Madhya Pradesh: Means Business Forest, Environment & Herbal
MP is the second largest State in the Country stretching over 308,000 sq kms.
The State is blessed with large mineral resources of coal, diamond, limestone, methane etc.
MP is among the top 4 states of the Country for industrial investments.
Per capita GSDP USD 369**
Manufacturing sector USD 8.5 bn**
(Registered & Unregistered)
Gross state domestic product (GSDP) USD 23,983.63 Mn**
Average growth rate 5.5% per annum
Total electricity generation capacity 6,449.25 MW*
India’s first greenfield SEZ Indore SEZ
Industrial Centers 8
The State is centrally located
Investor friendly Government policies
Madhya Pradesh has one of the upcoming industrial base in India Economic Snapshot Madhya Pradesh is emerging as a key growth center for the Country Madhya Pradesh (MP) – State that means business Overview
MP is rich in low grade coal suitable for power generation.
Potential of hydro-energy generation.
Installed power capacity (MP’s share)
Hydel Power Generation: 852.7 MW*
Thermal Power Generation: 2,147.5 MW*
Power Electricity generation capacity at present is 6,449.25 MW and estimated to rise to a surplus in 2008-09 *Ministry of Power ( powermin.nic.in ) **Source: Indiastat.com (as on 23 Feb 2006)
ROAD NETWORK AIRPORTS RAILWAY NETWORK
The State is well connected with the rest of India with almost 425 trains passing through the State on a daily basis. Of these 175 trains pass through the State capital Bhopal alone.
The total length of roads spanning MP is 67,600 kms.**
National highways of 5,200 kms run through the State.*
18 National highways including trunk routes of Delhi-Mumbai, Delhi-Chennai, Delhi-Bangalore, Delhi- Hyderabad.
The total length of State highways in the State is 9,885 kms.**
Convenient linkages to western ports i.e. Kandla Port, Jawahar Nehru Port Trust.
Convenient air links from key Indian cities like Delhi & Mumbai to Bhopal, Jabalpur, Gwalior, Indore and Khajuraho.
5 operational airports.
Indore airport has the capability of handling international cargo.
An international airport proposed in Bhopal.
Enabling Infrastructure MP IS CENTRALLY LOCATED AND WELL CONNECTED WITH ALL MAJOR CITIES IN INDIA *Source: Department of Road Transport & Shipping ( morth.nic.in ) **Source: www.destinationmadhyapradesh.com INDORE BHOPAL JABALPUR GWALIOR KHAJURAHO
Third largest producer of cement in India* 12 blocks with reserves totalling 2,585 million tons of coal has been identified Largest producer of pulses and oilseeds in the Country (~ 75% of soyabean production) 31% of the State under forest cover with a largely unexploited species of rare, valuable medicinal- herbal plants Over 2,000 kms of roads being developed with Private Partnership (BOT) Over 18,000 technical graduates and 230,000 graduates add to workforce each year Over 144 BCM of coal bed methane reserves available Over 100 agricultural farms with an area of over 20,000 acres is available on lease to investor India’s 1st operational Greenfield SEZ at Indore Favourable climatic conditions for cotton and over 40,000 power-looms are driving the textile industry Availability of coal and natural gas (G.A.I.L pipeline) along with support from Government to make investment in Thermal Power Plants lucrative Offers diverse tourists destinations catering to various segments of tourism such as religious ( Bhojpur ), eco/ adventure ( Panchmari ), heritage ( Sanchi , Khajuraho ) tourism etc. Madhya Pradesh: A Preferred Investment Destination Various blocks available for power, cement, iron and steel units *Source: www.mpsidc.org & Brochure: MP Means Business
Source: (Reference: RK Swamy) MP: The Right Place with the Right Environment MP is centrally located. The State is at an easy distance from all the key consumer markets in the Country. DESTINATION MADHYA PRADESH - Distances rounded off **Source: India Today (September ‘06 Issue) Fastest mover* in overall performance among the big States in the Country. Fastest mover in agriculture Fastest mover in infrastructure development. Ranks 2nd in terms of governance. Ranks 3rd in terms of law & order Cost of skilled labour is USD 2.4/day vis-a-vis USD 3.5 – USD 4.0/day in metros * Fastest mover is the State where the rate of improvement between 2003 & 2006 was greater than that between 1991 & 2003 Bhopal and Indore have substantial cost advantages, even when compared to other Tier III and IV cities. Savings in Office Space Rates (A comparison of rates in Central Business Districts) The cost of land is one of the lowest in the Country. Even central hubs such as Indore and Bhopal fare well against other cities in terms of low land cost. (Estimated Values for Multi-product SEZs) Savings in Land Cost Mumbai (780 Kms) (MPV - 1000) Pune (800 Kms) (MPV - 206.51) Bangalore (1400 Kms) (MPV - 254.52) Chennai (1430 Kms) (MPV - 362.84) Hyderabad (840 Kms) (MPV - 257.9) Delhi (740 Kms) (MPV - 789.5) Ahmedabad (570 Kms) (MPV - 220.63) Kolkata (1350 Kms) (MPV - 613.19) Key Markets (Distance From Bhopal) MPV – Market Potential Value
Industrial Policy: Catalyst for the Investments
The Government of MP has devised an investor friendly industrial policy, which is aimed at achieving global competitiveness. The policy emphasizes on industrial growth in the state through adopting cluster approach, establishing specialized infrastructure and offering favourable incentives.
