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Make India - Food Processing - Feb 2016

This document provides an overview of investment opportunities in the food processing sector in India. It highlights that India has a large population with growing incomes, making it an attractive market for food production and processing. The food processing industry is identified as a priority sector by the Indian government and has seen increasing private investment. Several sub-sectors within food processing like fruits and vegetables, dairy, meat, and marine products are growing rapidly and expected to provide major opportunities. The document analyzes trends in various sub-sectors and trade to promote investment in India's large and promising food processing industry.

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Food Processing Industries
Agenda Why India? 01 Make in India Initiative 02 Food processing industry 03 Investment Opportunities 04 Business & Environment in India 05
Why India? 01
Advantage India World’s largest democracy with 1.3 billion people Access to technology as a result of the IT revolution Enabling busines environment with greater global participation Progressive rationalization of direct and indirect tax structures Land of abundant natural resources and diverse climatic conditions Impetus to Infrastructure Development Large and growing domestic consumer market Competitively priced skilled labour
India - A favoured investment destination largest economy in the world by nominal GDP (2015) largest economy in the world by Purchasing Power Parity (PPP) on baseline One of the fastest growing economies in the world Source: World Bank 2011-12 2012-13 2013-14 2014-15 Sector contribution to GDP 18% 18% 18% 17% 33% 32% 31% 30% 49% 50% 51% 53% (2014-15) 13.7% 10.6% 3.9% 3.6% Key import sources (2014-15) % contribution to total imports 13.5% 6.3% 5.8% 4.9% FDI destination (Jan-June, 2015) April 2000 and September 2015 Source: Financial Times - FDI Markets 11th largest importer in the world. 2004-05 2008-09 2014-15 16% 17% Import Services 1 - 17% Services 2 - 9% 3 - 7% Telecommunications 4 - 5% Pharmaceuticals 5 - 5% 6 - 4% 7 - 7% 8 - 46% Others Source: DIPP, GoI 2014 2020 2.04 3 between 2014 and 2020 GDP anticipated to reach GDP at current prices 100% 50% 0% 5 0
Growing domestic consumer base 1991 Rising disposable income and urbanization Source: Census of India, 2011, PwC analysis 2001 2008 2030 Per capita disposable income More than 800 million people under the age of 34 years Source: Census of India, 2011, PwC analysis 2016 2021 2026 60 and above 55-59 50-54 45-49 40-44 35-39 34 and below Democratic set up and strong economic reforms Strong democracy Progressive economic reforms Investor friendly government initiatives Visionary Initiatives Make in India Skill India Digital India Smart Cities Mission
Make in India Initiative 02
Major national initiative, designed to facilitate investment, foster innovation, enhance skill development, protect intellectual property and build best-in-class manufacturing infrastructure The objective of Make in India initiative is to promote India as the most preferred global manufacturing destination
Strong impact created by the initiative Major investment announcements under Make in India in the Food Processing sector - (Note: Assumed rate of Rupee-Dollar is as follows: 1USD = Rs.65)
Food processing sector 03
September 2015Source: APEDA, MoFPI, MPEDA, IBEF, Research & Markets – Global Food Container Market 2015-2019, PwC & FICCI Global Scenario The food processing industry is one of the largest manufacturing industries in the world. • 2nd largest producer of Fruit and Vegetables • 2nd largest producer of Rice, Wheat and other Cereals • Largest Milk producing country; largest population of Cattle – 210 million • 5th largest Egg producer • 3rd Largest in Fisheries and 2nd in aquaculture • 52% of total land is cultivable as against global average of 11% • 2nd largest arable land – 161 million hectares. • Largest area under irrigation – 65.26 million hectares Contribution of Indian Food Processing industry globally The global food market is expected to reach USD 5.77 trillion by 2017, growing at a CAGR of 5.02%. India is home to over 37,000 registered Food Processing units
September 2015 Source: IBEF, Techsci, www.India Stat.com , MoFPI, DGCI&S Indian Scenario Food Processing industry in India is one of the largest industries in terms of production , consumption, export and expected growth. 60,378 58752 67508 82063 84522 2008-09 2009-10 2010-11 2011-12 2012-13 GDP , Food Processing industries in Rs CroreBy FY 2020: Indian Food & Retail market is projected to touch USD 482 billion. By FY 2013-14: India’s export of processed Food and related products increased to USD 37.79 billion. By FY 2022: Food Processing sector has the potential of attracting USD 33 billion of investment in coming years and generate employment of 9 million person days.
September 2015 Sector contribution to Indian economy Food Processing industry forms an important segment of the Indian economy in terms of contribution to GDP, employment and investment, and will be a major driver in country’s growth in near future. Source: MoFPI, ASI 2012-13 Indian Food processing industry accounts for 14 % of manufacturing GDP Indian Food Processing industry accounts for 6 % of total industrial investments Indian Food Processing industry accounts for 13 % of total exports 14% 13 % 6 % Food Processing industry was the largest contributor of employment provision; it provided industrial employment to ~11.95% employed population
September 2015 14787 20427 31762 36212 37798 2009-10 2010-11 2011-12 2012-13 2013-14 Indian export trends Value of exports has steadily increased with an average annual growth rate of 20.53 % for five years ending 2013-14. Values of processed food export was of the order USD 37.79 billion and is project to reach around USD 100 billion by 2020 • Greater private sector participation with modern facilities and increasing focus on packaging and quality has led to increase in exports. • Indian subcontinent is strategically placed in the Indian ocean from where it enjoys geographical proximity to ASEAN, African and Middle East countries Growth drivers for rising Food exports: CAGR – 20.53 % Major export products from India: Marine products, Basmati Rice, Meat & Meat preparations, Rice other than Basmati, Cashews, Fresh Vegetables, Fresh Fruits. *: All agricultural produce when exported undergo an element of processing. Hence all edible agricultural commodities exported are included in the export data. Source: APEDA, MoFPI Annual Report share of Processed Food exports in India’s total exports12.1 %
September 2015 India Major export destinations for India Iran Vietnam USA Saudi Arabia Bangladesh Malaysia Indonesia India Source: IBEF USDA Foreign Agriculture Services Indian Ocean Pacific Ocean North Pacific Ocean South Pacific Ocean North Atlantic Ocean South Atlantic Ocean Arctic Ocean India export growth over the past decade has been the highest with an average annual rate of more than 21 %
