Investment Environment & Opportunities in Food Processing Compendium of Bihar ...foodprocessingindia.gov.in/state-profile-pdf/bihar.pdf · 2018-10-31 · Bihar has a huge base of

Compendium of financing options for the food processing sector

Investment Environment & Opportunities in Food Processing

Bihar

Knowledge Partner National Event Partner

Government of India Ministry of Food Processing Industries

Table of contents

State Introduction 2

Why Bihar 2

Raw Material Base 3

Production Clusters 6

Agricultural Marketing 8

Processing Clusters 10

Infrastructure 12

State Government Initiatives 15

Snapshot of Investable Projects 19

Contact Us 22

Investment Environment & Opportunities in Food Processing: Bihar

State IntroductionModern Bihar is divided in two halves by the river Ganga, and thus has the benefit of being located entirely on the fertile Gangetic plain. It is also the third most populated state bordered by Uttar Pradesh, Jharkhand and West Bengal.

Bihar - key highlights

State capital Patna

Geographical area1 94,163 km2

Population2 (Census 2011)

10.4 Crores (104 million)

Gross state domestic product (GSDP)3

(at current price, base year 2011-12)

INR 4.13 Lakh Crores (USD 60.542 billion) in 2015-16

Per capita income4

(Measured as Per Capita NSDP at current prices for 2013-14)

USD 427.38

FDI inflows5 USD 88.873 million- FY00-FY17 (Includes Bihar and Jharkhand)

Total road length (kms)6 (National Highways + State Highways)

9,127

Rail length (route kms)7 3,639

Airports8

International: Gaya Domestic : Munger,

Muzaffarpur, Patna,Jogbani and Raxaul

Why Bihar

One of the top producers of fruits, vegetables and meat in India

Extensive road and rail network, one international & five domestic airports.

More than 55 % of total land put to agricultural use in the state

Presence of a robust infrastructure – with three Mega food parks and 12 agri-export zones

1

2

3

4

Patna Bihar

3


Raw material base (1/3)

Bihar’s topography can be easily described as a fertile alluvial plain occupying the Gangetic Valley with rich farmland and lush orchards extend throughout the state

There are four agro-climatic zones in the state as shown below:

Rice, Wheat and Maize are the major crops produced in Bihar. It produces a large variety of pulses and is the largest producer of Mesta and Jute. Bihar has a huge base of livestock and is the 10th largest producer of milk. The total vegetable production in 2015-16, comprised potato, onion, tomato, cauliflower, cabbage, brinjal, bottle gourd and radish. The seven major fruits in Bihar in 2015-16 were: mango, guava, lychee, banana, pineapple, papaya and Indian gooseberry (Amla)

Bihar’s economy is fundamentally agricultural and rural with about 25% of the state GDP being contributed by agriculture sector (including forestry and fishing). The state being located on the flood plains of a major river makes agriculture easy

Snapshot of Land Under Cultivation(Year 2013-14)

Gross Cropped Area (‘000 Ha)

7580

Net Sown Area (‘000 Ha)

5252

Agriculture is the key to the overall development of the State economy. Agriculture employs 77% of workforce in Bihar, as a percentage this is significantly higher than the national average. The soils are light, alluvium - derived soils mostly khaddar (recent alluvium) and hanger (Old alluvium)

North East Alluvial Zone: Araria, Katihar,Khagaria, Kishanganj, Madhepura, Purina, Saharsa and Supaul

South West Alluvial Zone: Rohtas, Bhojpur, Buxar, Bhabhua, Arwal, Patna, Nalanda, Nawada, Jehanabad, Aurangabad, Gaya

North West Alluvial Zone: West Champaran, East Champaran, Siwan, Saran, Sitamarhi, Sheohar, Muzaffarpur, Vaishali, Madhubani, Darbhanga, Samastipur, Gopalganj, Begusarai

