

119 1,129,274 44 707,173

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At the very base of the agro processing industry lies a combination of inputs from field produce and research technology in processes and techniques. Karnataka is blessed with both of these, creating a solid foundation for the industry. State has 10 diversified agro climatic zones and is the largest producer in India for spices and tropical fruits; Karnataka is third in production of fruits and vegetables. Horticulture crop covers 14.8% of the net cultivable area and contributes 40% of the agriculture income and 80% of the agriculture exports.

Fertile soil and suitable climate ensures smooth supply of quality inputs that goes into the industry. The State also has strong capabilities in agricultural research and training, with institutes set up more than a hundred years ago, that continue to produce quality output adding value to the food processing sector nationally. There is a large network of warehouses and cold storage units across the State to help raise the shelf life of the produce, while good connectivity by road, rail, air and sea enable easy access to markets outside the State.

The State Government has considered FIIs’ role in food processing as a top priority and has recognised the Sector as a sunrise industry and provides incentives in terms of fiscal benefits, single window clearance for projects and promotes food parks and food processing zones. The Agricultural and Processed Food Products Export Development Authority (APEDA), Karnataka State Agricultural Produce Processing & Export Corporation Limited (KAPPEC) and National Horticulture Board (NHB) are mandated to provide all help to entrepreneurs in the Sector.

The Agriculture Produce Marketing Committee Act has been amended to facilitate the procurement of agri-produce directly from farmers by processors. According to McKinsey and Co., Karnataka has the potential to attract investments of about Rs.10,000 crores during the next 10 years period in this sector. However there are many challenges ahead:• Low farm productivity needs to be enhanced with modern

technology.• High wastage is a cause of concern.• Low inflow of FDI in the sector that can be increase by

addressing the lacunae in infrastructure.• Insufficient power supply to cold storage units etc.• Limited infrastructure for sorting and grading at farm level.

The Food Processing SEZ planned in Hassan over 285 acres will establish a ‘one-stop-shop’ for all exported-oriented units in the sector.

These concerns are being addressed by the Government e.g.,ongoing power projects planned by KPCL, PCKL, KREDL and IPPs

are slated to bring about energy sufficiency in the State by 2013-14 with a capacity addition of 23,523 MWs in the next four years.

The fact that this industry has garnered the highest number of new industrial units registered in the last two years, amongst all sectors, shows the high interest level of private investment in agro and food processing. The State Government aims at working with the private entrepreneurs to enable a smooth journey to higher levels of activity in the food processing industry.

Success Stories

There are ample examples of success private-public partnership in the food processing industry in Karnataka. The perfect climatic conditions in Karnataka along with fertile soil, low labour costs and excellent connectivity has brought successful investment stories from some of the leading companies in this sector.

Global Green, a subsidiary of Delhi-based Avantha Group has been doing business in agriculture for the past fifteen years. Headquartered in both Bangalore and Belgium, the firm is the largest gherkin supplier outside of the US, the third-largest in the world, and accounts for a third of India's production of gherkins. Rival local producers include Natural Fresh Fruits, Green Pickles and Balaji Agro. The company introduced European methods in farming gherkins in Medleri village, developed a harvester to suit the small acreages here and set up its sorting and bottling plant on the outskirts of Bangalore that supplies to German, US and UK supermarkets. In 2008, the company produced 65,000 tonnes of gherkins for global markets; 55,000 tonnes came from India. Global Green is a highly successful global company, expecting to treble turnover in the next four years from its present levels ofUS$ 130 million and Karnataka, forms an integral part of its expansion plans.