September 2015 USA tops the list in terms of investing in the Food Processing Sector. 70.17 102.71 278.89 188.67 170.21 401.46 3982.88 0 1000 2000 3000 4000 5000 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 FDI in USD million Source: D&B, DIPP, Ministry of Commerce , IBEF, Official Website of Coca Cola & PepsiCo, Livemint E-Paper (July 15, 2015) Company Indian subsidiary Type of business Starbucks Corporation TATA Global Beverage Beverage Kagome & Mitsui Ruchi Soya Industries Tomato Products McCormick Kohinoor Foods Limited Basmati & Food Products McCormick Eastern Condiments Seasonings Dan Cake Phadnis Group Cake & Biscuits Molson Coors Cobra India Brewing Hershey Godrej Chocolates Foreign Joint Venture partnerships in India FDI inflow was higher in 2013-14 owning to two big investment announcement by Coca Cola & PepsiCo in the consumer foods segment. FDI growth trends
September 2015 Date Target company Acquiring company Type of business Deal value (USD million) 2015 United Spirits Diageo Liquor 862.64 2014 Lactalis Group Tirumala Milk Products Milk Production 298.61 2014 Nashik Vintners Pvt Ltd Investor Group Wines & Brandy 39.27 Source: India Brand Equity Foundation Report Major M&A activity in India Major Private Equity funding in India Date Company Investor company Type of business Deal value (USD million) 2014 Bikaji Foods Linthouse Funds LLC Manufacture wholesale snacks 14.9 2013 VKL Seasonings India Value Fund Seasonings 44.19 2013 Kohinoor Foods Al Dahra Hoardings Rice 21.17 Select major foreign investments in India
September 2015 Industry testimonials PepsiCo on Sri city plant inauguration. “For more than 25 years , PepsiCo has been investing in the Indian economy and its people. As we move forward into our next 25 years, that commitment is stronger than ever”. -  Indira Nooyi , Chairman & CEO, PepsiCo Dominos Pizza “ We are quickly approaching 1000 stores in India, that is now by store count our biggest market outside of the US.” -  Patrick Doyle, CEO, Dominos Pizza Inc Industry view Godrej Agrovet limited, a subsidiary of Godrej industries limited “ The business is doing well and we think there is tremendous scope of growth. The value added milk business is growing very rapidly in our country. We certainly hope so and we certainly feel that there is tremendous opportunity.” -  Mr. Adi Godrej, Chairman, Godrej Group
September 2015 Favourable demographics – India accounts for approximately 17.5 % of global population and is set to be world’s most populous country by 2028, India offers a large and growing domestic market. Shift in consumption habits – With rising income of working middle class, consumption pattern of population has also changed with increasing expenditure on Dairy, Poultry and Consumer Foods thereby driving growth in these sectors. Increasing disposable income – Consuming class households are likely to reach 137 million in 2025 with a collective disposable income of USD 1.5 trillion which would increase the demand for food products. Government policy support – Government has identified Food Processing sector as a priority sector and has introduced several fiscal & procedural incentives to promote private sector participation. Rising export opportunities – Spike in global demand as emerging markets grow at fast pace also proximity to key export destinations like Middle East and ASEAN. Source: CII –RABO Equity Report , MoFPI Emergence of retail sector – Rising penetration and growth of organised retail would further propel the growth of food products. (Global retail market ,2012 – USD 518 billion) Growth drivers
September 2015 Key sub sectors Fruits & Vegetables - Beverages, Juices, Concentrates, Pulps, Slices, Frozen & Dehydrated products, Chips etc. Milk & Dairy - Whole Milk powder, Skimmed milk powder, Condensed milk, Ice cream, Butter and Ghee Meat & Poultry - Frozen and packed food mainly in fresh form, Egg powder Marine Products - Frozen & Canned products mainly in fresh form Grain Processing - Flour, Bakeries, Biscuits, Starch, Glucose, Cornflakes, Malted foods, Consumer Foods - Chocolates, Confectionery, Soft/Aerated beverages
September 2015 Source: MoFPI, APEDA, Ministry of Commerce Note: Assumed rate for rupee dollar is as follows: 1 USD = Rs. 65 Fruits & Vegetables Fruit & Vegetable production in India India is world’s 2nd largest producer of Fruits and Vegetables India accounts for ~12.6 % and ~14 % share in world production of fruits and vegetables respectively. Export trends - India exported fruits and vegetables worth ~USD 1150 million which comprised of fruits worth ~USD 426 million and vegetables worth ~USD 723 million . (2014-15) Sector overview Growth potential – APEDA estimates that processing level in this sector can grow to 25% by 2025. 0 500000 1000000 1500000 2000000 2500000 2012-13 2013-14 2014-15 InTons Fruits Vegetables
September 2015 Source: MoFPI & APEDA, CII & Mckinsey, AC Neilson and India Food Guide, Edelweiss 108 112 116 122 128 132 138 146 0.00 20.00 40.00 60.00 80.00 100.00 120.00 140.00 160.00 Dairy & Dairy products India is world’s largest producer of milk and dairy products with 16.43 % of total milk production in the world. Milk production has witnessed steady growth between 2007-08 and 2014-15 from 107.94 MT to 146.31 MT in 2014-15 Export trends - India is a major exporter of dairy products; it exported dairy exports worth USD 546.1 million during 2013-14. Saudi Arabia, Bangladesh, UAE, Egypt are the top export destination Sector overview Growth potential – The total dairy market is projected to grow at a CAGR of 10-11% and would touch USD 82 billion by 2016. Milk production ( In Million Tons )
September 2015Source: www.India Stat.com , APEDA 5556.24 6024.4 6302.4 6645 6973.07 7343.8 3.73 8.43 4.61 5.44 4.94 5.32 0 1 2 3 4 5 6 7 8 9 0 1000 2000 3000 4000 5000 6000 7000 8000 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 4280 4566 4869 5514.3 5948.17 6235 6.76 6.68 6.64 13.25 7.87 4.82 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 0 1000 2000 3000 4000 5000 6000 7000 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Meat & Poultry India is 5th largest meat producer globally Sector is mainly export driven with around 70 % of buffalo meat exported to Vietnam, Malaysia, Thailand, Egypt and Saudi Arabia India exported 1.49 million ton of buffalo meat worth USD 4304 million.(2014-15) Sector overview Total Poultry market size is estimated at USD 9.93 billion and has been growing at 7-8 % Eggs and Broilers are leading the Growth in this segment with a growth rate of 16% and 20% respectively Marginal export to European nations, almost all Indian poultry and egg production is consumed within the country Meat production ( In “000” ton) Egg production ( In 10 million numbers )
September 2015 Source: MoFPI & MPEDA 7,127 7,616 7,853 8,231 8,666 9,040 9,577 10,072 0 2000 4000 6000 8000 10000 12000 Marine products Total fish production during 2014-15 was estimated at 10.07 million ton The sector contributes around 1.1% to overall GDP and around 5.15 per cent of Agri GDP Marine exports aggregated to 0.98 million ton valued at USD 5007.70 million Sector overview Value addition of marine products and emphasis on export of products through setting up new units, capacity enhancement and diversifying current activities would be the key to growth. Fish production (In “000” tons)
