2nd largest arable land in the world

India holds 2nd largest arable land in the world. With 20 agri-climatic regions, all 15 major climates in the world exist in India. The country also possesses 46 of the 60 soil types in the world

Largest producer of pulses, milk, tea etc.

India is the largest producer of pulses, milk, tea, cashew and mangoes, buffalo meat; and the second largest producer of tea, wheat, sugarcane and rice

Largest livestock population

Globally, India has the largest livestock population of 470 million, which includes 205 million cattle and 90 million buffaloes

Rising consumption expenditure

Consumption expenditure is likely to reach USD3.6 trillion by 2020, up from an estimated USD1.0 trillion in 2010.

Favourable location for exports

Strategic geographic and proximity to food importing nations, makes India favourable for export of processed foods

Source: World Travel and Tourism Council, Aranca Research

2009

Strong demand growth Growing demand

Demand growth for processed food has been rising with growing disposable income, urbanisation, a young population and nuclear families Household consumption is set to double by 2020 Changing lifestyle and increasing spend on health and nutritional foods

Food processing hub

India benefits from a large agriculture sector, abundant livestock, and cost competitiveness Investment opportunities will arise in agriculture, food infrastructure, and contract farming Diverse agro-climatic conditions making it suitable for practicing different crops

2020E
Domestic food spending: USD318 billion

Domestic food spending: USD181 billion

Advantage India
Increasing investments

Government expects USD21.9 billion of investments in food processing infrastructure by 2015 Investments, including FDI, will rise with strengthening demand and supply fundamentals Launch of Infrastructure Development scheme to increase investments in food processing infrastructure

Policy sector support The engineering is delicensed; 100 per cent FDI is allowed in the Sops to private sector participation; sector 100 per cent FDI under automatic route Due to policy support, there was Agri Export Zones have been set up; cumulative FDI of USD14.0 billion into under the governments Vision 2015 the sector over April 2000 February plan, mega food parks to be 2012, making up 8.6 per cent of total established FDI into the in that period Approval of country National Mission on Food Processing

Notes: 2020E Estimate for 2020; Estimates are from Flavours of Incredible India (Ernst & Young, 2009) FDI Foreign Direct Investment

Fruits and vegetables

India is the worlds second largest producer of fruits and vegetables

Milk and milk products

With 127.3 MT in FY12, India is the largest producer of milk in the world

Meat and poultry* Food processing Marine products

India is the largest producer of buffalo meat (1.5 MT*) and the second largest producer of goat meat (0.6 MT*)

With 8.9 MT production in FY12, India is the second largest producer of fish in the world

Grain processing

India produced about 259.3 MT of food grains in FY12

Consumer food

Among the fastest growing segments in India; it includes

Source: Indiabusiness.nic.in, Ministry of Agriculture, APEDA, Meat & Poultry Processing Board, FAOSTAT Note: FY Indian Financial Year (April March) MT - Million Tonnes, * - Data mentioned is for FY12

Packaged food

Aerated soft drinks

Packaged drinking water

Alcoholic beverages

The food processing industry is among one of the largest industries in India and ranks 5th in terms of production, consumption and exports With an estimated value of USD121 billion in FY12, Indias food processing industry accounts for 32 per cent of the total food market

Contribution of food processing industry in manufacturing (FY12)

Food processing segment and market share (FY12)

Meat, Fish, Fruits, Vegetables and Oils Dairy products

9% 25% Food Processing 40%

Grain Mill products Other Beverages 20% 91% 11% 5% Other food products

Source: Ministry of Food Processing Industries ( MOFPI), Annual Report MOFPI (2012-13), Aranca Research

Inputs

Production

Procurement and storage

Processing

Retailing

Key activities

Seeds, Fertilizers and Farm equipments

Farmers, cooperatives and Private companies

Warehouses, cold storage and silos

Grading, sorting, milling and packing

Retail shops, malls, cash and carry

National Seeds Corporation Limited, Cargill and Advanta India Ltd

Major players

Farmers, Amul, ITC, Pepsi, Hindustan Unilever Lever Ltd

Food Corporation of India, NCMSL, Arshiya International

ITC ltd, Cargill, Adani Enterprises, Olam International

Kirana shops, Bharti-Walmart, Future Retail, Aditya Birla Retail Limited

Source: Ministry of Food Processing Industries ( MOFPI), Aranca Research. Note: NCMSL - National Collateral Management Services Limited

