Bhopal 20100215

Detailed project report
on
Development of Food
Park at Bhopal
For Madhya Pradesh State Agro

Industries Development Corporation
Ltd.
February 2010
Disclaimer
This document has been prepared by Ernst & Young Pvt. Ltd. (hereinafter referred to as Ernst
& Young) in accordance with our terms of reference via engagement letter dated 4th
September, 2009 with Madhya Pradesh State Agro Industries Development Corporation Ltd.
(hereinafter referred to as MP Agro) for preparing a detailed project report for the proposed
food park in Bhopal.
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proposed development.
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2 Detailed project report on development of Food Park at Bhopal

Table of contents
S. no Chapter Page no.
Executive summary 09
1 Setting the context 14
1.1 Background to the study 15
1.2 Objectives of the study 15
2 Defining food processing industry 16
2.1 Evaluating the scope 17
3 Food processing industry in India 21
3.1 Food market in India 22
3.2 Food processing sector in India 24
3.3 Food processing industry formats and concepts in India 39
4 Value and supply chain of food processing industry 43
4.1 Value chain 44
4.2 Food supply chain 45
4.3 Modern food supply chain practices 51
4.4 Emerging models in food supply chain 52
4.5 Challenges in the food supply chain 54
5 Food processing industry in Madhya Pradesh 57
5.1 Madhya Pradesh state overview 58
5.2 Madhya Pradesh infrastructure overview 59
5.3 Agriculture overview of Madhya Pradesh 61
5.4 Food grains in Madhya Pradesh 66
5.5 Horticulture crops in Madhya Pradesh 70
5.6 Animal husbandry 77
5.7 Agriculture marketing 79
5.8 Advantages for food processing industry in Madhya Pradesh 80
5.9 Challenges for food processing industry in Madhya Pradesh 81
5.10 Cluster formats for food processing in Madhya Pradesh 82
6 Incentives for food parks by Centre and State Government 85
6.1 Incentives under Mega Food Parks Scheme (MFPS) 86
6.2 Concept of Mega Food Park 90
7 Bhopal- Site analysis 93
7.1 Bhopal: district profile 94
7.2 Location and linkages 95
7.3 Site description 96
7.4 Site neighbourhood 96
7.5 Site strengths and weakness 98

Table of contents
S. No Chapter Page no.
8 Bhopal- Cluster analysis 99
8.1 Cluster identification 100
8.2 Crop availability analysis 101
8.3 Other critical success factors 118
9 Development concept 122
9.1 Processing zone (factory and building area) 125
9.2 Common infrastructure 126
9.3 Open area 131
9.4 Support infrastructure 131
10 Organisation structure 135
10.1 Management and organisation structure 136
11 Marketing plan 140
11.1 Best practices adopted 141
11.2 Target market 142
11.3 Marketing strategy for the proposed cluster 143
11.4 Benchmarking 147
11.5 Marketing channel 150
11.6 Marketing program management 153
11.7 Unique Selling Propositions (USPs) of the proposed food park 154
12 Financial analysis 155
12.1 Area statement 156
12.2 Revenue assumptions 156
12.3 Cost assumptions 157
12.4 Development phasing 159
12.5 Sale phasing 161
12.6 Cash flow statement 163
12.7 Profit and loss statement 164
12.8 Balance sheet 165
12.9 Key financial parameters 166
12.10 Summary of cost 167
12.11 Processing zone summary 168
12.12 Support infrastructure zone summary 169
12.13 Land cost and return scenario 170
Annexure I- Case studies 171
Annexure II- Real estate overview- Bhopal 192
Annexure III- Food processing industry 194
Annexure IV- SEC classification 200

List of tables
Table no. Name of the table Page no.
1.1 Details of food parks to be developed under PPP 15
2.1 Food processing segments and sub-segments 18
2.2 Food processing techniques 19
3.1 India food processing industry statistics (2007-08) 25
3.2 India food processing segment wise production (2007-08) 25
3.3 Share of organised sector and key processed products 26
3.4 Prominent players in the organised sector 27
3.5 Key export products 30
3.6 Key agro export zones in India 40
3.7 Major food parks in India 41
5.1 Madhya Pradesh- state snapshot 58
5.2 Power fact file for Madhya Pradesh 60
5.3 Agro climatic regions and horticulture crops in M.P 64
5.4 Current status of food parks across Madhya Pradesh 82
6.1 Investment promotion assistance for VAT and CST 86
6.2 Land concessions based on project cost 87
7.1 Bhopal- District snapshot 94
7.2 Distance of site from key nodes 95
7.3 Distance of site from key landmarks 95
8.1 Districts and areas 100
8.2 Opportunity assessment matrix- Bhopal food park 116
8.3 Existing warehousing facility in Bhopal cluster (June 2009) 118
8.4 Tariff applicable for industrial and non industrial consumers 120
8.5 Installed capacity in Bhopal District 120
9.1 Developed plots area statement (indicative) 125
9.2 Water demand estimation in food park 128
9.3 Power demand estimation in food park 129
9.4 Estimated employee inflow in the food park 131
9.5 Affordability analysis for food park in Bhopal 132
9.6 Area statement- Bhopal food park 133
10.1 Responsibilities of Advisory Board 137

List of tables
Table no. Name of the table Page no.
11.1 Land pricing - benchmark 147
11.2 Benchmarking for other components 147
11.3 Pricing 148
11.4 Existing industrial areas 149

List of figures
Page
Fig. no. Name of the figure no.
2.1 Flow diagram of different levels of food processing 20
3.1 Private final consumption expenditure-India 22
3.2 Private final consumption expenditure- India 23
3.3 Food products and beverages factory numbers (2001-02 to 2004-05) 26
3.4 Exports of food processing from India 29
3.5 Indias exports to other countries 29
3.6 Segment wise exports 30
3.7 Government outlay and expenditure for food processing during X Five Year Plan 34
3.8 FDI inflow in food processing industry 35
3.9 Clustering of food processing industries in India 39
4.1 Value chain of food processing industry 44
4.2 Traditional food and grocery supply chain 45
4.3 Cereals and pulses supply chain 47
4.4 Milk and dairy products supply chain 48
4.5 Fruits and vegetables supply chain 49
4.6 Poultry, meat and marine products supply chain 50
4.7 Food supply chain- business models 53
4.8 Illustrative prices from farm gate to consumer 54
4.9 Mark-up from farm gate to consumer 55
5.1 Map showing road network across Madhya Pradesh 59
5.2 Map showing railway network across Madhya Pradesh 59
5.3 Map showing airports across Madhya Pradesh 60
5.4 Sectoral contribution to GSDP- Madhya Pradesh 61
5.5 Land use classification Madhya Pradesh 61
5.6 Soil types in Madhya Pradesh 62
5.7 Distribution of agro climatic zones and crop zones across Madhya Pradesh 63
5.8 Total cereals production in Madhya Pradesh (2002-07 66
5.9 Total pulses production in Madhya Pradesh (2002-07) 66
5.10 Total oilseeds production in Madhya Pradesh (2002-07) 67

List of figures
Fig. no. Name of the figure Page no.
5.11 Distribution of horticulture crops by production 70
5.12 Distribution of horticulture crop zones across Madhya Pradesh 70
5.13 Fruits production in Madhya Pradesh (2002-07) 71

5.14 Vegetables production in Madhya Pradesh (2002-07) 72
5.15 Spices production in Madhya Pradesh (2002-07) 73

5.16 Flowers production in Madhya Pradesh (2002-07) 74
5.17 Medicinal and aromatic plants production in Madhya Pradesh (2002-07) 74
5.18 Milk production in Madhya Pradesh 77
5.19 Egg production in Madhya Pradesh 78

5.20 Meat production in Madhya Pradesh 78
5.21 Status of food parks in Madhya Pradesh as on 2006 79
5.22 Map showing food parks across Madhya Pradesh 82
5.23 Agri export zones in Madhya Pradesh for various products/ crops 84
6.1 Features of a food park 90
6.2 Farm to market cluster based approach 92
7.1 Sectoral distribution of district domestic product (DDP) 94
7.2 Socio economic classification (SEC) 94
Google map showing the subject site at Adampur Chwani village, in District
7.3 96
Bhopal
8.1 Map showing Bhopal cluster 100
8.2 Fruits-potential assessment matrix 102
8.3 Vegetables-potential assessment matrix 106
8.4 Spices-potential assessment matrix 109
8.5 Food grains-potential assessment matrix 111
8.6 Cold chain structure 118
8.7 Existing cold storage facility in Bhopal cluster 118
8.8 Existing workforce in the Bhopal cluster 119
9.1 Layout of proposed food park 124
10.1 Organisation structure of the food park 136
11.1 Target tenant mix for food park 142
12.1 Target IRR estimation 170

Executive summary
Executive summary
The M.P. State Agro Industries Development Corporation, a state nodal agency of Ministry of
Horticulture & Food Processing Industries, under the XIth Five Year Plan by Planning
Commission (Government of India), is implementing scheme of food parks in various districts of
the state to provide a mechanism to bring farmers, processors and retailers together and link
agricultural production to the market so as to ensure maximisation of value addition,
minimisation of wastage, adherence to global quality standards and improvement in farmers
income. This it intends to implement under public-private partnership (PPP) scheme with a view
to maximise the return.
India is currently the worlds second largest producer of food next to China and is surplus in
food produce. Changing demographics, growing population and rapid urbanization are expected
to continue in the future and therefore, are expected to increase the demand for value added
and processed food products in India. The Governments focus is towards food processing
industry as a priority sector and has thus ensured conducive polices for attracting more FDI.
Madhya Pradesh shares a major share of the national agriculture production. It is the fourth
largest producer of agri produce in India and enjoys availability of rich quality soil types,
favourable for horticulture crops, food grains as well as vegetable produce. The state is the
leading producer of pulses, gram and soyabean, second largest producer of oilseeds, eighth in
production of fruits in the country and is the third largest producer of oranges in the country.
The state government has undertaken various infrastructure developments to augment the
marketing avenues for agricultural and food processing produce so as to enhance the food
processing industry in the state. These include a modern multi modal logistic hubs, modern
whole sale markets, pack houses, refrigerated vans, waxing plants, cool chambers, ripening
chambers, centers for perishables cargo at airports, technology and physical infrastructure up-
gradation in existing market yards and irradiation centers and modern warehousing.
The state is opportune for the food processing industry on account of diverse advantages such
as availability of a suitable agro climate, central location of the state, easy availability of
manpower, presence of facilities for an agriculture market, low land prices, practice of modern
farming techniques mechanisms, availability of logistics and transportation facilities and
physical infrastructure such as power and water.
The proposed Food Park in Bhopal is located at Adampur chawni village, approximately 15km
from Bhopal city and is proposed to be spread over 50 acres. The food park at Bhopal would
primarily be dependent on the raw material available within 200 km (cluster), that would act as
an input for the processing units in the food park. While inputs such as packaging material and
low volume/high value products may be procured from anywhere in India, the base raw
material is expected to be procured mainly from within this radius.

Further, units involved in primary, secondary or tertiary processing of crops in the cluster with a
high market share and yield ratio are expected to be attracted to the food park in the immediate
to short term (within 1 year of commencing operations). Tertiary units based on processing of
input crops with a low market share and high yield or high market share but low yield could be
expected in the mid term (2-3 years of operations). Following are the raw materials and value
added products, which could be processed in the subject food park.
Opportunity matrix
Key raw material (immediate

Category Key value added products
term)
Watermelon, Mango, Guava,

Juice syrup, flavor emulsions for milk shakes, fruit
Fruits Sweet lime, Muskmelon,
concentrate, jam, pulp
Lemon
Vegetables Green peas, Onion, Arbi Frozen vegetables, puree, paste
Spices Coriander, Garlic Pickles, chutney
Sweetened condensed milk, milk powder, dairy whitener,

ghee, khoya, malai, processed butter, butter, ice cream,
milk based baby food, curd, cheese, flavoured milk,
Poultry Milk, meat
malted milk, pro biotic dairy products such as cheese,
yogurt, cottage cheese etc. lactose and casein, Frozen
meat, sausages, meatballs, kababs, ham
Arhar/Tur dal, Maize, Jowar, Edible oil, roasted dried snacks, health food, sprouts,
Food grains
Soya bean, Gram, Pulses mixes
Project strengths and weaknesses
The project is in proximity to Bhopal, a state capital and thus has certain inherent advantages:
Proximity to an urbanized setting with adequate infrastructure
Proximity to Transport Nagar, which could be leveraged for logistics
Proximity to a slaughter house is favorable for poultry (meat) processing units
Has access to logistics, warehousing and cold storage network and facilities
A modern wholesale terminal market of international standards in Bhopal has been

proposed and expected to be completed in next 1.5 -2 years (as indicated by MPSAIDC)
Availability of low cost manpower and low cost of land
Utilities (power, water etc.) to be made available from MP state

These include capital grant equivalent to 50% of the project cost (excluding land cost) or INR50
crore (under MFPS), VAT and Central Sales Tax (CST) assistance as per Madhya Pradesh Food
Processing Policy, 2008. Besides these incentives, private developers developing food
processing parks would be reimbursed 10% of expenditure incurred or INR1 crore whichever is
lower.
However, the project also faces certain threats in terms of existing competing Food Parks and
Food Processing SEZs in favorable locations closer to the coast. Though, these could attract
largely export oriented units. Hence the subject food park could target units with largely
domestic sales.
The subject project also faces certain challenges in terms of currently lacking direct access,
being bound by land with obnoxious use and lack of established social infrastructure in the
immediate vicinity.
The proposed food park is envisaged as an integrated development accommodating units

engaged in processing of diverse food products. The food park is proposed to comprise
processing zone which should hold common processing facilities offering common
infrastructure to be shared by the units. The food park shall also comprise social and support
infrastructure, offering residential and other social infrastructure .
The units are proposed to be offered plotted development with built to suit options and built
spaces for common infrastructure. There are around 35 units anticipated in the park when
operating in full capacity. The proposed pricing for various facilities offered are as below:
Pricing of key components

Suggested pricing*
Development component Subcomponents
( INR per sq. ft.)
Processing zone
Plots Developed plots 21
Packaging center 715
Multi-tenanted facilities Post production packaging 715
Quality testing laboratory 715
Logistics zone
Warehouse space 715
Semi processing and value
Warehouse and distribution 715
added services
center
Open yard 82
Cold storage 945
Support infrastructure
Apartment- 2 BHK 1,200
Residential
Commercial Retail 1,800
*Note: Pricing excludes any equipment/ plant and machinery cost

Based on an upfront land payment of INR4.75 lacs per acre, the financial indicators for the food
park are as illustrated in the table below :
Fig in INR Crore
Key parameters
Net present value (NPV) 2.23
Weighted average cost of capital (WACC) (Post tax) 12.46%
Project IRR* 19.71%
Equity IRR 20.84%
Project Cost 49.61
Equity 10.91
Debt 10.91
Internal Accruals 27.79

* IRR Internal rate of return
While the pricing of various components are competitive compared to benchmarks in the state
and neighboring regions, the financial returns may not be very attractive for a private bidder.
Hence, MPSAIDC could evaluate various structures to incentivize and attract a private
developer partner. This could include subsidizing the land or reducing the upfront land cost.
Project return scenarios for various land cost

Land Cost (INR
0.02 0.03 0.04 0.05 0.06 0.07 0.08
crore/acre)
NPV (INR crore) 3.09 2.78 2.47 2.15 1.83 1.51 1.18
Project IRR 23.61% 22.11% 20.72% 19.39% 18.15% 17.00% 15.92%
Equity IRR 28.97% 25.84% 22.93% 20.17% 17.61% 15.23% 13.00%
The project structuring would be detailed in phase II of the study, based on discussions with
MPSAIDC.

Chapter one Setting the context
1. Setting the context
1.1 Background to the study
The M.P. State Agro Industries Development Corporation, a state nodal agency of Ministry of
Horticulture & Food Processing Industries, under the XI Five Year Plan by Planning Commission
(Government of India), is implementing scheme of food parks in various districts of the state to
provide a mechanism to bring farmers, processors and retailers together and link agricultural
production to the market so as to ensure maximisation of value addition, minimisation of
wastage, adherence to global quality standards and improvement in farmers income.
M.P. State Agro Industries Development Corporation Ltd., intends to develop food parks at
Ratlam, Bhopal and Harda in Madhya Pradesh under public-private partnership (PPP) basis with
a view to maximise the return. Details of food parks to be developed under PPP are given as
under:
Table 1.1: Details of food parks to be developed under PPP
Available land area

Project Village
(approximately)
Food park at District Ratlam, Madhya Pradesh Karmadi 80.25 acres
Food park at District Bhopal, Madhya Pradesh Adampur Chawani 50.00 acres
Food park at District Harda, Madhya Pradesh Anjana Saraiyat 60.07 acres
1.2 Objective of the study
This study has been undertaken to assess the viability of the proposed food park and its
scope includes the following:
Market opportunity assessment of the food processing industry in Madhya Pradesh and the
identified region of the proposed food park
Assessment of subject site on its development potential based on physical condition and
characteristics, social infrastructure support and neighbourhood profile
Devise suitable development options for the subject site, based on the site analysis and
product short-listing
Assessment of financial viability of the project

Chapter two Defining food processing industry
2. Defining food processing
industry
2.1 Evaluating the scope
2.1.1 Definition
Food processing is the set of methods and techniques used to transform raw ingredients into
food or to transform food into other forms for consumption by end users or by the food
processing industry. The process involves any type of value addition to agricultural or
horticultural produce and also includes processes such as grading, sorting and packaging which
enhance the shelf life of food products, and make them more palatable and marketable. [1]
Food processing can also be described as the production and distribution of meat products,
dairy products, canned, frozen, and preserved fruits, vegetables, and food specialties, grain
mill products, bakery products, sugar and confectionery products, fats and oils, miscellaneous
food preparations and kindred products, groceries and related products, and candies. [2]
Further, from a socio-economic perspective,

Benefits of food processing
food processing provides the crucial linkage
between farm and industries which aids in Protection from pathogenic microbes
accelerating the overall agricultural and toxic substances
development, adding value to the produce and
generating employment opportunities. Increased shelf-life through preservation
Ease of distribution and marketing of
2.1.2 Product segmentation food
Year-round availability of several food
The food processing industry can be
products
categorized into multiple sub-sectors based on
the source or raw material used. Some of the Ease of consumer utilization
important sub sectors in the food processing
Food consistency
industry include:
Facilitating long-distance transportation
Fruit and vegetable processing of delicate, perishable foods
Fish processing Health benefits through modern
processed foods which are high in
Milk processing
nutritional value
Meat and poultry processing
Economies of scale through mass
Packaged/convenience foods production, resulting in large profit
potential for manufacturers and
Alcoholic beverages and soft drinks
suppliers of processed foods
Grain processing
[1] Source: Federation of Indian Chamber of Commerce and Industries
[2] Source: One Source

These categories can further be divided into multiple segments as illustrated in the table below:
Table 2.1: Food processing segments and sub-segments
Segment Sub-segment Segment Sub-segment
Whole milk and

Fruit based beverages
skimmed milk powder
Juice concentrates
Condensed milk
Pulps
Ice cream
Processed Jams, jellies, marmalade
fruits and Dairy Butter
vegetables Frozen
Ghee
Dehydrated
Cheese
Wafers
Yoghurt
Chutney, pickles, sauces
Liquid milk
Powdered spices
Puffed products Pastes and bottled
Spices,
Cereals and condiments
Flaked products tea and
pulses
coffee Tea bags
Milled products
Instant tea and coffee
Cooked
Egg powder
Cured
Salted, smoked and dried
Frozen
meat
Processed Dried
meat and Ground meat: sausages, Fisheries
poultry patties Salted
Frozen Smoked
Fermented
Canned
Canned
Alcoholic Fruit/sap: wine, brandy Vegetable oils