September 2015 Source: Corporate Catalyst India Private Limited, www.IndiaStat.com 934 967 992 891 960 1053 1052 1063 142 148 146 147 182 171 183 193 758 786 807 808 869 949 935 958 0 200 400 600 800 1000 1200 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 Wheat Pulse Rice Grain processing India produced around 251 MT during 2014-15. On an average it produces more than 200 million tons of different food grain every year India is the 2nd largest rice producer in the world with around 20 % global share Primary milling of Rice, Wheat and Pulses are most important activities in food grain processing Sector overview There are 10,000 Pulse mills in country with milling capacity of 14 million tons, milling approximately 75 % of annual pulse production Wheat, Pulse & Rice production (in lakh ton)
September 2015 Source: ASSOCHAM, Techsci Research, Yes Bank, APEDA Organic farming is practiced in 12 states in about 4.72 million hectares. In 2013-14, organic food production was approximately 1.24 million tons. Growing awareness towards health consciousness and rising disposable income of consumers would drive the growth in this sector. Current demand is usually from Tier 1 cities India exported 165262 MT of organic products belonging to 135 commodities valuing at US$ 312 million (approximately INR 1900 crore). Organic Food market is expected to grow at a significant CAGR of 19 %. Organic Pulses and Food grains are t he main product in this sector. Organic Food market will touch USD 1 billion by 2020 Production Drivers Exports Potential Organic Food products
September 2015Source: CARE Ratings: Changing consumer preference driving growth of ready to eat snack food products , IBEF Packaged Foods has grown at a compounded annual growth rate (CAGR) of around 13% since 1998 till 2014 and expected to grow at a CAGR of 22% during 2014-2019. Among the highest growing segment in India. Rising urbanization, expansion in hospitality segment and product innovation & marketing techniques shall be be the key to its growth. Bakery products, Snacks, Beverages, Chocolates, processed Fruits and Vegetables, branded Flour, Dairy products, Tea/Coffee, Soft Drinks. The sale of snack food category have grown more than six-fold from Rs.8,000 crore in 2004 to more than Rs.50,000 crore in 2014.Major pl ayers in this segment are: •  Pepsico India •  Haldiram Foods •  ITC Foods •  Balaji Wafers •  Bikaji Foods International Ltd Consumer Foods
September 2015 6 Critical Success Factors 6. Enabling Government Policies 1. Preferred Location 2. Availability Of Raw Material 5. Presence of Industrial & Transport Infrastructure 4. Availability of Employable Work Force 3. Presence of Technical Institutes Enabling policies: —  Major government policies for providing a boost to sector growth Presence of Industrial & Transport infrastructure —  Industrial Corridor —  Major Seaports for export of processed food products. —  Major Airports Availability of employable work-force: —  Presence of employable work force at preferred investment destinations in India Preferred investment destinations: —  Preferred locations in India based on total number of registered food processing units. Presence of Technical Education Institutes: —  Major state and central agricultural institutes which also offers courses in food processing. Availability of raw material: —  Leading states in production of Fruits & Vegetables, Milk, Meat, Pulses, Food grains etc., —  Leading states with cold storage and Fish processing facilities. Availability of Factors of Production (FoPs)
September 2015 Legend Major State Number of Units Andhra Pradesh 9359 Tamil Nadu 5186 Maharashtra 3113 Punjab 2784 Uttar Pradesh 2116 Karnataka 1979 Gujrat 1924 Source: ASI , MoFPI Preferred investment destinations in India
September 2015 Major producer of Milk Major producer of Fruits & Vegetables Major producer of Meat Legend Major producer of Wheat Major producer of Pulse Major producer of Rice Source: MoFPI, APEDA, www.IndiaStat.com Availability of raw material
September 2015 Legend Major State No of Units Cold Storage Capacity In MT Uttar Pradesh 2176 1,36,33,039 Punjab 606 20,04,778 Gujrat 560 20,30,873 Maharash tra 540 7,06,302 West Bengal 502 59,01,925 Andhra Pradesh 404 15,77,828 Bihar 303 14,06,395 Source: MoFPI, www.indiastat.com (Status as on 31.03.2014) Veraval Mumbai Kochi Port Visakhapatnam Mangalore Kolkata Goa Major fish processing centre Infrastructure – Cold storage & Fish processing centre
September 2015 Haryana Chaudhary Charan Singh Haryana Agricultural University Haryana National Institute of Food Technology Entrepreneurship and Management Rajasthan: Maharana Pratap University of Agriculture & Technology, Udaipur Gujrat: Anand Agricultural University, Anand Karnataka: 1) University of Agricultural Sciences, GKVK, Bangalore 2) University of Agricultural Sciences, Dharwad Punjab: Guru Angad Dev Veterinary and Animal Sciences, Ludhiana Tamil Nadu Agricultural University, Coimbatore Tamil Nadu Indian Institute of Crop ProcessingTechnology , Thanjavur Telangana: Acharya N G Ranga Agricultural University, Hyderabad Manipur: Central Agricultural University, Imphal Uttar Pradesh: 1)Aligarh Muslim University, Aligarh 2) Banaras Hindu University Varanasi Uttaranchal: Govind Ballabh Pant University of Agriculture, Pantnagar, Himachal Pradesh: Ch Sarwan Kumar Krishi Vishwavidyalaya, Palampur Dr Yashwant Singh Parmar University of Horticulture & Forestry, Solan Source: MoFPI Presence of Technical Educational institutes
September 2015 Figures based on data from Ministry of Labour & Employment, India Stat and 2011 Population Census *Employable population calculated on basis of unemployed above 15 years age according to Usual Principal and Subsidiary Status (PS+SS) approach Punjab: Employable population: 0.63 million Maharashtra: Employable population: 1.34 million Karnataka: Employable population: 0.61 million Andhra Pradesh: Employable population: 0.93 million Tamil Nadu: Employable population: 1.44 million Uttar Pradesh: Employable population: 3.98 million Gujrat: Employable population: 0.24 million Availability of employable population
September 2015 Amritsar – Kolkata Industrial Corridor Delhi – Mumbai Industrial Corridor Bengaluru Mumbai Economic Corridor Chennai - Bengaluru – Industrial Corridor Vizag - Chenai Industrial Corridor International Airports Major Ports Dedicated Freight Corridor National Investment & Manufacturing Zones Proposed Industrial Corridors Influence region of proposed industrial corridors in India Presence of Industrial & Transport infrastructure
September 2015 . Source: APEDA Agri Exchange, Year 2014-15 Total value of exports from Sea Ports: USD 12.24 billon Total value of exports from Airports: USD 429.62 million Kandla Port Mundra Port Pipavav Port Jawaharlal Nehru Port Mumbai Airport Marmagoa Port Mangalore Port Kochi Port Kochi AirPort Delhi Airport Haldia Port Vishakapatnam Port Kakinada Port Krishnapatnam Port Kattupalli Port Chennai Airport Bangalore Airport Trivandrum Airport Presence of Airports & Seaports catering to exports