During FY06-11, the food processing industry expanded at a CAGR of 4.8 per cent; in FY11 alone, the industry grew 7.1 per cent Food processing is an important segment in terms of contribution to GDP, and share in the agriculture and manufacturing sectors In FY11, India had as many as 35,838 registered food processing units with total capital investment of approximately USD52.1 billion According to MOFPI in FY11, capital investments in Indias food processing sector have increased a significant 28.6 per cent over the last year

GDP (USD billion) and growth of food processing industry in India

14.0 10.0%

8.0%
13.0 6.0% 4.0% 12.0 2.0% 11.0 0.0% -2.0% 10.0 FY07 FY08 FY09 FY10 FY11
Growth - right axis GDP- Food processing industry

-4.0%

Source: Ministry of Food Processing Industries ( MOFPI), Annual Report MOFPI (2012-13), Aranca Research

Although figures for output of food products and beverages from ASI are not available post FY10, data from the Index of Industrial Production (IIP) suggest strengthening growth momentum in food products and beverages in FY11-12 Growth for food products and beverages shot up to 14.8 per cent in FY12 from 8.9% in FY11; the sector was the second-fastest growing sub-segment within manufacturing in FY12 and its growth far outpaced that of the overall manufacturing sector in the fiscal year

Annual growth of food products and beverages from IIP (%)

20 15 10

5
0 FY06 FY07 FY08 FY09 FY10 FY11 FY12

Source: Ministry of Statistics and Programme Implementation (MOSPI), Aranca Research

-5 -10 Annual growth of Food products & beverages as per IIP Annual growth of overall manufacturing sector as per IIP

Notes: ASI Annual Survey of Industries IIP Index of Industrial Production

The unorganised sector accounts for 42 per cent of Indias food processing industry The sizeable presence of small scale industries points to the sectors role in employment generation

Unorganised sector has the largest share in the sector (FY11)

33% Unorganised sector

25%

Organised sector

42%

Small scale industries

Source: Ministry of Food Processing Industries ( MOFPI), Annual Report MOFPI (2012-13), Aranca Research

Rice mills account for the largest share of processing units in the organised sector The governments focus on infrastructure is likely to see a sharp rise in the number of cold storage units in the years ahead

Shares in production by value and volume (FY11)

30% 50%

70% 50%

By Volume Unorganised sector

By Value Organised sector

Source: Ministry of Food Processing Industries, Aranca Research

In FY09, the sector employed 48 million people Policymakers have identified the food processing sector as a key one in encouraging labour movement from agriculture to manufacturing

Healthy contribution to employment generation (FY09) Direct employment (13 million) Food processing industry Indirect employment (35 million)

Notes: FY Indian financial year (April March)

Source: Ministry of Food Processing Industries, Aranca Research

Changing consumer tastes

Wide array of products, coupled with increasing global connectivity has led to a change in the tastes and preference of domestic consumers This trend has been bolstered by rising incomes, increasing urbanisation, a young population, and the emergence of nuclear families

Entry of international companies

Liberalisation and growth of organised retail have made the Indian market more attractive for global players With a large agriculture sector, abundant livestock, and cost competitiveness India is fast emerging as a sourcing hub of processed food

Rising business and product innovation

Companies have been moving up the value chain; for example, cooperatives are transitioning from being pure producers of milk to offering a wide range of dairy products Firms, both domestic and global, have been focussing on product innovation to cater to domestic tastes, while also introducing international flavours

Rising demand on Indian products in international market

Strategic geographic location and continuous increase in production of raw materials helps India to supply cheaper products to other countries Indias exports of processed food and related items rose at a CAGR of 27.3 per cent during FY0812
Notes: FY Indian Financial Year (April March)

