FDI in food processing

1. Dr. R. T. Patil
Ex-Director CIPHET, Ex-Group Director
(MBA) TIT & Chairman, Benevole Welfare
Society for Post Harvet Technology, Bhopal
Foreign Direct Investment (FDI)
in Food Processing Sector

2. Production & Post Harvest Scenario
•Agriculture contributes about 15% of GDP, employs 52
% workforce and sustains approx over 60 % of the
population
•India is the world’s second largest producer of food next
to China and has the potential of becoming the biggest in
the World.
•Spending on food accounting for nearly 21% of India’s
GDP and Indian domestic food market is expected to
grow by nearly 40%.
•Overall processing level in India has only recently
reached 10% and food losses range from 6 - 18 %
•Exports of processed foods in world trade has remained
at around 2 percent
•Food processing creates 1.8 jobs directly and 6.4
indirectly for every US$ 25000 investment

3. Price Difference
Tomato-Rs. 5/kg Tomato ketchup-Rs 50-80/kg
Fruit- Rs. 15-20/kg Fruits Bar-Rs. 200/kg
Fruit Juice- Rs. 35/litre
Coriander -Rs. 80/kg Coriander Powder-Rs. 200/kg
Turmeric-Rs.65/kg Turmeric Powder –Rs. 200/kg
Chili- Rs. 200/kg Chili Powder-Rs. 300/kg
Black pepper-Rs. 100/kg Pepper Powder- Rs.300/kg
Vegetables-Rs.3-5/kg Minimal Processed/Ready to Cook
Rs. 25-30/kg

4. Agro Entrepreneurship

5. Agro Entrepreneurship

6. The Indian food processing industry accounts for 32% of the
country’s total food market.
Estimated to be worth USD 121 billion, it is one of the largest
industries in India, and is ranked fifth in terms of production,
consumption and exports.
The industry employs 13 million people directly and 35 million
people indirectly.
It accounts for 14% of manufacturing GDP, nearly 13% of India’s
exports and 6% of total industrial investment.
Currently growing at more than 11% per annum, it stood around
USD 39.03 billion in 2013 and expected to touch USD 64.31 in
2018.
Indian agriculture and processed food exports during April May
2014 stood at USD 3813.63 million.
The CII has estimated that the food processing sectors has the
potential of attracting US$ 33 billion of investment in 10 years
and generate employment of 9 million person days.

7. The Government of India allows 100% FDI under the
automatic route in the food processing sector, in
agri-products, milk and milk products, and marine and
meat products, except in the case of the following:
• Proposals that require an industrial license and
cases where foreign investment exceeds 24%
equity in units that manufacture items reserved
for small-scale industries.
• Proposals in which the foreign collaborator has a
previous venture or tie-up in India as on January
12, 2005.
Policies and Promotions

8. Units based on agri-products that are 100% export-
oriented are allowed to sell up to 50% in the
domestic market.
There is no import duty on capital goods and raw
material for 100% export-oriented units.
• Earnings from export activities are exempt from
corporate tax.
• Additionally, there is 100% tax exemption for five
years, followed by 25% tax exemption for the next
five years, for new agro-processing industries.
Policies and Promotions

9. Mega Food Parks: Government of India is actively promoting
the concept of mega food parks (MFPs) and is expected to set
up 30 such parks across the country to attract FDI.
•The government has released a total assistance of USD
23 million to implement the Food Parks Scheme.
•Until now, approved 50 food parks for assistance across
the country.
•The Centre has also planned for a subsidy of USD 22
billion for mega food processing parks.
Agri-Export Zones: The government has established 60 fully
equipped agri-export zones (AEZs), in addition to food parks,
to provide a boost to agricultural and food processing exports.
Policies and Promotions

10. • Structural factors: Growing urbanization, an increase in the
number of nuclear families, the rising size of the Indian middle
class, rising health awareness and evolving consumer
preferences due to more exposure to global markets.
• Evolving tastes: flavoured milk is gaining popularity, consumption
of chicken is increasing more rapidly, juices, jams, jellies, purees,
soups, powders, dehydrated vegetables, flakes, shreds and
ready-to-eat curries.
• Raw materials: Abundant supply of raw materials for food
production, including fruits, vegetables, spices, dairy products
and edible oils. The presence of a skilled workforce and low
labour costs are also key factors.
• Food processing equipment: canning, dairy and food processing,
specialty processing, packaging, frozen food/refrigeration and
thermo-processing.
Factors Influencing FDI