September 2015 •  Deduction for expenditure incurred on investment is allowed if this investment is wholly and exclusively for the purpose of setting cold chain facility, warehouse facility for storage of agricultural produce. •  Deduction of Tax from Profit – New units in the business of processing, preservation and packaging of fruits and vegetables are permitted to claim deduction from Income Tax. ( 100 % Tax Exemption for first 5 Years of Operation) Income Tax •  Exemption of Service tax is allowed for the following services: Construction of original works pertaining to post harvest storage infrastructure including cold storage. •  Mechanized food grain handling systems. •  Loading and Unloading, packaging, storage or warehousing of agricultural produce. •  Transportation of agricultural produce and goods. Service Tax •  Project Imports benefits to following projects: installation of mechanized food grain handling systems, cold storage and industrial projects for preservation, storage, horticulture, dairy, poultry, marine produce and meat. Customs Duty •  Accessibility of adequate and affordable credit – Soft Loan is extended up to 95 % of total project cost for entities promoted by state governments. •  100 % FDI allowed under automatic route. FDI & Credit Availability Source: MoFPI , Annual Report Enabling policy initiatives
Investment Opportunities 04
September 2015 Inputs Production & procurement Storage Processing Retail services Technological and financial support to farmers. Contract farming arrangement Post harvest Infrastructure & Transportation: Warehouses, Cold Storage Process automation and up gradation of existing Food Processing facilities Setup of organized retail chains Potential Investment opportunities Enhanced productivity for farmer and exposure to greater markets Better price for farmers and abundant supply of raw material for industries Reduction in wastage of perishaable products Improved productivity, quality & profitability. customer loyalty in competitive market Enhances efficiency across value chain by benefitting farmers, processors and consumers. Benefits across Value Chain Investment opportunities across value chain
September 2015 Mega Food Park scheme intends to facilitate establishment of an Integrated value chain with food processing at the core and supported by forward and backward linkages. Investment opportunities in Mega Food parks Investment opportunities in core processing facilities: • Storage facilities for raw materials and finished products • Food processing equipment's • Contemporary plug & play sheds • Packaging facilities • Cold storage facilities • Bulk material handling equipment • Grading & sorting facility • Basic enabling infrastructure – Roads, Water storage & distribution system, Waste disposal facility, Effluent treatment plant, Captive Power plants
September 2015 2 4.7 12.8 0 2 4 6 8 10 12 14 2009 2013E 2017F Cold Chain industry in India in USD billion CAGR 23.3 % CAGR 28.3 % Source: India Cold Chain Expo, Reed, MoFPI, Yes Bank Investment opportunities in Cold Chain logistics Indian Cold Chain industry is expected to reach a market size of ~USD 13 billon in 2017. Cold Chain logistics – snapshot • Key growth drivers include growth in organized retail and food services industry, government’s initiatives, rising export demand for processed and frozen foods. • India’s Cold Chain industry is still evolving, not very well organized and currently operating below capacity. ( Cold Chain gap of 29 million tons) • India offers great market potential for cold chain logistics solution provider including refrigerant transport. • Growing focus towards multi purpose cold storages.
September 2015 Temperature Controlled Vehicles market in India 27400 36000 51800 0 50 100 150 200 250 300 350 0 10000 20000 30000 40000 50000 60000 2009 2013E 2017F US $ Million No of Units 17 29 47 0 2 4 6 8 10 12 14 0 10 20 30 40 50 2009 2013E 2017F US $ Billion Million Tonnes Temperature Controlled Warehouse market in India Source: India Cold Chain Expo, Reed, MoFPI, Yes Bank Investment opportunities in Cold Chain logistics Potential areas of investment: • Controlled atmosphere/modified atmosphere storage • Pre cooling at farm. • Modern pack houses • Ripening chambers • Reefer technology. • Refrigerated transport solutions • Energy efficiency solutions
September 2015Source: GIRACT Consultancy, ASSOCHAM, DIPP Annual Report 2014-15 Investment opportunities in Food Processing machinery Food processing machinery is expected to grow at 15-20 % fueled by strong international and domestic demand for food products, industry’s focus on modernization & automation, and energy efficient processes. Packaging equipment Growth in consumer food sector and consumer awareness towards the aesthetic appeal of the packaging would propel the growth of packaging machinery. Significant investment opportunities lies in – canning, dairy and food processing, specialty processing, frozen food, thermo processing. Water & Air Pollution control equipment This sector has excellent growth potential as there is growing awareness regarding water & air pollution and stringent environmental control standards in processing industries. Categories of water pollution control equipment include waste water, drinking water and effluent treatment plants, settling chambers, bag filters, electrostatic precipitators, wet scrubbers etc.
Business & Environment in India 05
Reform Focus Manufacturing push Infra development Job Creation and inclusive growth Kick start of investment cycle Fiscal prudence and accountability Non-adversarial tax regime Indian Finance Minister - Narendra Modi, Indian Prime Minister “What we need are not more new Acts – - Narendra Modi, Indian Prime Minister
Foreign Investment Framework Evolution of foreign investment regulations Governed by Foreign Exchange Management Act, 1999 Progressive liberalization in the policies Foreign Direct Investment (‘FDI’) in India Automatic route (No prior approval requirement): such as railway and road infrastructure Approval route (Prior Government approval required before setup): such as multi brand retail trading
FDI investment route No requirement of any prior regulatory approval Filing an intimation with RBI in prescribed format within 30 days of investment Filing particulars of issue of shares within 30 days of issue of shares to foreign investors Prior Approval Route Required approval from Govt. of India – Considered by Ministry of Finance, Foreign Investment Promotion Board & Department of Filing an intimation with RBI in prescribed format within 30 days of investment Filing particulars of issue of shares within 30 days of issue of shares to foreign investors
Business presence in India – Form of entities Foreign Company Operates as a foreign company Establishes local presence Liaison Project Branch Joint Ventures Limited Liability Partnership Wholly Owned Subsidiary Key considerations for choosing investment vehicle Commercial considerations Regulatory framework(prior approval requirements for Chinese companies) Tax considerations Cost of operations
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Make India - Food Processing - Feb 2016

  • 1.
