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Food Processing Sectoral Overview (Knowledge paper)
Government of Odisha
Spices Fruits & Vegetable
Fisheries Food Grains
To become the investment destination of choice by continuously creating and delivering outstanding opportunities for business growth, fostering all-round socio-economic development for the state and its people.
NAVEEN PATNAIKChief Minister, Odisha
VISION
CONTENTSTable of Contents Page
1. Sectoral Overview: Agro & Food Processing 2
1.1. Agro & Food processing – Global Industry Overview 2
1.1.1 Major Segments in Agro & Food Processing Industry
1.1.2 Global Agro & Food Processing Market Trends
1.2. Overview of Indian Agro & Food Processing Industry 2
1.2.1 Strategic Advantage and Demand drivers of Agro & Food Processing 3
1.2.2 Major segments of Indian Agro & Food Processing industry 3
1.2.3 Agro & Food Processing Market Size 4
1.2.4 Indian Agro & Food Processing exports 5
1.2.5 Market Investment Opportunities – Agro & Food Processing 6
1.2.6 Funds for Food Processing Infrastructure development 7
1.2.7 Investment initiatives and Statutory Framework 7
2. Odisha Agro & Food Processing Sector 7
2.1 Strategic Advantage 7
2.2 Agro & Food Processing Clusters in Odisha 8
2.3 Key Segments in Odisha 8
2.4 Agro-Food Processing Infrastructure in Odisha 9
2.5 Growth Drivers – Agro & Food Processing Sector 9
2.6 Policy initiatives and statutory framework 11
2.7 Target Segments for Agro & Food Processing 12
2.8 Key Projects in Offering 12
1. SECTORAL OVERVIEW: FOOD PROCESSING
44
1.1. Food processing – Global Industry Overview
Globally, the food market is expected to bring in revenue by 2020 of $3.03 trillion as per
research report by Research and Markets. Food and agribusiness have a massive economic
and social footprint—the $5 trillion industry represents 10% of global consumer spending and
40% of employment. The global agro-food products industry is expected to reach $1,148.3
billion by 2018, with good growth over the next two years. Rising disposable income,
increasing awareness of health and wellness, higher population, expanding urbanization,
and consumer spending are the major drivers of the industry. The structure of the global food
industry is continually changing and evolving as food suppliers, manufacturers, and retailers
adjust to meet the needs of consumers, who are increasingly demanding a wider variety of
higher quality products.
Global Food Industry Statistics and Market Size Overview
I. Vital Statistics Quantity Unit Date Source
Total Value of Global Food Exports 1,486.30 Bil. US$ 2014 WTO
Total Value of Global Food and 7.8 Tril. US$ 2015 PRE
Agricultural Industry
Global Non-Food Agricultural Exports 279.1 Bil. US$ 2014 WTO
Global Food and Agricultural Sector Revenues 7.9 Tril. US$ 2015 PRE
Global Food and Agricultural Sector Share of GDP 10 % 2015 PRE
Global Packaged Food Industry 2.5 Tril. US$ 2015 PRE
Food Production Increase Required to 70 % 2010-2050 UN
Meet Global Demand
Global Organic Food Sales 72 Bil. US$ 2013 IFOAM
II. Aquaculture
Estimated Global Aquaculture's Share of Fish 60 % 2030 FAO
for Human Consumption
Global Aquaculture Exports 160 Mil. Tons 2013 FAO
Total Value of Global Aquaculture Exports 136 Bil. US$ 2013 FAO
III. Other
Global Wine Market 420 Bil. US$ 2013 VINEXPO
WTO = World Trade Organization IFOAM = International Federation of
Organic Agriculture Movements
PRE = Plunkett Research Estimate FAO = UN Food and Agriculture Organization
UN = United Nations
Source: Plunkett Research, Ltd.