The main thrust of this policy is:
Establishment of a Madhya Pradesh Trade and Investment Facilitation Corporation which would take decisions about rationalization of taxes, facilities of mega projects and other related matters.
Enacting an Industrial Facilitation Act and to change the rules of business with a view to make single window system decisive and result oriented.
Developing infrastructure for supporting the identified industrial clusters
Reviving closed down/ sick industrial units by granting special packages.
Attractive incentive schemes.
Indore – Pharmaceutical, Textile, Food Processing, IT, Auto Components
Special package for Mega Projects on project basis by apex level investment promotion empowered committee headed by the Chief Minister.
Industrial investment promotion assistance – 50% to 75% of commercial tax for 3-10 years
Concessional registration charges and stamp duty exemption for Term Loans.
Interest subsidy on term loan for 5 – years @ 3% to 5% .
For thrust sector industries, 25% capital subsidy would be provided limiting up to a maximum of USD 56,000
Land on 75% concessive rate for Mega Projects limited to USD 4.4 million.
Entry tax exemption for 5 years .
5 years electricity duty exemption on captive power generation
15% capital subsidy to SSI up to USD 33,000 in backward areas
Infrastructure grant up to USD 0.22 million crore for developing private sector industrial parks
Partial reimbursement for Project report, ISO Certification, Patent and Technology Purchase cost
SPECIAL INCENTIVES SPECIALIZED INFRASTRUCTURE Indore Gems & Jewellery Park Indore (SEZ) Apparel Park Bhopal Life Sciences Project Chhatarpur Granite Park Rewa Herbal Park Katni Stone Park Mandsaur, Khargone, Chhindwara, Hoshagabad, Mandla and Bhind Food Parks Indore Crystal IT Park
Area Developed : 2,492 Hectares Allotted : 1431 Hectares Units established : 575 Major Groups : Tata, Ranbaxy, Eicher, Bridgestone, Hindustan Motors, Kinetic, SRF, S Kumars, Gajra, Nicholas Piramal, Indorama, IPCA, Bhilwara Special Infrastructure : SEZ, Crystal IT Park, Food Park, Apparel Park In a bid to build a competitive environment; industries and their ancillaries would be promoted in clusters based on the availability of raw materials , skilled labour and market potential . Under this Industrial Policy through Madhya Pradesh Audyogik Kendra Vikas Nigam Ltd (MPAKVNs) scheme, the State Government, has identified industrial clusters. Many of the industrial giants have their establishments in these areas, however 44% of developed area is still untapped and open for investment. Doing Business Made Easy Through MPAKVN INDORE AKVN Area Developed : 1,330 Hectares Allotted : 618 Hectares Units established : 286 Major Groups :HEG, Crompton Greaves, P&G, Godrej, Lupin, IFB, Oswal, Nahar Special Infrastructure : ICD, Food Park Area Developed : 2,262 Hectares Allotted : 800 Hectares Units established : 326 Major Groups : JK, Surya Roshini, Godrej, Grasim, Cadbury, Hotline, Crompton Greaves Special Infrastructure : ICD, Food Park Area Developed : 273 Hectares Allotted : 115 Hectares Units established : 121 Major Groups : Birla, Jaypee Special Infrastructure : Integrated infrastructure development centres (IIDC) Area Developed : 790 Hectares Allotted : 125 Hectares Units established : 52 Major Groups : Raymond, Hindustan Petroleum, PBM, Ayur Special Infrastructure : Stone Park, Food Park BHOPAL AKVN GWALIOR AKVN JABALPUR AKVN REWA AKVN Pithampur, Kheda, Dewas, Maksi, Megh Nagar Malanpur, Malanpur Phase II, Banmore, Chainpura, Siddhgawan, Pratappura Rewa, Waidhan Borgaon, Maneri, Purena Mandideep, Pillukhedi, Mandideep Phase II Source: MPSIDC 19 Growth centres 1,360 Total units established 3,089 Hectares Total allotted area 7,147 Hectares Total developed area