Fruits, vegetables, processed grain

Milk and milk products

Meat, poultry and marine products

Alcoholic beverages

Consumer food

Aerated soft drinks and packaged drinking water

Packaged food

Source: Company Website, Aranca Research

Growing demand demand

Strong domestic

Rising export Strong opportunities government support

Indias greater integration with the global economy

Supply-side advantages

Policy support

Rising disposable incomes

Favourable climate for agriculture; wide variety of crops

Vision 2015 plan targets trebling of food processing sector

Growing middle class, urbanisation, a young population

Increasing exports with advantage of proximity to key export destinations

Large livestock base aids dairy and meat processing sector

Mega food parks, Agri Export Zones to attract FDI and aid infrastructure

Large domestic Expected market spike in

Changing lifestyles and food habits

global demand as emerging markets grow at a fast pace

Inland water bodies, long coastline help marine products

Approval of National Mission on Food Processing

Source: Ministry of Agriculture, Aranca Research

Rising disposable incomes

Strong growth in per-capita income has resulted in greater demand for food items Incomes have risen at a brisk pace in India and will continue rising given the countrys strong economic growth prospects. Nominal per capita income is estimated (IMF) to have recorded a CAGR of 11.2 per cent over 200012 There has also been a shift in demand From carbohydrates to meat products (in line with the various phases of economic growth) To convenience foods, organic and diet foods
2,100

Rising per-capita income in India

30% 25% 20% 15% 10% 5% 0% -5%
2011F 2012F 2013F 2014F 2015F 2016F 2017F 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

1,800
1,500 1,200 900 600 300

Gross domestic product per capita, current prices

Growth

Source: IMF, Aranca Research Note: E - Estimate, F - Forecast

Changing wealth dynamics of Indias population Growing middle class, urbanisation

Strong economic growth since the 1990s has led to Rapid urbanisation and a growing middle class Nuclear families and dual income households Coupled with a young population and increasing media penetration, this has led to a surge in demand for packaged food, alcoholic and non-alcoholic beverages, snacks, savouries, etc
Million Household,100% 222 273 26% 50% 322 15% 32%

40%
35% 25% 12% 1% 2% 3% 6%

29%
17% 7%

2008
Income segment
Globals (>22065.3) Seekers (4413.1 - 11032.7) Deprived (<1985.9)

2020

2030
Strivers (11032.7 - 22065.3) Aspirers (1985.9 - 4413.1)

Source: McKinsey Quarterly, Aranca Research

Confectioner items (USD millions)

750

Fruit Juices and Concentrates (USD millions)

227

588 495 529 558 121 131 143

154

FY07

FY08

FY09

FY10

FY15E

FY07

FY08

FY09

FY10

FY15E

Soft and aerated drinks (million cases)

479

Dairy whiteners/creamers (MT)

450

388
359 373

403 243

263

284

307

FY07

FY08

FY09

FY10

FY15E

FY07

FY08

FY09

FY10

FY15E

Source: Ministry of Food Processing Industries, Aranca Research. Note MT is Metric Tonnes

During FY08-12, India's exports of processed food and related products increased at a CAGR of 27.3 per cent to USD24.0 billion Main export destinations for food products have been the Middle East and South East Asia

Exports of processed food and related items (USD millions)

24.0

CAGR: 27.3%
14.0 10.9

10.7

10.7

FY08

FY09

FY10

FY11

FY12

Source: Ministry of Food Processing Industries, Aranca Research; Notes: FY Indian Financial Year (April March)

Rising demand from rest of the word

Share of exports in total output of processed food stood at 19.8 per cent in FY12 This has primarily resulted from Greater exports to advanced economies More demand from emerging/ developing economies as they experience strong growth

Exports of key processed products (USD millions)

3,456 2,628 3,234 3,226

2,329

2,300 1,915 1,253 858 1,154 305 505 50 1,106 746 488

682 244 78 53

659

Guargum

Basmati rice

Buffalo meat
FY10

Non basmati rice

FY11

Other cereals
FY12

Groundnuts

Jaggery and Confectionery

Source: Ministry of Agriculture, APEDA, Aranca Research Notes: FY Indian Financial Year (April March)