5
1.2. Overview of Indian Food Processing Industry
The Indian Agro and food processing sector contributes for 14% of manufacturing GDP, 13%
of India’s exports and 6% of total industrial investments. Food Processing Sector has been
growing at 8.50%, much faster than the agricultural sector indicating the greater proportion
of raw material is being processed. About 37% of the food produce in India is processed at
present. Of the total workforce of 107 lakhs, around 15 lakhs are employed in the registered
(organized) sector.
• In terms of the exports of agricultural products, the country is ranked sixth in 2013, with
major export destinations being South East Asia and Middle East.
• With the tenth largest arable land resources in the world, India is the largest producer of
milk, 2nd largest producer of fruits and vegetables, 3rd largest producer of rice and 2nd
largest producer of fishes.
• The industry also plays an important role in employment generation, with a sizeable
presence of small scale industries. The unorganized sector is about 42% of the Food
Processing industry.
Recognized as a priority sector in the New National Manufacturing Policy in 2011, the Food
Processing sector is provided the necessary thrust by attractive fiscal incentives provided by
the Central and the State Governments including capital subsidies, depreciation benefits,
tax rebates, reduced custom duties and excise duties etc. 100% FDI is also permitted in the
automatic route for most of the food products in the country. Backed by favourable policy
initiatives by the Government of India, the Indian Food industry is poised for high growth,
thereby increasing its share in the world food trade.
Contribution of food processing industry
to India’s GDP through manufacturing (FY16)
6
1.2.1 Strategic Advantage and Demand drivers of Food Processing
Point to be added under Key Strength : 100% FDI in Food Processing. (MoFPI Website)
1.2.1 Major segments of Indian Agro & Food Processing industry
The Indian food processing sector consists of a number of segments with varied
characteristics.
• The country produced 90.18 million MT of fruits, 169.06 million MT of vegetables.
• During 2015-16, India exported fruits and vegetables worth Rs. 8,391.41
crores which comprised of fruits worth Rs. 3,524.50 crores and vegetables
worth Rs. 4,866.91 crores.
• The area under cultivation of fruits stood at 6.110 million hectares while
vegetables were cultivated at 9.542 million hectares.
• India’s food grain production reached 275.68 million tonnes (MT) in FY16.
• The basic feature of the sector is the predominance of primary processing
sector sharing of 96% of the total value with secondary and tertiary sectors
contributing about 4% of the total value addition.
Fruit and
Vegetable
Grains and
Cereals
Economic Survey 2017-18 (GoI)
7
•
producer of milk globally. India's milk production is expected to reach 180
million MT by 2020, from current 163.7 million MT, while the demand is
projected (by NDDB) to reach 200 million MT.
• The dairy industry is growing at a compounded annual growth rate
(CAGR) of 15%-17%
• The value-added products are growing way beyond a compounded
annual growth rate (CAGR) 24%
With production of around 163.7 million MT (2016-17), India is the largest
Dairy
Products
• India has the world’s largest population of livestock and is world’s 5th
largest producer of meat
• The total processing capacity in India is over 1 million tons per annum, of
which 40-50 percent is utilized
• India is the ninth-largest producer of poultry meat, fifth largest egg
producer and the eighteenth largest producer of broilers in the world.
Meat
and
Poultry
• Total fish production in India is estimated at 10.80 million MT during 2016-17.
• India ranks second in world fish production, contributing about 5.4 per
cent of global fish production. It is also a major producer of fish through
aquaculture.
• The sector contributes about 1% to overall GDP and represents 4.6 per cent
of agri GDP
Fish and
Marine
Products
• Indian edible oil industry is the world’s fourth-largest industry after USA, China
and Brazil and accounts for around 9% of the world’s oil seed production
• The consumption growth is rising by nearly 5.5 to 6.0% per annum.
• Import of edible oil has increased nearly 2.5 times in last 8 years
Edible
Oils
• Packaged foods market is largely organised and has been witnessing
strong growth across categories.
• Potato chips and potato-based products constitute about 85 percent
share of the Indian snack market.
Packaged
Food
• Consumption of non-alcoholic beverages in India is expected to increase
by 16.5–19 percent over the next three years.