  • 2.
  • 3.
  • 4.
    Advantage India World’s largest democracy with 1.3billion people Access to technology as a result of the IT revolution Enabling busines environment with greater global participation Progressive rationalization of direct and indirect tax structures Land of abundant natural resources and diverse climatic conditions Impetus to Infrastructure Development Large and growing domestic consumer market Competitively priced skilled labour
  • 5.
    India - Afavoured investment destination largest economy in the world by nominal GDP (2015) largest economy in the world by Purchasing Power Parity (PPP) on baseline One of the fastest growing economies in the world Source: World Bank 2011-12 2012-13 2013-14 2014-15 Sector contribution to GDP 18% 18% 18% 17% 33% 32% 31% 30% 49% 50% 51% 53% (2014-15) 13.7% 10.6% 3.9% 3.6% Key import sources (2014-15) % contribution to total imports 13.5% 6.3% 5.8% 4.9% FDI destination (Jan-June, 2015) April 2000 and September 2015 Source: Financial Times - FDI Markets 11th largest importer in the world. 2004-05 2008-09 2014-15 16% 17% Import Services 1 - 17% Services 2 - 9% 3 - 7% Telecommunications 4 - 5% Pharmaceuticals 5 - 5% 6 - 4% 7 - 7% 8 - 46% Others Source: DIPP, GoI 2014 2020 2.04 3 between 2014 and 2020 GDP anticipated to reach GDP at current prices 100% 50% 0% 5 0
  • 6.
    Growing domestic consumerbase 1991 Rising disposable income and urbanization Source: Census of India, 2011, PwC analysis 2001 2008 2030 Per capita disposable income More than 800 million people under the age of 34 years Source: Census of India, 2011, PwC analysis 2016 2021 2026 60 and above 55-59 50-54 45-49 40-44 35-39 34 and below Democratic set up and strong economic reforms Strong democracy Progressive economic reforms Investor friendly government initiatives Visionary Initiatives Make in India Skill India Digital India Smart Cities Mission
  • 7.
  • 8.
    Major national initiative,designed to facilitate investment, foster innovation, enhance skill development, protect intellectual property and build best-in-class manufacturing infrastructure The objective of Make in India initiative is to promote India as the most preferred global manufacturing destination
  • 9.
    Strong impact createdby the initiative Major investment announcements under Make in India in the Food Processing sector - (Note: Assumed rate of Rupee-Dollar is as follows: 1USD = Rs.65)
  • 10.
  • 11.
    September 2015Source: APEDA,MoFPI, MPEDA, IBEF, Research & Markets – Global Food Container Market 2015-2019, PwC & FICCI Global Scenario The food processing industry is one of the largest manufacturing industries in the world. • 2nd largest producer of Fruit and Vegetables • 2nd largest producer of Rice, Wheat and other Cereals • Largest Milk producing country; largest population of Cattle – 210 million • 5th largest Egg producer • 3rd Largest in Fisheries and 2nd in aquaculture • 52% of total land is cultivable as against global average of 11% • 2nd largest arable land – 161 million hectares. • Largest area under irrigation – 65.26 million hectares Contribution of Indian Food Processing industry globally The global food market is expected to reach USD 5.77 trillion by 2017, growing at a CAGR of 5.02%. India is home to over 37,000 registered Food Processing units
  • 12.
    September 2015 Source: IBEF,Techsci, www.India Stat.com , MoFPI, DGCI&S Indian Scenario Food Processing industry in India is one of the largest industries in terms of production , consumption, export and expected growth. 60,378 58752 67508 82063 84522 2008-09 2009-10 2010-11 2011-12 2012-13 GDP , Food Processing industries in Rs CroreBy FY 2020: Indian Food & Retail market is projected to touch USD 482 billion. By FY 2013-14: India’s export of processed Food and related products increased to USD 37.79 billion. By FY 2022: Food Processing sector has the potential of attracting USD 33 billion of investment in coming years and generate employment of 9 million person days.
  • 13.
    September 2015 Sector contributionto Indian economy Food Processing industry forms an important segment of the Indian economy in terms of contribution to GDP, employment and investment, and will be a major driver in country’s growth in near future. Source: MoFPI, ASI 2012-13 Indian Food processing industry accounts for 14 % of manufacturing GDP Indian Food Processing industry accounts for 6 % of total industrial investments Indian Food Processing industry accounts for 13 % of total exports 14% 13 % 6 % Food Processing industry was the largest contributor of employment provision; it provided industrial employment to ~11.95% employed population
  • 14.
    September 2015 14787 20427 31762 36212 37798 2009-10 2010-112011-12 2012-13 2013-14 Indian export trends Value of exports has steadily increased with an average annual growth rate of 20.53 % for five years ending 2013-14. Values of processed food export was of the order USD 37.79 billion and is project to reach around USD 100 billion by 2020 • Greater private sector participation with modern facilities and increasing focus on packaging and quality has led to increase in exports. • Indian subcontinent is strategically placed in the Indian ocean from where it enjoys geographical proximity to ASEAN, African and Middle East countries Growth drivers for rising Food exports: CAGR – 20.53 % Major export products from India: Marine products, Basmati Rice, Meat & Meat preparations, Rice other than Basmati, Cashews, Fresh Vegetables, Fresh Fruits. *: All agricultural produce when exported undergo an element of processing. Hence all edible agricultural commodities exported are included in the export data. Source: APEDA, MoFPI Annual Report share of Processed Food exports in India’s total exports12.1 %
  • 15.
    September 2015 India Major exportdestinations for India Iran Vietnam USA Saudi Arabia Bangladesh Malaysia Indonesia India Source: IBEF USDA Foreign Agriculture Services Indian Ocean Pacific Ocean North Pacific Ocean South Pacific Ocean North Atlantic Ocean South Atlantic Ocean Arctic Ocean India export growth over the past decade has been the highest with an average annual rate of more than 21 %
  • 16.
    September 2015 USA topsthe list in terms of investing in the Food Processing Sector. 70.17 102.71 278.89 188.67 170.21 401.46 3982.88 0 1000 2000 3000 4000 5000 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 FDI in USD million Source: D&B, DIPP, Ministry of Commerce , IBEF, Official Website of Coca Cola & PepsiCo, Livemint E-Paper (July 15, 2015) Company Indian subsidiary Type of business Starbucks Corporation TATA Global Beverage Beverage Kagome & Mitsui Ruchi Soya Industries Tomato Products McCormick Kohinoor Foods Limited Basmati & Food Products McCormick Eastern Condiments Seasonings Dan Cake Phadnis Group Cake & Biscuits Molson Coors Cobra India Brewing Hershey Godrej Chocolates Foreign Joint Venture partnerships in India FDI inflow was higher in 2013-14 owning to two big investment announcement by Coca Cola & PepsiCo in the consumer foods segment. FDI growth trends
  • 17.