Oils
beverages Grain: beer, whisky Animal fats and oils
Snacks
Non-alcoholic beverages
Canned
Packaged
Confectionery and bakery Feed and
consumer Semi moist
pet food
goods goods
Dry
Other ready- to- eat or
ready- to- serve products
Source: EY research

2.1.3 Processing techniques
Food is processed in order to reduce the risk of spoilage and increase its availability. Food is
considered preserved, once it is stabilized with respect to safety and quality. Therefore, several
food processing techniques are used to preserve foods as well as stabilize foods texturally.
Apart from the common mechanical raw material handling techniques such as cleaning,
sorting, grading, de-hulling/destalking, de-stemming, trimming, there are two main categories
of food processing methods chemical and physical which are enumerated below:
Table 2.2: Food processing techniques
Food processing techniques Product examples
Mechanical handling of raw materials
Cleaning, peeling, skinning Fruits, vegetables

Sorting, screening Fruits, vegetables, cut meat, eggs
Grading Meats, cheese, tea, wine
De-hulling/destalking Legumes, cocoa beans, soya beans
De-stemming Grapes
Trimming, chopping or slicing Meat, fish, cheese, vegetables, fruits, potatoes
Mincing and macerating Homogenization of meat
Liquefaction Fruit juice
Physical food processing
Sterilization Canned foods

Emulsification Creating emulsions like skimmed milk or margarine
Cooking: boiling, broiling, frying,
steaming, grilling Canned foods, chips, meat
Baking Breads, biscuits, cookies

Addition of gas Air entrainment for bread, gasification of soft
drinks
Proofing
Spray drying Baking technique
Pasteurization Natural and artificial flavours and milk powders

Packaging and canning Milk
Freezing
Fish, meat, fruits, vegetables
Drying and dehydration
Meat, fish, blanched fruit and vegetables
Hurdle or combination processing
Dried soup mixes, dried fruit, powdered milk, spices
Yoghurt, fresh salads

Chemical processing
Fermentation Beer, wine, fish, dairy products
Pickling Fruit, vegetable, meat, fish
Binding Cookies, cake, bread
Controlling the pH Dairy products, stabilizing foods
Addition of chemicals Smoked, salted meat/fish, products with

preservatives
Source: EY research
Each of the above techniques is used at different levels of processing. Some of the mechanical
processing techniques such as cleaning, sorting and grading are done at primary level of
processing, where the form of the raw material remains the same. In the secondary level of
processing, these raw materials are transformed into more convenient forms for consumption,
through techniques such as trimming, de-hulling, chopping, slicing, mincing and liquefaction.
The tertiary stage produces ready-to-use products through chemical and physical processing
methods.
Figure 2.1: Flow diagram of different levels of food processing
Food processing
Primary Secondary Tertiary
No change in shape, Transformed into more Ready to

size and form convenient form to use utilize/ consume
Cleaning Cooked rice

Paddy- Rice
Conditioning Bread and
Oilseeds - Oil
Grading biscuits
Wheat- Flour
Packaging Cooked meat
Goat- Meat
Storage Ketchup
Source: EY research

Chapter three Food processing industry in India
3. Food processing industry in
India
3.1 Food market in India
India ranks amongst the leading food production and consumption centres of the world. Food
products are the single largest component of private consumption expenditure, and accounts
for as much as 35% of the total spending. As per the year 2008 estimates, total private final
consumption in India is valued to be INR8706.6 billion (USD180 billion) [1].
Food consumption in India is expected to grow by 22.8% from 2008 to reach INR10,662.7
billion (USD220.4 billion) in 2013 [2]. It is the leading producer of pulses and milk and also
ranks among the top three producers of rice, wheat, groundnuts, tea, coffee, tobacco, spices,
sugar and oilseeds in the world. The country is also a leading exporter of cereals and pulses.
Fig 3.1: Private final consumption expenditure-India
*Egg is in billion nos, coconut is in 00mn nos, rest are as indicated in the chart. Base taken is 1996,
figures are from 1996 to 2006 [3]
[1] Source: Central Statistical Organization

[2] Source: EY-FICCI report, Winning with intelligent supply chains,2007
[3] Source: EY research

The consumption trends in India are witnessing a rapid shift. This can be attributed to the rise
in household incomes and affordability, aided by increasing urbanization, which has played a
significant role in this shift in consumption.
The food market in India has been significantly impacted by the rise in income and propensity
to spend. This is substantiated by the fact that food products are the single largest component
of the private consumption expenditure and account for almost 35% of the total spending as
illustrated in the graph below:
Fig 3.2: Private final consumption expenditure- India
Transportation and communication

4% 4%
12% Recreation, education and cultural services
Miscellaneous goods and services

7% Medical care and health services
7% 35% Gross rent, fuel and power
Grocery
4%
Furniture, furnishings, appliances and services
18%
Food
5%
4%
Clothing and footwear
Beverages, pan and intoxicants
Source: Private final consumption expenditure CSO, 2006-07, EY research
The food industry in India faces the challenge of cultural preference towards fresh food. In
spite of being among the largest producers of primary agricultural products, less than 2% of
fruits and vegetables are processed in India as compared to 65% in the US, 78% in the
Philippines, and 23% in China. This share is low even within the country when compared with
milk (35%) and marine products (26%). However, with changing life styles processed food
(branded food, health food and convenient food) is gaining popularity. In addition, the growing
middle class segment, accounting for about 350-370 million[1] of Indias total population, has
shown a gradual increase in preference for processed food.
[1] Source: FICCI, Food and Beverages survey-2006

3.2 Food processing sector in India
The food processing industry is one of the sunrise sectors in India and is amongst the largest in
terms of production, consumption, export and growth prospects. The government has
accorded the status of thrust sector to food processing industry and is incentivising it with
numerous fiscal benefits, to encourage commercialization and value addition to agricultural
produce.
The industry comprises a wide range of segments with an array of products which may require
primary, secondary or tertiary level of processing. The segments under the food processing
industry include [1] :
Dairy products: Milk products contribute to nearly 17% of the countrys total expenditure
on food.
Fruits and vegetables processing: India is the second largest producer of fruits (50 million
tonnes) and vegetables (100 million tonnes) in the world.
Grain processing: On the export front, export of oil meals, oilseeds, minor oils (fats) and
castor oil during the year 2007-08 reported at 62.6 lac tonnes.
Meat and poultry processing: Annual production of meat and poultry is 4.3 million tonnes.
However, only 1% of the meat production is converted into value added products.
Fish processing: Fish production in India, as per 2007-08 estimates, stands at 6.4 million
tonnes.
Packaged foods: Size of packaged food industry was INR76.7 billion (USD 2 billion) during
the year 2005-06.
Beverages: Estimated market demand of 373 million cases a year.
With a market size of around INR3,386.5 billion (USD70 billion), the food processing industry is
one of the largest in terms of production, consumption and export. The industry is on a growth
trajectory and has achieved a growth rate of 18% in 2007-08 over 13% in 2006-07. According
to the Ministry of Food Processing, the industry is projected to grow at the rate of 20% by year
2015, a significant increase from the growth rate of 6-7% recorded in 2003-04 [2] .
[1] Source: Ministry of Food Processing Industries, GoI, Annual Report (2007-08)
[2] Source: www.imsme.org, CII

Table 3.1: India food processing industry statistics (2007-08)
Total market size INR3,386.5 billion (USD70 billion)
Domestic market INR3,135.9 billion (USD64.82 billion)
Export market INR250.6 billion (USD5.18 billion) (4% of

total exports)
Share of food processing in overall industrial production >6%
Growth rate (Y-O-Y) 18%
GDP contribution (2007) 6.3%
Employment 13million directly, 35 million indirectly
Source: www.imsme.org, CII
Although, India is one of the largest food producing countries in the world (as depicted in the
table below), currently, less than 2% of the countrys total food produce is being processed.
The highest share of processed food is in the dairy segment, with around 35% of the total
produce being processed, followed by marine segment at around 26% of the total produce.
Further, only 2.2% of the total fruits and vegetables, 6% of poultry and 20% of meat produced
in the country is being processed as compared to around 60-70% processing of food products
in the developed countries.[2 ]
Table 3.2: India food processing segment wise production (2007-08)
Amongst the largest in the

Total food products 600 mn tonnes
world
Milk 90 mn tonnes Highest in the world
Fruits and vegetables 150 mn tonnes Second largest in the world
Livestock 485 mn Largest in the world
Food grain 204 mn tonnes Third largest in the world
Fish 6.3 mn tonnes Third largest in the world
Poultry 489 mn -
Eggs 45,200 mn -
Source: FICCI, Annual report (2007-08),MoFPI
India is the largest milk producing country in the world and has been maintaining its leadership in
this segment since year 1988 . This can be attribute to various initiatives undertaken as a part of
the Operation flood which lays emphasis on organizing milk producers into cooperatives;
building infrastructure for milk procurement, processing and marketing; and providing financial,
technical and management assistance to the producers. There are reportedly 676 dairy plants
operating in the organized sector in India.
[1] Source: MoFPI, Annual report 2007-08

Further, India is the second largest producer of fruits and vegetables and has been witnessing a
positive growth in ready-to-serve beverages, pickles and frozen food segments amongst others.
Fish production in India is the third largest in the world, but currently lacks adequate
infrastructure facilities such as cold chain and freezing units to handle and preserve fish.
However, the Ministry is working in collaboration with Marine Products Export Development
Authority (MPEDA) for technology upgradation and promotion of the segment.
The food processing industry is highly Fig 3.3: Food products and beverages
fragmented in nature and the factory numbers (2001-02 to 2004-05)
unorganized players account for 50%
of the sectors output in value and
70% in volume. The organized sector
contributes to 30% of the share in the
food processing industry. The graph
alongside illustrates the number of
factories operational in India with the
growth rates in the respective years.
Source: Annual survey of industries, MoFPI
Table 3.3: Share of organized sector and key processed products
Segment Share of organized sector Key processed products
Butter, cheese, ghee, flavoured/sweetened

Dairy products 13%
milk
Canned fruits and vegetables

Fruits and
48% Dried and preserved fruits and vegetables
vegetables (F&V)
Pickles and chutneys/pastes
Meat and poultry Poultry and buffalo meat

5%
processing
Marine fisheries, frozen products and minced

Fisheries NA
fish products
Packaged foods 80% Noodles, biscuits and confectionary
Fruit based drinks, carbonated drinks and

Beverages 77%
wine
Staple foods 50% Sugar, wheat , flour and salt
Source: IBEF 2008

Table 3.4: Prominent players in the organized sector
Turnover Exports
Name of the
Product in INR mn in %
company
(2007) (2007)
Dabur Foods Fruit juice, cooking pastes, coconut milk, tomato

2,434.0 10.07
Ltd. puree, lemon drink, chilly powder and honey
Cadbury India Chocolates, hard boiled confectionery, malt foods and

14,419.2 0.32
Ltd. cocoa powder
Godrej Edible oils, vanaspati, bakery fats, fruit drinks, fruit

1,974.3 0.62
Industries Ltd. nectar, fruit juices and tomato puree
Ready-to-eat curries and rice, ready-to-cook gravies,

MTR Foods Ltd. frozen foods, ice creams, instant snack and dessert 1,633.4 9.1
mixes, spices, pickles and papads
Britannia Biscuits, flavored milk, dairy, whitener, ghee, bread,

23,830.7 0.42
Industries Ltd. cake, and rusk
Agro Tech Wheat flour (atta), edible oil, vanaspati, popcorn,

10,381.5 0.03
Foods Ltd. french fries and green peas
Nestle India Instant coffee, condensed milk, dairy whitener, infant

36,474.9 8.94
Pvt. Ltd. food, chocolates and confectioneries
PepsiCo India
Soft drink, fruit juice and chips - 4.58
Holdings
Source: IBEF-2008, Cygnus research

3.2.1 Key drivers of the food processing industry in India
Anticipated growth in demand for processed food is likely to be a

major growth driver for the food industry.
As per 2007 estimates, around 30 million middle and upper middle
Growth in demand class people consume processed foods. This number is projected to
for processed food increase to over 200 million by the year 2010, due to rapid
urbanization and changing lifestyles[1].
As per industry estimates, ready-to-eat market in India is expected to
grow to INR29 billion by year 2015 from INR1.3 billion in year 2006.
Growing health and wellness trend is leading to an increase in the

consumer demand for functional foods due to their specific health
benefits. There is growing awareness of functional ingredients such as
Rising demand for
herbs, minerals, vitamins, omega fatty acids and probiotics.
functional food
High growth is likely in sub categories such as energy drinks, enhanced
shelf stable juices, probiotics and omega fortified food and beverages.
The proliferation of organized retail stores is leading to increased

visibility for packaged and processed food products and resulting in
higher sales for the manufacturers.
Growth in Though organized retail constitutes only 3% of the INR11,127.2 billion
organized retail (USD230 billion) Indian retail market, it is expected to grow 400% from
INR338.6 billion (USD7 billion) to over INR1,451.3 billion (USD30
billion) by year 2010[2].
Hypermarkets are expected to drive most of the growth in organized
retail. Hypermarkets account for a share of over 50% in retail
distribution of processed food in developed countries.
Rural India, which accounts for 70% of the countrys population,

contributes to 34% of the sales of FMCG products. Demand from rural
areas is expected to be a key growth driver.
Growth in rural Rural penetration levels are presently low in processed food segment,
markets and is estimated at only about 7% to 8% of the total food production.
Planned development of roads, ports, railways and airports, are also
expected to improve access, and increase FMCG penetration in the
long term in rural areas.
[1] Source: Business Standard, 20th November, 2007

[2] Source: Government estimates, Financial Express, 17th January, 2009

3.2.2 Export import scenario
Despite a leadership position in agricultural production, Indias share in global agricultural

exports is only 1.5%. Although, the focus on exports in the food processing industry has been
limited, the export values have increased to a large extent over the past few years.
As illustrated in the graph alongside,

the exports in food processing from Fig 3.4: Exports of food processing from India
India have been growing at a CAGR of
25.6% in the last five years (2003-08). 6 5.18
Further, it is estimated that food CAGR: 25.6%
5
processing exports would grow at a 3.9
USD billion
4
CAGR of 25% till year 2025 and the 2.88
3 2.08 2.25
industry is expected to account for 5%
2
share of world trade by year 2020.
1
0
The key export geographies are
2003-04 2004-05 2005-06 2006-07 2007-08
Bangladesh, U.A.E, Saudi Arabia,
Malaysia, U.S.A, UK, Indonesia, Sri Source: Ministry of Food Processing Industries (MoFPI) Annual
report
Lanka, Philippines, Netherlands,
Pakistan, Nepal, Germany, Japan,
China, France, Italy, Nigeria, Belgium, Fig 3.5: Indias exports to other countries
Russia and Jamaica.
29%
The major products of export are

marine items, cereals and preparation,
nuts, processed foods and beverages. 17%
The major products imported are
edible oil (mainly palm oil), pulses and 34%
nuts.
10%
7%
Meat products (including marine) 1%
contribute to the largest share in the
South Asia Middle East East Asia
exports, in value terms, at 35% each.
Western Europe Rest of the world US and Canada
This is attributed to the fact that, India
exports more than 500,000 metric Source: UN Comtrade; CEPII
tonnes of meat of which major share is
buffalo meat. The buffalo meat
produced in India is generating high
demand in international markets due to
its lean character and near organic
nature. India is the fifth largest
exporter of bovine meat in the world.

Fruits and vegetables contribute the Fig 3.6: Segment wise exports
next largest share to exports at 24%. 120.0
Further, India is also the fourth largest 1.0

100.0 4.0
exporter of tea. 0.7
5.5 35.8
80.0
Packaged foods from India are also 25.5
IN R B illio n
1.5
penetrating the international markets 60.0 3.6 3.6 1.2
2.9 0.9
with key players such as MTR Foods 1.5
19.4 1.2
40.0 19.2
Ltd. and ITC exporting ready to eat 13.3 1.2
1.1 29.0 36.1
curries, gravies, frozen food, instant 1.0
20.4
20.0 16.5
food and spices. 18.7
24.5 25.0
12.1 11.3 15.5
0.0
2002-03 2003-04 2004-05 2005-06 2006-07
Milled products
Milk and Milk products
Consumer foods packaged/ convenience foods, cocoa products, other
Alcoholic and non-alcoholic beverages
All meat ( including marine)
Fruits and vegetables
Source: APEDA, MoFPI
Table 3.5: Key export products
Segments Key export products
Dairy products Ghee, cheese and curd
Dried and preserved vegetables, mango and mango

Fruits and vegetables (F&V)
based pickles
Meat and poultry Bovine meat, frozen egg yolk and poultry meat
Fisheries Marine and fish products
Packaged foods Masalas, ready-mixes and instant food
Beverages Alcohol
Grain Basmati rice and non-basmati rice
Source: MoFPI, Annual report 2007-08

3.2.3 Government initiatives
In order to meet the increasing demand for quality processed food products and enhance the
capacities of value added and processed food products the government has been increasing
its outlay and increasingly incentivising the industry. Some of the government initiatives
include:
Policy initiatives
Complete de-licensing, except for alcoholic beverages and items reserved for small
scale sector.
Automatic approval for equity upto 100% for most of the processed food products
except alcohol, beer and those reserved for small scale sectors subject to conditions.
Central sales tax reduced from 4% to 3%.
Income tax rebate allowed (100% of profits for 5 years and 25% of profits for the next
five years) for new agro processing industries set up to process, preserve and package
fruits and vegetables.
All services provided by technology business incubators and their incubates whose
annual business turnover does not exceed INR50 lacs has been exempted from service
tax for the first three years.
Incentives on customs duty
Waived for refrigerated motor vehicles.
Customs duty on food processing machinery reduced from 7.5% to 5%.
Duty levied on sunflower oil crude and refined is 50% and 60% respectively.
Excise duty incentives
Exempted on processed fruit and vegetables.
Duty waived on all kinds of food mixes including instant mixes, Soya Bari (food
supplement) and packaged foods.
Exemption limit for small scale industry raised from INR1 crore to INR1.50 crore.
Waived on condensed milk, ice cream, preparation of meat, fish and poultry, pasta and
yeast.
Source: MoFPI, Annual report 2007-08

Mega Food Park Scheme
Primary objective: To provide adequate infrastructure facilities along the food value
chain including development of transportation, logistics, cold storages and centralized
processing centre.
Central Processing Centre (CPC): It should have integrated infrastructural facilities
required for processing and packaging, environmental protection systems, quality
control labs, trade facilitation centres, etc.
Each mega park is expected to have around 30 35 food processing units with an
investment of INR250 crore.
Each park is proposed to have an annual turnover of about INR450 - 500 crores and
would generate employment (direct and indirect) of about 30,000 people.
The scheme is proposed to be entrepreneur driven and to be implemented on a PPP
basis.
The government would provide assistance up to 75% of the project cost, subject to a
maximum contribution of INR50 crores.
The units, established in these mega food parks, may also get tax incentives.
Source: Mega Food Park Scheme, Eleventh Five Year Plan (2007-12), Planning Commission

A comparative summary of the revised proposal for financial assistance under different
schemes as stated in the XI Five Year Plan vis--vis X Five Year Plan is presented below [1] :
Schemes X Five Year Plan XI Five Year Plan
Financial assistance revised to

Integrated food Financial assistance upto 25% of 75% of the project cost with a
zones/mega the project cost limited to INR4 ceiling of INR50 crores per park,
food parks crores. scale of assistance to be 90% in
adhoc area.[2]
25% or 33.33% of the cost of Assistance increased to 50% and

Modernization of plant and machinery in general 60% of the cost of plant and
plant and areas and adhoc areas machinery in general areas and
machineries respectively with ceiling of INR4 adhoc areas respectively with
crores. ceiling of INR15 crores.
Integrated cold 50% and 75% of the total project

chain, 25% of the project cost in cost in general areas and adhoc
preservation general areas and 33.33% in areas respectively subject to
infrastructure adhoc areas; all components maximum grant of INR10 crores;
and distribution have separate ceiling rates. no separate ceiling for each
centres component.
100% contribution from

100% contribution from
central/state government
central/state government
agencies.
agencies.
Quality control
Private sectors eligible to
and food testing Private sectors eligible to
laboratory contribute upto 90% of the cost
contribute upto 33% and 50% of
of laboratory equipments and
the cost of capital equipments
33% of the cost of civil works in
respectively in general areas and
general areas; assistance revised
adhoc areas.
to 50% in adhoc areas.
Grant-in-aid is available up to 100% and 50% of the project

33% of the capital cost for cost as grant from government
R&D facility
general areas and 50% of the organizations and private sector
capital cost for adhoc areas. organizations respectively.
Provision of grant outlay of up to

INR5 crores for setting up/
upgrading the infrastructure
including installation/ up
Food court/food
corner
Not applicable gradation of modern food stalls,
water supply and drainage,
waste disposal system, public
utilities, electrical appliances,
etc.
[1] Source: Eleventh Five Year Plan (2007-2012), Planning Commission, Government of India
[2] Source: Adhoc areas referred to as North Eastern states, Union Territories of Andaman and Nicobar islands and
Lakshadweep island.