• Sales of alcoholic drinks are forecast to increase by CAGR of 8 percent by
volume in 2012–17 period.
Beverages
8
1.2.3 Food Processing Market Size
• Indian Agro & Food Processing is expected to grow at around 13% on a nominal basis
and reach size of USD 530-550 billion by 2020.
• The Indian food and grocery market is the world’s sixth largest, with retail contributing to
70% of the sales and is projected to grow to US$ 482 billion by 2020.
• Food Processing in India ranks fifth in terms of production, consumption and exports and
is expected to reach US $258 billion by 2020.
• The Agro and Food Processing market includes both the organized and unorganized
sector where organized forms 50-55% of the overall market. Grains and pulses,
beverages and other foods and dairy products make up around 80% of the total
processed food market
• Within the food processing sector, segments like meat and marine, edible oils, grains and
cereals are expected to witness high growth rates.
• By 2022, the food processing industry is expected to generate about 44.34 lakh new jobs,
primarily entry-level and supervisory profiles.
Source : MoFPI, GoI website.
Source: MOFPI, KPMG Report, 2013
9
1.2.4 Indian Food Processing exports
• During FY11–16, India's exports of processed food and related products (inclusive of
animal products) grew at a CAGR of 11.74%, reaching USD16.2 billion
• Main export destinations for food products have been the Middle East and Southeast
Asia
10
1.2.5 Market Investment Opportunities – Food Processing
Outsourcing Hub • India enjoys favourable supply-side fundamentals (abundant
raw materials supply, cost advantages). Therefore, Global
supermarket majors looking at India as a major outsourcing hub
AEZs and Food Parks • The government has helped by investing in AEZs, mega food
parks, easier credit.
• The establishment of food parks – a unique opportunity for
entrepreneurs, including foreign investors to enter in the Indian
food processing sector.
• With an investment of USD1.6 billion, process of setting up 42
mega food parks in PPP is underway, as of 2015
Supply chain infrastructure • The government’s main focus is on supply chain related
infrastructure like cold storage, abattoirs and food parks.
1.2.6 Funds for Food Processing Infrastructure development
1.2.7 Investment initiatives and Statutory Framework
11
u
u
Angul, the State is in the process of developing other dedicated Parks which would provide
opportunities for downstream units across Steel, Stainless Steel and Aluminium sectors
These Parks are being anchored by the established mother units in the State, as shown below:
Besides, the National Investment Manufacturing Zone, Kalinganagar and Aluminium Park,
Sl. No Project Proponent Sector Location Area (in acres)
M/s Vedanta Alumina Limited
M/s Jindal Steel & Power Limited
M/s Jindal Stainless Limited
DownstreamSteel Park
DownstreamSteel Park
Jharsuguda
Badkerjung,Angul
Kalinganagar,Jajpur
230
500
300
DownstreamAluminium Park
1
2
3
Technical Infrastructure
u
u u
for Testing/ Training/ Design Facilities/ Tool Room
Telecom & IT Infrastructure Intake well, pump house
Common Facilities Centers including Equipment u Admin, Business training complex
12
Others
u One-stop solution for all required services by an investor during the investment life cycle of a project
Government of Odisha – Single Window for Investor Facilitation & Tracking (GO SWIFT)
DOING BUSINESS AND POLICY ECOSYSTEMEase of Doing Business Reforms
u
a hassle free experience, some of the marquee reforms implemented in the State include:
Odisha has been a pioneer in bringing out reforms for the ease of investors. To provide investors
Hassle Free labour compliances
Power at one go
Fast track for white industries
Get set build
Voluntary Compliance Scheme and
self certification
New energy connection in
15 days with minimal documentation
Exemption of White Category industries
from consent administration
Online BuildingPlan Approval within 30 days
u
facilitation
Facilitation cells set up at IPICOL and DICs provide one stop solution for all investment
u
u
one of the first legislations in the country
for “Single Window Clearance”
