Transcript Food Processing Industry in India

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Food Processing Industry
in India
8 September 2014
Strictly Private
and Confidential
Draft
Agenda
Page
1
Significance of Indian Food Processing sector
2
3
4
5
6
7
8
Market scenario
Key players across the food processing value chain
Gap in the food processing sector
Growth prospects in the sector
Opportunities in the sector
Challenges facing the sector
References
1
7
10
12
14
17
20
23
Section 1
Significance of Indian Food
Processing sector
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Section 1 – Significance of Indian Food Processing sector
Draft
Significance of Indian Food Processing sector
Food processing
sector is known as
the Sunrise Sector
of India
Value addition of agricultural produce
Creation of skilled and unskilled employment
Remunerative price to farmers
The sector provides
link between
Food security
agriculture and
industry
Export earnings
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Section 1 – Significance of Indian Food Processing sector
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Significance of Indian Food Processing sector
One of the largest food
producers in the world
Large and diverse raw
material base
Potential to grow as
the largest sector in
India
Advantage
India
Supportive
government policies
and initiatives
Large scientific and
research talent
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Section 1 – Significance of Indian Food Processing sector
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India's Competitive advantage
Production
• Largest producer of milk, livestock, pulses and buffalo meat
• Second largest producer of fruits & vegetables
• Third largest producer of food grains and fish
Cost
Low labour and manufacturing cost
Geographical location
• 15 major climates, 20 agro climatic regions
• 2nd largest arable land in the world, 46 out of 60 soil types
• 52% cultivable land in India v/s 21% of world average
• Good connectivity to major export destinations
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Section 1 – Significance of Indian Food Processing sector
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Supporting Environment
Government policies and initiatives
•
In the 12th five year plan, there is an allocation of 1 b USD made by the Government for
the expansion of food processing industry
•
Approval of National Mission on Food Processing
•
Focus on infrastructure development: Agri Export Zones, Mega Food Parks etc.
•
Investment opportunities:
• 100% FDI permitted under automatic route in food processing industry and food
infrastructure
• 100% export oriented units are allowed to sell up to 50% of output in domestic
market
• Export earnings exempted from corporate taxes
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Section 1 – Significance of Indian Food Processing sector
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India’s economic strength in the sector
•
Food processing industry in India is estimated to be worth
135 b USD; around 35% of the total food market
•
Industry provides employment to 13 million people directly and 35 million
people indirectly
•
Estimated number of registered FPI units in India are 36881
•
India's exports of Processed Food was 37.79 b USD in 2013-14 (12.1% of
total exports
Human resource
•
With over 1 b population and more than 35% of population between
the age group of 20- 44 yrs, human resource is an abundant
factor in Indian economy
•
Right skillset development would be a key parameter
•
As per IMF, democratic dividend could add 2% points to per capita
GDP growth per annum
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Section 2
Market scenario
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Section 2 – Market scenario
Draft
Key segments in the food processing sector
Beverages, juices,
concentrates, pulp, slices,
frozen & dehydrated
products, potato
wafers/chips etc.
Snack food, namkeens,
biscuits, ready to eat foods,
alcoholic and non alcoholic
beverages
Flour, bakeries, starch
glucose, cornflakes, mated
foods, vermicelli, beer and
malt extracts, grain based
alcohol
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Whole milk powder,
skimmed milk powder,
condensed milk, ice cream,
butter and ghee, cheese
Fruits and
vegetables
(4%)
Consumer
foods
(32%)
Dairy products
(16%)
Frozen and packed- mainly
in fresh form, egg powder
Key segments
and their
contribution
Grain
processing
(34%)
Meat and
Poultry
(10%)
Fisheries
(4%)
Frozen and canned products
mainly in fresh form
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Section 2 – Market scenario
Draft
Classification of the Indian food processing industry
Organized sector is mostly lead by private players and co
operatives
Small scale
industries
33%
Unorganized
sector
42%
Significant presence of small scale industries depict the
sector’s contribution in employment generation
Organized
sector
25%
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Section 3
Key players across the food
processing value chain
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Section 3 – Key players across the food processing value chain
Draft
Key players across the food processing value chain
Inputs
Production
Procurement &
storage
Processing
Retail
Kirana shops
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Section 4
Gap in the food processing sector
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Section 4 – Gap in the food processing sector
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Gap in the food processing sector
Despite the recent developments, food processing industry still withholds a huge untapped potential
Inadequate level of processing: Only 8% of the total food
produced in India is processed which is far lesser than
other major countries
Processed food (% of total food
production)