Schemes X Five Year Plan XI Five Year Plan
Financial assistance at the rate

of 25% per cart is proposed to be
made available to vendors with
Safe food town Not applicable
an additional INR15 crores for
capacity building and project
implementation charges.
Food processing training centre: Food processing training centre:
Grant upto INR3.50 lacs and Grant upto INR3 lacs and
INR7.50 lacs for single product INR9.50 lacs for single product
line and multi product line line and multi product line
respectively. respectively.
Creation of infrastructure Creation of infrastructure

facilities: Grant upto INR50 lacs facilities: same as X Five year
for infrastructure development Plan.
Human resource
in colleges/universities/HRD
development
institute for conducting Entrepreneur Development
degree/diploma/ certificate Programme: same as X Five year
courses in food processing. Plan.
Entrepreneur Development
Programme: Grant upto a
maximum of INR1 lac for
conducting EDP on food
processing.
Government expenditure and outlay in

Fig 3.7: Government outlay and expenditure for food
food processing has been steadily processing during X Five Year Plan
increasing over the last five years.
(MoFPI). As illustrated in the adjacent 250 200
180
graph the government has increased 200 159.8
INR crore
150 110 115.3

its outlay in the food processing 75 75 80.4
100 72.8 63.8
industry to diversify agricultural
50
activities, support domestic and export 0
growth. 2002-03 2003-04 2004-05 2005-06 2006-07
Additionally, the national policy aims to Outlay Expenditure

increase the level of food processing
Source: MoFPI , Annual report 2007-08
from 2% to 10% in year 2010 and to
25% in year 2025.

However, achieving these targets would be challenging unless R&D programmes are upgraded
to reduce costs, improve quality and performance and tap opportunities in the food and
beverage industry. Therefore, the Ministry of Food Processing Industry, in a bid to promote
technology, facilitate infrastructure, set up new units and technology up gradation, has
provided financial assistance of around INR33 crores across segments in 2007-08.[1]
Further, it has been estimated that farm produce of 30-35% and food worth INR580 billon is
being wasted every year due to lack of adequate storage facilities, transportation, cold chain
and other post-harvest management infrastructure facilities. To address this, the ministry has
drafted the Vision 2015, entailing an expenditure of INR1,000 billon. It outlines a roadmap for
cluster-based and demand-driven farming and integration of food processing infrastructure
from farm to market.
3.2.4 Investment climate
Indias competitive advantage owing to favourable government policies and relatively lower
cost of labour and production, (cost of production in India is lower by 40% when compared to
costs in European Union and 10-15% when compared to the costs in United Kingdom), has
been attracting both domestic and foreign investments in the country.
FDI inflow into food processing in India Fig 3.8: FDI inflow in food processing industry
is estimated at INR35,294.5 million
(USD729.54 million) from April 2000
to September 2008, which constitutes
112.8
1.03% of the total inflow into the 120 107
country[2]. Further, food processing 100
industry in year 2007 had reportedly 80
received INR6 billion Private Equity 60

38.1 39.5 40.5
(PE) investments,[3] with emphasis on 40

14.2
20
the processing and retailing stage of
0
the value chain. It has also been 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
observed that major investment (upt o
Nov.2007)
opportunities lie in processing milk, * CAGR from 2002-03 to 2006-07
sugar, fruits and vegetables and Source: MoFPI annual report, 2007-08
marine products with an estimated 30%
capacity addition for the export
market.
In addition, the Ministry of Food Processing Industries has estimated that an investment of about
INR1,064 billion (USD22 billion) would be made in the industry within the next 10 years.
[1] Source: MoFPI annual report, 2007-08

[2] Source: MoFPI annual report, 2007-08
[3] Source: Deal Tracker, 2007-08

3.2.5 Emerging product categories
The food processing industry in India has widened the scope of investment and business
opportunities owing to the innovative product categories emerging in the market over the past
few years. This section also outlines the emerging product categories in the industry.
Health and functional foods/nutraceuticals
Nutraceutical can be defined as, "a food (or part of a food) that provides medical or health
benefits, including the prevention and/or treatment of a disease [1] .Nutraceuticals are more
affordable alternatives to pharmaceuticals owing to which Indian health ingredients and
nutraceutical market is on an upswing. Some of the nutraceutical products include calcium-
enriched fruit juices and other nutritional drinks, resveratrol from red grape products as an
antioxidant, soluble dietary fiber products, such as psyllium seed husk for reducing
hypercholesterolemia, broccoli (sulforaphane) as a cancer preventative, and soy or clover
(isoflavonoids) to improve arterial health. Consumers focus and growing awareness for
preventive healthcare is the key factor which is driving the market.
Indian nutraceuticals market (including functional foods) in year 2007 was estimated to be
INR18.75 billion and is expected to grow at 20% CAGR to achieve a market size of INR27 billion
in year 2009. Vitamins, minerals and nutrients constitute about 85% of the market while
antioxidants and anti-agents account for 10%, other segments such as herbal extracts occupy
5% of the market, globally.[2]
Probiotics[3]
Probiotics are dietary supplements composed of single bacterial strain or group of bacteria[4].
According to the definition by FAO/WHO, probiotics are: "Live microorganisms which when
administered in adequate amounts confer a health benefit on the host. Probiotics are
accessible in various forms including powder, liquid, gel, paste, granules and also capsules,
sachets, etc. Probiotic dairy products are an emerging category in the Indian food market as
they constitute of live organisms, which aid in digestion and improve immunity. Dietary
supplements such as multivitamin tablets, memory tonics, calcium tablets and chyawanprash
amongst others are widely consumed in the Indian domestic market.
Although the segment is in its nascent stage currently, it is poised to grow substantially. A
healthy domestic economy and awareness of health products are expected to give a boost to
the segment.
[1] Source: www.aapsj.org

[2] Source: Cygnus, www.dnaindia.com, 2009
[3] Source: IBEF,2008, www.dnaindia.com,2009
[4] Source: www.ias.ac.in

Packaged, ready-to-cook foods and ready-to-eat foods
The packaged and ready to eat industry is still an emerging concept in India and is
characterized by high volumes and low margins. Low market penetration has been witnessed in
this segment, with product acceptance largely restricted to the urban population. However,
demand for convenience and ready to eat foods has been increasing in the global markets,
especially the Non Resident Indians (NRIs) residing in North America, UK, Australia, Malaysia,
Singapore and UAE.[1]
Some of the major players in ready to eat market are ITC Foods, MTR Foods, Kohinoor, Amul,
Rajbhog Foods Inc., Ethnic Kitchens and Tasty Bite. Size of the semi-processed and ready to eat
packaged food industry is estimated to be over INR48.37 billion (USD 1 billion) and is growing
at over 20%.[2]
The segment is poised to be an attractive option for multinational companies with established
brands and strengths in innovation, to enter and establish base in India.
Pet food
The pet industry in India has been witnessing new product trends, treats segments, pet care,
changes in domestic policy for pets, veterinary and cosmetic products for pets. The INR967.5
million (USD20 million) market in the country for pet foods is growing rapidly and is set to
evolve into a size of INR3,580 million (USD74 million) by 2012.[3] It is also estimated that 30%
of this market comprises imported products while the remaining products are locally
manufactured.[4]
Currently, Pedigree and Royal Canin are the major dog food brands in the INR210-crore dog
care market, capturing about 65% market share in the country.
Pedigree has recently launched vegetarian pet food target the market of vegetarian pet owners
in the country. The company is primarily targeting Tamil Nadu and Gujarat markets as the city
of Chennai has a market potential of INR580.5 million (USD12 million), with 30% of the pet
owners favouring vegetarian pet food.
Pet foods comprising several kinds of products such as plump whole chickens, cut loafs of beef,
fresh grains, and all other kind of wholesome nutritional food are increasingly gaining
prominence and offer an opportunity for pet food companies to commence operations in India.
[1] Source: IBEF, 2008

[2] Source: Ministry of Food Processing
[3] Source: www.petfoodindustry.com
[4] Source: Indian International Pet Trade Fair

3.2.6 Outlook
India was once a net food importer but currently is surplus in food produce, thus enhancing the
potential for the food processing industry. India is the worlds second largest producer of food
next to China, with the potential to develop and sustain a larger food processing industry.
In addition, the food processing industry in India has witnessed a significant growth and
transformation over the past few years, driven by changing trends in markets, consumer
segments and regulations. These trends, such as changing demographics, growing population
and rapid urbanization are expected to continue in the future and therefore, are expected to
increase the demand for value added and processed food products. India has the potential to
become one of the leading markets in the industry owing to the Governments focus towards
food processing industry as a priority sector and ensure conducive polices for attracting more
FDI. Further, India has competitive edge owing to low labour cost, competitive food production
cost, and diverse agro climatic conditions with raw material availability and significant R&D
institutions to foster the growth of the industry.

3.3 Food processing industry formats and concepts in India
Food processing industries have traditionally

Key food processing cluster formats
developed as isolated units, dependent on
raw material availability, proximity to market Food/agro processing parks
and infrastructure availability. For a typical
food processing unit, the area required Special economic zones
varies from approximately 2 to 3 acres, while
Agro-export zones
for a large scale unit the area can range from
2.5 to 5 acres.[1]
With the advancement of food manufacturing processes for achieving economies of scale in
production, similarities have surfaced in the type of facilities and infrastructure, such as cold
storage and logistics, availed by food processing units of different segments. This growth has
resulted in manufacturers realizing the benefits of sharing facilities, processes, business
information and establishing multiple synergies with one another within different sections of
the value chain, thereby setting ground for the emergence of food processing industry clusters.
A cluster is simply a geographic concentration of producers and institutions that are engaged
in the same industry and which, through collaboration, generate efficiencies and competitive
advantage for the individual partners and for the cluster as a whole.[2]
Fig 3.9: Clustering of food processing industries in India[3]
% share of food processing
Punjab
5% Uttar Pradesh
11%
Gujarat
9%
6%
Madhya Pradesh
Maharashtra
17%
Andhra Pradesh
Karnataka 17%
5%
Tamil Nadu
7%
% share of food processing in India
[1] Source: Primary research
[2] Source: Establishing clusters: agro-industrial clusters and food parks, GAIF 2008,
http://www.gaif08.org/content/roundtable_propositions_establishing_clusters.pdf retrieved on 05-May-2009
[3] Source: EY research

Of late, Government of India has been encouraging the development of food processing or
agro-food processing hubs to promote industry on a large scale. This is achieved through
induced cluster development, which aids in greater availability and enhanced access to
advanced technology, infrastructure and incentives that can be commonly availed by all
entities operating within the cluster. These agro food/food processing clusters primarily
operate out of two major formats - industrial parks and export oriented zones. The
unprecedented success of the Information Technology (IT) clusters in India, such as Bangalore
and Gurgaon, have set a trend for clustering of industries such as pharma and biotechnology
providing a base for viability of the cluster format.
The key formats in India are the food parks, the SEZs and the Agro Export Zones (AEZs). The
key characteristics of each of the three formats have been outlined in the following sections:
3.3.1 Agro Export Zones (AEZ) Table 3.6: Key agro export zones in India
Location of AEZ State
AEZs were conceptualized to enhance
the operations of a particular Bangalore Karnataka
agriculture / horticulture produce Chittoor Andhra Pradesh
located in a contiguous area for the
Kolar Karnataka
purpose of developing and sourcing the
raw materials, their processing, Villupuram Tamil Nadu
packing, and their final export.[1]
The operational concept is to facilitate this through public-private partnership. However, it has
been observed that, the AEZs havent emerged as a successful model even after six years of
inception with the most AEZs reporting low occupancies.
3.3.2 Industrial parks/food parks
Industrial parks for food processing, termed as food processing parks are usually formulated
in public-private partnership model. This could be attributed to the fact that, in the agro-
industrial sector, clusters are unlikely to naturally evolve and so they must, therefore, be
induced. The role of government is to play a central role in the inducement process, to
catalyze the process, facilitate it and, to some extent, bankroll it, at least in the first stage. For
the cluster to be successful, its members must buy in to the process and be empowered to
assume leadership from the onset.[2]
The development of the highly sophisticated international agro park - Green port near
Shanghai, China, has pioneered the development of agro-parks based on principles of closed
cycles in the flows of energy, CO2, nutrients, water and wastes. The result is a world-class,
ecological urban agro-food production and processing system innovation.
In India, the concept of food parks has caught on, with both private and government sector
initiatives involved.
[1] Source: Agriculture Processing and Exports Development Authority (APEDA)

[2] Source: Establishing clusters: agro-industrial clusters and food parks , GAIF 2008,
http://www.gaif08.org/content/roundtable_propositions_establishing_clusters.pdf

Table 3.7: Major food parks in India
Size Year of
Name of food park Location Tenants
(acres) establishment
Parison foods, Fosters

foods, Merry Times
KINFRA food Kakkancherry,
60 Foods, Falcon Foods, 2003
processing park Calicut, Kerala Rime Rich, Central
Warehousing Corp.
Sudha Ras Howrah (NH-6)

(Sankrail) Agri Bio Calcutta, West 50 Frito Lay (Pepsico India) 2006
Park Ltd. Bengal
Shirwal, Satara
Chordia Food Products,
district, 55km
Chordia food park 30 Heinz Natco of UK, 2002
from Pune,
Capital Foods
Maharashtra
Shirwal, Satara
Western Agri Food
district, 75 NA 2009
Parks Ltd.
Maharashtra
Source: EY research
3.3.3 Food Parks in India
Development of food parks is envisaged to spur growth in the food processing industry,
providing common infrastructure, proximity to raw material, sales and distribution channels.
The Government has promoted food parks since the VIII Five Year Plan (1992-1997) to
promote the food processing industry. Although 54 parks were approved in the plan, most of
them are yet to be established. Only eight parks out of the total of 25 parks sanctioned in the
X Five Year Plan (2002-2007) were established, with many suffering from under utilization.
There have been a number of reasons for the food park scheme not becoming a success viz.:
Absence of strong backward linkages food parks are often not in close proximity to the
source of produce
Weak linkages with the market
Inadequate basic infrastructure such as roads, power and water
Lack of common facilities under a cluster within the park including
on farm storage
processing infrastructure including mobile pre-cooling units, primary processing,
mobile processing unit and packaging centre
palletisation
retail outlets
Lack of entrepreneurial initiatives, interest and aggressive promotional marketing efforts

Food parks can be revived by addressing key failures including appropriate institutional
development at the grass root level through the involvement of small and marginal farmers,
developing clusters of producers, and providing efficient processing and storage infrastructure
at low cost with effective distribution linkages.
3.3.4 Special economic zones (SEZ)
In the case of a food processing SEZ, the cluster is oriented towards export production, and is
typically facilitated by world-class design and infrastructure, often the best in the country, and
sometimes the world. SEZs are deemed as foreign territory and can avail of multiple tax
benefits under the SEZ policy. Providing the benefits of an SEZ to the food park would reduce
the cost of production and increase quality and competitiveness of processed food products.

Value and supply chain of food processing
Chapter four
industry
4. Value and supply chain of food
processing industry
4.1 Value chain
In food processing, the basic value chain for any segment typically starts from the farm and
ends at the consumer.
Raw materials are transported/supplied to food processing units from the farm, where they
are prepared, processed and packaged to be sent to the distributors and retailers. The retailer
then sells the end product to the consumer.
Different food products have unique supply chain attributes with multiple procurement
channels, different layers of intermediaries and storage requirements.
A typical value chain in the processed food industry is illustrated below:
Figure 4.1: Value chain of food processing industry
Food processing value chain
Harvesting Transportation Processing Distribution and retail
Aggregation, Packaging, Food

Farm Preparation, Consumers
storage and Exports
produce Processing marketing retailing
logistics
To maximize productivity and create a robust value chain, prominent organized players in India
are collaborating with raw material producers (farmers) and the aggregators/logistics
providers. This increasing integration of backward and forward linkages of players across the
value chain has led to the emergence of the business models such as contract farming, custom
farming and terminal markets.

4.2 Food supply chain
The food and grocery supply chain in India is highly fragmented and is clogged with several
intermediaries including farm processors, distributors and retailers, resulting in high costs.
The various intermediaries are connected by weak infrastructure, resulting in most of them
working in silos. This prevents sharing of information and effective supply chain planning.
Fig 4.2: Traditional food and grocery supply chain
Source: EY FICCI report, Winning with intelligent supply chains, 2007
Indias supply chain operates at two levels - first operated at the farmer level, and the second
at the food processor level. This is unlike developed economies, like US and Europe, where
the two operate as a single supply chain. Typical food supply chain in India consists of a
farmer, consolidator, Agriculture Produce Market Committee (APMC), agent distributors,
wholesaler, distributor and retailer.

Farmers have small land holdings and lack even the basic infrastructure to carry out any post
harvest practices, such as pre-cooling or storage. After setting aside 35% to 40% of the produce
for personal consumption (including barter), the rest is usually offloaded at the Agriculture
Produce Market Committee ( APMC) markets, either directly or through small local retailers and
consolidator agents. The produce at the APMC markets are procured directly by retailers or by
distributors who would process the produce and sell them to small retailers. This multitude of
intermediaries adds to transaction costs, resulting in sharp increase of sales price that is more
than 3.5 times the farm gate price.
4.2.1 Supply Chain Models
Different food product categories have unique supply chain attributes with multiple procurement
channels, different layers of intermediaries and storage requirements.
a. Cereals and pulses
Cereals and pulses are staple consumption products in India. Cereals like rice and wheat are major
commodities in the public distribution system managed by the Government to facilitate low priced
grains through fair price shops. APMC markets mandis facilitate the trade of fresh produce
between farmers or consolidator agents and the wholesalers. Spot exchanges like National Spot
Exchange and MCDEX are other facilitators that provide an opportunity for farmers to sell their
produce at transparent prices.
Food processing companies in India often procure their supplies through the APMC mandis or via
consolidator agents. Some large organized retailers use a central procurement model which is
based on direct procurement from farmers or through APMC or from processing units (Millers).
Retailers like Reliance Retail are developing a farm to fork model which allows them to procure
directly from the farmer. Small and mid-sized retailers, however, procure their supplies from the
wholesaling network as their procurement volumes are limited. However, due to ineffective
policies and lack of infrastructure, such a model which reduces intermediaries by direct sourcing
is yet to be successfully implemented.