South East Alluvial Zone: Sheikhpura, Munger, Jamui, Lakhisarai, Bhagalpur & Banka

4


Total production of 14.09 million tonnes of food grains

o Rice – 6.49 million tonnes

o Wheat – 4.7 million tonnes

o Coarse Cereals – 2.43 million tonnes

Total production of 18.76 million tonnes of horticulture products

o Fruits – 4.23 million tonnes

o Vegetables – 14.4 million tonnes

o Plantation –97.3 thousand tonnes

o Spices –12.54 thousand tonnes


Major strength of Bihar’s food processing industry lies in the following: Seed Spices- Garlic, Turmeric, Green Chili, Ginger

Pulses- Green gram (Moong), Gram, Red gram (Tur)

Coarse cereals- Finger millet (Ragi), Barley

Oilseeds- Linseed, Sunflower, Sesamum

Commercial crop- Sugarcane

Food Grains: Key production highlights (2015-16)

Horticulture products: Key production highlights (2015-16)

5


Eggs 10.02 billion Fish 479.8 Meat 301.74

Potato 6345.51 Onion 1247.3 Brinjal 1138

Banana 1535.3 Mango 1464.93 Guava 370


Rice 6489

Wheat 4753 Coarse grains 2427 Grains

Fruits ‘ (000 MT)

VEGETABLES ‘(000 MT)

LIVESTOCK & FISHERIES

‘(000 MT)

‘ (000 MT)

6


Bihar leads in production of: Lychee, with 35% of India’s produce from the state

The major production clusters9 of Bihar are given below:

Banana

Nalanda, Muzzafarpur, Vasihali, Samastipur, Patna

Brinjal

Nalanda, Vaishali

Mango

Nalanda, Muzzafarpur, Vasihali, Samastipur, Patna

Potato

Nalanda, Muzzafarpur, Vasihali , Samastipur, Patna

Rice

Buxer, Rohtash, Bhojpur

Milk

Pashchim Champaran, Vaishali

Wheat

Nalanda, Bhabhua, Gaya, Buxer, Rohtash

Tomato

Muzzafarpur, Vasihali

Lychee

Muzzafarpur, Vasihali

Onion

Nalanda, Patna

Production Clusters

7


Production Clusters

8


Agriculture marketing and warehousing

Bihar has the following marketing facilities in the state10: Food Processing Units: There are 407 food processing units in Bihar as of 2015-16, out of

which 278 (68.3 %) were operational. Over two-thirds of the agro-based industries in

Bihar are engaged in processing of cereals

Agri-Export Zones: Total of 12 Agri-Export Zones have been identified in Muzaffarpur,

Samastipur, Hajipur, Vaishali, East and West Champaran, Bhagalpur, Begulsarai, Khagaria,

Sitamarhi, Saran and Gopalganj for focus products like Litchi, Vegetables and Honey.

100 main wholesale agricultural markets in the state

355 Cold Storage Units with a capacity of 23.26 lakh1 MT

Central Warehouse Corporation(CWC) capacity 1.18 lakh1 MT, State Warehouse

Corporation(SWC) capacity 2.6 lakh1 MT, Total storage capacity in the state is 7.19 lakh1

MT

1 10 Lakh= 1 million

Agricultural markets in

Bihar

100 main market yards

12 Agri Export Zones

355 cold storage

3 Food-Parks

407 food processin

g units

9


Processing Clusters (1/2)

Spices & Condiments

Samastipur, Purnia, Motihari,

Patna

Honey & Sweeteners

Gaya, Muzzafarpur, Patna

Prepared Foods

Gaya, Begusarai, Vaishali

Fruits & Vegetables

West Champaran, Patna, Nalanda, Samastipur, Muzaffarpur,

Bakery products

Samastipur, Vaishali, West Chamaparan, Patna

Geographical Indication of Agricultural Products in Bihar15:

Milk

Vaishali, Paschim Chamaparan

Fox Nut (Makhana)