India
8
China
23
USA
65
Phillipines
78
0
20
40
Source: FnBnews.com
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80
100
Wastage of food products leading to revenue loss of
approximately Rs. 44000 crores/ annum
Commodity
Wastage (%)
Cereals
4- 6
Pulses
4- 6
Oilseeds
3- 10
Fruits & vegetables
6- 18
Milk
0.8- 1
Fish
6- 9
Meat
2- 2.5
Poultry
3.5- 4
Source: CIPHET Study on post-harvest losses, 2010
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Section 5
Growth prospects in the sector
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Section 5 – Growth prospects in the sector
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Growth prospects in the sector
Food industry size in India is estimated to increase from 135 b USD in 2012 to 200 b USD in 2015
With a CAGR of more than 7%, share of Food processing sector in India is estimated to increase to
6.5% of GDP by 2015
Value of exports in the sector has been showing an increasing trend with AAGR of 20.53% for the
preceding 5 years ending 2013- 14
Export of processed food & related commodities (USD b)
2013- 14
37.80
2012- 13
36.21
2011- 12
31.76
2010- 11
20.43
2009- 10
0.00
14.79
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
Source: DGCI&S, Kolkata
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Section 5 – Growth prospects in the sector
Draft
Growth prospects in the sector
Government
initiatives
Investment
opportunities
Increasing
demand
Government plans to raise value addition of food products from 20% in 2005 to
35% by 2015
•
•
FDI in the sector from April 2000 up to July 2013 has been 1.97 b USD
Government expects 1.9 b USD of investment in infrastructure by 2015
•
The demand for processed food is expected to increase by about 8.5% by the
end of 2017
Consumption expenditure is likely to reach USD 3.6 t by 2020 up from USD
1.0 t in 2010
•
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Section 6
Opportunities in the sector
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Section 6 – Opportunities in the sector
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Opportunities in the sector
Infrastructure development
• Storage: Warehouses, cold storage facilities etc.
• Processing: Value added centres, irradiation facilities and modernised abattoir etc.
• Marketing: Packaging centres, Food Parks etc.
Capacity building
• Skill development:
Setting up of Food Processing Training Centres, trainings at recognized institutions etc.
• Commercialization of farming community: contract farming, transfer of technology,
best cultivation practices etc.
• International market linkages
Services
• Information technology: Market linked, weather based, etc.
• Extension services
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Section 6 – Opportunities in the sector
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Opportunities in the sector
Investments
• Infrastructure development: Incentives available for setting up processing plants in
Agri Export Zones, exemption of service tax for setting up mechanized Food Grain
Handling Systems, processing units for agricultural produce etc.
• Logistics: Truck Refrigeration units manufacturing refrigerated vans/trucks exempted
from basic customs duty, grants available for Integrated Cold Chains etc.
• Processing: Key segments include fruit & vegetable, meat, fish & poultry, packaged,
convenience foods & drinks, milk products etc.
• R & D:
Financial assistance available for :
• Creation of infrastructure for running degree/diploma courses in food processing sector)
• Strengthening of institutional mechanism for human resource development in the sector
• Transfer of Technology/ technology commercialization:
Grants from the government available for
• Entrepreneurship Development Programme
• Setting up of Food Processing Training Centres
• Training at Recognized National/State Level Institutions etc.
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Section 7
Challenges facing the sector
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Section 7 – Challenges facing the sector
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Challenges facing the sector
Inadequate infrastructural facilities
•
High pressure on highways due to excess traffic volumes leads to delay in transit
•
Rail transport suffers from lack of availability of wagons, lack of last mile connectivity from rail
transporters etc.
•
Dependence on manual labor and low technology usage at ports affects turnaround time and cost
Implementation of Food safety Laws and policies
Unawareness amongst various stakeholders about the Food Safety and Standards Act
Unavailability of trained manpower
Expected shortfall of workforce in Indian Food Processing industry could be more than 9million
workforce by 2022
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Section 7 – Challenges facing the sector
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Challenges facing the sector
Constraints in raw material production
•
Availability of right quality of produce at the right time is an important issue in the sector
•
Precision farming practices, better harvesting methods need to be adopted by the farmers
Lack of Applied research
•
R & D institutions need to develop more innovative products, processes and machinery
•
Developments also required in the areas of industry interface, collaborative efforts with global
peers etc.
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Section 8
References
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Section 8 – References
Draft
References
•
Ministry of Food Processing Industries
•
Federation of Indian Chambers of Commerce and Industry
•
National Skill Development Corporation
•
FnBnews.com
•
Corporate Catalyst India
•
Agricultural and Processed Food Products Export Development Authority
•
Indian Brand Equity Foundation
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