French wines from the backyards of Bangalore? Back in the Eighties, on a 40-acre stretch on the foothills of Nandi near the Karnataka Capital was born Grover Vineyards. With nine varieties of French wine grapes from the original 35 varieties of the Vitis Vinifera species planted one these acres - it has grown to 60 acres since then - Grover Vineyards produce today is heard of most distinctly in renowned events like the London International Wine Fair and has caught the attention of many a renowned oenologue. Grover Vineyards even sells wine to France! As much as 30% of Grover Vineyards production - which includes a portfolio of La Reserve, Cabernet Shiraz, Sauvignon Blanc, Viognior Clairette and Shiraz Rose, Grover Vineyards Ltd - is exported to more than 10 countries and appreciated in some of the world’s best restaurants.

3130


The success that comes to an industry that locates in Karnataka is also well illustrated by the decision of the Central Food Technological Research Institute’s to base itself in Mysore. The CFTRI has brought Karnataka into the limelight for food technology research and provides excellent support to the food processing industry nationally. Innovations such as baby food from buffalo milk have been used by Amul, the leader in dairy products in India for more than 4 decades. Other achievements include: simple processes to extend shelf life of vegetables and fruits, indigienous technology to produce spice oils, fermentation and drying of cocoa powder, automation of the processes to make traditional Indian snacks etc.

When rice shortage during World War II hit the Sub-Continent, an experiment with sooji (Rava in Kannada) gave birth to the Rava Idli. The cooks to whom this gastronomical credit goes to belonged to MTR, established in 1924. Since then, Bangalore-headquartered MTR Foods Pvt Ltd has come a long way and is known as legendary innovator of 'complete meal solutions' which range from ready-to-eat curries and rice, ready-to-cook gravies, frozen foods, ice cream, instant snack and dessert mixes, spices, pickles and papads.

CHIKMAGALUR

DAKSHINA KANNADA

UDUPI

UTTARA KANNADA

SHIMOGA

HAVERI

COORG

HASSAN

DAVANGERE

BELGAUM

DHARWARGADAG

BAGALKOTE

KOPPAL

BIJAPUR

MYSORE

MANDYA

CHAMARAJA NAGAR

BIDAR

TUMKUR

CHITRADURGA

RAMANAGARAM

BANGALORE URBAN

BANGALORE RURAL

CHIKBALLAPUR

BELLARY

RAICHUR

YADGIR

GULBARGA

RANIBENNURU 671

MANGALORE

SHIMOGA 3104

HEGGADADEVANAKOTE 990

HASSAN 1058

HONNALI 201

KADUR 1589

ARASIKERE 238

HOSADURGA

HARPANAHALLI 200

HOLALKERE 600

SHIGGAON 274

HUBLI 751

HUKKERI 4873

BAILHONGAL 670

DHARWAR 2862

HAVERI 407

MUNDARGI

KOPPAL

BILGI

BASAVANABAGEVADI 7969

SRIRANGAPATNA 722

NELAMANGALA 1574

TIPTUR 212

GUBBI 863

HIRIYUR 1072

SIRA 3853

CHALLAKERE 500

TUMKUR 3146

DODDABALLAPUR 736

KANAKAPURA 1367

BANGALORE NORTH 1898

CHINTHAMANI 1385

BANGALORE SOUTH 424

BAGEPALLI 810

MULABAGAL 1559

GAURIBIDANUR 496

DEVANHALLI 918

HOSKOTE

MAGADI

MANDYA

MADDUR

KUNIGAL 290

RAMANAGARAM

KOLAR 686

HUNSUR

CHAMARAJA NAGAR 1362

KRISHNARAJPET

BELGAUM 1351

BELLARY 4995

SIRUGUPPA

RAICHUR

GULBARGA 2439

KHANAPUR

BIDAR

Legend

District boundary

Taluk boundary

NH

STATE_RAIL

Land bank status

Lands notified under sec 3(1),1(3),28(1)

Lands notified under sec 28(4)

Lands to be submitted to Govt approval

(as on 15th May 2010)STATUS OF LAND BANKS IN KARNATAKA

Land notified u/s 3(1),1(3) & 28(1) : 46,734 Acres.Land notified u/s 28(4) : 12,379 Acres.Land to be submitted forGovernment approval : 41,748 Acres.Total :100,861 Acres

ABSTRACT

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ANNEXURE

Karnataka - A pioneer in Sugar Industry

Karnataka is one among the major sugarcane and sugar-producing states in the country, ranking fourth and third respectively in the country. There are 55 established factories, with an installed crushing capacity per annum of 280 lakh tonnes; while 30 are in the private sector, 22 are in the cooperative sector and 2 in the public sector.