Darbhanga, Madhubani, Purnia, Katihar

Pulses

Bhagalpur, Darbhanga,

Rice

Darbhanga, Bhojpur, Purnia, Lakhisarai

Beverages

West Chamaparan, Vaishali, Patna

Jardalu mango, Katarani paddy, Magahi Paan (betel leaf)

10


Shreya Food Products Pvt. Ltd. Purnia

Anjana Food Industries Pvt. Ltd. Bhagalpur

Aryadeep Silky Rice Mill Pvt. Ltd. Bhojpur

Processing Clusters (2/2)

Chhapolia Agri & Dairy Pvt. Ltd.

Products India Pvt. Ltd.

Pashchim Champaran

Aasma Foods & Beverages Pvt. Ltd.

Vaishali

Archana Food Product Pvt. Ltd. Purnia

Ashok Oil Atta & Masala Mills Pvt. Ltd.

Samastipur

Samriddhi Agro Trading Pvt. Ltd.

Patna

Farmanze Agri Pvt. Ltd. Patna

Dairy products and Analogues

Spices

Fruits & Vegetables

Cereal processing

Cereals &

Cereals Products

11


Pg clusters Processing Clusters

12


Infrastructure

The status of key physical and agricultural infrastructure in Bihar is as follows:

Parameter Status

Inland container depots (ICD) 11

Two ICDs at Patna and Raxaul

Existing Industrial Areas/ SEZs12

12 Agri Export Zones, with focus on products like Litchi, Vegetables

and Honey, have been identified by State Government in

Muzaffarpur, Samastipur, Hajipur, Vaishali, East and West

Champaran, Bhagalpur, Begulsarai, Khagaria, Sitamarhi, Saran &

Gopalganj

A total of 40 industrial areas present in the state. 20 in Patna

District, 10 in Darbangha, eight in Muzaffarpur and 12 in Bhagalpur

district

Food Parks12

Three Mega Food Parks in the state of Bihar namely: - Mums Mega

Food Park Pvt. Ltd. (in Buxar), Pristine Mega Food Park Pvt. Ltd. (in

Khagaria) and JVL Mega Food Park Ltd (in Rohtas)

Installed power 13

(including allocated

shares in Joint &

Central Sector Utilities

as on 31 Mar 2017)

Thermal: 3205.33 MW Hydro(Renewable): 110 MW RES(MNRE): 292.22 MW

Utilities

Electricity cost 14

INR 270 per KVA per month as fixed charges and INR 5.3 per unit

variable for HT (High Tension) line upto 11KV, INR 5.1 per unit for

HT line upto 33KV and flat rate of INR 5 per unit for HT line above

33KV

13


Infrastructure (2/2)

Cold Chains: The objective of the Scheme of Cold Chain, Value Addition and Preservation Infrastructure is to provide integrated cold chain and preservation infrastructure facilities, without any break, from the farm gate to the consumer. Below is the list of cold chains present in the state:

S.no Project Type of product District

1 Ganga Dairy Ltd. Dairy Begusarai

2 Mahua Cooperative Cold Storage Pvt. Ltd.

Fruits & Vegetables Vaishali

3 RK Agri Biz Pvt. Ltd. Fruits & Vegetables Muzaffarpur

S. No. Name Location Type (Multi/

single product),

ETC.