Supply-side advantages
Growth in food product exports has been aided by Significant improvements in product and packaging quality Greater private sector participation India has a location advantage it is geographically close to key export destinations (Middle East, South East Asia) The US and the UAE are the top destinations for Indias exports of processed food and agriculturerelated products, followed by Vietnam and Saudi Arabia

Top ten destination countries of Indias exports of processed food and agriculture related products in FY12 (USD million)

3,061

1,490 1,402

1,171 852

795

734

576
406 396

Bangladesh

Viietnam

Indonesia

Iran

Saudi Arabia

Source: Ministry of Food Processing Industries, APEDA, Aranca Research

Malasiya

Nigeria

USA

UAE

Kuwait

In FY11, APEDA products had 41.6 per cent share in total exports; non-APEDA products made up the rest Within APEDA products, cereals had the highest share (36 per cent) while for non-APEDA products marine products dominated with a share of about 21 per cent

Shares in APEDA exports (FY12)

1% 6% Cereals

Shares in non - APEDA exports (FY11)

14% Animal products

Marine Products 21% Sugar & Mollasses

36%
35% Processed Fruits & Vegetables Other processed foods Fresh Fruits & Vegetables 5% 17% Floriculture & Seeds

11%

Oil Meals
Spices 14% 20% Tea & Coffee 20% Others

Source: APEDA, Aranca Research

Source: APEDA, Aranca Research

Indias comparative advantage lies in its favourable climate, large agriculture sector and livestock base, long coastline, and inland water resources India also has an edge in cost of production compared to its competitors in Asia and the developed world
Milk (Cow & Buffalo) Pulses (nes)

Production Global (million tonnes) Global rank Share*(%) FY12

127.3
7 3.4 29.6 15.18 0.96 155.7 277.7 93.9

16.9%
19.7% 42.8% 27.8% 39.0% 23.0% 23.6% ~24.0% ~10.0%

1
1 1 1 1 2 2 2 2

Units Arable land (million hectares) Area under Irrigation (million hectares) Coast line ('000 kilometers) Cattle (million)
157.9

Global rank
2*

Buffalo meat Bananas Mangoes and Guavas

63.1

1*

Tea Rice (Paddy)

7.5 205.0

18**
Sugarcane

1**

Wheat

Source: World bank, FAOSTAT, CIA World Fact book, Aranca Research Notes: * - For the year 2009; ** - For the year 2012

Notes: * Data for Global share is taken from different sources

Encouragement to private sector

100 per cent export-oriented units are allowed to sell up to 50 per cent of their produce in the domestic market Export earnings are exempted from corporate taxes

Tax incentives and other sops

Import duty scrapped on capital goods and raw materials for 100 per cent export-oriented units 100 per cent tax exemption for 5 years followed by 25 per cent tax exemption for the next 5 years for new agro-processing industries Full excise duty exemption for goods that are used in installation of cold storage facilities

Relaxed FDI norms

100 per cent FDI under automatic route (except for alcohol, beer, and sectors reserved for small scale industries) Repatriation of capital and profits permitted
Source: Ministry of Food Processing Industries, APEDA, Aranca Research Notes: FDI Foreign Direct Investment

Focus on infrastructure

Assigned priority sector for bank credit 60 Agri Export Zones (AEZ) have been set up across the country According to Vision 2015, formulated by MoFPI, the government plans to establish 30 mega food parks in public-private partnership mode across the country; out of these 10 have already been approved in the first phase Government has also announced setting up of 15 Mega Food Parks in its FY12 Budget, as part of the third phase of Mega Food Park Scheme

Incentives for development of storage facilities

Investment-linked tax incentive of 100 per cent deduction of capital expenditure for setting up and operating cold chain facilities (for specified products), and for setting up and operating warehousing facilities (for storage of agricultural produce)

Focus on R&D and mordenisation

The government launched initiatives such as for the Setting Up/Upgradation of Quality Control/Food Testing Laboratory, R&D and Promotional Activity scheme and the Technology Upgradation/Setting Up/Modernisation/Expansion of Food Processing Industries Scheme
Source: Ministry of Food Processing Industries, APEDA, Aranca Research