Regulatory approvals under “Odisha
Right to Public Service Act” for time
bound disposal
Odisha Industries Facilitation Act, 2004 – Final project approval within 15
days for White/Green Category
Industries
Final Project approval
within 30 days for other industries
13
Industrial Policy Resolution - 2015u
u
u
priority sectors
The manufacturing units under this sector can avail exclusive provisions as mentioned below
Besides, the State provides land at a subsidised cost in the identified Steel, Stainless Steel and
Aluminum clusters
Industrial Policy Resolution 2015 has identified Downstream & Ancillary in Metals as one of the
Incentive Description
Capital Subsidy for 10% of investment for investments more than INR 100 Crs and employment
Plant & Machinery more than 100 people (max cap: INR 50 Crs based on investment size &
employment potential) or25% of capital investment for micro & small
industries (max cap: INR 1 Cr)
Power Tariff Reimbursement on investments more than INR 100 Crs and employment
more than 100 people
Stamp Duty 100% exemption
Interest Subsidy 5% p.a. for 5 years of the term loan availed from Public Financial Institutions/
Banks upto INR 1 Cr
Energy Charges Exemption of electricity duty upto a contract demand of 5 MVA
for 5 years
Net SGST* 100% Net SGST reimbursement for 7 years from the date of production on
the net tax paid, cap of 200% of cost of plant and machinery
Anchor Tenant The first and the lead investor in the industrial park whose brand value &
potential for backward and/or forward linkage shall stimulate further
investments in the industrial park-
l 25% subsidy on cost of land
l VAT reimbursement for additional 2 years subject to the overall limit
* Under finalization
14
VISION 2030: DEVELOPMENT OF DOWNSTREAM UNITS IN METAL SECTOR
u
shown below-
Odisha is a leader in terms of total reserves in the country and is home to variety of minerals as
Minerals in Odisha as a percentage of Total Reserves in India
u
u
has set a Vision 2030: Development of Downstream Units in Metal Sector’. The Vision is to
achieve more than 50% value addition to the primary metal produced in the State.
The Vision is proposed to encompass short, medium and long term interventions in order to
propel the business ecosystem for metal sector downstream units. These include financial &
policy support, business & promotional support, requisite infrastructural and institutional
framework, promoting innovation and R&D, amongst others. The roadmap would become the
blueprint for attracting downstream units to the State.
With an aim of greater value addition to primary metal within the State, the State government
15
KEY PLAYERSSteel & Stainless Steel
u
u Increasing the capacity of Kalinganagar by 5 MT with an investment of
INR 23, 500 crore
One of the world’s top ten steel producers
u
u
power, mining and infrastructure sectors
JSPL set up the largest blast furnace of India in the State with an investment
of INR 29, 580 crore
Industrial powerhouse with a dominant presence in steel, stainless steel,
u
u
and aluminum metals
Expanding its current unit with an investment of INR 168 crore
German based equipment supplier to the metallurgical industry for steel
u
u
u
One of the
Invested more than INR 24, 650 crores in the State
In the process of expansion of refinery with an investment of INR 1, 300 crores
Asia’s largest producer of primary aluminium
Aluminium
u
u In the process of expanding it refinery capacity from 2.275 MPTA to 3.275
MPTA with an investment of INR 4, 375 crores
Major State owned Aluminium company headquartered in Odisha
u
u
u
Has invested more than INR 49, 000 crores in the State
Further expanding with expected investment of INR 6, 483 crore in the State
Global diversified metals and mining company
u JSL plans to increase the capacity to 2 MTPA from existing 0.8 MTPA
16
Industrial Promotion & Investment Corporation of Odisha Limited (IPICOL)
IPICOL House, Janpath, Bhubaneswar – 751022, Odisha
Tel: +91-674-2542601 Fax: +91-674-2543766
E-mail: contact@@investodisha.org
For more information and investment enquiries:
Find us on
For more details, visit www.investodisha.org | Call toll free 1800 345 7111