Forest, Environment & Herbal
Sector Profile : Forests, Environment & Herbal Investment Destination - Opportunities in Forest & Environment Concessions and Facilities for Herbal Industry Investment Destination - Opportunities in Herbal Way Forward MP: An Investment Destination MP : Herbal Potential Herbal Market Scenario MP : Forest Snapshot MP: Forest Capital of India
Madhya Pradesh has a forest area of 94689.38 sq. km which constitutes nearly 31% area of the state. With a share of nearly 13% of the total forest area of the country, MP has the largest forest covered area among all the States in India.
The state has a diverse range of forest. The four key types are Tropical Moist, Tropical Dry, Tropical Thorn, Subtropical broadleaved Hill forest.
There are three key forest formations, namely Teak Forest, Sal Forest and Miscellaneous Forests. Further, Bamboo bearing areas are widely distributed in the State.
Forest based industries are key contributor to the State’s economy and provide employment to a large part of the population.
In 2004-05 forests and logging contribute 2.1% to the State GDP.
The total growing stock (volume of timber / wood) in MP is 50 mn cu. m valued worth USD 55.5 bn .
MP: Forest Capital of India Non Forest 69% Forest 31% India 90.62% MP 9.38% MP Forests are valuable sources of various medicinal herbs and aromatic plants and are sole source of woody and non woody products such as timber, gums and resins etc. Forest Map of MP Classification of MP land Mass Unclassified 1.7% Protected 32.84% Reserved 65.36%
MP: Forests Snapshot Production of Timber, Fuel wood and Bamboo Lakh Cu M Lakh nt Revenue From Sale of Forest Products *One standard bag of Tendu Leaves in Madhya Pradesh means 1000 bundles of 50 leaves each.
MP’s forest reserves are a rich source of Timber, Fuel wood and Bamboo . They are also a key source of minor forests products such as Tendu, Harra, Sal Seed and Gums .
MP is the largest producer of Tendu leaves in the country which is the key raw material used for the production of “Biddi”. The average annual production of Tendu Leaves in the state is around 2.5 mn standard bags*.
MP accounts for nearly 25% of all the Tendu Leaves produced in India
US$ Mn Key Tree Species Tinsa (Ougeinia Ogeinensis) Lendia (Lagerstroemia parviflora) Khair (Acacia catechu) Haldu (Adina cordifolia) Bija (Pterocaropus marsupium) Saja (Terminalia) Sal (Shorea robusta) Salai (Boswellia serrata) Teak ( Tectona grandis) Harra, All other gums, Satawar, Kalmegh, Giloe, Achar, Arjun Bark, Aonla, Gudnar, Chiratia, Nagarmocha, Beheda, Bael, Bhilwa, Mahua, Van, Tulsi, (more than 155)
Non-Nationalised Minor Forest Products Nationalised Minor Forest Products Woody Products Key Forest Products
Herbal Market Scenario
As per the estimates of the WHO, nearly 80% of the world’s population depends on herbal medicine for their primary health care requirements.
Global trade in medicinal plants is over USD 60bn in 2004 with an annual growth rate of 15%.
India is rapidly emerging as a key player for supplying medicinal plants to the world.
Estimated total value of products from Ayurvedic production in India is nearly USD 1 bn .