Fig 4.3: Cereals and pulses supply chain

b. Milk and dairy products
The milk distribution model (Refer Fig 4.4) involves the direct sale of liquid milk by producers to
end users, as well as through the traditional Dudhaiya system, which involves a local
consolidator agent (Dudhaiya). The Dudhaiya usually operates through an advance payment
system to ensure guaranteed supply, and the procured milk is then sold to end customers or to
chilling centres and processing plants.
The processed dairy products are distributed through distribution centres or Consignee Agent
(CA)/Carrying and Forwarding Agents (CFAs) to retailers and end consumers. The dairy sector
has a well developed producers cooperative model. Some cooperatives supply directly to
processing companies, whereas others, such as Amul, carry out dairy processing on their own
before supplying the final product to consumers through wholesalers and large/ small retailers.
Fig 4.4: Milk and dairy products supply chain

c. Fruits and vegetables
Farmers producing fruits and vegetables currently sell their fresh produce directly to
consumers in rural and urban markets or through the APMC market. Many farmers also deal
with consolidator agents. Large retailers procure supplies through the APMC route or from
farmers through consolidator agents. The food processing companies sell the final product
through their Clearing Agent/ Clearing and Forwarding Agent (CA/CFA) depot network and
wholesalers to small retailers or deal directly with large retail chains.
Fig 4.5: Fruits and vegetables supply chain

d. Poultry, meat, and marine products
The poultry sector includes both organized and backyard operations. More than two-third of
egg production and almost the entire broiler production are carried out in the organized sector
in India. Poultry producers supply the raw or processed produce to distributors, and through
the wholesale network to retailers and institutions including hotels and catering firms.
The meat supply chain spans across slaughter houses to chilling units and further to processing
units. The processed meat is then prepared for exports or sold through the wholesale network
to retailers and end consumers. The fish and marine products supply chain comprises
consolidator agents who procure the fish produce from fishermen and either sell the fresh
produce directly to end consumers or to processing units. Chilling units and cold chain
infrastructure form a key component of these supply chains to ensure the preservation and
freshness of the final product.
Fig 4.6: Poultry, meat and marine products supply chain

4.3 Modern food supply chain practices
Internationally and in India, companies and farmers have adopted practices that have allowed
them to reduce their cost of procurement and marketing, improved the quality of produce
while offering lower prices to consumers. These include:
a. Contract farming
Contract farming is an option in regions where most farmers have small land holdings and are
unable to compete without the services provided by contract farming companies. In contract
farming, selective crops are grown under a buyback agreement with an agency engaged in
trading or processing. The produce could be purchased by large retailers, smaller companies,
government agencies, farmer cooperatives or individual entrepreneurs.
In India, contract farming has been successful with potato, tomato and chili in Punjab, palm
oil in Andhra Pradesh and seed production contracts for hybrid seed companies in Karnataka.
However, lack of enforceability and a good structure that protects the interest of all
stakeholders, has hampered the growth and popularity of this model.
b. Custom farming
Unlike contract farming, in custom farming companies can procure only that part of the
produce that meets their requirements both in terms of volumes and quality. Custom farming
is an alternative for companies that do not want to lease farmland or enter into restrictive
contract farming arrangements. In custom farming, companies can agree to cultivate the
farm land owned by small farmers/landowners, implementing their modern farming
techniques and bringing in their own equipment. The company engaging in custom farming
does not have to bear the cost of owning/leasing the farm land. Fuel, lubrication and
equipment repair are the primary additional costs. In return, the small farmer/ landowner
gets to keep the entire produce with the company procuring only a portion of the produce.
The remaining stock with the farmer can be sold to other parties.
c. Direct marketing
Direct marketing allows farmers, processors and other bulk buyers to economize on
transportation cost and improve price realization. In this channel, the produce moves directly
from farmers to consumers without middlemen. Farmers are encouraged to undertake
grading of farm produce at the farm gate and obviate the need to transport the produce to
regulated markets for sale. Some examples of these channels include Apni Mandi, Hadaspar
Mandi, Rythu Bazars and Uzhavar Sandhai- Fair trade organization (FTO) owned by Tamil
Nadu Government. These channels are mostly adopted in sales transactions of highly
perishable commodities such as fruits, vegetables and flowers. Direct marketing not only
reduces prices for consumers but also allows farmers to get a greater share of the price paid
by the consumer. However, a good cooperative mechanism is required to replicate this model
successfully.

4.4 Emerging models in the food supply chain
The deficiencies in the traditional food supply chain provide organized retailers and procurement
aggregators with considerable opportunities to improve efficiencies, reduce wastage and offer
farmers a better price realization while providing consumers with products at competitive prices.
Many retailers may seek to duplicate successful strategies from overseas. But the local market
conditions may prove to be too challenging for such players. Companies can succeed by adapting
supply chain strategies to local conditions.
Emergence of e-retailing in the food and grocery category enabled by the increased use of
technology allows retailers to cater to customer demand for fresh produce with lesser lead time.

Fig 4.7: Food supply chain- business models
Old model in India

Farmers co-operative Enables disintermediation
model Minimum investment in infrastructure at collection centres
Fixed price and convenient shopping
Direct sourcing from the farm

Eliminating /limiting control of intermediaries
Farm to fork
Capital intensive model; requires significant investment in backend
model
operations
Contract farming
Builds relationships/exploits existing relationship at the source

Role change of intermediaries
Wholesaling
Investment in backward linkages
model
Acting as wholesalers to retailers, retailers to farmers
Transparency in price discovery
Contract farming/corporate farming/outsourced farming
High investment in post harvest infrastructure
Export driven Mainly export driven, lately forward integration through self-owned
model
stores
Focus on quality, grading and packaging
Sourcing from intermediaries or with an APMC license

Broad line food High investment in food processing distribution centres, cold chain
distribution model Focused on managing backend operations for
institutions/restaurants, lately setting up own stores
Sourcing from aggregators/wholesalers

Fifty-fifty
Minimal investment in backend operations
model
Focused on creating demand rather than meeting demand
Sourcing from aggregators/wholesalers/farmers

E-retailing model Minimal investment in backend operations
Focused on front-end web enabled infrastructure

4.5 Challenges in the food supply chain
As discussed in the earlier section the food supply chain in India is fraught with a number of
challenges, including fragmented land holdings resulting in lack of scale in operations, non-
availability of credit, lack of grading and post harvest infrastructure, and no price discovery
linkages with the consumer.
As a result of this inefficiency the farm gate price in India is very low as compared to international
markets, despite the prices for the consumer being significantly higher.
Fig 4.8: Illustrative prices from farm gate to consumer
Farmer Trader Wholesaler Retailer Consumer

(28%) (35%) (15%) (22%) (INR 100)
a. Procurement
The unorganized structure of the supply chain and lack of backward linkages have served as major
impediments to procurement and handling. Poor infrastructure and inconsistency in capabilities
between top tier and smaller suppliers have meant that organized retailers have more suppliers
for the same product vis--vis international benchmarks. A majority of suppliers lack in critical
elements of service, viz. quality, delivery reliability and value added services. Product quality is
compromised due to inadequate infrastructure and poor connectivity. With just 4% of suppliers
within 5 km of a manufacturing facility and more than 50% located at distances of over 500 km,
delivery time of suppliers show huge variances.
One solution to managing a huge supplier base could be to empower the smallest supplier by
creating collectives as in the case of Amul. A cooperative model will provide farmers with:
benefits of scale
easy access to agricultural inputs and modern storage practices
better negotiating power with procurement agents
opportunity to deal directly with retailers and other consolidation agents without having to go
through the APMC
Another option could be the use of electronic media to link suppliers in an efficient manner
enabling free flow of information as has been done by ITCs e-choupal.
Globally, many retailers have developed a procurement strategy that allows them to buy large
volumes at low cost thereby, providing their customers with products at lower prices. Tesco in
the UK is one retailer that has successfully pursued this strategy all along while also adopting new
delivery formats to emerge as a market leader.

b. Post-harvest losses
Improper harvesting methods, lack of pre-

Losses at the retail, service and consumer
cooling after harvesting, incorrect handling
levels, estimated to be:
techniques and aggregation of the produce and
transportation are among the major causes of approximately 10% in developed
post harvest losses. At the wholesaler level, countries
the major losses occur due to rough handling
approximately 20% in developing
and inappropriate storage practices. countries
Post harvest losses can be curtailed to a large
Losses because of poor handling practices
extent if farmers adopt simple practices like
(cleaning, sorting, grading and packaging)
pre-cooling within five hours of the harvest, as
at the village level, estimated to be:
this alone will help double the shelf life of the
produce. Use of fabricated storage and 30% for fruits and vegetables
maintaining the produce in a chilled 10% for spices
environment during storage and transportation
can further prolong the shelf life. Source: EY FICCI report, Winning with intelligent supply
chains, 2007
With only 7% of products being graded before sale, farmers often get low realizations for their
produce. Setting up pack houses that provide pre-cooling infrastructure along with grading,
sorting and temperature controlled storage facilities in proximity to village clusters will help
minimize pre-harvesting losses and improve shelf-life of the produce.
c. Wastage
The wastage of agricultural food items is estimated to be about INR685 billion (USD14.15) billion
annually [1]. Post harvest losses, lack of farm economies of scale and lack of modern storage
facilities including cold chains are some of the reasons for this large wastage in the food supply
chain. Multiple-point handling and long transit periods in a complex supply chain with multiple
intermediaries also result in breakages of produce and wastage.
d. Intermediaries Fig 4.9: Mark-up from farm gate to consumer
400
Indias large size and poor infrastructure 350
350
makes outsourcing imperative at every 300
level. India has 6 to 7 intermediaries in the 250 220
fruits and vegetables supply chain, as 200 160
150
against 2 to 3 in developed countries. 100
100
These intermediaries play a vital role in 50
linking farmers with consumers in the 0
traditional supply chain, but their Farm gate Milk Fish Fruits and
inefficiencies raise costs by up to 3.5 times prices vegetables
of the farm gate price.
Retail markets
Source: EY research
Many of these intermediaries have strong linkages as they act as financiers - locking the farmer
into supplying their produce which makes it difficult for the farmers to break out. Unlike organized
retailers who procure only the top quality produce, these middlemen allow farmers to sell their
entire stock to them. Retailers seeking to completely eliminate intermediaries can achieve critical
mass quickly by developing relations/linkages with large number of farmers through the
middlemen, till they scale up and contract farming becomes viable.

e. Inadequate cold chain facilities
Existing cold chain infrastructure in India is largely focused on serving the export requirements
of the country. Large scale investments in the domestic cold chain infrastructure, however,
have not taken place so far.
More than 90% of the storages are individually owned. The small scale of operations of existing
players means refrigeration during transport is very expensive In the absence of organized
players, there is minimal investment in modern state-of the-art infrastructure for cold chains.
One disincentive currently is that investments in a cold chain infrastructure are viable only if
the produce is preserved for at least 100 days. In India, however, the typical inflow for raw
material from agriculture is within the range of 30 to 40 days for each product. Fruits and
vegetables are consumed within the vicinity of production centres, requiring little cooling. With
the emergence of the convenience food culture and rising consumption of processed foods,
this scenario is likely to change in the future. A number of large retailers, including Reliance
Retail , are currently investing in developing a farm gate to consumer cold chain infrastructure.
The Indian Railways is also considering a plan to make its surplus land across the country, close
to its railway stations, available for the development of cold chain and warehousing
infrastructure.
f. Multiplicity of regulations
A regulatory regime that is conducive to investments from the private sector is essential for
the emergence of a strong food processing and distribution value chain. India has multiple laws
which prescribe varying standards for a range of food products including additives,
contaminants, preservatives, and labeling. Different tax structures across states currently
make it easier to import food items rather than transporting from one state to another.
The Essential Commodities Act, The Prevention of Food Adulteration Act, and The Fruits
Product Orders, 1955 have also contributed to making internal trade difficult and fragmented
markets. The Agricultural Produce Marketing Act (APMC) increased costs by keeping the
producer and consumer apart. Processing industries can buy produce from farmers mainly
through notified markets and not directly. For agricultural markets to be developed in private
and cooperative sectors, and to be provided a level competitive environment, the existing State
APMC Acts need to undergo a change. Many states have reformed this Act while a few still
need to do so.
Reform of the APMC and Essential Commodities Act will remove the restrictive provisions that
come in the way of an efficient and competitive marketing system.
The Food Safety and Standards Act 2006, needs to be put in place to avoid the contradictory
provisions in various Acts and develop a harmonized system of standards. The emergence of
an Integrated Food Law will provide a huge fillip to the food processing industry and aid the
development of an efficient distribution infrastructure.

Food processing industry in Madhya
Chapter five
Pradesh
5. Madhya Pradesh overview
5.1 Madhya Pradesh (MP) state overview
Spread across an area of 308,000 sq km, MP is the

second largest state of the country, constituting 9.4 per
cent of the total geographical area. It is bordered by the
states of Rajasthan, Uttar Pradesh, Chhattisgarh,
Maharashtra and Gujarat.
According to Census 2001, the state had a population of

60.3 million, which is about 6% of the countrys total
population. Urban population of the state is estimated as
close to 16 million, while the rural population is estimated
at 44.3 million. States population density is 196 persons
per sq km, compared to an all-India average of 313
persons per sq km.
With a Net State Domestic Product (NSDP) of around

INR475 billion (USD9.8 billion), Madhya Pradesh is the
ninth largest economy in India.
Table 5.1: Madhya Pradesh- state snapshot
Population (Census 2001) 60.3 million
Population density ( Census 2001) 196 per sq. km.
Sex ratio (Census 2001) 920 (females per 1000 males)
Principal languages Hindi
Literacy rate (Census 2001) 64%
Major industries Cement, textiles ,minerals and edible oil
Major crops Soyabean ,gram, pulses like masoor and arhar
Domestic airports Bhopal, Indore, Gwalior, Jabalpur and Khajuraho
GSDP at current prices in 2004-05 INR1,271,842 mn
Annual per capita income at current prices in

INR43,000
2006-07
Source: Department of Finance, Government of Madhya Pradesh

5.2 Madhya Pradesh infrastructure overview
5.2.1 Road network

Fig 5.1: Map showing road network across Madhya
Pradesh
Roads carry 80% of the goods and
passenger traffic in Madhya Pradesh. The
total length of roads spanning MP is
67,600 km. About 5,200 km of national
highways (NH) run through the state. The
road network provides convenient linkages
to ports on the west coast, including
Kandla and Jawahar Nehru Port Trust
(JNPT). There are 18 national highways in
the state, including trunk routes of Delhi-
Mumbai, Delhi-Chennai, Delhi-Bangalore
and Delhi-Hyderabad. The total length of
state highways (SH) is 9,885 km.
5.2.2 Railway network

Source: IBEF and EY study
The state is well connected with the rest of
India through a vast railway network.
Almost 425 trains pass through the state Fig 5.2: Map showing railway network across Madhya
daily, with Bhopal, the state capital, alone Pradesh
accounting for 175 trains.
The total length of the railway network in

Madhya Pradesh is 5,992 km. Of this,
almost 1,880 km is electrified. Currently,
railway upgradation projects include
adding 1,151 km of railway lines at a cost
of INR22,255 million (USD460 million) and
implementing a major track modernization
programme to convert 285 km of existing
metre gauge routes to broad gauge at a
cost of INR5,418 million (USD112 million).
The completion of these projects will
further strengthen the railway network in
the state. Source: IBEF and EY study
Under Delhi-Mumbai Industrial Corridor (DMIC) project, investment regions of around 100-200
square km would be developed around the Dedicated Freight Corridor (DFC). The development
will drive economic activity and provide access to JNPT port. Four areas have been selected in
Madhya Pradesh for development of investment regions. These are:
(1) Pithampur-Dhar-Mhow Mega Investment Region
(2) Dewas-Shajapur Investment Region
(3) Ratlam-Nagda Mega Investment Region
(4) Neemuch-Nayagaon Investment Region

5.2.3 Airports [1]
Fig 5.3: Map showing airports across Madhya Pradesh
The state has five operational airports and
Q
twenty five airstrips with regular services. There Gwalior
are convenient flights from Delhi and Mumbai to
Bhopal, Jabalpur, Gwalior, Indore and Khajuraho.
Q Q
Indore airport has the capability to handle Khajuraho
Q
international cargo. An international airport is
Q
Bhopal
being proposed for Bhopal. Jabalpur
Indore
5.2.4 Water supply [1]

The state has several major rivers including Mahi, Narmada, Tapti, Chambal, Betwa,
Wainganga, Ken, Sindh and Pench, which offer 56.85 MAF (million acre feet) of water. Of this,
69.74% has the potential to be harnessed for irrigation purposes. Besides, 23.55 MAF of
ground water is also available, of which 50 per cent can be utilized for irrigation purposes. The
net irrigated area in the state in 2005-2006 was 5.68 million ha, which was 37.69% of the net
area sown.
The state has developed an irrigation potential of 2.4 million ha; the utilization, however, is
only about 50%. Besides this, Narmada Valley Development Authority (NVDA) has developed a
potential of 230,000 ha. The Rural Development and Agriculture Departments are also
contributing to water harvesting and creation of irrigation potential.
5.2.5 Power [1]

The installed capacity of the Madhya Table 5.2: Power fact file for Madhya Pradesh
Pradesh State Electricity Board
(MPSEB) as on October 30, 2008 was Power generation installed capacity 6.449.25 MW
3,692.95MW. Further, the state has a
Power generation 24,834 MW
share of 1,665.85 MW in Central
Sector Projects and additional Total power available 50,679 MW
allocation of 50 MW is available from
Eastern Region Electricity Board Per capita power consumption 352KWh/annum
(EREB). Apart from the above, 1,000 Source: www.indiastat.com

MW from Indira Sagar HEP and 712.5
MW from Sardar Sarovar HEP
(interstate) is also available. Thermal
energy accounts for 95.66% of Madhya
Pradeshs electricity generation
capacity, and the rest is based on hydel
generation.
[1] Source: IBEF and EY study

5.3 Agriculture overview of Madhya Pradesh
Agriculture is the predominant economic activity in the state, with 73% of rural population
largely dependent on it .The agriculture sector forms almost one-third of the GSDP and forms
the states economy. The state also shares a major share of the national agriculture
production. Madhya Pradesh is the fourth largest producer of agri produce in India with the
lowest consumption of fertilizer per hectare.
The state has five crop zones, eleven agro climatic regions and four soil types, which add to
the biodiversity in the state and make it favourable for the production of various crop types.
Fig 5.4: Sectoral contribution to GSDP- Fig 5.5: Land use classification Madhya Pradesh
Madhya Pradesh
11%
32% 28%
32% 4%
3%
48%
48%
4%
49%
20%
20%
Net area sown Forest

Primary sector Secondary sector Forest
Not available for cultivation Other cultivable land
d excluding fallow land
Secondary sector Tertiary sector Cultivable waste land Fallow land
Source: Review of Madhya Pradesh Economy, Source: Compendium of Agriculture Statistics 2006-07, Madhya
CMIE, August 2004 Pradesh
Of the total gross cultivated area 59% is sown in the Kharif season (June November), 41%
in the Rabi season (October - June) and multiple cropped area is about 24%. Of the total area
of 308,000 sq km in Madhya Pradesh 49% area is under the net sown area.