Uttaranchal: Basmati rice, aromatic and medicinal plants Jammu & Kashmir: Apples, walnuts Himachal Pradesh: Apples

Uttar Pradesh: Basmati rice, potatoes, mangoes, vegetables

Assam: Ginger
Punjab: Basmati rice, vegetables Rajasthan: Coriander, cumin Gujarat: Mangoes, vegetables, sesame seeds

West Bengal: Pineapple, litchi, Darjeeling tea, vegetables Madhya Pradesh: Onions, garlic, seed spices, lentils Maharashtra: Grapes, grape wine, mangoes, flowers, onion Andhra Pradesh: vegetables, mango pulp, grapes, gherkins Karnataka: Gherkins, rose, onions, flowers, vanilla Tamil Nadu: Flowers, mangoes, cashew nuts
Source: APEDA, Aranca Research

Between April 2000 and January 2013, FDI in agriculture and food processing in India stood at USD5.2 billion Demand growth, supply advantages, and policy support have been instrumental in attracting FDI

Cumulative FDI inflows (Apr 2000Jan 2013) into the food and agriculture sector (USD million)
2,000 1,600 1,200 800 385 400 0 Agri services Agri machinery Fermentation Food processing Vegetable oil Tea and Coffee Sugar 223 101 52 0% 10% 1,489 1,801 40%

30%
1,135 20%

Notes: FDI Foreign Direct Investment,

Cumulative FDI inflow (USD million) Share of total FDI inflow (%) - right axis

Source: Department of Industrial Policy & Promotion, Aranca Research

The governments main focus is on supply-chain related infrastructure like cold storage, abattoirs and food parks

12th Five Year Plan (2012-17) outlay shares: Food Processing

1.3% Infrastructure development National Mission on Food Processing Strengthening of institutions Food Safety, R&D and Promotional Activities Innovation Fund Scheme

Notes: GOI Government of India 11.5%

5.5%

36.3%

45.4%

Plan allocation to the Food Processing sector: USD2.9 billion

Source: Ministry of Food Processing Industries (2009-10 Annual Report), Aranca Research

PE investments in the food and agriculture totaled USD229 million during 2011-12
Company
Godrej Agrovet Nuziveedu Seeds Temasek Blackstone Group Actis Private Equity Sequoia Capital IDFC Darby Asia Investors Standard Chartered Pvt Eq Ltd Carlyle Group Motilal Oswal Private Equity Advisors Verlinvest SA Motilal Oswal Private Equity Advisors IL&FS Investment Managers Coffee

Investor

Type of business
Agribusiness Floriculture Dairy Snacks Dairy Non-citrous fruit farming Rice milling Milk production General food products Wine and liquor Dairy products Coffee and tea

Deal value (USD million)

105.0 80.0 65.0 30.0 29.0 25.0 25.0 22.0 15.0 15.0 14.1 13.5

Major PE deals Jan 2010 Mar 2013

Nilgiris Dairy Prakash Snacks Pvt Ltd Parag Milk & Milk Products Amalgamated Beans Coffee Trading Co Bush Foods Overseas Pvt Ltd Tirumala Milk Products The CREMICA Group Nashik Vinters Parag Milk & Milk Products Godrej Tea

Source: Thompson ONE Banker, Assorted News Articles, Aranca Research

M&A activity
Target company
United Spirits Ltd

Acquirer company
Relay BV EID Parry NSL Sugars Ltd

Type of business
Liquor Sugar Sugar

Deal value (USD million)

2,045 114.8 51.99

M&A deals Jan 2010 Mar 2013

GMR Industries Ltd Jay Mahesh Sugar Industries

Olam International Ltd

Eastern Condiments Krishidhan Seeds Bajaj Hindustan Sugar & Ind Associated Distilleries Taraori Rice Mills Pvt Ltd Candico India

Hemarus Industries Ltd

McCormick & Co Summit Partners Bajaj Hindusthan Globus Spirits Ebro Foods SA Keventer Agro

Sugar
Seasonings, sauces Agricultural seeds Sugar, ethanol Liquor Food and Beverage Candy items