Exports of Ayurvedic medicines have reached a value of USD 100 million a year. Of the total exports, about 60% is crude herbs, 30% finished product shipped abroad for direct sales to consumers, and the remaining 10% is partially prepared products to be finished in the foreign countries.
The Ayurvedic industry in India is dominated by around 30 companies. Key suppliers like Dabur, Baidyanath, and Zandu , together contribute about 85% of India's domestic market. Charak Pharmaceuticals, Vicco Laboratories, Emami Group, Aimil Pharmaceuticals Ltd, Viswakeerthy Ayurvedic Pharmacy etc are few of the well-known names in this sector.
Of late, leading players in the FMCG segment like the Hindustan Lever Limited (HLL) are increasing their focus on Ayurveda.
Contract farming of medicinal plant species which are in demand in the foreign market is seen as the key growth driver of the domestic herbal industry.
2050 2004 USD 60 bn USD 5 Tn Global Demand of Medicinal Plant Source: WHO Estimates With demand of herbal products increasing globally, the market presents substantial business opportunities for herbal companies in India. Break up of Ayurvedic Export Market
MP: Herbal Potential
With 11 Agro-climatic zones out of the total 16 in the country, MP is well suited for cultivation of a large number of Medicinal and Aromatic plants (MAPs).
The production of MAP’s in the State in 2004-05 was 20,000 tonnes and is estimated to rise to 40,000 tonnes by the year 2009.
MP’s share in the national production of MAPs was 6.25% in 2004-05 and is expected to rise to 8.63% till 2009.
30% of the demand of Indian herbal industry is met by the herbal collections centers of Madhya Pradesh.
MP is the natural habitat for over 50% of the herbs used in the pharmaceutical industry and is the key source of raw material to various herbal processing units across the country. The Government is keen to develop MP as the key processing center for herbal products.
Estimated Production Potential of key Medicinal Plants Tonnes Increasing Annual Production of MAPs in MP MP’s Rising Share in National Production of MAPs MT
Concessions and Facilities for Herbal Industry
To facilitate the development of herbal industry, the Government of MP extends various concessions and facilities to industries.
The key concessions offers are capital investment subsidy, interest subsidy, concessional land rates, industrial investment promotion assistance and entry tax exemption etc.
Exemption from electricity duty for 5 years
Exemption from stamp duty/registration charges
New industries are exempted from paying entry tax for five years from the date of first purchase of raw material
Partial reimbursement of expenditure incurred on quality certifications , ISO-9000, patent filing, BIS etc by the industries in the state.
Units with fixed capital investment of USD 2.2 million and above would be treated as mega projects. 5 to 20 acres of land would be allotted to such units at a concessional rate of 25% of the stipulated rate. Further all such mega projects shall be eligible for special incentive package on case to case basis
An industrial investment promotion assistance equivalent to 50% amount of Commercial tax and Central Sales Tax (excluding Commercial Tax on the purchase of raw materials) deposited by the unit in the preceding year, would be given to the industry having fixed capital investment between USD 0.2 million to USD 2.2 million for 3 years in advanced district and for 5 year in backward district. The rate of assistance is 75% for investment above USD 2.2 million.
The Government is keen to harness the natural riches of MP and is vigorously promoting the development of herbal industry in the State. Special capital subsidy at 25%. To a maximum of USD 0.02-0.05 as per category, if the investment is more than USD 0.11mn Capital Investment Subsidy 33,000 15% Backward C 22,000 15% Backward B 11,000 15% Backward A Upper limit of subsidy (USD) % of subsidy on fixed Investment Category of district 44,000 44,000 33,000 22,000 Upper limit of subsidy (USD) 5% 7 No Industries Blocks Interest Subsidy 5% 7 Backward C 4% 6 Backward B 3% 5 Backward A Interest Subsidy Duration (Years) Category of district 5 4.4 million Backward A Industrial Investment Promotion Assistance 10 2.2 million Backward C 7 3.3 million Backward B 3 5.5 million Advanced Duration (Years) Minimum eligible fixed capital investment (USD) Category of district
Investment Destination- Opportunities in Herbal
Reimbursement of 50% of the total fees incurred on hiring technical consultancy for getting GMP certification. With an upper limit of USD 22,000 per project.
For participation in the international trade fairs and exhibitions, entrepreneurs of herbal industries will be given financial assistance of 50% on one half of the stall charges.