5.3.1 Soil types and agro-climatic zones in Madhya Pradesh
The state has four different soil types available in four distinct parts. The western and central
regions are covered by medium and deep soil constituting 53% of the soil area. The eastern part
of the State is primarily covered by black soil which comprises 25-26% of the total geographical
area.
Most of the States potential in agriculture lies in the central and western zones. These zones are
rich in medium and deep soil.
Fig 5.6: Soil types in Madhya Pradesh
II
I Medium and deep soils
IV II Alluvial soils
Bhopal
I III Shallow and medium
black soils
IV Black soils
III
Bhopal cluster
Source: Compendium of Agriculture Statistics 2006-07,

Madhya Pradesh
S.no. Soil type and % of total area Name of districts
Narsingpur, Hoshangabad, Harda, Shahdol,

Umaria, Jabalpur, Katni, Sagar, Damoh,
Medium and deep soil Vidisha, Raisen, Bhopal, Sehore, Rajgarh,
I Ujjain, Dewas, Shajapur, Mandsaur, Neemuch,
(36.53%) Ratlam, Jhabua, Dhar, Indore, Khargone,
Barwani, Khandwa, Guna (partly), Shivpuri
(partly),Datia (partly) and Sidhi (partly)
II Alluvial soil (7.57%) Gwalior, Morena, Sheopurkala and Bhind
III Shallow and medium black soil (6.91%) Betul, Chhindwara and Seoni
Mandla, Dindori , Balaghat, Rewa, Satna,

Panna, Chhatarpuur, Tikamgarh,
IV Black soil (26.39%)
Shivpuri.(partly), Guna (partly), Datia (partly),
and Sidhi (partly)

Fig 5.7: Distribution of agro climatic zones and crop zones across Madhya Pradesh
VI
VII
III
IX
IV
XI
II
V
X VIII I
Wheat/ Wheat/ Rice

Cotton/ Rice Zone Wheat Zone
Jowar Zone
Jowar
Legend
Zone Name Regions
I Chattisgarh Plains Balaghat
Northern Hills Zone of

II Mandla, Dindori, Shahdol, Annupur, and Umariya
Chattisgarh
Kymore Plateau and

III Jabalpur, Katni, Seoni, Rewa, Panna, Sidhi
Satpura Hills
IV Vindhya Plateau Sagar, Damoh, Bhopal, Raisen, Sehore and Vidisha
V Central Narmada Valley Narsinghpur, Hoshangabad and Harda
Gwalior, Guna, Ashok Nagar, Morena, Shivpuri,

VI Gird Zone
Sheopur and Bhind
VII Bundelkhand Zone Datia, Chattarpur and Tikamgarh
VIII Satpura Plateau Chiindwara and betul
Indore, Ujjain, Neemuch, Dhar, Mandsaur,Dewas,

IX Malwa Plateau
Ratlam, Rajgarh
X Nimar Valley Khandwa, Khargone and Badwani
XI Jhabua Hills Jhabua
Source: Compendium of Agriculture Statistics 2006-07, Madhya Pradesh

5.3.1.1 Agro climatic regions and horticulture crops in Madhya Pradesh
Table 5.3: Agro climatic regions and horticulture crops in M.P
S. Name of agro- Soil type Name of Horticulture crops

No. climatic regions districts recommended
Mango, sapota (chiku), guava,

lime, banana, papaya,
munga, pomegranate, colocasia,
Chhatisgarh Plain Sandy loam
1 Balaghat aonla in irrigated condition,
Balaghat District and light black
turmeric, chillies, ginger, jack
fruit, ber, in arid condition (all
vegetables)
Pear, peach, litchi, mango, jack

Northern Hill Red and yellow Shahdol, Mandla, fruit, coffee, turmeric, ginger,
2 Region medium black. Dindori, Annupur tree spices, off season
of Chhatisgarh (medium/light) and Umariya vegetables, medicinal and
aromatic crops
Jabalpur, Katni, Mango, guava, lime, ber, aonla,

Kymore Plateau Shallow, black
3 Seoni, Rewa, chillies, coriander and other
Satpura Hills with red soil
Panna and Sidhi seasonal vegetables
Mango, acid lime, mandarin, ber,

Narsinghpur,
Central Narmada Deep black guava, aonla, papaya, medicinal
4 Hoshangabad
Valley sandy loam and aromatic plants and all
and Harda
seasonal vegetables
Mandarin, acid lime, sweet lime,

Sagar, Damoh,
aonla, pomegranate, mango, ber,
Medium deep Bhopal, Raisen,
5 Vindhya Plateau chiku, papaya, turmeric, chillies,
black, gravel Sehore and
coriander, ajwine, and all
Vidisha
seasonal vegetables
Mandarin, sweet orange, lime

Gwalior, Guna,
under assured irrigation, guava,
Alluvial, loamy, Ashok Nagar,
ber, aonla, custardapple under
6 Gird Region loam, loamy Morena, Shivpuri,
rainfed condition, coriander,
light Sheopur and
chillies, garlic and seasonal
Bhind
vegetables
Orange, sweetlime, acid lime,

Mixed red and Datia, Chattarpur aonla, mango, sapota (chiku),
7 Bundelkhand
black (medium) and Tikamgarh karonda, ginger turmeric,
dioscoria and colocasia
Orange, sweetlime, acid lime,

Shallow black Betul and mango, guava, ber, chillies,
8 Satpura Plateau
gravel Chhindwara turmeric, flower marigold,
colecrops and other vegetables

S. Name of agro- Soil type Name of districts Horticulture crops
No. climatic regions recommended
Orange, acid lime, sweetlime,

Indore, Ujjain,
grape, sapota (chiku) under
Medium Neemuch, Dhar,
9 Malwa Plateau irrigated conditions, ber, guava,
black gravel Mandsaur,Dewas,
pomegranate, coriander,
Ratlam, Rajgarh
fenugreek and vegetables
Mango, banana, grape, papaya,

chiku, lime, guava, and
Khandwa,
Medium pomegranate in irrigated
10 Nimar Plains Khargone and
black condition. Turmeric, chillies,
Badwani
colocasia, fennel and seasonal
vegetables
Medium Lime, sweetlime, ber, guava,

gravel black, aonla, custard apple,
11 Jhabua Hills Jhabua
light pomegranate, garlic, methi and
medium seasonal vegetables

5.4 Food grains in Madhya Pradesh [1]
Madhya Pradesh is predominantly Kharif crop growing state occupying about 54.25% of the
total cropped area in the state. Madhya Pradesh is the largest producer of pulses (linseeds,
gram, maize) and oilseeds and the second largest producer of jowar and masoor in the
country. Madhya Pradesh produces about 16 million tonnes of food grains (comprising 12.6
million tonnes cereals and 3.4 million tonnes of pulses) and 5.7 million tonnes of oilseeds.
About 41% of cropped area in Madhya Pradesh is generally occupied by cereal crops, 21% by
pulses and 27% by oilseeds. Rest 11% of the area is occupied by vegetable, fruits, fodder and
other horticultural crops.
5.4.1 Cereals and pulses [1] Fig 5.8: Total cereals production in Madhya Pradesh
(2002-07)
12,469 10,944 10,544
10,227
Madhya Pradesh ranks second in the 10000
8,373
(in 000'tonnes)
production of lentils and niger seeds. 8000

Production in
tonnes
About 25% of the countrys pulses (44% - 6000

4000
gram) are grown in the state. Major
000
2000
cereals and pulses grown in Madhya
0
Pradesh include wheat, paddy, gram, 2002-03 2003-04 2004-05 2005-06 2006-07
maize, jowar, small millets (bajra), tur, Source: Destination Agribusiness- March 2008, Government
lentil (masoor), urad, moong moth and of Madhya Pradesh
koolthi amongst others.

Fig 5.9: Total pulses production in Madhya Pradesh
(2002-07)
The state enjoys a distinct advantage due 4000
3,488 3,351
to production of specialized wheat 3,259 3,204
000000'tonnes)
varieties such as Durum wheat which 3000

2,376
Production in
commands a higher price compared to

tonnes
2000
non durum wheat, mainly on account of
(in
its use in processing wheat products. 1000
0
2002-03 2003-04 2004-05 2005-06 2006-07
Source: Destination Agribusiness- March 2008, Government
of Madhya Pradesh
Pulses Main production areas Cereals Main production areas
Chindwara, Narsingpur, Hoshangabad, Dhar, Sehore, Vidisha,

Wheat
Tur Betul, Siddhi, Raisen and Indore, Raisen, Gwalior and Shivpuri
Khandwa
Balaghat, Seoni, Rewa, Siddhi, Satna,
Paddy
Vidisha, Raisen, Sagar, Katni, Mandla and Jabalpur
Lentil Jabalpur, Satna,
(masoor) Narsingpur, Panna and Vidisha, Sagar, Narsingpur, Rasien,
Gram
Rewa Datia and Chatarpur
Chindwara, Jhabua, Dhar, Ratlam,

Maize
Mandsaur and Shajapur
Khargone, Betul, Rajgarh, Ujjain,

Jowar
Barwani and Chindwara
[1] Source: Destination Agribusiness- March 2008, Government of Madhya Pradesh
5.4.2 Oilseeds [1]
A wide range of oilseeds are being produced in Madhya Pradesh including mustard,
groundnut, sunflower, sesame, rapeseed, soyabean, linseed and castor. The state is a leading
producer of soyabean in India contributing to about 75% of the total national production. Of
the total oilseed production in the state, almost 75% is attributed to soyabean.
Oilseeds Main production areas Fig 5.10: Total oilseeds production in Madhya Pradesh
(2002-07)
Mustard Morena, Bhind, Sheopur,
and rape Kalan, Gwalior, Shivpuri 6,054 5,813
6000 5,624
seed and Mandla 4,908
000'tonnes)
Shivpuri, Chindwara, 4500

Production in
tonnes
Groundnut Tikamgarh, Barwani, 3,144

Jhabua and Khargone 3000
000
(in
Ujjain, Dewas, Sehore, 1500

Shajapur, Rajgarh, Dhar,
Soya bean
Indore, Mandsaur,
0
Hosangabad and Harda
2002-03 2003-04 2004-05 2005-06 2006-07
Destination of
Source: Directorate Agribusiness- March
Horticulture, 2008,
Madhya Government of
Pradesh
Madhya Pradesh

5.4.3 States share and rank in national agriculture production
Madhya Pradesh is the leading producer of pulses, gram and soyabean where as second largest
producer of oilseeds.
States share and rank in national agriculture production

Crop Rank
(2006-07)
Madhya Pradesh 24.14% 1
Uttar Pradesh 16.67%

2
Pulses
Maharashtra 15.02%
3
0% 5% 10% 15% 20% 25% 30%

Madhya Pradesh ranked 1
Maharashtra 12.68% 2
Gram
Uttar Pradesh 11.79% 3
0% 10% 20% 30% 40% 50%
Soyabean
Rajasthan 10.40% 3
0% 10% 20% 30% 40% 50% 60%

Rajasthan 21.30% 1
Oilseeds Madhya Pradesh 20.44% 2
Gujarat 16.73% 3
0% 10% 20% 30%

States share and rank in national agriculture production Rank
Crop
(2006-07)
Karnataka 21.89% 2
Jowar
0% 10% 20% 30% 40% 50% 60%
Rajasthan 54.37%
1
Rape/ Uttar Pradesh 11.19%

2
mustard
seed Madhya Pradesh 10.46%
3
0% 10% 20% 30% 40% 50% 60%
Maize
4 6 7 8 11 13
Wheat
Madhya Pradeshs rank and share
Arhar
10% 8.76%
8.50% 8.59%
Cotton
8%
Bajra
6% 5.11%
4.05%
Groundnut 3.52%
4% 2.88%
Cereals 1.81%
2% 0.86%
Sugarcane 0%
Wheat
Cereals
Groundnut
Cotton
Maize
Sugarcane
Rice
Bajra
Arhar
Rice

5.5 Horticulture crops in Madhya Pradesh[1]
The total area covered under horticulture crops is 3.5% of the total cultivated area of Madhya
Pradesh. Horticulture crops primarily comprise fruits, vegetables, spices, flowers and
medicinal and aromatic plants. Vegetables comprise around 65% of the total horticulture crop
production in the state. A wide range of tropical fruits and most of the seasonal vegetables are
grown extensively in the state. Moreover, varied agro climatic conditions offer immense scope
for cultivation of variety of horticulture crops.
The State Government has identified horticulture as a thrust sector for promotion. Some of the
major districts for producing horticulture crops are Shajapur, Ujjain, Ratlam, Khandwa,
Mandsaur, Dewas, Indore and Khargone.
Fig 5.11: Distribution of horticulture Fig 5.12: Distribution of horticulture crop zones across
crops by production Madhya Pradesh
3%
7%
27%
63%
Fruits Vegetables
Spices Flowers
Medicinal and aromatic
Source: Directorate of Horticulture, Madhya Pradesh

Coriander Fenugreek Chillies Garlic Potato
Oranges Guava Mango Banana
S.No. Horticulture crop Prominent regions
1 Coriander Guna and Malwa
2 Fenugreek Malwa
3 Chillies Nimar and Bundelkhand
4 Garlic Ratlam and Mandsaur
5 Potato Malwa Plateau and Chhindwara District
6 Orange Satpura Plateau, Hoshangabad and Shajapur
7 Guava Hoshangabad
8 Mango Rewa and Jabalpur
9 Banana Burhanpur and Khargone

[1]Source: Destination Agribusiness- March 2008, Government of Madhya Pradesh

5.5.1 Fruits[1]
Madhya Pradesh ranks eighth in production of fruits in the country and it is the third largest
producer of oranges in the country. Major fruits grown in the state are banana, orange,
guava, lemon, mango and papaya. Banana, orange and mango are the leading fruit crops in
Madhya Pradesh and account for over 82% of the area under fruit cultivation and over 87% of
the total fruit production.
Fruit Main production areas Fig 5.13: Fruits production in Madhya Pradesh
(2002-07)
Betul, Hoshangabad, Jabalpur,
Mango
Bhopal and Jhabua
15
Chhindwara, Mandsaur, Shajapur, 11.1 11.7 12.3
Orange
(in lac tonne)
Rajgarh, Betul and Hoshangabad 10.3

Production
10 9.1
Betul, Jhabua, Jabalpur, Bhopal,

Aonla
Rewa and Tikamgarh 5
Burhanpur, Khandwa, Badwani,
Banana
Khargone and Dhar 0
Rewa, Gwalior, Indore, Ujjain and 2002-03 2003-04 2004-05 2005-06 2006-07
Guava
Hoshangabad Year
Dhar, Ratlam, Burhanpur and Source: Directorate of Horticulture, Madhya Pradesh

Papaya
Badwani
In terms of productivity, Madhya Pradesh enjoys a competitive position in fruit crops such as
orange, sweet lime, banana and mango.
MPs All India

MPs contribution
productivity productivity MPs rank in MPs rank in
Fruit to national
(tonnes per (tonnes per production productivity
produce
hectare) hectare)
Banana 40 30.6 4% 7 4
Orange 16 6.7 20% 2 1
Source: Destination Agribusiness- March 2008, Government of Madhya Pradesh

5.5.2 Vegetables[1]
Most seasonal vegetables are grown extensively across the state. Total production of
vegetables in Madhya Pradesh was 26.21 lac metric tonnes(2006-07). Potato and onion are
the major vegetables grown covering an area of around 26% and 19% of the total area under
vegetable production respectively. Other vegetables grown are tomato, green peas, brinjal,
okra and cauliflower. Potato, onion, tomato and peas account for over 65% of the total
vegetable production in the state. Madhya Pradeshs share in the total national production of
peas is 9%.
Malwa potato grown in the western part of the state ( Malwa region) has low starch content, a
quality that has proven useful for potato chips processing.
Fig 5.14: Vegetables production in Madhya
Pradesh (2002-07)
Vegetable Main production areas
30 28.0 28.1
Indore, Dewas, Shajapur, 26.2
25 23.3
20.6
(in lac tonne)
Potato Ujjain and Dhar

Production
20
Khandwa, Shajapur, Ujjain, 15
Onion Dewas and Ratlam 10
5
Peas Jabalpur and Tikamgarh
0
2002-03 2003-04 2004-05 2005-06 2006-07
The productivity of onion and peas in Madhya Pradesh is high as compared to Indias average
productivity.
All India
MPs Rank in Rank in
productivity 04-
contribution to production productivity
Vegetable 05 (metric
national produce (2004-05) (2004-05)
tonnes per
(2004-05)
hectare)
Potato 3% 6 8 18.8
Onion 7% 6 5 12.7
Peas 9% 8 3 7.1
Brinjal 3% 8 5 16.4

5.5.3 Spices
Madhya Pradesh leads in seed and bulbous spices production with the largest production of
garlic, accounting for 37% of the total national production of garlic. The state is the second
largest producer of coriander in the country. Total production of spices in the state is 3.49
lac tonnes. Garlic, coriander and chilies are the leading spice crops in Madhya Pradesh.
Fig 5.15: Spices production in Madhya Pradesh (2002-07)

Spices Main production areas
4
Mandsaur, Ratlam, 3.1
3.2
Neemuch, Indore, (in lac tonne)
3 2.6
Production
Garlic Chhindwara and Bhopal 2.3
Khargone, Khandwa, 2 1.6

Chillies Badwani and Chhatarpur
1
Shajapur, Mandsaur,
Coriander Rajgarh and Shivpuri 0
Mandsaur, Neemuch and 2002-03 2003-04 2004-05 2005-06 2006-07

Ginger Tikamgarh Source: Directorate of Horticulture, Madhya Pradesh
In terms of productivity, Madhya Pradesh enjoys a competitive position in spices such as

coriander and garlic.
All India productivity MPs productivity

Spice
(tonnes per hectare) (tonnes per hectare)
Chillies 1.01 0.91
Ginger 3.50 1.15
Turmeric 3.53 0.96
Garlic 4.07 4.21
Coriander 1.64 0.39
Source: Destination Agribusiness- March 2008, Government of Madhya Pradesh

5.5.4 Flowers
The major flowers grown are tube rose, roses, marigold and gladious. The main districts for
flower cultivation are Bhopal, Betul, Ujjain, Ratlam and Indore.
Type Flower Production Fig 5.16: Flowers production in Madhya Pradesh

areas (2002-07)
Roses Bhopal, Indore,

Cut Ujjain, Dewas 2500
Flowers 2,000
Bhopal, Indore, 2000
Production
Gladious (in tonnes)
Dewas 1500
850 1,000 1,000 1,000
Tube Rose Ujjain, Bhopal, 1000
Indore
500
Marigold Bhopal, Ujjain,
Betul, Dhar 0
Bulbous
Flowers 2002-03 2003-04 2004-05 2005-06 2006-07
Chrysanthe Indore, Ratlam,
mum Ujjain, Bhopal Source: Directorate of Horticulture, Madhya Pradesh
Glardia Ujjain, Bhopal,

Indore, Betul
Loose Indore, Ujjain,

Aster
flowers Bhopal
5.4.5 Medicinal and aromatic plants
31% of the total area of the State is Fig 5.17: Medicinal and aromatic plants production
in Madhya Pradesh (2002-07)
under forest cover, with largely
2.0
unexploited species of rare and
(in lac tonne)
valuable medicinal and herbal plants.