    September 2015 Date Targetcompany Acquiring company Type of business Deal value (USD million) 2015 United Spirits Diageo Liquor 862.64 2014 Lactalis Group Tirumala Milk Products Milk Production 298.61 2014 Nashik Vintners Pvt Ltd Investor Group Wines & Brandy 39.27 Source: India Brand Equity Foundation Report Major M&A activity in India Major Private Equity funding in India Date Company Investor company Type of business Deal value (USD million) 2014 Bikaji Foods Linthouse Funds LLC Manufacture wholesale snacks 14.9 2013 VKL Seasonings India Value Fund Seasonings 44.19 2013 Kohinoor Foods Al Dahra Hoardings Rice 21.17 Select major foreign investments in India
  • 18.
    September 2015 Industry testimonials PepsiCoon Sri city plant inauguration. “For more than 25 years , PepsiCo has been investing in the Indian economy and its people. As we move forward into our next 25 years, that commitment is stronger than ever”. -  Indira Nooyi , Chairman & CEO, PepsiCo Dominos Pizza “ We are quickly approaching 1000 stores in India, that is now by store count our biggest market outside of the US.” -  Patrick Doyle, CEO, Dominos Pizza Inc Industry view Godrej Agrovet limited, a subsidiary of Godrej industries limited “ The business is doing well and we think there is tremendous scope of growth. The value added milk business is growing very rapidly in our country. We certainly hope so and we certainly feel that there is tremendous opportunity.” -  Mr. Adi Godrej, Chairman, Godrej Group
  • 19.
    September 2015 Favourable demographics– India accounts for approximately 17.5 % of global population and is set to be world’s most populous country by 2028, India offers a large and growing domestic market. Shift in consumption habits – With rising income of working middle class, consumption pattern of population has also changed with increasing expenditure on Dairy, Poultry and Consumer Foods thereby driving growth in these sectors. Increasing disposable income – Consuming class households are likely to reach 137 million in 2025 with a collective disposable income of USD 1.5 trillion which would increase the demand for food products. Government policy support – Government has identified Food Processing sector as a priority sector and has introduced several fiscal & procedural incentives to promote private sector participation. Rising export opportunities – Spike in global demand as emerging markets grow at fast pace also proximity to key export destinations like Middle East and ASEAN. Source: CII –RABO Equity Report , MoFPI Emergence of retail sector – Rising penetration and growth of organised retail would further propel the growth of food products. (Global retail market ,2012 – USD 518 billion) Growth drivers
  • 20.
    September 2015 Key subsectors Fruits & Vegetables - Beverages, Juices, Concentrates, Pulps, Slices, Frozen & Dehydrated products, Chips etc. Milk & Dairy - Whole Milk powder, Skimmed milk powder, Condensed milk, Ice cream, Butter and Ghee Meat & Poultry - Frozen and packed food mainly in fresh form, Egg powder Marine Products - Frozen & Canned products mainly in fresh form Grain Processing - Flour, Bakeries, Biscuits, Starch, Glucose, Cornflakes, Malted foods, Consumer Foods - Chocolates, Confectionery, Soft/Aerated beverages
  • 21.
    September 2015 Source: MoFPI,APEDA, Ministry of Commerce Note: Assumed rate for rupee dollar is as follows: 1 USD = Rs. 65 Fruits & Vegetables Fruit & Vegetable production in India India is world’s 2nd largest producer of Fruits and Vegetables India accounts for ~12.6 % and ~14 % share in world production of fruits and vegetables respectively. Export trends - India exported fruits and vegetables worth ~USD 1150 million which comprised of fruits worth ~USD 426 million and vegetables worth ~USD 723 million . (2014-15) Sector overview Growth potential – APEDA estimates that processing level in this sector can grow to 25% by 2025. 0 500000 1000000 1500000 2000000 2500000 2012-13 2013-14 2014-15 InTons Fruits Vegetables
  • 22.
    September 2015 Source: MoFPI& APEDA, CII & Mckinsey, AC Neilson and India Food Guide, Edelweiss 108 112 116 122 128 132 138 146 0.00 20.00 40.00 60.00 80.00 100.00 120.00 140.00 160.00 Dairy & Dairy products India is world’s largest producer of milk and dairy products with 16.43 % of total milk production in the world. Milk production has witnessed steady growth between 2007-08 and 2014-15 from 107.94 MT to 146.31 MT in 2014-15 Export trends - India is a major exporter of dairy products; it exported dairy exports worth USD 546.1 million during 2013-14. Saudi Arabia, Bangladesh, UAE, Egypt are the top export destination Sector overview Growth potential – The total dairy market is projected to grow at a CAGR of 10-11% and would touch USD 82 billion by 2016. Milk production ( In Million Tons )
  • 23.
    September 2015Source: www.IndiaStat.com , APEDA 5556.24 6024.4 6302.4 6645 6973.07 7343.8 3.73 8.43 4.61 5.44 4.94 5.32 0 1 2 3 4 5 6 7 8 9 0 1000 2000 3000 4000 5000 6000 7000 8000 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 4280 4566 4869 5514.3 5948.17 6235 6.76 6.68 6.64 13.25 7.87 4.82 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 0 1000 2000 3000 4000 5000 6000 7000 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Meat & Poultry India is 5th largest meat producer globally Sector is mainly export driven with around 70 % of buffalo meat exported to Vietnam, Malaysia, Thailand, Egypt and Saudi Arabia India exported 1.49 million ton of buffalo meat worth USD 4304 million.(2014-15) Sector overview Total Poultry market size is estimated at USD 9.93 billion and has been growing at 7-8 % Eggs and Broilers are leading the Growth in this segment with a growth rate of 16% and 20% respectively Marginal export to European nations, almost all Indian poultry and egg production is consumed within the country Meat production ( In “000” ton) Egg production ( In 10 million numbers )
  • 24.
    September 2015 Source: MoFPI& MPEDA 7,127 7,616 7,853 8,231 8,666 9,040 9,577 10,072 0 2000 4000 6000 8000 10000 12000 Marine products Total fish production during 2014-15 was estimated at 10.07 million ton The sector contributes around 1.1% to overall GDP and around 5.15 per cent of Agri GDP Marine exports aggregated to 0.98 million ton valued at USD 5007.70 million Sector overview Value addition of marine products and emphasis on export of products through setting up new units, capacity enhancement and diversifying current activities would be the key to growth. Fish production (In “000” tons)
  • 25.