Registration fees charged by the importing countries for import of herbal products will be reimbursed up to a maximum of USD 1100 and air fare to a maximum of USD 1100.
All concessions and facilities that are available to industrial units in the backward districts will also be extended to units located in the developed and advanced district such as Indore and Bhopal.
Relevant provisions of labour laws applicable in Special Economic Zones will be applicable for existing and upcoming herbal parks as well as the herbal and Ayurvedic industries.
Stamp duty waiver for Herbal and Ayurvedic industries in case of change in name, collaboration, inclusion of partners, reorganizations and for amendment in the lease deed for the next 3 years and also for entering into agreement with financial institutions for getting financial assistance.
Small scale pharmaceutical industries will be given priority under store purchase rules
Fast track clearances for setting up pharmaceutical and herbal industries.
Special incentive Package for Herbal Industry
MP is the key supplier of raw material to the herbal industry across the country. While MP has several success stories in the cultivation and collection steps of the value chain; substantial opportunities now exist for entrepreneurs in the post harvest process such as manufacturing/processing, quality testing as well etc.
To promote the growth and development of herbal industries in the State, the Government of MP has announced a special incentive package for the herbal industry.
Key Drivers for Herbal Industry Lack of competition in herbal processing Single window clearance system for drug license Land available for industrial operations at economic rates Mass scale cultivation of large number of species already initiated Abundant cultivable land available Abundant availability of raw herbs Expeller units for producing Bio-diesel and Neem oil Perfume production units Herbal cosmetics production units Isabgol dehusking units Primary processing centers for raw herbs Production of concrete and absolute from flowers Food and vegetable colours and dyes Ayurvedic drug formulation units Fractional Distillation units for essential oil production and refining Herbal extraction units Aloe Vera gel extraction and spray dried powder manufacturing units Viable Herbal Processing Industrial Opportunities in MP
Investment Destination- Opportunities in Forests & Environment
Being the largest producer of Tendu leaves; MP is strategically the most suitable location in the Country for manufacturing/ processing of tobacco based products. The companies located in the State can save substantial costs on raw material and transportation by establishing processing units for the production of Biddi and related products .
The forests in the State are a key source of high quality timber yielding variety of Teak and Sal which forms the backbone of the furniture industry. Companies can set up the furniture units in the State and leverage following key location advantages:
1) Proximity to raw material
2) Proximity to target markets
3) Proximity of ports for exporting products
Given its vast forests landscape and scenic vistas, eco-tourism and adventure tourism opportunities are abound in MP. The State has nine natural parks and 25 sanctuaries, which present an immense potential for tourism and hospitality industry to flourish.
Significant opportunities exists for the development of handicraft industry specially for the production of Bamboo based goods . Opportunities for private participation are immense as there is a high demand for handicrafts products in the foreign countries as well as in the domestic market. Further, companies can leverage the availability of local inexpensive labour with high skill sets in production of various forests goods.
Nagpur (350 Kms) Lucknow (680 Kms) Kanpur (600 Kms) Mumbai, JNPT (780 Kms) Pune (800 Kms) Bangalore (1400 Kms) Chennai (1430 Kms) Bhubaneshwar (1200 Kms) Hyderabad (840 Kms) Delhi (740 Kms) Jaipur (580 Kms) Ahmedabad (570 Kms) Kolkata, Haldia (1350 Kms) Patna (910 Kms) Key Markets (Distance From Bhopal) Vishakapatnam (1310) Kandla (933) Key Ports (Distance From Bhopal) Sanctuaries Madhya Pradesh is Strategically Placed for Forest Based Products The forests resources of MP provides immense business opportunities for forests based product manufacturing.
Environment protection and conservation is one of the key concerns of the State Government. All the envisaged development plans in the state would result in heightened commercial activities which is likely to put severe stress on the State environment.
Due to the rapid industrialization of the State, the effluents discharge from the companies specially chemicals & pharmaceuticals, will be a key environmental concern.
Per capita waste generation in major cities in MP ranges from 0.20 Kg to 0.60 kg. The urban local bodies spends between USD 11 to USD 33 per ton on solid waste for collection, transportation, treatment and disposal.
60-70% of the total amount is spent on collection, 20-30% on transportation and less than 5% on final disposal. Most of the methods used by the municipal corporation are unscientific and lack safe disposal techniques.