Production
1.5
1.1 1.15
Major medicinal plants grown in MP are 0.95 0.93 0.94
aonla, bel, white musli, isabgol, 1.0
ashwagandha, ajwain and aloe vera. 0.5
The main districts for cultivation of
medicinal and aromatic plants are 0.0
Katni, Mandla, Chattarpur, Satna, Rewa 2002-03 2003-04 2004-05 2005-06 2006-07
and Umariya

5.5.6 States share and rank in national fruit production
Fruit States share and rank in national fruit production (2006-07) Rank
Tamil nadu 26% 1
Maharshtra 21% 2
Banana
Gujarat 14% 3
Madhya
Madhyapradesh
Pradesh 3% 11
Andhra Pradesh 40% 1
Maharashtra 21% 2
Citrus
fruits 8%
Punjab 3
Madhya
Madhyapradesh
Pradesh 4% 5
Maharashtra 77% 1
Karnataka 12% 2
Grape
Tamilnadu 5% 3
Madhya
Madhyapradesh
Pradesh 0.30% 7
Andhra Pradesh 41.80% 1
Gujarat 18.20% 2
Papaya
West Bengal 11.50% 3
Madhya
MadhyaPradesh
Pradesh 1.10% 10
Source: National Horticulture Board

5.5.7 States share and rank in national vegetable production
States share and rank in national vegetable production

Vegetable Rank
(2006-07)
Uttar Pradesh 55% 1
Madhya Pradesh 9% 2
Peas
Himachal Pradesh 8% 3
Uttar Pradesh 32% 1
West Bengal 29% 2

Potato
Bihar 17% 3
Madhya Pradesh 2% 6
Maharashtra 33% 1
Gujarat 18% 2
Onion
Karnataka 10% 3
Madhya Pradesh 5% 5
Andhra Pradesh 15% 1
Orissa 13% 2
Tomato 13%
Karnataka 3
Madhya Pradesh 3%
10
Orissa 35% 1
Uttar Pradesh 23% 2

Sweet
potato West Bengal 21% 3
Madhya Pradesh 2% 8
Source: National Horticulture Board

5.6 Animal husbandry [1]
Madhya Pradesh with 14% of the countrys total cattle population, ranks first in India. Livestock
contributes to about 12.5% of the state GDP. There has been growth of 79.1% in cross bred
cattle population in Madhya Pradesh during 17th Animal Census (2003) against the growth of
22.8% at national level indicating the success of breeding program in the state. Moreover,
there has been a decline of only 3.7% in indigenous cattle population in Madhya Pradesh
against 10.2% at national level. 14% growth of buffalo population in Madhya Pradesh against
the growth of 8.9% at national level.
The 11 agro-climatic zones and rich biodiversity are the key factors that make Madhya Pradesh
conducive for development of poultry, dairy and rearing of sheep, goats and pigs.
Fig 5.18: Milk production in Madhya Pradesh

5.6.1 Dairy [1]
6%
The total milk production in the state 6,283
Production in thousand tonnes
6400
is around 6.28 million tonnes 6200
contributing to 11.7% to the national 6000
5800
production of milk. Madhya Pradesh 5600
5506
5343 5388
has a model of dairy development 5283
5400
through Madhya Pradesh Dairy Co- 5200
5000
operative Society established on 4800
Anand dairy model. The society 4600
procures around 4.5 lac litres milk per 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006
day. Source: Basic animal husbandry statistics 2006
x% States share in total national production
An increase of about 10-15% in milk production is expected through various programmes

including artificial insemination, cross-breeding, supply of balanced cattle feed etc. being
conducted by Madhya Pradesh State Department of Animal Husbandry and Dairy. This could be
attributed to healthy livestock population in the state and the average milk yield per animal. In
addition, the per capita milk consumption in the state of 233gm per day in 2008 is targeted to
be increased to 500gm per day by 2013.
The co-operative milk unions are spread across 44 districts in the state having a combined
plant capacity of 9 lac litres per day. The desired scenario is to shift milk handling from
unorganized to organized sector by increasing the surplus in year2008 from 30% (co-
operative-16%, private sector-14%) to 70% (co-operatives 40%, private players-30%). The
present challenge is to achieve the estimated demand of 172 million tonnes by year 2021-22.
Under the National Dairy Development Plan, of the total 48 districts, 17 have been identified
as rich districts in milk production where National Dairy Plan (NDP) and Government of India
dairy development schemes have priority. The identified districts are Badwani, Bhind, Bhopal,
Dewas, Gwalior, Indore, Jabalpur, Katni, Mandsaur, Morena, Neemuch, Ratlam, Satna,
Shajapur, Sheopur, Ujjain and Vidisha. The potential in these districts can be facilitated by
developing backward linkages and implementing various government schemes.

5.6.2 Poultry[1]
Fig 5.19: Egg production in Madhya Pradesh
Production of eggs in Madhya Pradesh
7%
is around 902 million and meat
production is around 15.78 thousand 8,962 9,023 9,414
10,000
tonnes. The production of eggs and 7,844
Production in lacs
8,000
broilers in the state has been rising at 6,107
6,000
the rate of 8%-10% per annum.
4,000
2,000
-
2001-2002 2002-2003 2003-2004 2004-2005 2005-2006
Source: Basic animal husbandry statistics 2006
Fig 5.20: Meat production in Madhya Pradesh
Meat production in Madhya Pradesh

1%
25
Production in thousand tonnes
19.5
20
15.8
14.8
15
9.9 10.4
10
0
2001-2002 2002-2003 2003-2004 2004-2005 2005-2006
Source: Basic animal husbandry statistics 2006
x% Statess share in total national production

5.7 Agriculture marketing
Following infrastructure developments are being undertaken by Madhya Pradesh

state government to augment the marketing avenues for agricultural and food
processing produce:
Modern multi modal logistic hubs

Modern whole sale markets
Pack houses, refrigerated vans, waxing plants
Cool chambers, ripening chambers
Centers for perishables cargo at airports
Technology and physical infrastructure up-gradation in existing market yards
Irradiation centers and modern warehousing
Fig 5.21: Status of food parks in Madhya Pradesh as on 2006
Centre for perishable

cargo at Indore Airport : Modern whole-sale market at Bhopal:
The project is being Estimated outlay is approx INR44
funded by Mandi Board crores. Tender for the construction
to be operated by a works are being released. PPP
private player. format for services like cold chain,
hyper market etc.
Irradiation centre at
APMC, Indore -
estimated outlay of
Bhopal Food Park : Food
INR40 crores. Land has Jabalpur
Park is being
been allotted to Center
Indore developed on 155
for Advanced
Hoshangabad acres in Jabalpur
Technologies (CAT), for
implementing the
Burhanpur
project.
Modern multi modal logistic hub at Powarkheda

Spot trading through
( between Hoshangabad and Itarsi ) - estimated
commodity exchange :
outlay of INR100 crores. Land has been
National Spot Exchange
Special Marketing acquired and tenders for construction of
Ltd., Mumbai, has been
Zones are being infrastructure under PPP are being released.
granted license on
April06, 2009, to developed at Mhow
operate in two APMCs, for potato and
i.e. Indore and Burhanpur for
Ganjbasoda. banana food park
Source: M.P. State Agro Industries Development Corporation Ltd.

5.8 Advantages for food processing industry in Madhya Pradesh
Biodiversity and 11 agro climatic zones

suitable agro 5 crop zones
climate 4 soil types
The state is at the centre of the nations commercial activities

Location At an easy distance from major agricultural markets in India
73% of the population in the state largely dependent on

Manpower agriculture
Easy availability of manpower at a lower retention cost
State is a leading producer in cereals and pulses and amongst

top producers of fruits, vegetables and dairy products
rendering an easy availability of significant raw material for
Availability of food processing units
agricultural inputs Large network of primary agricultural co-operative societies-
playing a crucial role in supplying agricultural inputs including
seed, fertilizer and pesticides in the far flung areas
Presence of notified agricultural market yards and sub market

Facilities for sale
yards which provide facilities for sale of agricultural produce
Rate of prime land in the State is amongst the lowest in the

Low land prices
country, thereby offering an advantage to the investor by
and capital
investment reducing capital investment cost
Farm mechanization is being promoted in the state by the

Directorate of Agricultural Engineering
Farming Contract farming is being recognized as the most promising
techniques and
practices
opportunity for an investor in the state. The state has
identified around 100 agricultural farms with an area of over
20,000 acres which are available on lease to investors
Linkages to ports on the west coast, including Kandla and

Jawahar Nehru Port Trust (JNPT).
18 national highways in the state, including trunk routes of
Delhi-Mumbai, Delhi-Chennai, Delhi-Bangalore and Delhi-
Hyderabad. Total road length 68,101km
Infrastructure The state had two dry ports in Pithampur (near Indore) and
Malanpur (near Gwalior) while the third one in Mandideep
Installed power capacity 3,692.95MW
Major rivers including Mahi, Narmada, Tapti, Chambal, Betwa,
Wainganga, Ken, Sindh and Pench, which offer 56.85 MAF
(million acre feet) of water

5.9 Challenges for food processing industry in Madhya Pradesh
Food processing industry in Madhya Pradesh has not developed to its potential owing to
factors such as high wastage level, lack of training and linkage between R&D institutions and
farmers, low processed food marketability and high per unit cost.
High wastage High level of wastage due to poor post harvest storage and
levels transportation infrastructure and technology
Sector dominated by small scale and unorganized units which

account for more than 75% of the total industry in the state.
Fragmented
sector Such units lack access to knowledge, technology, larger
markets and operational efficiencies due to economies of
scale.
Lack of training
and linkage Lack of training and development for human resources, most
between R&D importantly farmers
institutions and Farmers fail to access best practices in farming technology
farmers
High per unit cost Cumulative effect of low productivity, spoilage due to poor
due to inefficient infrastructure, inefficient and costly transportation, low
processes
capacity utilization, high cost of capital
Low processed Despite vast domestic market size, the present level of
food marketability processed food marketability in the state is very low

5.10 Cluster formats for food processing in Madhya Pradesh
The cluster formats for food processing in the state are largely limited to food parks and
Agricultural export zones (AEZ). Details have been discussed below:
5.10.1 Food parks in Madhya Pradesh

Fig 5.22: Map showing food parks across Madhya Pradesh
a Bhind Malanpur
r en
Mo
Gwalior
Sheopur Datia
Shivpuri
Jaggakhedi
Tikamgarh
Chhatarpur
Ashok Rewa
Guna Nagar Satna
Neemuch
Panna
Sidhi
Mandsaur
Rajgarh Vidisha Sagar Damoh

Katni
Bhopal
Umaria
Ratlam Shahdoi
Ujjain Shajapur Jabalpur
Raisen
Sehore Annupur
Jhabua Narsimhapur
Indore Dindori
Dewas Mandla
Dhar Hoshangabad
Alirajpur Harda Seoni

Chhindwara
Khargone Khandwa Betul Balaghat

Barwani
Maneri
Burhanpur
Boregaon
Nimrani Bawai
Source: Madhya Pradesh State Industrial Development Corporation
Table 5.4: Current status of food parks across Madhya Pradesh
Project
Name of the Implementing Sanctioned
cost (in Present position (2008-09)
project agency date
INR crores)
Madhya 50 acres of land acquired for the

Pradesh park.
Jaggakhedi, Audyogik 3 plots have been allotted and an
District Kendriya 815 20.12.00 amount of INR734.28 lacs has
Mandsaur Vikas Nigam been spent on this project up to
(MPAKVN) , 31-3-04 (land cost INR300 lacs
Indore also included.)
Madhya 67 acres of land acquired for the

Pradesh park.
Nimrani, Audyogik 4 plots have been allotted. An
District Kendriya 866 27.9.01 amount of INR488.08 Lacs has
Kharagone Vikas Nigam been spent on the project up to
(MPAKVN) 31.3.04. (land cost INR300 lacs
Indore also included.

Project
Name of the Implementing cost (in Sanctioned
Present position (2008-09)
project agency INR date
crores)
Land measuring 53 acres is

under possession of AKVN,
Madhya
Pradesh Jabalpur
Pipariya Bawai, Audyogik Land development work is
District Kendriya Vikas 821 22.1.02 completed
Hoshangabad Nigam Work worth INR 501.24 lacs
(MPAKVN)
done by IA up to 31.3.04.
Bhopal (land cost INR200 lacs also
included
Work worth INR786.58lacs

Madhya done by I.A.up to 31.05.04
Pradesh (land cost INR30 lacs also
Boregaon , Audyogik included)
District Kendriya Vikas 844 8.3.02 Land development work,
Chhindwara Nigam street light, common water
(MPAKVN) supply facility, common power
Jabalpur supply up to substation etc.
are completed
Government of India's share of

INR200 lacs released on
29.11.02
Madhya
Pradesh Work worth INR476.10 lacs
done by IA up to 31.3.04.
Malanpur, Audyogik
Ghirongi, Kendriya Vikas 801 22.11.02 Land development work is
District Bhind Nigam completed
(MPAKVN)
2 LOI and one allotment letter
Gwalior
have been issued.
One unit has started its
production
Government of India's share of

INR200 lacs released on
29.11.02.
Madhya
Work worth INR368.15 lacs
Pradesh
done by IA up to 31-05-04
Maneri, District Audyogik
(land cost INR300 lacs also
Mandla, Kendriya Vikas 801 29.11.02
included in it)
Jabalpur Nigam
(MPAKVN) Land development, street
Jabalpur light, civil work like- drainage;
road, common water supply
facility, common power supply
facility etc. are completed
Source: Madhya Pradesh State Industrial Development Corporation

5.10.2 Agri Export Zones (AEZ)[1] in Madhya Pradesh
To facilitate promotion and development of specific products, several Agri Export Zones (AEZs)
have been identified in the State of Madhya Pradesh.
AEZs are ideally located in close proximity to raw materials to create efficiency in production
processes. AEZs are concentrated more towards the Eastern and North eastern parts of the
State.
Fig 5.23: Agri export zones in Madhya Pradesh for various products/ crops
Seed spices coriander and fenugreek Pulses Wheat Oranges Potato
[1] Note- The concept of the Agri Export Zones (AEZ) has been initiated by the Government under all aspects of efficient agri
practice such as production, R&D, post harvest management, packaging, leading to final exports. This is done with the
objective to promote agricultural exports from the country and remunerative returns to the farming community. Further,
market promotion and development are also undertaken in the AEZs.

Incentives, policies and schemes for food
Chapter six
processing industry
6. Incentives for food parks by
central and state governments
The Madhya Pradesh state government is promoting the development of food parks in the state
and hence provided incentives for the development of agro food processing infrastructure.
6.1 Incentives under Madhya Pradesh Food Processing Policy, 2008 [1]
6.1.1 Incentives for perishable based industries
The proposed food park is envisaged to be focused on perishable and hence may attract
incentives specified for perishable based industries and other incentives as specified in the
Madhya Pradesh Food Processing Policy, 2008, subject to its Infusion of modern technology
and fixed capital investment of at least INR5 crore.
VAT and Central Sales Tax (CST) assistance
Table 6.1: Investment promotion assistance for VAT and CST
Type of industries Incentives Period Maximum limit
50% amount of VAT and

Fixed capital investment
CST deposited by the Maximum assistance upto
between INR1 crore to For 5 years
unit in the preceding fixed capital investment
INR10 crores
year
Fixed capital investment

75% amount of VAT and Maximum assistance upto
of more than Rs10 For 10 years
CST fixed capital investment
crores
[1] Source: Madhya Pradesh Food Processing Policy 2008

6.1.2 Concessions to projects (investments of more than 10 crores) in land allotment
Subject to the availability of land, the area between 5 to 25 acres would be provided at a
concessional rate of 25% of the prevalent premium.
For availing this concession, investment in fixed capital shall be made within a period of
three years.
Table 6.2: Land concessions based on project cost
S.No. Project cost (INR Crores) Land available at concessional rates
1. 10 to 25 Maximum 5 acres as per requirement
2. Above 25 up to 50 Maximum 10 acres as per requirement
5. Above 100 Maximum 25 acres as per requirement
6.1.3 Other concessions/exemptions available to units in food park
Exemption in stamp duty and registration charges
Industries obtaining loan for new units, expansion, diversification or modernization

would be eligible for total exemption from stamp duty
Registration charges would be INR1 per INR1,000 of the transaction value
Exemption from entry tax
Exemption from Entry tax to new units for a period of seven years from the date of
first purchase of raw material
Interest subsidy on term loan
Interest subsidy of 5% for a period of seven years up to a maximum of INR25 lacs to

new units
The upper ceiling of INR25 lacs would be not be applicable for Self Help Groups
(SHGs), Scheduled Castes, Scheduled Tribes and Women Entrepreneurs
Concessions to the existing units
Existing units should invest at least 50% of the existing fixed capital provided fresh
capital investment is not less than INR25 lacs

Exemption from mandi fee and tax
Exemption from mandi fee on fruits, vegetables and flowers used as raw material
by food processing units
Food processing units purchasing fruits and vegetables directly from farmers on
contract farming basis would be exempted from mandi tax
Reimbursement of research and development expenditure
Reimbursement of expenditure incurred on technology transfer from National

Research Development Council or other Government Research Centers to the extent
of 50% or INR5 lacs whichever is less.
Assistance for preparing project reports: Expenditure incurred for preparation of project
reports for setting up new industries would be reimbursed as given below:
For small scale industries, 1% of the project cost or INR3 lacs whichever is minimum
For medium and large scale industries, 0.5% of the project cost or INR3 lacs,
whichever is minimum
Reimbursement of expenditure on ISO9000 or quality certifications
Units obtaining these certifications would be reimbursed to the extent of 50% of the
expenditure incurred or INR3 lacs whichever is less
Reimbursement of up to INR5 lacs or 50% of actual expenditure made for obtaining

essential certifications such as Agmark, ISO, HACCP, BIS, etc.
Reimbursement of expenditure on patents: Reimbursement of 100% of expenditure or

INR5 lacs whichever is minimum
Transport subsidy would be provided to industries exporting perishable goods.
The reimbursement would be provided for 15% of the cost of transportation or INR5
lacs whichever is minimum for a period of 5 years.

6.1.4 Incentives available for the establishment of food processing park
Development by private sector: Expenditure on establishment/development of food

processing parks would be reimbursed at the rate of 10% of expenditure or INR1 crore
whichever is minimum subject to the following conditions:
Minimum 10 units
Establishment of food park within 5 years from the date of sanction of the scheme
Development through public private partnership: In case, food processing park is

established through PPP route, the private sector would be reimbursed to the extent of
10% of the expenditure or INR1 crore whichever is minimum.
[2]Source: Mega Food Park Scheme, Eleventh Five Year Plan (2007-12), Planning Commission

6.2 Concept of Mega Food Park
The objective of the Mega Food Park Scheme (MFPS) is to provide adequate and excellent
infrastructure facilities for food processing along the value chain from farm to market. The supply
chain infrastructure should facilitate the establishment of collection centers, primary processing
centers and cold chain infrastructure.
Fig 6.1: Features of a food park
Cluster Farm to
based market
approach
Food park
Demand Pre-
driven marketed
Central processing center (CPC): Food processing units would be located at a Central
Processing Center (CPC) with need based common infrastructure required for processing,
packaging, environmental protection systems, quality control labs, trade facilitation centers,
specialized storage facilities, cold chain infrastructure, steam sterilization systems, food
incubation cum development centers, etc.
There will be a provision for a centralised infrastructure for processing activities, which require
cutting edge technology like testing laboratories, effluent treatment, packaging etc. which are
capital and technology intensive.
Primary processing centers (PPCs) and collection centers (CCs): CPC would be supported
by farm proximate PPCs and CCs. PPCs and CCs will have cleaning, grading, sorting and packing
facilities (including equipments), dry warehouses, specialized cold stores including pre-cooling
chambers, ripening chambers, reefer vans, mobile pre-coolers, mobile collection vans etc.
On farm primary-processing centers for processing of fresh produce and collection centers for
aggregation of primary processed produce for onward transportation either to retail outlet or
to the processing unit would be established.
The food park would serve as sourcing hubs for retail chains for fresh produce/minimally
processed products.

6.2.1 Supply Chain Management
Self help groups (SHGs): The concept of self-help groups may comprise of 10-20
farmers. These groups can be the first point of aggregation of the produce and can also
act as an agency for transfer of technology for adoption of best practices to improve
productivity and quality to meet the market needs. They can be empowered by
establishing On Farm Primary Processing Centers at Panchayat level.
Producers society/association: The producers society/association is the next

suggested level for aggregation of the produce. Producers society/association would be a
cluster of 20-30 self-help groups, which would also provide these groups with basic
minimum facilities for handling the fruits and vegetables etc. produced by its members. To
facilitate aggregation of the produce, collection centre can be established at the block
level on need basis. Apart from the SHGs, large farmers and village level traders in the
identified zone also can serve as supply source of raw material. Around 10-20 PPCs and
CCs clusters can be organized in the service area of food parks to ensure regular supply of
raw materials to the park.
The food park will therefore have three tiers in the supply chain (backward linkage) viz.
producers groups comprising of 20-30 SHG (Each SHG:10-20 farmers) / large farmers/village
level traders in the zone- with on farm primary processing center for cleaning, grading, sorting
and controlled temperature storage.