11. Kraft (USA)
Mars (USA)
Nestle (Switzerland)
McCain (Canada)
Danone (France)
Ferrero (Italy)
Del Monte (USA)
Kagome (Japan)
Kelloggs (USA)
Pepsi (USA)
Unilever (Anglo Dutch)
Perfetti (Italy)
Cargill (USA)
Coca Cola (USA)
Hershey (USA)
Foreign Investors

12. Important Crops &
Novel Technologies

13. Important Food Grains
Rice
Wheat
Pulses
Oil Seeds
Groundnut
Soybean

14. Soybean as Protein Food Source
Why Soybean
•40% best quality plant protein
•20% excellent quality oil omega-3
•Full of phytochemicals and
micronutrients to fight life style
diseases
•USFDA health claim food
Need
•Protein 1 g/kg body weight all
through life
•Pulse consumption need to be
75g/day
•9 kg/family of 4
•Protein deficiency has created
health problems in Indian above 40
years
Soy Products
Soymilk
Soy Paneer
Full Fat Soy Flour
Medium Fat Soy Flour
Soy Nuggets
Soy fortified bakery products
Soy fortified noodles/Pasta
and other formed products

16. Oilseeds- Modernization of
Traditional Industry
• To get chemical free quality oil through
mechanical pressing, filtering and physical
refining
• Modernisation and upgradation of existing oil
mills
• The mechanical pressed and physically refined
oil is always healthy compared to solvent
extracted and chemically refined oil

17. Double Chamber Modern Oil Expeller
•Provision for cooling the barrel by
passing water through water jackets
for temperature of the barrel below
70 C
•Pungent compounds present in the
oil are not escaped during expelling.
•10 tpd capacity provides 5.8%
residual oil in mustard cake in one-
go crushing, as compared to 7.5% in
conventional expeller
•Mustard cake is bright green
without any discolouration.
•Durability worm & cage bar
assemblies (10 week against 3
weeks conventional expellers)
•The plant requires less space for
installation.

18. Pulses- Modernization of Dal
Milling Industry
• Hi-tech modern dal mills with assured
minimum dal recovery of 73%.
• Installation of noise dampner, dust arrester
and other pollution control devices
• Using high temp short time heating process
and conditioning process to get maximum gota
• Loosening of husk without excess water or oil
addition

19. Nutri Rice from Brokens

20. Dal Analogue Based on Soybean
• Dal analogue is made from edible
grade defatted soya flour, whole
wheat flour and turmeric powder
using extrusion process.
• Dal analogue has more than 30%
protein which is more than 30%
increase in protein content compared to dals
• The quality of protein is superior due to typical combination of
pulses and cereal.
• It is a pre‐cooked product it takes less than 10 minutes to cook
on open flame compared to more than 25 minutes for other
dals.
• Perfect vehicle for micronutrients fortification.
• Protein from soy can certainly help in reducing certain diet
related degenerative diseases like heart disease and
osteoporosis.

21. Agro Processing Centres
for Rural Development
• Rural youths in a team be encouraged to set up agro processing
centres to clean, grade, package and process food grains to get
the benefit of off season higher prices.
• Similarly a village level power plant using biomass briquettes can
also be encouraged by a team of rural youth.
Mini Dal Mill Mini Rice Mill
Mini Biomass Power Plant

22. Important Horticulture
Crops
Medicinal Crops
Garlic
Guava
Onion
Tomato

23. Garlic Processing Machines
Garlic Flaking MachineGarlic PeelerGarlic Bulb Breaker
Capacity-800 kg/h
Cost-INR 20000
Capacity-400 kg/h
Cost-INR 20,000
Capacity-40-50 kg/h
Cost-INR 75000

24. Method to Prepare Dried Garlic Slices
• The cloves are
separated, peeled and
sliced across the length.
• Slices of 3mm thickness
are dipped in 0.5%
sodium metabisulphite
solution for 15 min at
ambient temperature
and dried to 6% moisture
content (db) in a
fluidized bed dryer
at 600C air temperature.
• Slices thus obtained
should be immediately
packed in airtight
containers.
Plant & machinery :Stainless Steel knives,
Fluidised bed dryer, Work tables, Dipping tanks
etc., Manpower :10-15 kg raw garlic / person for
8 h, Investment: 2 lakhs approx., Capacity:10-
15 kg dried garlic slices / day.