Karnataka was the second State in the country to establish a sugar factory. Mysore Sugar Company Ltd., Mandya, was the first sugar factory established in the year 1933-34 in public sector while India Sugars & Refineries Ltd., Hospet, Bellary district was the first in the private sector, established in 1934-35. The Kampli Co-op. Sugar Factory Ltd., Kampli in Bellary Dist. (now privatised and called Sundari Sugars Ltd.) in the co-operative sector was established in the year 1958-59. Apart from sugar production, by-products like ethanol and co-generation have become integral part of sugar economy, adding much value to the energy position in the State. To assist the sugar industry in the State, the Government set up the Karnataka Sugar Institute in Belgaum , that provides extensive technical services to the sugar sector including research and development of sugarcane viz., improved varieties of sugarcane, cropping pattern, irrigation techniques, methods of cultivation, plant protection, post harvest techniques etc., research and development pertaining to sugar engineering and sugar technologies, conducting workshops, training, seminars, field days etc. It also provides assistance in setting up co-generation plants. The Karnataka Sugar Institute is an excellent example of the Government support to the industry in the State.

Shree Renuka Sugars Ltd., the company with India’s largest sugar refining capacity is headquartered at Belgaum. The firm began operations in Munoli in 1999 and is one of India’s fastest growing sugar companies. Its facility at Munoli is spread over a 15,000 command area across 150 villages supporting 8,000 farmer shareholders. An ambitious company, the promoters have always gone in for innovation and the latest technology. The company commissioned a 11.2 MW co-generation plant in Munoli in 2000, just a year within starting operations. At present, the company owns cane crushing facilities at Munoli, Athani, Havalgah and Gokak Sugars in Karnataka and Ratnaprabha Sugars in

Maharashtra. It also operates three leased facilities at Arag in Mahaarashtra, Aland and Raibag in Karnataka. Its port based refinery at Haldia, West Bengal, is strategically placed for accessing export markets. In February 2010 , it announced the purchase of a 51% stake in Brazil's Equipav SA Acucar Alcool for Rs. 1,530 crore (US$ 329 million), making the transaction the largest deal by an Indian sugar producer. The second biggest deal in the sugar space - that of a US$ 240-million buyout of Brazilian sugar and ethanol maker Vale Do Ivai in November 2009 - was also by Renuka Sugars. After the consummation of the deal, Renuka Sugars will have a total sugar cane crushing capacity of 115,000 tonnes of cane per day, with about half the capacity coming from its latest buyout in Brazil, the world's largest sugar producing country. Together with Vale Do Ivai, Equipav will give Renuka Sugars the opportunity to tap the global market. The company is a symbol of Karnataka’s entrepreneurial skills that work to leverage on its natural resources base to rise to great heights.

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CONTACT US

Department of Industries & CommerceGovernment of Karnataka2rd Floor, Khanija Bhavan, Race Course Road, Bangalore - 560 001. IndiaPh: +91 80 222386796Fax: +91 80 22389909Email: [email protected]: www.karnatakaindustry.gov.in

Karnataka Udyog Mitra3rd Floor, South Wing, Khanija Bhavan, #49, Race Course Road, Bangalore - 560 001. IndiaPh: +91 80 22282392Fax: +91 80 22266063Email: [email protected]: www.kumbangalore.com