Fig 6.2: Farm to market cluster based approach
FARM TO MARKET CLUSTER BASED APPROACH
10 to 20 farmers, large farmers, village levels traders together would form

Self Help Group (SHGs) providing On Farm primary processing facilities 1st level of
aggregation
Self Help Self Help

Groups Groups
Cluster of 20 to 30 SHGs would form Producers

association which could facilitate basic minimum
facilities for handling crop produce through Primary 2nd level of
Processing Centers (PPC) and Collection Centers (CC) aggregation
Cleaning Grading
MARKET
PPC
/CC Raw
Packaging Sorting material
Storage
Cluster of around 10-20 PPCs/CCs would be 3rd level of

established to support a Central Processing aggregation
Center (CPC) or Food park
30-35 Food processing

units located at Central
Processing Centre (CPC)
CPC
MARKET
Need based common

Processed
infrastructure required
for processing like (FoodCPC food
packaging, quality control
labs, trade facilitation Park)
centers and cold storage
etc.
Storage

Chapter seven Bhopal- Site analysis
7. Site analysis
7.1 Bhopal district profile
Bhopal the capital city of Madhya Pradesh, is

located on the northern side of the Vindhya
Mountains and is the second largest city in the
state, after Indore.
Bhopal district is bounded by the districts of Guna

to the north, Vidisha to the northeast, Raisen to
the east and southeast, Sehore to the southwest
and west, and Rajgarh to the northwest.
Subject site
As the principal city of the region, it serves all
towns and districts around, the nearest large city
of Indore being about 180 km to west. The major
regional road network comprises of NH 12
connecting Hosangabad and Narsingarh and a
number of State Highways linking Indore, Sagar, Source: www.mapsofindia.com
and Jabalpur.
Table 7.1: Bhopal- District snapshot
Population
14.33 lacs
(Census 2001)
Area (in sq km) 308.14
Area under agriculture (in

68,597
hectares)
District Domestic Product

675,923
(DDP)
Source: www.bhopal.nic.in, Indicus Analytics (2006-07)
Fig 7.1- Sectoral distribution of district Fig 7.2- Socio economic classification (SEC)
domestic product (DDP)
10% 5% 10%
2%1%
2%
3% 31%
13%
46% 31%
19%
27%
Agriculture Mining and quarrying SEC A SEC B SEC C SEC D SEC E
Fishing Forestry
Construction sector Manufacturing sector
Electricity,gas,water supply Banking and insurance Source: Indicus Analytics (2006-07)
Rest of tertiary sector
(Refer Annexure IV for SEC details)
Source: Indicus Analytics (2006-07)

7.2 Location and linkages
The proposed site for food park is located at Adampur chawni village, Bhopal district, central
region of Madhya Pradesh. The proposed site is located approximately 15km from Bhopal city
on Bhopal- Raisen Road (NH-86).
The site currently lacks direct access. The only access is via an approximately 10 ft. wide
village road connecting to the NH-86. However, this road also, does not extend upto the site. A
bridge/ road from bypass road connecting to Transport Nagar is proposed, which is expected
to improve connectivity to the region.
Table 7.2: Distance of site from key nodes Table 7.3: Distance of site from key landmarks
S. Approximate S. Approximate
no Location Location
distance (in km) no distance (in km)
1 Bhopal 15 1 Transport Nagar Kokta 2-5
2 Mandideep 35 2 Proposed Slaughter 2-5

house
3 Ratlam 255
3 Adampur Chhawni 1
4 Indore 215
Ghoda Pachad
5 Mumbai 800 4 1-2
reservoir
6 Nagpur 230 5 L.N.C.T institute 5
7 Vadodara 255 6 Hathikheda dam 5-8
8 Delhi 755 7 Bhopal airport 25
Source : www.mapsofindia.com
8 Bhopal railway station 10-15
Source : EY research
Road connectivity: National Highways (NH)- 12 (Narsingharh Hoshangabad), connects Bhopal

to Jabalpur in the East and Jaipur in the West and National Highways (NH) 86 (Indore
Raisen), connects Bhopal to Sagar in the East to Indore in the West. Four State Highways
connect Bhopal to other prominent cities of Madhya Pradesh, including Bikisganj, Kolar,
Bairasia and Vidisha.
Rail connectivity: Bhopal is well connected to important cities such as Delhi, Mumbai,
Hyderabad, Chennai, Bangalore, Thiruvananthpuram, via its broad gauge railway line, which is
part of the main North-South line of the country.
Air connectivity: The nearest domestic and international airport to the subject site is Raja
Bhoj Airport. This airport is approximately 25 km from subject site. This airport provides
connectivity to Mumbai, Indore, Delhi Gwalior, Guwahati, Goa, and Lucknow. The airport is
currently undergoing expansion with addition of integrated international terminal which is
expected to be completed by the year 2010.
With limited international connectivity from the city, exports from the subject food park could
be restricted. Export oriented food processing units could prefer setting up in parks closer to
the sea port.

7.3 Site description
As per information from M.P. State Agro Industries Development Corporation (MPSAIDC),
the subject site admeasures around 50 acres, which is part of a 212 acres land and has
been identified in the illustration below.
The site has a flat topography with sparse vegetation in the form of scattered grass and a
few hutments on it.
Fig 7.3: Google map showing the subject site at Adampur Chawni village, in District Bhopal
Ghodapacchad
Reservoir
Slaughter
house
Transport
Nagar
Adampur
Chhawni
Hatai Kheda
Site for
food
park
Dal Mill
Anand
Siddharth Nursery
Nagar Warehouse
Lake City
NH 86 LNCT engineering
college
Source: Google maps, Map not to scale
7.4 Site neighbourhood

The proposed site is surrounded predominantly by agricultural land. The eastern boundary of
the site has High Tension (HT) lines passing through it. Ghodapachad reservoir and proposed
slaughter house are present towards the north of the site and Transport Nagar lies to the
west. There are warehouses, nursery, thresher plant and an engineering college situated to
the south. The closest settlement is the Adampur Chawni village which is less than a kilometer
from the site.

Site pictures
Hutments
Approach Road
View of parcel of land along the HT line Sparse vegetation
Sericulture Board building
Bypass Road
Sparse vegetation
View from Bypass Road towards Ghoda Pachad Dam View from Bypass Road

7.5 Site strengths and weakness
The strengths and weaknesses of the subject site are as discussed below:
Strengths
The site enjoys a location advantage on account of it being close to a national highway,
which is however downplayed on account of lack of direct access to the site
It is adjoining the Transport Nagar and approximately 15km from the railway station,
which provides it ease of logistics for raw material to and processed goods from the
proposed food park
Skilled manpower is available for the food park due to the presence of R&D, technical
training and educational institutions in Bhopal such as the Central Institute of Agricultural
Engineering, Indian Institute of Soil Science and 35 Industrial Training Institutes (ITIs)
currently functional in the cluster
The site is in proximity to Bhopal rendering it good accessibility to an established social

infrastructure, which is desired for such a development to attract skilled workforce
It has a water reservoir (Ghoda pachad reservoir) in the vicinity providing it ready access
to water
The site also has a slaughter house, which could be an advantage for meat and poultry
processing units in the food park
Weaknesses
Currently, the site lacks direct access with the only access being through a village road
A high tension (HT) line runs on the edge of the site
The land around the site is designated as obnoxious land-use (as per the Bhopal draft
master plan, 2021), which could act as a detractor for food processing related activities

Chapter eight Bhopal- Cluster analysis
8. Cluster analysis
8.1 Cluster identification Fig 8.1: Map showing Bhopal cluster
Madhya Pradesh with its ideal agro climatic

conditions, varied soil types and raw
material has distinct advantages with
respect to the food processing industry. For
the development of a food park at Bhopal, it
is imperative to understand the drivers for
the food processing industry, viz. availability
of raw material, manpower, enabling
infrastructure and micro climate of Bhopal.
Madhya Pradesh
Based on the location dynamics and nature
of the food park, districts falling within a NH-3
distance of around 200km from the site at
Adampur Chawni village, have been NH-12
classified as a cluster. It is understood that

the regions beyond 200km (influence zone)
may not directly influence the processing
units/industries in the food park.
NH-3
Q
The cluster identified thus comprises the NH-12

districts of Bhopal, Sehore, Raisen, Vidhisha,
Rajgarh, Guna, Dewas, Hoshangabad, Harda
and Sagar which lie within an approximate NH-69
radius of 200km from the site. Subject site
National
The cluster covers an approximate area of Bhopal cluster Highway
Q
Airport
69,720sq km which is 23% of the total area
of Madhya Pradesh. Table 8.1: Districts and areas
Districts of Bhopal
cluster Area (in sq km)
Bhopal 2,772
Sehore 6,578
Raisen 8,466
Vidhisha 7,371
Rajgarh 6,153
Guna 11,064
Devas 7,020
Hoshangabad 6,707
Harda 3,330
Sagar 10,252
TOTAL 69,713
Source: www.bhopal.nic.in

8.2 Crop availability analysis
The food park at Bhopal would primarily be dependent on the cluster for procuring the raw
material or semi-processed food that would act as an input for the processing units in the food
park. While inputs such as packaging material and low volume/high value products may be
procured from anywhere in India, the base raw material is expected to be procured mainly
from within the cluster.
The findings of the cluster study are broadly segregated into agriculture produce, horticulture
produce and animal husbandry, which are set out in the following sections.
8.2.1 Raw material potential assessment- methodology
A two dimensional matrix has been prepared to identify the potential crops which could serve
as inputs to processing units to be established in the subject food park. The potential
assessment matrix evaluates the crop availability on two parameters as defined below:
1. Market share: Market share of a crop indicates the concentration i.e. percentage share of
the clusters production in the total production of the crop in Madhya Pradesh. A high market
share indicates favourable opportunity for the crop.
2. Yield ratio: Yield ratio for a crop is computed as the ratio between productivity (or yield) of
a crop in Madhya Pradesh and productivity (or yield) of this crop in India. For a crop, yield
ratio of 1 indicates that the yield of a crop in Madhya Pradesh is comparable to that of Indias
average yield. Yield ratio of greater than 1 indicates productivity in Madhya Pradesh for the
crop is higher than that of India's average productivity.
Market share (scale 0-100%) has been plotted on X-axis and Yield ratios (scale 0 to 2.5) have
been plotted on Y-axis. A market share of 30% has been considered as a threshold. The crops
for which the clusters share is more than 30% in MPs total production, have been considered
as opportune for processing in the cluster.
Based on the above analysis, crops can be categorized into four quadrants, as defined below:
Processing
Quadrant Rationale
opportunity
Processing units with input crops in this quadrant could be
High market Immediate targeted in the immediate term, as these crops are readily
share, high yield term available in the cluster with a higher than average yield in the
country and high market share in the state.
Crops which have high production in the cluster, however yield is
High market Short term lower than India's average. Units with such input crops could be
targeted in the short term. It is believed that over a 1-2 year
share, low yield (1-2 years) period, yield of the crop could be improved with sustained efforts
and infrastructure support facilities.
Crops with higher productivity in Madhya Pradesh as compared to
India's average productivity, however the existing production
Low market Mid term (2- volume lacks the critical mass. Such crops could be targeted over
share, high yield 3 years) the mid term with more producers encouraged to take up such
farming through contract farming arrangement by potential units
in the said food park.
Low market Not Crops which have low market share as well as low yield may not
share, low yield considered present any significant opportunity for the proposed food park.

8.2.2 Raw material potential assessment for fruits
Fig 8.2: Fruits- potential assessment matrix
2.00
Guava
1.80
Lemon
1.60 Mango
1.40 Sweet lime

Yield ratio
1.20
Watermelon
1.00
Musk melon
0.80
0.60
0.40
0.20
0.00
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Clusters share in fruit production
Source: Department of Horticulture, Madhya Pradesh ; EY analysis
Potential for Key districts in the

Quadrant Target crop
the food park cluster
High yield high

Immediate Watermelon Hoshangabad and Harda
market share
Muskmelon, mango,
High yield low
Mid term sweet lime, lemon Hoshangabad, Vidhisha
market share
and guava
Key observations
There is a potential for primary and secondary processing units (sorting, grading, packing,
liquefaction etc.) of these fruits and tertiary units (jams, squash, flavor emulsions, jelly
etc.).
The cluster contributed to almost 37% of the total grape production of the state after Harda
district, which had 55% share in the year 2006-07.
Guava, lemon, sweet lime, mango and muskmelon currently have low level of production in
the cluster. However, yield for these fruits is higher than the national average

Fruits immediate
End products
Juice, syrup (fruit concentrate), squash, flavor
emulsions for milk shakes, watermelon seeds,
Watermelon Processing watermelon seed oil, fruit flavored toffee, fruit
flavored chocolate, ice-cream, jelly, murabba,
tutty fruity, husk and husk powder
Bhopal clusters share in watermelon

Production Area production
Districts (in metric (in
tonnes) hectares)
Bhopal - - Bhopal
cluster
Sehore - -
63%
Raisen - -
Vidhisha 450 15
Rajgarh 180 6 Production in Madhya Pradesh
25,680
Guna - - (in metric tonnes)
Dewas 330 11 Area (in hectares) 856

Hoshangabad 6,480 216
Productivity in Madhya Pradesh
Harda 8,820 294 30
(metric tonnes per hectare)
Sagar - - Productivity in India
30
TOTAL 16,260 542 (metric tonnes per hectare)
Fruits -mid term

End products
Pulp, puree, muskmelon dried seeds,
seed oils, canned muskmelon slices,
Muskmelon Processing fruit flavored toffee, fruit flavored
chocolate, ice-cream, jelly, murabba,
tutty fruity, juices, husk and husk
powder
Production Area Bhopal clusters share in muskmelon

(in metric (in
Districts tonnes) hectares) production
Bhopal - - Bhopal
Sehore - - cluster
35%
Raisen - -
Vidhisha 156 13
11,856
Guna - - (in metric tonnes)
Dewas - - Area (in hectares) 988

12
Harda 504 42 (metric tonnes per hectare)
Sagar - - Productivity in India
12

Fruits - mid term
End products
Jam, beverages, juices ,squash, syrup,
concentrate, crush, pulp, fruit flavored
Sweet lime Processing
toffee, fruit flavored chocolate, ice-cream,
jelly, murabba, tutty fruity, pickle
(chutney), lime oil and frozen dried sweet
lime
Production Area Bhopal clusters share in sweet lime production

tonnes) hectares) Bhopal
Bhopal - - cluster
12%
Sehore - -
Raisen - -
Vidhisha - -
Rajgarh 48 3
Production in Madhya Pradesh
Guna - - 3,520
(in metric tonnes)
Dewas 176 11
Area (in hectares) 220
Hoshangabad 208 13
Harda - - 16
Sagar - -
Productivity in India
TOTAL 432 27 11
End products
Pectin, jam, jelly, pickle, powder, puree, peru
khand, beverages, juices, squash syrup, fruit
Guava Processing flavored toffee (candies), fruit flavored
chocolate, ice-cream, murabba, frozen dried
guava, pulp, tutty fruity ethanol production,
wine and animal feed preparation
Production Area Bhopal clusters share in guava production

tonnes) hectares)
Bhopal 120 6 Bhopal
cluster
Sehore 420 21 24%
Raisen 380 19
Vidhisha 1,360 68
49,020
(in metric tonnes)
Guna 340 17
Dewas 300 15 Area (in hectares) 2,451
Hoshangabad 7,300 365 Productivity in Madhya Pradesh

20
Harda 180 9
Sagar 660 33 Productivity in India
11
TOTAL 11,540 577

Fruits - mid term
End products
Jam, beverages , juices, sorbet, squash, syrup,
lemon concentrate, crush, fruit flavored toffee
Processing (candies), fruit flavored chocolate, ice-cream, jelly,
Lemon
murabba, tutty fruity, pickles, frozen lemon slices,
citric acid, pectin lemon slices, dry flavored powder.
Ingredient for lemon tea (dried lemon peels),
essential oils and oil blend
Production Area Bhopal cluster's share in lemon production
tonnes) hectares)
Bhopal - -
Bhopal
Sehore 352 22 cluster
25%
Raisen 496 31
Vidhisha 48 3
17,536
Guna 272 17 (in metric tonnes)

16
9
End products
Syrup, mango concentrate, fruit flavored toffee,
fruit flavored chocolate, ice-cream, jelly, murabba,
tutty fruity, beverages, juices, squash, shakes ,
Mango Processing nectar, jam, pulp, puree, pastes, pickles (chutney),
canned slices, mango pappadums, starch from
mango kernel, frozen dried mango, brined o slices,
dry mango powder, flavor emulsions for shakes,
flavor paste for water products
Production Area Bhopal clusters share in mango

Districts (in metric (in production
tonnes) hectares)
Bhopal 450 50 Bhopal
10%
Raisen 81 9
Vidhisha 1,026 114
57,717
Guna 396 44 (in metric tonnes)
Harda - - 9
6

8.2.3 Raw material potential assessment for vegetables
Fig 8.3: Vegetables- potential assessment matrix

2.0
1.8
1.6
Green
1.4 peas
1.2 Onion
Yield ratio
Arbi
1.0
Tomato
Cabbage Brinjal
0.8 Cauliflower
Potato
0.6 Sweet potato Okra
0.4
0.2
0.0
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Bhopal clusters share in vegetable production
Potential for the Key districts in the

food park cluster
High yield low Arbi, onion and green Vidhisha, Sagar,

Mid term Sehore, Rajgarh,
market share peas Dewas, Hoshangabad
Key observations
There is a potential opportunity for units involved in primary and secondary processing of
the above mentioned vegetables.
Green peas produced in the state have low water content and hence can be utilized for
producing frozen peas.
Vegetables such as green peas, onion and Arbi (colocasia) produced in the cluster have
higher yield than the national average. Hence, their production levels could be increased
over the mid term.

Vegetables mid term
End products
Frozen peas, ready to eat food

Green peas Processing and snacks
Bhopal clusters share in green peas

tonnes) hectares)
Bhopal - - Bhopal
cluster
Sehore 66 6
3%
Raisen - -
Vidhisha 649 59
229,559
(in metric tonnes)
Guna - -
Dewas - - Area (in hectares) 20,869
11
Harda - - (metric tonnes per hectare)
7
Medium term
End products
Onion paste, pickle, onion crush,
dehydrated onion flakes and fried
Onion Processing onion rings
Production Area Bhopal clusters share in onion production

tonnes) hectares)
Bhopal 17,229 1,036 Bhopal
Sehore 16,597 998 cluster
25%
Raisen 8,149 490
Vidhisha 3,027 182
Rajgarh 23,398 1,407 Production in Madhya Pradesh
629,745
Guna 1,663 100 (in metric tonnes)
Dewas 34,624 2,082 Area (in hectares) 37,868

17
Harda 3,675 221 (metric tonnes per hectare)
Sagar 42,872 2,578 Productivity in India
13
TOTAL 160,164 9,631 (metric tonnes per hectare)

Vegetables mid term
End products
Dried, peeled and pickled
Colocasia Processing
(Arbi)
Bhopal clusters share in colocasia (arbi)

tonnes) hectares)
Bhopal
Bhopal - - cluster
552 46 12%
Sehore
Raisen - -
Vidhisha 1,548 129
Rajgarh 36 3 48,084
(in metric tonnes)
Guna 312 26
60 5 Area (in hectares) 4,007
Dewas
12
Sagar 2,076 173 Productivity in India

12

8.2.4 Raw material potential assessment for spices
Fig 8.4: Spices- potential assessment matrix

2.00
1.80
1.60
1.40
Yield ratio
1.20 Garlic
Garlic
1.00
0.80 Chilies
Chillies
0.60
0.40 Ginger Ginger
0.20 Coriander
Turmeric
Coriander Turmeric
0.00
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Clusters share in spice production in Madhya Pradesh

food park cluster
Low yield high

Short term Coriander Guna
market share
High yield low

Mid term Garlic Dewas
market share
Key observations
There is an opportunity for primary and secondary processing of the above spices
(grading, sorting, grinding, packing etc.).
During 2006-07, the Bhopal cluster contributed almost 76% and 62% in the total garlic
and coriander production in the state respectively.
Guna and Dewas are the leading producers of coriander and garlic respectively.