25. Process Technology for Guava Bar
• Guava is perishable in nature
and cannot be stored for
more than two days during
peak season.
• Guava can be processed into
a number of products like
fruits bar and beverage
• Fruits, which are rich in
nutrients can be blended to
improve its acceptability and
flavor
• Guava bar acceptable even
after 6 month of storage
Composition: Moisture: 15%, Vitamin C: 120 mg/100g, Acidity: 1.08%,
Reducing sugar: 14%, Non-reducing sugar: 46%, Weight of each bar: 5-10
g, KSM: 0.2%

26. CIPHET Process of Mechanical
Dewatering and Drying
• Process-The onions were washed,
peeled and mechanically dewatered
prior to drying with centrifugal juicer.
• Partial mechanical dewatering
resulted in as high as 60.98 % less
consumption in energy than
conventional method besides getting
high value products i.e. onion juice
and onion powder.
• The optimum combinations are 60%
dewatering and 60-70 C
temperatures.
• Onion juice was concentrated to
75% solids for increasing its shelf
life.
• Storage studies of onion powder
showed that there has been no
significant loss in quality even after 2
months storage at room
temperature.

27. Minimal Processing of Vegetables

28. Crushed Tomato Technology
• Intermediate processing technology
to produce tomato puree in
production catchment and its cold
storage for further use by Ketchup
or Soup or Juice Manufacturers is
best option to avoid price
crash/distress sale and provide local
employment
• Crushed tomato is an intermediate
product developed by ICAR-IIHR
where inclusion of seed and skin
adds to the consistency and colour
of the product and can be used as a
substitute to the fresh tomato for
various curry preparation

29. Other Useful Technologies

30. Shrink Packaging of Fruits and Vegetables
Storage life
Ambient Cold store
Commodity
Shrink wrapped Unwrapped Shrink wrapped Unwrapped
Kinnow 27 13 70 41
Tomato 19 10 39 23
Capsicum 25 4 46 21

31. Process Technology for Ber Preserves
• Excellent natural color
• Very good texture
• Rich in Vit. C
• Rich in minerals
• Least enzymatic
browning
Can keep well up to 6 months

32. Minimal Processing of Pomegranate Arils
Arils are treated with
Chlorinated water for 5
minutes (Sodium
hypochloride 100 ppm) +
Antioxidant for 30 seconds
(5% W/v Citric acid or
Ascorbic Acid) and packed
in 25 μ Semi permeable
film and store at 5 ± 1ºC
Maintains quality, colour
and shelf life up to 16 days
with good physical and
microbiological conditions.

33. Modern Jaggery Manufacture
This liquid jaggery and jaggery cubes are getting very
popular and fetch very high price and such plants at
panchayat level can be very successful

34. Food Quality and Safety
Mandatory employment of a food professional in
food business with >50 lakh turn over per year

35. Selected Successful
Examples

36. Soybean Milk and Tofu
Sh B S Garcha
Dist. Sangrur Punjab.
Established: 2000
Products: Soymilk, Tofu, Whey
beverage, Soy namkeen etc.
Monthly Income: >Rs50,000
Employment generated: 10
Capital Investment: 3-4 lakhs
Sales outlets stalls in University
and colleges

37. Soybean Products
Sh J S Sandha,
Jalandhar Punjab
Established: 2008
Products: flavored soya milk,
curd, lassi, namkeen and soya
roasted nuts
Created Small Scale Franchisees
Technical guidance and support
by CIPHET

38. Dried Green Chilli, Ginger and Garlic Powder
Sh Saket Ranjan
M/s Skysnacks, Punea, Bihar
Trained by CIPHET
Products: Green chilli powder, Ginger
Powder, Garlic Powder, Sattu and Pappad
etc.
Employment: >10 mostly ladies

39. Chowdhary Made Agriculture Profitable with
Value Addition in Rajasthan
Kailash Chaudhary, Age 60 years
Products: Aamla juice, amla
powder, aloe vera juice, candies,
squashes, pickles, sweets
Exports to many countries
Employment: Direct 30;Indirect 40
Established: 2004
Training and Technologies by
CIPHET
Turnover: > 1 crore
Web: www.ksbiofoods.com

40. Email ID- ramabhau@gmail.com
Mobile. No. 08964030701
Phone No. 07554007489