Total Area

(in hectares)

Total Land

Available (in

hectares)

1 Mums Mega Food Park Pvt. Ltd.

Buxar Multi product To be finalized To be finalized

2 Pristine Mega Food Park Pvt. Ltd.

Khagaria Multi products 2328.328 2328.3

3 JVL Mega Food Park Pvt. Ltd.

Rohtas Multi products To be finalized To be finalized

State Government proposes setting up of two food parks in fruits and vegetable clusters in the State : Muzaffarpur-Vaishali region and Bhagalpur-Katihar region. Focus is on fruits and vegetables due to relatively higher level of wastage, but may also promote other food processing units based on grains, milk products etc.16

14


Infrastructure

15


State government initiatives (1/2)

Ease of Doing Business Reforms

The state of Bihar has undertaken key initiatives to enable an investor- friendly business climate for

investors keen on setting up business in the state:

Availability of Information

The 'Udyog Samwad Portal (www.udyog.bihar.gov.in) – A one stop platform for

investors' provides information on acts, rules, policies, circulars, notices,

notifications and various requirements published by all relevant departments of the

state and also has all the relevant detailed procedures/ guidebooks covering all

applicable steps, from application submission to application approval

Institutional strengthening to catalyse industrial development

Empaneled professional project management agencies (PMAs) in the food

processing sector facilitate speedy project appraisal

Defined punitive actions on non-compliance of services are covered under Bihar

Right to Public Service Act

The Udyog Samwad Portal also facilitates grievance redressal. This platform provides

an option to directly interact with the Principal Secretary, Department of Industries

Labour related reforms

Online application for registration and licenses (including renewal) under the Factory

Act & other labour laws

Well defined inspection procedures, including online risk based differential

compliance inspection of registered units including automatic allocation of

inspectors, etc.

Application tracking facility & clear timelines mandated for issue of registration

certificates and licenses including online facility to download the registration

certificate & other licenses

16


Environment Related Reforms

Online consent management system for Consent to Establish (CTE) and Consent to

Operate (CTO) under Water & Air Act; authorization under Hazardous Waste Rules

Application tracking facility & clear timelines mandated for issue of

CTE/CTO/authorization certificates including online facility to download certificates

Industries under Green category exempted from obtaining CTO & CTE

Validity of CTO increased from 3 years to 5 years

Lowered compliance inspection requirement-Green: once in 5 years, Orange: once

in 3 years &Red: once in a year)

17


State Government Initiatives (2/2)

BIHAR STATE INDUSTRIAL POLICY 2016

State Government is committed to encourage the process of industrialization by assuring an

entrepreneur-friendly regime and an attractive package of incentives for the entrepreneurs. Food

processing has the status of “Priority Sector” under the Bihar State Industrial Policy, 2016.

The following package of incentives is made available to entrepreneurs. Directorate of Industries,

Bihar is the nodal department for facilitation of these incentives.

Type of Incentive Salient Features

Capital Subsidy Grant up to 40% of the project cost, subject to maximum of INR 10 Crores2 for SPV in case of common cluster infrastructure and up to 35% of the project cost subject to maximum INR 5 Crores2 in case of an individual investor. For expansion and capacity increase of existing units, though, the benefits of the Scheme will only be available if the expansion project leads to capacity addition of at least 50 %

Non - Fiscal State Government is committed to develop physical and environmental infrastructure, which includes drainage, water supply, sewerage, power supply including captive power plant, effluent collection, treatment & disposal, hazardous waste management facility, telecommunication lines etc.

Power Reimbursement of 50% capital investment on plant & machinery for captive power generation/Diesel generating set with no upper limit

Tax related incentives • All new units can avail tax related benefits with a maximumlimit of 100% of the approved project cost

• All new micro and small units will be given tax benefits byadditional 30% of the approved project cost.

• All units engaged in generation of solar and/ or renewableenergy for commercial purpose will be given tax benefits byadditional 30% of the approved project cost

Interest Subvention for

promoters availing terms

loans

a) State shall extend ―Interest Subvention‖ to all the eligible unitson the term loan availed by the unit from a scheduled nationalized bank or financial institution approved by RBI/SEBI

b) Rate of interest for interest subvention will be 10% or actualrate of interest on term loan, whichever is lower. For micro and small units, there shall an interest subvention of 12%