73.8
35.0 30.0 14.1 14.0 14.0 11.2

Source: Thompson One Banker, Aranca Research Notes: M&A Mergers and Acquisitions

Players like McCormick had identified India as a strategic market way back in the 1990s Global players like Hershey are now keen on entering the increasingly attractive Indian market Established players like Nestle and Coke are extending their global JVs to India

Foreign Players
Molson Coors
Dan Cake McCormick McCormick Nestle, Coca Cola

Indian Partner
Cobra India
Phadnis Group Kohinoor Foods Ltd Eastern Condiments -Godrej AVT

Type of business
Brewing
Cake and biscuits Basmati and food products Seasonings Beverage Chocolates Spices

Stake ratio
NA
66:34 85:15 26:74 50:50 51:49 50:50

Year
2011
2011 2011 2010 2010 2007 1994

Hershey
McCormick

Source: Thompson ONE Banker, Aranca Research Note: JV Joint Venture

Operation Flood was initiated in 1970 by the National Dairy Development Board to achieve national self sufficiency in milk production by creating nationwide milk grids; under Operation Flood Indias milk production rose to 127.3 million metric tonnes (mmt) in FY12 from 21.2 mmt in FY1969 India retained its position as the worlds largest milk producer in 2011-12 Dairy cooperatives offer employment opportunities to about 12 million farm families

Source: National Dairy Development Board, GCMMF (www.amul.com), Aranca Research

PHASE I (Jul-1970 to Mar-1981) Dairy cooperative societies (000)

13.3

PHASE II (Oct-1979 to Mar-1985)

34.5

PHASE III (Jul-1985 to Mar-1996)

72.5

Members (million)

1.8

3.6

9.3

Milk procurement (million kg/ day) Liquid milk marketing (million litres/ day) Milk drying capacity (million tonnes/ day)

2.6

5.8

11.0

2.9

5.0

10.0

261

507.5

842

Source: GCMMF (www.amul.com), Aranca Research

Gujarat Cooperative Milk Marketing Federation (GCMMF) is the largest food products marketing organisation in India Set up in 1967, it is Indias largest exporter of dairy products and has been accorded trading house status

GCMMF (Amul) sales (USD billion)

2.4

CAGR: 20.8%
1.7 1.5 1.3 0.9

2.1

FY07

FY08

FY09

FY10

FY11

FY12

Source: GCMMF (www.amul.com), Aranca Research Notes: CAGR Compound Annual Growth Rate FY Indian Financial Year (April March)

Main brand: Amul Products: milk (including flavoured), butter, margarine, cheese, curd, desserts, infant food

Facts and Features

NOTABLE AWARDS

Authority APEDA

Producer members (million)

Village societies Milk handling capacity (million litres/ day) Total milk collection (FY12, billion litres) Daily milk collection (FY12, million litres) Milk drying capacity (million tonnes/ day)

3.18
16,117 13.67 3.88 10.6 647

Excellent performance in dairy product exports for 11 consecutive years CIO International IT Excellence Award (2003) for positive business performance through resourceful IT management and best practices International Dairy Federation Marketing Award (2007) for Amuls pro-biotic ice cream launch

IDGs CIO Magazine (USA) International Dairy Federation

Source: GCMMF (www.amul.com), Aranca Research

Revenue base of over USD6,375 million

One of the worlds fastest growing FMCG company Acquisitions of companies and plats facilities Focus on R&D Aggressive acquisitions of lands for soya and palm plantations Strong brands like Nutrela and Vansapati and Sunrich

Market capitalisation of USD473.05 million

Sales growth at a CAGR of 25 per cent Over FY01-12

Organic growth phase

Strong presence in Edible oil and meal market

Top edible oil producer in India with market share of 18.2 per cent

Primary focus on crushing and trading activities

Expansion of extraction and refining capacity; focus on branded products

Focus on developing upstream business; secured access to 185,000 hectares of palm plantation; major expansion of refining capacity 2008-12
Source: Ruchi Soya website, Aranca Research