The Special Officer, Food Karnataka Limited Khanija Bhavan, No.49, 4th Floor, East Wing, Race Course Road, Bangalore - 560 001Ph: 080 22269188, 22258131/2/3Fax:080 41126904, 22255740Email:[email protected], [email protected]: http://www.ksiidc.com/fkl.html

Department of HorticultureLalbagh, Bangalore - 560 004Phone: 080-26571925E-mail : [email protected]

Directorate of FisheriesIII Floor, Podium Block, Vishweshwaraiah Tower, Dr. Ambedkar Veedhi, Bangalore - 560001Ph: 080-2286 4681 Fax: 080-2286 4619E-mail: [email protected]

Commissioner, Animal Husbandry & Veterinary Services, 2nd Floor, Vishweshwariah Mini Tower, Dr. B. R. AmbedkarVeedhi, Bangalore-560 001 Tel: 091-080-22864989 Fax: 091-080-22861075Website: http://www.ksiidc.com (link – Food Karnataka Limited),http://www.ksiidc.com/fkl.html

References

Economic growth data from Central Statistical OrganisationIndustry status from Government of Karnataka, Industrial Skyline of Indicus AnalyticsFlavours of Incredible India, FICCI-Ernst and Young, October 2009Newspapers as quoted in endnotesReport of the Global Agro-Processing Industries Forum, Improving Competitiveness and development Impact, Food and Agriculture Organisation of the United Nations, 2008 Agro-Processing Industries in India—Growth, Status and Prospects, R. P. Kachru. ICARDepartment of Industrial Policy and PromotionAnnual Survey of Industries, 2005-06, Ministry of Statistics and Programme Implementation

Websites

• Ministry of Food Processing http://www.mofpi.nic.in/ContentPage.aspx?CategoryId=122• IBEF http://www.ibef.org/industry/foodindustry.aspx• Indian Institute of Horticultural Research http://www.iihr.res.in/• Central Food Technological Research Institute http://www.cftri.com/aboutus/index.html• University of Agricultural Sciences http://www.uasbangalore.edu.in/• National Dairy Research Institute http://www.ndri.res.in/data.php?name=News&file=article&sid=41• HOPCOMS http://hopcoms.com/

The world’s biggest industry, November 2007 http://www.forbes.com/2007/11/11/growth-agriculture-business-forbeslife-food07-cx_sm_1113bigfood.html

FAO

National Dairy Development Board http://www.nddb.org/statistics/milkproduction.htmlEleventh Five Year Plan on Food Processing Sector http://www.mofpi.nic.in/ContentPage.aspx?CategoryId=148Annual Survey of Industries, 2005-06http://dipp.nic.in/fdi_statistics/india_FDI_July2009.pdfhttp://www.ibef.org/industry/foodindustry.aspxEconomic Survey, Government of Karnataka 2009-10http://www.indicareer.com/32-colleges-in-Karnataka.html, http://www.economywatch.com/stateprofiles/karnataka/institutes-and-universities.htmlILO, Project on Youth Employment and Social Dialogue in Southern India, December 2008. A note on Agro and Food Processing Sector, Govt of Karnatakahttp://www.ft.com/cms/s/0/3fbbf268-b78f-11de-9812-00144feab49a.htmlhttp://stg2.kar.nic.in/ksi/HomePage.htmhttp://timesofindia.indiatimes.com/biz/india-business/Renuka-Sugars-buys-Brazil-co/articleshow/5600906.cms

Appendix

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S E C T O R P R O F I L E : F O O D P R O C E S S I N G

Welcome to Karnataka - The Knowledge Hub of AsiaWelcome to Karnataka - The Knowledge Hub of AsiaDEPARTMENT OF INDUSTRIES & COMMERCEGovernment of KarnatakaE-mail: [email protected]: www.karnatakaindustry.gov.in

KARNATAKA UDYOG MITRA(A Government of Karnataka Organisation)E-mail: [email protected]: www.kumbangalore.com

Associate partners:

sector profile: food processing• located in the south-western part of the country; shoreline along...

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