The State Government is keen on implementing key environmental protection plants Which includes building up of collection stations for solid waste.
Significant opportunities exists for the commercial waste management companies in the State both for solid waste management and also for the effluent treatment plants.
Investment Destination- Opportunities in Forests & Environment Key Investment Opportunities To utilize the large amount of waste land in the State, the Government of MP has drawn up plans to convert them into plantation center. Paper pulp producing trees would be planted in next 5-7 years over one million hectares of waste land. The opportunities for commercial paper production in the state is pegged at USD 1.5-2 bn. Recycled Goods Industry Solid Waste Management Bio-diesel Bamboo products Handicrafts Furniture Industry Eco-Tourism Paper Pulp Timber Production Tobacco Industry
In collaboration with the international FMCG major Hindustan Lever Ltd , the Government of MP has initiated efforts to promote the herbal industries of the State. It has launched its proprietary brand “Vindhya Herbal ” to market various herbal formulations that are being produced in the state. All products are processed employing current Good Manufacturing Practices.
Key Products Promoted under Vindhya Herbal Brand Success Story : Vindhya Herbal
The Government is keen to develop MP as the key processing center for herbal products. The natural advantage of the State coupled with government initiatives makes MP an ideal destination for investment.
The success of “Vindhya herbal” has generated ample confidence among the privates players to invest in the business opportunities presented by the herbal industry.
The key opportunities of investments are in contract farming, contract collection centers, herbal processing units, collaborative manufacturing and setting up high quality testing laboratories for testing medicinal plants and products.
MP provides ample opportunities across the value chain of Herbal Industry Contract Farming Setting Big Processing Units Collaborative Manufacturing Government 3-tier Strategy for Development of Medical & Aromatic Plants Industry Cosmetic oil/ shampoo Tulsi Shankhpushpi powder Senna Safed Musli powder Shatawari pppowder Rosha oil Palas Flower Mulethi Punarnava Nirgundi Maha Neem Bark Kulanjan Kamarkas Konch powder Keoti Bark Jamun seed powder Karanj bark powder Kalmegh Imli Indrajau Hadjod powder Honey Gulbakavali ark Gudmar powder Gokharu Powder Giloy Gorakhmundi Triphala Dhaora Gum Dronpushpi powder Chiroji ( Achar fruit) Bhui Aonla Powder Babul Pods Powder Bija glass (Tumbler) Bijasar Bark powder Bach Baheda Baibidang Banjira Ayurvedic face packs Bavachi Bhringraj powder Baichandi Brahmi Bael Pulp Apamarg powder Arjun Powder Amaltas powder Aonla sherbut Aonla Aschar Aonla Candy Ashwagandha powder Aonla Powder Aonla Supari Aonla Murabba
MP has been successful in attracting several large companies in the forest & forest based products segment.
By investing in the MP an investor can join the club of companies such as Dabur, HLL, Baidyanath, Lupin, ITC etc. This truly reflects upon the bio-diversity of the state and the investor confidence.
There are over 32 contract farming companies operating in the state and this figure has been rising substantially in the recent past.
The increased production of certain products is the indicator of increased activity in the state. For instance, the production of lac has increased from 3,000 quintals in 2003 to 40,000 quintals in 2005.
There is also scope for teak and sal based furniture business in the state.
The growth of the sector is likely to continue as a result of increased demand for derived products of forest produce.
MP is the land of opportunities for Forest & Forest Based Products Key Investment Opportunities Join The Club Vijay Herbals & Essential Oils Kasturi Herbal Farm Sanwaria Herbal Farm Devika Herbal Omni Pharmaceuticals Gewit Herbal EH Herbal Forest & Environment Wild MAPS Honey Processing Lac Processing Opportunity Jabalpur Katni Sheopur Kalan Seoni Annupur Key Locations Jetropa -Bio-diesel Plantations Bamboo Teak & Sal (Furniture factory) Opportunity Balaghat Chattarpur Key Locations
Madhya Pradesh Minor Forest Produce Co-operative Federation Center for Entrepreneurship Development Government of Madhya Pradesh www.mfpfederation.com www.cedmapindia.com http://www.mpgovt.nic.in Forest Department MP http://www.forest.mp.gov.in Connecting Further