2 1 Crore= 10 Million

18


Type of Incentive Salient Features

c) The overall limit of this subvention for food processing sectorunits will be 30% of the approved project cost with The upper limit of this subvention at INR 10 crore2

d) Disbursement of the subvention amount would be ininstalments linked with the term loan repayment schedule stipulated by the concerned bank/financial institutions which extends the term loan to the unit. Interest shall not be payable on promoter‘s contribution in any form in the unit

Stamp duty & Reg. fee

exemption

100% reimbursement of stamp duty/registration fees levied on lease/ sale /transfer of industrial land/shed as also those outside the jurisdiction of Bihar Industrial Area Development Authority would be available to all the new units after the unit commences the commercial production

Electricity Duty exemption All new units are eligible for 100% reimbursement of the electricity duty on power including captive power consumed by the same unit or exported to the BSPHCL from the date of commencement of commercial production for a period of 5 years

Land Related

Concession/Exemption

100% reimbursement of ―land conversion fees/ change in land use fees being levied for conversion of agricultural land after the unit commences the commercial production

Skill Development / Human

Resource Development

State aims at creating 3 regional facilities like library, laboratory, pilot plants, etc., for running Degree / Diploma Courses and Training Programs for Food Processing. It is proposed to have a minimal user fee in the first 5 years and full financial support by the state

Technology up-gradation and

R&D related Incentives

Financial assistance to be provided for upgradation / setting up of around 9 food-testing laboratories at District levels during the vision period. Towards this, 100% grant towards cost of equipment in case of state agencies, universities, and up to 75% to private sector institutions will be provided. It is proposed to provide a 25% subsidy for investment in plant and machinery for all food processing units in the state with special focus on dairy and confectionery etc.

Investment Promotion

Assistance / Marketing

Assistance / Export

Promotion incentives

Market linkages and development to be promoted with state government budgeting INR 20 Crores2 as total grant available for the private sector.

Establishment of 100 Rural Agri-Business Centers (RABCs) / Primary Processing Centers with 25% grant subject to INR 1.25 Crores2 per center

Link of policy document http://industries.bih.nic.in/Acts/AD-01-01-09-2016.pdf

http://industries.bih.nic.in/Acts/AD-01-01-09-2016.pdf

19


Snapshot of Potential Investable Projects

Proposed Project Process-able Products/ infrastructure

Value Proposition

1. Storage Unit

For Fresh

Onions

Onion A lot of produce is wasted due to lack of

proper storage units. Huge potential for

investments in this area

2. Maize Value

Added Unit

Maize The state contributes as One of the top 5

producers of Maize and a maize value

added unit will ensure proper utilisation of

the produce by better preservation

3. Setting up aBottled DrinkManufacturingPlant

Health drink Increasing demand for packed beverages by

the growing Indian population can be

served by the sufficient supply of milk and

fruits in the state

4. Establishmentof Small ScaleFruit ProcessingUnit

Pulp, squash/ juices, jam

& jellies, pickles, etc.

Availability of raw material near fruit belt

and need for controlling wastage through

processing will provide dual benefits

5. Establishment

of Baker’s Yeast

Unit

Molasses The manufacturing unit can focus on

production, processing, marketing, export

of Yeasts. With the increasing demand for

bakery products, demand for yeasts is also

increasing. Requirement of raw material

molasses (by product of sugar mills) and the

state is abundant in raw material.

6. Medical HerbsExtraction Unit

aromatic herbs and

spices

Employment generation, utilisation of raw

material

7. Establishmentof Freeze DriedFruit ProcessingUnit

Dry Fruits Freeze dried food products have some of

the highest per unit value and raw material

available in Bihar will provide the ability to

export products and explore markets

8. Malting Unit Coarse Grains India is currently malt importing and the

applications of malt are both in the brewery

20


industry as well as in instant foods and

health foods. State is abundant in raw

material and has huge potential for

profitability

9. Cattle Feed

Plant

Cattle Feed Growing number of livestock in the state is

a key driver for the demand of cattle feed in

the state, which is ever-increasing and

therefore this sector has a great scope for

growth

10. Modern

Abattoir, small

scale

Livestock Demand for red meat exceeds supply in

India, State is abundant in raw material

required and provides a good opportunity

11. Development of

Fruits and

Vegetables

Cluster

Fruits, Vegetable, Grains,

Spices, etc.