    September 2015 Source: CorporateCatalyst India Private Limited, www.IndiaStat.com 934 967 992 891 960 1053 1052 1063 142 148 146 147 182 171 183 193 758 786 807 808 869 949 935 958 0 200 400 600 800 1000 1200 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 Wheat Pulse Rice Grain processing India produced around 251 MT during 2014-15. On an average it produces more than 200 million tons of different food grain every year India is the 2nd largest rice producer in the world with around 20 % global share Primary milling of Rice, Wheat and Pulses are most important activities in food grain processing Sector overview There are 10,000 Pulse mills in country with milling capacity of 14 million tons, milling approximately 75 % of annual pulse production Wheat, Pulse & Rice production (in lakh ton)
  • 26.
    September 2015 Source: ASSOCHAM,Techsci Research, Yes Bank, APEDA Organic farming is practiced in 12 states in about 4.72 million hectares. In 2013-14, organic food production was approximately 1.24 million tons. Growing awareness towards health consciousness and rising disposable income of consumers would drive the growth in this sector. Current demand is usually from Tier 1 cities India exported 165262 MT of organic products belonging to 135 commodities valuing at US$ 312 million (approximately INR 1900 crore). Organic Food market is expected to grow at a significant CAGR of 19 %. Organic Pulses and Food grains are t he main product in this sector. Organic Food market will touch USD 1 billion by 2020 Production Drivers Exports Potential Organic Food products
  • 27.
    September 2015Source: CARERatings: Changing consumer preference driving growth of ready to eat snack food products , IBEF Packaged Foods has grown at a compounded annual growth rate (CAGR) of around 13% since 1998 till 2014 and expected to grow at a CAGR of 22% during 2014-2019. Among the highest growing segment in India. Rising urbanization, expansion in hospitality segment and product innovation & marketing techniques shall be be the key to its growth. Bakery products, Snacks, Beverages, Chocolates, processed Fruits and Vegetables, branded Flour, Dairy products, Tea/Coffee, Soft Drinks. The sale of snack food category have grown more than six-fold from Rs.8,000 crore in 2004 to more than Rs.50,000 crore in 2014.Major pl ayers in this segment are: •  Pepsico India •  Haldiram Foods •  ITC Foods •  Balaji Wafers •  Bikaji Foods International Ltd Consumer Foods
  • 28.
    September 2015 6 Critical Success Factors 6.Enabling Government Policies 1. Preferred Location 2. Availability Of Raw Material 5. Presence of Industrial & Transport Infrastructure 4. Availability of Employable Work Force 3. Presence of Technical Institutes Enabling policies: —  Major government policies for providing a boost to sector growth Presence of Industrial & Transport infrastructure —  Industrial Corridor —  Major Seaports for export of processed food products. —  Major Airports Availability of employable work-force: —  Presence of employable work force at preferred investment destinations in India Preferred investment destinations: —  Preferred locations in India based on total number of registered food processing units. Presence of Technical Education Institutes: —  Major state and central agricultural institutes which also offers courses in food processing. Availability of raw material: —  Leading states in production of Fruits & Vegetables, Milk, Meat, Pulses, Food grains etc., —  Leading states with cold storage and Fish processing facilities. Availability of Factors of Production (FoPs)
  • 29.
    September 2015 Legend MajorState Number of Units Andhra Pradesh 9359 Tamil Nadu 5186 Maharashtra 3113 Punjab 2784 Uttar Pradesh 2116 Karnataka 1979 Gujrat 1924 Source: ASI , MoFPI Preferred investment destinations in India
  • 30.
    September 2015 Major producerof Milk Major producer of Fruits & Vegetables Major producer of Meat Legend Major producer of Wheat Major producer of Pulse Major producer of Rice Source: MoFPI, APEDA, www.IndiaStat.com Availability of raw material
  • 31.
    September 2015 Legend Major State No of Units Cold Storage Capacity InMT Uttar Pradesh 2176 1,36,33,039 Punjab 606 20,04,778 Gujrat 560 20,30,873 Maharash tra 540 7,06,302 West Bengal 502 59,01,925 Andhra Pradesh 404 15,77,828 Bihar 303 14,06,395 Source: MoFPI, www.indiastat.com (Status as on 31.03.2014) Veraval Mumbai Kochi Port Visakhapatnam Mangalore Kolkata Goa Major fish processing centre Infrastructure – Cold storage & Fish processing centre
  • 32.
    September 2015 Haryana Chaudhary Charan SinghHaryana Agricultural University Haryana National Institute of Food Technology Entrepreneurship and Management Rajasthan: Maharana Pratap University of Agriculture & Technology, Udaipur Gujrat: Anand Agricultural University, Anand Karnataka: 1) University of Agricultural Sciences, GKVK, Bangalore 2) University of Agricultural Sciences, Dharwad Punjab: Guru Angad Dev Veterinary and Animal Sciences, Ludhiana Tamil Nadu Agricultural University, Coimbatore Tamil Nadu Indian Institute of Crop ProcessingTechnology , Thanjavur Telangana: Acharya N G Ranga Agricultural University, Hyderabad Manipur: Central Agricultural University, Imphal Uttar Pradesh: 1)Aligarh Muslim University, Aligarh 2) Banaras Hindu University Varanasi Uttaranchal: Govind Ballabh Pant University of Agriculture, Pantnagar, Himachal Pradesh: Ch Sarwan Kumar Krishi Vishwavidyalaya, Palampur Dr Yashwant Singh Parmar University of Horticulture & Forestry, Solan Source: MoFPI Presence of Technical Educational institutes
  • 33.
    September 2015 Figures basedon data from Ministry of Labour & Employment, India Stat and 2011 Population Census *Employable population calculated on basis of unemployed above 15 years age according to Usual Principal and Subsidiary Status (PS+SS) approach Punjab: Employable population: 0.63 million Maharashtra: Employable population: 1.34 million Karnataka: Employable population: 0.61 million Andhra Pradesh: Employable population: 0.93 million Tamil Nadu: Employable population: 1.44 million Uttar Pradesh: Employable population: 3.98 million Gujrat: Employable population: 0.24 million Availability of employable population
  • 34.
    September 2015 Amritsar –Kolkata Industrial Corridor Delhi – Mumbai Industrial Corridor Bengaluru Mumbai Economic Corridor Chennai - Bengaluru – Industrial Corridor Vizag - Chenai Industrial Corridor International Airports Major Ports Dedicated Freight Corridor National Investment & Manufacturing Zones Proposed Industrial Corridors Influence region of proposed industrial corridors in India Presence of Industrial & Transport infrastructure
  • 35.