2001-04

2005-08

Salient characteristics KRBL is worlds largest rice miller and basmati rice exporter It has strong brand presence through global retail giants like Carrefour, Bharti-Walmart, Spencer and Future Group It is the largest producer of contract farming basmati rice in the world The company accounts for 25 per cent of Indias total exports of branded basmati rice KRBL is well-integrated in terms of farming, rice processing, oil production and power generation

Sales (USD million)

333.1 285.7 247.6 140.5 339.0 340.3 292.4

Exports (USD million

178.2

CAGR: 33.4%

FY08

FY09

FY10

FY11

FY12

9M FY13

FY11

FY12 Source: Company Annual Report, Aranca Research Note: KRBL - Khushi Ram and Behari Lal

Untapped market with strong growth potential

Potential global outsourcing hub

Supply chain infrastructure and contract farming

Fragmented market leads to lower processing levels and value addition The government plans to raise value addition to 35 per cent by 2015 (from 20 per cent in 2005) PPP modules ideal for the private sector Strong demand growth household consumption set to double by 2020

Global supermarket majors are looking at India as a major outsourcing hub India enjoys favourable supply-side fundamentals (abundant raw materials supply, cost advantages) The government has helped by investing in AEZs, mega food parks, easier credit

Both firms and the government are eager to boost efficiency and access to markets Investment potential of USD22 billion in food processing infrastructure; 100 per cent FDI in this area Firms increasingly taking recourse to contract farming in order to secure supply

Notes: PPP Public Private Partnership, AEZ Agri Export Zones, FDI Foreign Direct Investment

Governments focus and launch of various schemes to provide excellent infrastructure facility in food processing sector opens up various opportunity for private investors Various schemes launched by government provides capital grant, subsidy, duty free export of products and tax incentives to the investors

Fund allocated for infrastructure development in food processing industry (USD million)

Project wise fund allocated in 12th Five Year Plan (USD million)

1,088.5 58.1 Mega Food Parks Scheme

CAGR: 27.2%
544.4 349.0 Scheme for Integarted Cold Chain 677.0 Scheme for Modernsiation of Abattoirs 11th Five Year Plan 12th Five Year Plan

37.5 10th Five Year Plan

Notes: PPP Public Private Partnership, AEZ Agri Export Zones, FDI Foreign Direct Investment

Agricultural and Processed Food Products Export Development Authority (APEDA)

NCUI Building 3, Siri Institutional Area, August Kranti Marg, New Delhi 110 016 Phone: 9111 26513204, 26514572, 26534186 Fax: 91 11 26526187 E-mail: headq@apeda.com

Marine Products Export Development Authority (MPEDA)

MPEDA House, Panampilly Avenue PB No 4272, Cochin-682 036 Phone: 91 484 2311979/2311803 Fax: 91 484 2313361 e-mail: mpeda@vsnl.com, mpeda@mpeda.nic.in

AEZ: Agri Exports Zones MFP: Mega Food Parks CAGR: Compound Annual Growth Rate FDI: Foreign Direct Investment MT: Million Tonnes IIP: Index of Industrial Production FY: Indian Financial Year (April to March) So FY12 implies April 2011 to March 2012 GOI: Government of India INR: Indian Rupee PPP: It could denote two things (mentioned in the presentation accordingly) Purchasing Power Parity (used in calculating per-capita GDP) Public Private Partnership (a type of joint venture between the public and private sectors)

PE: Private Equity APEDA: Agriculture & Processed food products Export Development Authority GCMMF: Gujarat Cooperative Milk Marketing Federation USD: US Dollar Wherever applicable, numbers have been rounded off to the nearest whole number

Exchange Rates (Fiscal Year) Year

2004-05 2005-06 2006-07

Exchange Rates (Calendar Year) Year

2005 2006 2007 2008

INR equivalent of one USD

44.95 44.28 45.28

INR equivalent of one USD

45.55 44.34 39.45 49.21

2007-08
2008-09 2009-10 2010-11 2011-12 2012-13

40.24
45.91 47.41 45.57 47.94 54.31

2009
2010 2011 2012 2013

46.76
45.32 45.64 54.69 54.45
Average for the year

India Brand Equity Foundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared by Aranca in consultation with IBEF.
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