The sheer volume of vegetable and fruits

productions in Bihar means that there’s a

strong need & opportunity for developing a

dedicated mega Food park to support the

agriculture sector. The Food Park will be set

up by a Special Purpose Vehicle preferably

registered as a corporate body with at least

51% equity of the private entrepreneurs,

while the rest of the equity may be with

central and state government agencies,

banks and financial institutions etc.

21


References

1 https://data.gov.in/catalog/land-use-pattern 2 http://censusindia.gov.in/ 3 http://mospi.nic.in/sites/default/files/press_releases_statements/State_wise_SDP-28october2016.xls 4 http://pib.nic.in/newsite/PrintRelease.aspx?relid=123563 5 http://dipp.nic.in/English/Publications/FDI_Statistics/2017/FDI_FactSheet_January_March2017.pdf 6http://rcd.bih.nic.in/Network.htm 7 http://pib.nic.in/newsite/PrintRelease.aspx?relid=155019 8 https://www.aai.aero/ 9 http://mofpi.nic.in/sites/default/files/indicative_list_of_identified_agri-horti_production_clusters_fruits_vegetables_0_0.pdf 10 http://apeda.gov.in/apedawebsite/trade_promotion/AEZ_MARCH_2008.doc 11 http://agriexchange.apeda.gov.in/logistic/inland_container.aspx 12 http://pib.nic.in/newsite/PrintRelease.aspx?relid=174346 13 http://www.cea.nic.in/reports/monthly/installedcapacity/2017/installed_capacity-03.pdf 14 http://app.sbpdcl.in/Portal/TariffRegulation/16-May-2015-17-47Upload%20Tariff%20Scheduled.pdf 15 http://www.ipindia.nic.in/writereaddata/Portal/IPOJournal/1_2559_1/Journal_101.pdf 16 http://www.gov.bihar.nic.in

https://data.gov.in/catalog/land-use-pattern

http://censusindia.gov.in/

http://mospi.nic.in/sites/default/files/press_releases_statements/State_wise_SDP-28october2016.xls

http://pib.nic.in/newsite/PrintRelease.aspx?relid=123563

http://dipp.nic.in/English/Publications/FDI_Statistics/2017/FDI_FactSheet_January_March2017.pdf


http://mofpi.nic.in/sites/default/files/indicative_list_of_identified_agri-horti_production_clusters_fruits_vegetables_0_0.pdf

http://mofpi.nic.in/sites/default/files/indicative_list_of_identified_agri-horti_production_clusters_fruits_vegetables_0_0.pdf

http://apeda.gov.in/apedawebsite/trade_promotion/AEZ_MARCH_2008.doc

http://app.sbpdcl.in/Portal/TariffRegulation/16-May-2015-17-47Upload%20Tariff%20Scheduled.pdf

http://agriexchange.apeda.gov.in/logistic/inland_container.aspx


http://www.cea.nic.in/reports/monthly/installedcapacity/2017/installed_capacity-01.pdf

http://app.sbpdcl.in/Portal/TariffRegulation/16-May-2015-17-47Upload%20Tariff%20Scheduled.pdf

http://www.gov.bihar.nic.in

https://www.aai.aero/

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TRANSFORMING THE FOOD ECONOMY 3-5 November, 2017 | Vigyan Bhawan, New Delhi, India

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Documents

Investment Environment & Opportunities in Food Processing Compendium of Bihar ...foodprocessingindia.gov.in/state-profile-pdf/bihar.pdf · 2018-10-31 · Bihar has a huge base of