    September 2015 . Source: APEDAAgri Exchange, Year 2014-15 Total value of exports from Sea Ports: USD 12.24 billon Total value of exports from Airports: USD 429.62 million Kandla Port Mundra Port Pipavav Port Jawaharlal Nehru Port Mumbai Airport Marmagoa Port Mangalore Port Kochi Port Kochi AirPort Delhi Airport Haldia Port Vishakapatnam Port Kakinada Port Krishnapatnam Port Kattupalli Port Chennai Airport Bangalore Airport Trivandrum Airport Presence of Airports & Seaports catering to exports
  • 36.
    September 2015 •  Deductionfor expenditure incurred on investment is allowed if this investment is wholly and exclusively for the purpose of setting cold chain facility, warehouse facility for storage of agricultural produce. •  Deduction of Tax from Profit – New units in the business of processing, preservation and packaging of fruits and vegetables are permitted to claim deduction from Income Tax. ( 100 % Tax Exemption for first 5 Years of Operation) Income Tax •  Exemption of Service tax is allowed for the following services: Construction of original works pertaining to post harvest storage infrastructure including cold storage. •  Mechanized food grain handling systems. •  Loading and Unloading, packaging, storage or warehousing of agricultural produce. •  Transportation of agricultural produce and goods. Service Tax •  Project Imports benefits to following projects: installation of mechanized food grain handling systems, cold storage and industrial projects for preservation, storage, horticulture, dairy, poultry, marine produce and meat. Customs Duty •  Accessibility of adequate and affordable credit – Soft Loan is extended up to 95 % of total project cost for entities promoted by state governments. •  100 % FDI allowed under automatic route. FDI & Credit Availability Source: MoFPI , Annual Report Enabling policy initiatives
  • 37.
  • 38.
    September 2015 Inputs Production & procurementStorage Processing Retail services Technological and financial support to farmers. Contract farming arrangement Post harvest Infrastructure & Transportation: Warehouses, Cold Storage Process automation and up gradation of existing Food Processing facilities Setup of organized retail chains Potential Investment opportunities Enhanced productivity for farmer and exposure to greater markets Better price for farmers and abundant supply of raw material for industries Reduction in wastage of perishaable products Improved productivity, quality & profitability. customer loyalty in competitive market Enhances efficiency across value chain by benefitting farmers, processors and consumers. Benefits across Value Chain Investment opportunities across value chain
  • 39.
    September 2015 Mega FoodPark scheme intends to facilitate establishment of an Integrated value chain with food processing at the core and supported by forward and backward linkages. Investment opportunities in Mega Food parks Investment opportunities in core processing facilities: • Storage facilities for raw materials and finished products • Food processing equipment's • Contemporary plug & play sheds • Packaging facilities • Cold storage facilities • Bulk material handling equipment • Grading & sorting facility • Basic enabling infrastructure – Roads, Water storage & distribution system, Waste disposal facility, Effluent treatment plant, Captive Power plants
  • 40.
    September 2015 2 4.7 12.8 0 2 4 6 8 10 12 14 2009 2013E2017F Cold Chain industry in India in USD billion CAGR 23.3 % CAGR 28.3 % Source: India Cold Chain Expo, Reed, MoFPI, Yes Bank Investment opportunities in Cold Chain logistics Indian Cold Chain industry is expected to reach a market size of ~USD 13 billon in 2017. Cold Chain logistics – snapshot • Key growth drivers include growth in organized retail and food services industry, government’s initiatives, rising export demand for processed and frozen foods. • India’s Cold Chain industry is still evolving, not very well organized and currently operating below capacity. ( Cold Chain gap of 29 million tons) • India offers great market potential for cold chain logistics solution provider including refrigerant transport. • Growing focus towards multi purpose cold storages.
  • 41.
    September 2015 Temperature ControlledVehicles market in India 27400 36000 51800 0 50 100 150 200 250 300 350 0 10000 20000 30000 40000 50000 60000 2009 2013E 2017F US $ Million No of Units 17 29 47 0 2 4 6 8 10 12 14 0 10 20 30 40 50 2009 2013E 2017F US $ Billion Million Tonnes Temperature Controlled Warehouse market in India Source: India Cold Chain Expo, Reed, MoFPI, Yes Bank Investment opportunities in Cold Chain logistics Potential areas of investment: • Controlled atmosphere/modified atmosphere storage • Pre cooling at farm. • Modern pack houses • Ripening chambers • Reefer technology. • Refrigerated transport solutions • Energy efficiency solutions
  • 42.
    September 2015Source: GIRACTConsultancy, ASSOCHAM, DIPP Annual Report 2014-15 Investment opportunities in Food Processing machinery Food processing machinery is expected to grow at 15-20 % fueled by strong international and domestic demand for food products, industry’s focus on modernization & automation, and energy efficient processes. Packaging equipment Growth in consumer food sector and consumer awareness towards the aesthetic appeal of the packaging would propel the growth of packaging machinery. Significant investment opportunities lies in – canning, dairy and food processing, specialty processing, frozen food, thermo processing. Water & Air Pollution control equipment This sector has excellent growth potential as there is growing awareness regarding water & air pollution and stringent environmental control standards in processing industries. Categories of water pollution control equipment include waste water, drinking water and effluent treatment plants, settling chambers, bag filters, electrostatic precipitators, wet scrubbers etc.
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    Reform Focus Manufacturing push Infra development Job Creation and inclusive growth Kickstart of investment cycle Fiscal prudence and accountability Non-adversarial tax regime Indian Finance Minister - Narendra Modi, Indian Prime Minister “What we need are not more new Acts – - Narendra Modi, Indian Prime Minister
  • 45.
    Foreign Investment Framework Evolutionof foreign investment regulations Governed by Foreign Exchange Management Act, 1999 Progressive liberalization in the policies Foreign Direct Investment (‘FDI’) in India Automatic route (No prior approval requirement): such as railway and road infrastructure Approval route (Prior Government approval required before setup): such as multi brand retail trading
  • 46.
    FDI investment route Norequirement of any prior regulatory approval Filing an intimation with RBI in prescribed format within 30 days of investment Filing particulars of issue of shares within 30 days of issue of shares to foreign investors Prior Approval Route Required approval from Govt. of India – Considered by Ministry of Finance, Foreign Investment Promotion Board & Department of Filing an intimation with RBI in prescribed format within 30 days of investment Filing particulars of issue of shares within 30 days of issue of shares to foreign investors
  • 47.
    Business presence inIndia – Form of entities Foreign Company Operates as a foreign company Establishes local presence Liaison Project Branch Joint Ventures Limited Liability Partnership Wholly Owned Subsidiary Key considerations for choosing investment vehicle Commercial considerations Regulatory framework(prior approval requirements for Chinese companies) Tax considerations Cost of operations
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