Spices immediate term
End products
Powder (ground spice), ready to

Coriander Processing eat food (curry powder), dried
coriander seeds
Bhopal clusters share in coriander

Production Area
tonnes) hectares)
58%
Raisen 495 1,150
Vidhisha 968 2,252
50,141
(in metric tonnes)
Guna 18,125 42,152
Hoshangabad 155 360 Productivity in Madhya Pradesh
0.4

1.64
Mid term
End products
Garlic paste, ready to eat food,
dehydrated garlic flakes
Garlic Processing
Production Area Bhopal clusters share in garlic production

tonnes) hectares)
Sehore 4,182 957 cluster
14%
Raisen 459 105
Vidhisha 363 83
Rajgarh 4,571 1046
Guna 149 34 182,382
(in metric tonnes)
Dewas 12,551 2,872
Area (in hectares) 41,735
Hoshangabad 358 82
Harda 538 123 4.4
Sagar 1,298 297
TOTAL 25,103 5,744 4.0

8.2.5 Raw material potential assessment for food grains
Fig 8.5: Food grains- potential assessment matrix

2.0
1.8
1.6
1.4
Jowar
Pulses
1.2
Arhar Gram
Yield ratio
Maize
/ tur
Soyabean
1.0
0.8 Lentil
Sesame
Wheat
0.6 Sugarcane
Linseed
0.4
0.2
0.0
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Clusters share in Madhya Pradesh food grain production

food park cluster
Mid term High yield low market Jowar, maize, Rajgarh, Guna,
share arhar/tur, gram, Sehore, Raisen,
soya bean Vidhisha, Sagar,
Dewas
Key observations
There is potential for primary, secondary processing in the short term and tertiary
processing of the abovementioned food grains especially soyabean and maize (soya milk,
flour, cornflakes, snacks, popcorn, cornmeal etc.).
Food grains such as jowar, maize, arhar/tur, gram, soyabean and pulses currently have
low level of production in the cluster. However, yield for these food grains is higher than
the national average and this could be leveraged over the mid term to increase their
production level.

Food grains mid term
End products
Polished and processed,
Arhar/tur Processing powdered mixes, roasted forms,
dal health food (sprouts) and cereal
mixes
Production Area Bhopal clusters share in arhar/tur dal

tonnes) hectares)
Bhopal 500 1,000
Bhopal
Sehore 5,400 7,000 cluster
Raisen 15,700 23,900 17%
Vidhisha 500 900

Rajgarh 2,900 4,400
Guna 300 400 257,000
(in metric tonnes)
Dewas 4,900 9,100
Hoshangabad 8,800 8,300
Harda 3,000 2,600 0.8
0.7
End products
Processed jowar grains, and
Jowar Processing roasted dry snacks
Production Bhopal clusters share in jowar production

Districts (in metric Area (in
tonnes) hectares)
Bhopal 2,700 2,200 Bhopal

21%
Raisen 2,800 1,600
Vidhisha 12,300 10,500
631,000
Guna 30,600 32,300 (in metric tonnes)
Dewas 21,700 22,500 Area (in hectares) 660,300

1.2
Harda 1,300 1,000 (metric tonnes per hectare)

0.9
TOTAL 129,500 131,400

End products
Processed gram, flour, snacks,
Gram Processing health food (sprouts), mixes
Production Area Bhopal clusters share in gram production

tonnes) hectares)
Bhopal 34,400 34,700
Bhopal
Sehore 82,900 85,800
cluster
Raisen 127,800 131,900 37%
Vidhisha 184,800 206,300
Rajgarh 89,000 77,900
Guna 58,100 66,600 2,585,000
(in metric tonnes)
Dewas 83,700 79,900
Area (in hectares) 2,791,300
Harda 34,800 29,300 Productivity in Madhya Pradesh
0.9
Sagar 176,400 215,400
TOTAL 954,000 993,600 0.8
End products
Soya beans, processed soyabean,
Soya bean Processing soyabean milk, de-fatted soya
flour and soyabean mixes.
Production Area Bhopal clusters share in soyabean production

tonnes) hectares)
Bhopal 89,800 88,600
Bhopal
Raisen 86,700 96,900 39%
Vidhisha 131,700 123,100

Rajgarh 229,400 263,700
Guna 117,900 144,600 3747,100
(in metric tonnes)
Dewas 316,800 271,200
Harda 62,400 149,200 1.1
Sagar 153,800 180,000
TOTAL 1,470,200 1,752,100 1.07

End products
Processed maize kernels, maize
Maize Processing flour, corn flakes, cornmeal
(ground dried maize), starch
powder, popcorn, and snacks
Production Area Bhopal clusters share in maize production

tonnes) hectares)
Bhopal 3,600 2,800
Sehore 21,900 15,700 Bhopal
cluster
Raisen 7,700 4,700 12%
Vidhisha 8,800 5,400
Rajgarh 56,900 47,300
Guna 27,200 21,400 Production in Madhya Pradesh
1253,000
(in metric tonnes)
Dewas 14,100 12,900
Harda 1,700 1,400 Productivity in Madhya Pradesh
1.8
Sagar 5,000 3,900
TOTAL 149,100 117,300 2.1

8.2.6 Poultry analysis
Milk ('000 metric

Districts Meat ('000 metric tonnes)
tonnes)
Bhopal 96.6 3.4
Sehore 153.2 0.8
Raisen 180.3 0.3
Vidhisha 304.0 1.0
Rajgarh 155.2 0.6
Guna 187.3 0.2
Dewas 166.4 1.2
Hoshangabad 145.7 0.1
Harda - -
Sagar 140.5 0.3
TOTAL 1,529.2 7.9
Madhya Pradesh 6,239 19
India 97,066 2310
MPs share in India 6% 0.84%

Clusters share in Madhya Pradesh
production 25% 41%
Source: Department of animal husbandry, dairies and fisheries, Ministry of Agriculture, EY analysis
Key observations
Per capita availability of milk in MP (262gm per day) is higher than the national average
(241gm per day). As per National Dairy Development Plan, the districts Bhopal, Vidisha
and Dewas belonging to the cluster have been classified as rich districts*, where the
Government of India Dairy Development Schemes have priority. The potential of these
districts can be harnessed by suitable linkages and infrastructure that is envisaged to be
made available by the proposed Food Park.
Bhopal contributes more than 40% of the total meat production in MP. Meat production
will be further driven by the proposed slaughter house in the vicinity of the site. This
presents significant opportunity for meat processing in the food park.
There is potential for primary, secondary and tertiary processing of milk and meat in the
subject food park in the short term and mandates cold storage facilities in the park.

8.2.7 Opportunity assessment matrix
Table 8.2 : Opportunity assessment matrix- Bhopal food park
Type of Overall
Category Value added products
units opportunity
Juice, syrup (fruit concentrate), squash, pulp,

Primary & Immediate
puree, pectin, pastes, frozen dried mango, brined o
secondary term (all
slices, dry mango powder and animal feed
processing fruits)
preparation
Immediate
term
Flavour emulsions for milk shakes, watermelon
(Watermelon)
seeds, watermelon seed oil, fruit flavoured toffee,
Fruits fruit flavoured chocolate, ice-cream, jelly,
Mid term
murabba, tutty fruity, husk and husk powder,
Tertiary (Mango,
beverages, shakes , nectar, jam, pickles (chutney),
processing Guava, Sweet
canned slices, mango pappadums, starch from
lime,
mango kernel, flavour emulsions for shakes and
Muskmelon,
flavour paste for water products, fruity ethanol
Lemon)
production, wine
Immediate
Primary & Dried, peeled, paste, dehydrated onion and fried
term (Green
secondary
peas, Onion,
processing
Vegetables Arbi)
Mid term
Tertiary
Frozen peas, ready to eat food, pickle, (Green peas,
processing
Onion, Arbi)
Immediate
Primary &
Powder (ground spice), dried coriander seeds, term
secondary
Garlic paste, dehydrated garlic flakes (Coriander,
processing
Garlic)
Spices Immediate
term
Tertiary Ready to eat food (curry powder) and ready to eat (Coriander)
processing food
Mid term
(Garlic)

8.2.7 Opportunity assessment matrix (contd.)
Table 8.2 : Opportunity assessment matrix- Bhopal food park
Overall
Category Item Value added products
opportunity
Primary & Polished and processed grains, powdered mixes,

Immediate
secondary flour, cornmeal (ground dried maize), starch
term
processing powder, canned
Food grains Roasted forms, health food (sprouts) and cereal Mid term
mixes, processed maize kernels, corn flakes, ready (Arhar/tur dal
Tertiary
to eat food, popcorn, roasted dry snacks, soya Maize, Jowar,
processing
bean milk, de-fatted soya flour and soya bean Soya bean,
mixes Gram, Pulses)
Sweetened condensed milk, milk powder, dairy

whitener, ghee, khoya, malai, processed butter,
butter, ice cream, milk based baby food, curd,
Milk Short term
cheese, flavoured milk, malted milk, pro biotic dairy
Poultry products such as cheese, yogurt, cottage cheese
etc. lactose and casein
Meat Frozen meat, sausages, meatballs, kababs, ham Short term

8.3 Other critical success factors:
8.3.1 Warehousing and cold storage Fig 8.6: Cold chain structure
facility
Farm gate
An effective and well networked supply
chain is necessary for companies to
manage their costs, reduce wastage, Pack house
optimize inventory management and (pre cooling, grading, sorting)
meet customer requirements. The most
significant challenge in developing a
Bulk storage
smooth supply network is the lack of
adequate infrastructure particularly
reliable power supply, well-connected Transport
cold chain and warehousing
infrastructure .
Perishable cargo warehouse
In a typical cold chain network, the (outskirts of city, airport / port complex
fresh produce from the farm would be
transported to a pack house located in
Export / sale to retail chain
proximity where the produce (manufacturers / aggregators)
undergoes pre-cooling, grading,
Source: EY research
sorting, and packing. The produce,
Table: 8.3: Existing warehousing facility in Bhopal
after some value addition, is
cluster (June 2009)
transported as bulk storage to a Total
Total %
perishable cargo complex for further Region capacity
utilization utilization
processing before it is exported or sold covered
to a retail chain. Bhopal 5,49,922 5,52,888 101
Sagar 2,20,980 2,43,212 110
Perishable produce has been identified Proposed warehousing facility in Bhopal cluster
as thrust segment for the proposed (June 2009-10)
food park. Availability of adequate cold Location District Capacity MT
storage facility will be critical to the Karond Bhopal 4000
success of the food park.
Sehore Sehore 5400
The chart alongside presents details of Sagar Sagar 5400

cold storage facility in the cluster, Berchha Shajapur 3600
Source: www.mpwlc.com
which is estimated to have a capacity
of 44,400metric tonnes. Warehousing Fig 8.7: Existing cold storage facility in Bhopal cluster
capacity in the cluster is estimated as 50,000
in metric tonnes
7.69 lac units, which is presently over- 40,000
utilized. Thus, a warehousing facility in 30,000

the subject food park could tap the 20,000
latent demand.
10,000
-
Sagar Rajgarh Bhopal Dewas Total
private co-operative sector

Source: Compendium of Agriculture statistics 2006-07, Madhya Pradesh

The proposed food park also enjoys proximity to a grade A mandi (regulated agriculture
market), spread over 100 acres of land of which 30 acres is notified for fruits and vegetables.
This should provide the food park with a strong backward linkage.
8.3.2 Manpower
Food processing industry is a labour intensive industry, involving both mechanized and manual
nature of work. Wide range of activities within the food park necessitate availability of
adequate employable manpower (skilled, semi-skilled and unskilled), to ensure competitive
advantage for units within the food park.
A study of the workforce composition of the Bhopal cluster, as shown by the illustration below,
reveals that majority of the workforce in the catchment is significantly agrarian, engaged in
land cultivation, plantation and livestock rearing vocations.
As per 2001 census, almost 63% of the total workforce of the cluster was employed in
agriculture and close to 11% of the workforce employed in manufacturing. As illustrated in the
graph, Guna (150km from the site) had the highest number of agriculture workers with around
3.7 lac workers followed by Rajgarh (within 150 km from the site) with around 3.5 lac workers.
Fig 8.8 - Existing workforce in the Bhopal cluster

400,000
Workforce
300,000
200,000
100,000
-
Dewas
Hoshangabad
Raisen
Vidisha
Rajgarh
Bhopal
Sehore
Harda
Guna
Sagar
Source: Census 2001 Agriculture Manufacturing
Around 35 Industrial Training Institutes (ITIs) currently functional in the cluster itself are
expected to provide skilled manpower and cater to the training needs of the prospective
employees in the cluster.
These are strengthened by some prominent agriculture research institutes in the cluster such
as the Central Institute of Agricultural Engineering and Indian Institute of Soil Science in
Bhopal.

8.3.3 Physical infrastructure
MP State Agro Industrial Corporation (MPSAIDC) shall undertake to provide basic utilities to the
units in the food park upon request at prevailing rates.
Power infrastructure
Power requirement is to be met by Madhya Pradesh State Electricity Board (MPSEB) through
its grid. Closest point for power connection is reportedly at Bhopal city which is about 15
kilometres from the subject site. However this needs to be ascertained from the appropriate
authority.
The tariff for the sub-categories shall be based on current monthly consumption as per
following table:
Table 8.4: Tariff applicable for industrial and non industrial consumer
Fixed charges
Energy charges
Sr. No. Sub category of consumer (INR/KVA of billing
(INR/unit)
demand/month)
Industrial
1 11 KV Supply 130 4.05
2 33 KV Supply 220 3.86
3 132 KV Supply 320 3.56
Non industrial
1 11 KV Supply 120 4.30
2 33 KV Supply 200 4.00
3 132 KV Supply 300 3.70
Source: www.mp.gov.in
Table 8.5: Installed capacity in Bhopal District
HT Line
Number of sub stations 64
Number of transformers 112
Capacity (kVA) 491,000
LT Line
Number of transformers 5,277
Capacity (kVA) 826,230
Source: www.mp.gov.in

Water infrastructure
The food processing industry is largely dependent on the availability of power and water to
support the smooth functioning of the units.
Water is utilized across all stages of the industry value chain as majority of the food products
are washed and rinsed, thus consuming substantial amount of water. It is also a primary
ingredient in the beverage and fermentation industries. On an average a unit of 2-3 acres may
require between 8,000 liters to 10,000 liters per day. Therefore, water supply is critical for the
success of proposed food park.
Currently the subject site does not have any piped source of water supply. Hatai Kheda
Reservoir and Ghodapacchad Reservoir, which are adjoining the subject site could be possible
sources of water for the food park. However, yield of all these sources of water need to be
independently verified.

Chapter nine Development concept
9. Development concept
The development of the proposed food park is envisaged as an integrated development
accommodating units engaged in processing of diverse food products. The proposed park can
draw significant benefits from its catchment by virtue of its proximity to a strong raw material
base, connectivity advantages and other enabling infrastructure. The project aims to provide
well developed infrastructure, access to advanced technology, research and development
facilities, common facilities and other benefits typical to an integrated cluster development.
MPSAIDC proposes to establish food parks in the state with the following objectives:
Provide state of the art infrastructure for food processing in the state.
Ensure value addition of agricultural commodities and poultry, dairy, fisheries etc.
Establish a sustainable raw material supply chain for each cluster.
Facilitate induction of latest technology.
Foster interagency linkages for pooling of resources for activities complementary to food
processing.
Quality assurance through better process control and capacity building.
Address issues of small farm size and small and medium nature of processing industries
through a cluster approach with stakeholders managing the supply chain.
The proposed food park in Bhopal, though does not qualify as a Mega Food Park and hence will
not attract benefits available under the Mega Food Park Scheme. However, its overall
development vision will be guided by the broad contours of Mega Food Park Scheme (MFPS) as
envisaged by Ministry of Food Processing Industries, Government of India.
Thus, in line with the objectives of the MFPS adequate and excellent infrastructure facilities for
food processing along the food processing value chain from farm to market should be ensured
in the subject food park. The food park cluster is envisaged to comprise infrastructure
elements across the supply chain of the food processing industry and include:
central processing centre
primary processing centres
collection centres
cold chain infrastructure
These would together constitute the processing zone of the subject food park.

It is understood from the business model of other industrial parks and food parks in specific,
that the processing zone is to be sold at minimal margins to ensure suitable occupancies. The
subject food park is being developed to promote and encourage food processing sector by the
state. However, this is proposed to be developed in private partnership. Hence, it is imperative
for the development model to be attractive for all stakeholders and align to their objectives.
Accordingly part of the site has been apportioned to non processing activities, sale prices of
which could command a premium.
Based on various iterations, around 55% of the site has been allocated to the processing zone,
20% to open spaces and around 25% has been allocated to the support and common
infrastructure facilities. The processing zone of the park will be positioned to accommodate
various industries involved in diverse value chain of food processing and necessary
infrastructure to support the units in the park.
Fig 9.1: Layout of proposed food park
Common infrastructure
Industrial Logistics
infrastructure facilities
Processing zone
Developed plots/ built to suit Utility zone

Water supply
Primary Secondary Tertiary
Power
processing processing processing
SWM
centres centres centres
ETP
Collection centre
Common
infrastructure
Roads and
Entrance
other open
area
Residential Commercial retail

9.1. Processing zone (factory and building area)
Broadly, the processing zone would be developed in the following formats:
9.1.1 Developed plots

Large scale food processing units traditionally prefer
developed plots as per their requirement. This provides
flexibility to the companies to customize the units in
proportion to the production capacity and also make provision
for scaling up facility in line with expansion strategies.
Therefore, developed plots would be made available for the
industry players with basic support and utility infrastructure
such as approach roads, adequate supply of power and water.
The plots would also have access to industry specific infrastructure in the food park such as
cold storage and warehouse, R&D space, testing labs, etc. Thus, around 26 acres of land is
earmarked for plotted development with varied plot sizes as indicated below. Larger plots of
around 1 acre are also provided for anchor units.
The following table illustrates the proposed area statement for the subject food park:
Table 9.1: Developed plots- area statement (indicative)

Plot size (acres) No. of plots (range) Total area (acres)
<0.50 25-30 13.80
0.50 - 0.75 4-6 4.00
1.00 8 8.00
Total 30-40 approximately 25.8
9.1.2 Built-to-suit development
Food processing units seeking immediate initiation of

operations may opt for built-to-suit facilities which would be
customized developments built in accordance with the tenant
specifications. Such developments would be an advantage for
units that would outsource the construction activity, and
focus on their core competency of undertaking the processing
activity. Built-to-suit facility would also be preferred by large
regional and national players in the food processing industry,
who would not like to undertake any construction and civil
work.

9.2 Common infrastructure
The common processing facilities and critical infrastructure support could be available to all the
tenants to enhance productivity, quality and competitiveness in pricing and marketing. This
zone is expected to offer the common facilities for primary processing and collection centres
and could include:
cleaning, grading, sorting and packing facilities
quality control facility,
dry warehouses,
specialized storage facilities including controlled atmosphere chambers, pressure

ventilators, variable humidity stores, pre-cooling chambers, ripening chambers,
cold chain infrastructure including reefer vans, mobile pre cooling collection vans,
packaging units,
irradiation facilities,
steam sterilization and steam generating units,
R&D and quality testing laboratories etc.
Permanent exhibition center
Industrial training center
Further, industrial infrastructure, administrative wing and administrative space could also be
shared amongst the units within the park and hence included in the common facilities zone.
Some important components of the common processing facilities zone are detailed in the
following section.

9.2.1 Cold storage
The proposed food park would include units engaged in

manufacturing and processing fruits and vegetables, meat
and poultry products, dairy products etc. Such products are
perishable in nature and require preservation under
temperature controlled storage facility for retaining the
freshness and for maintaining the desired quality. Therefore,
the proposed food park would provide cold storage facility
with different temperature controls. The facility would be
equipped with necessary infrastructure such as, well covered
built up area, control room for plant and machinery, fork lifts,
shelf space etc.
9.2.2 Warehouse
Most raw material for food processing industry is perishable in

nature and requires modern warehousing facility through out
its value chain. Traditionally warehouses were dominated by
small players with limited capacity, poor infrastructure and
were termed as godowns. It is understood that most of such
godowns had erratic power supply, leakages, poor
construction etc. which resulted in wastage of food products.
The role of warehouse has been transformed to a modern
warehouse with supply chain mechanism, inventory
management system, and focus on value added service like
packaging, sorting, labeling etc.
To support the units in the manufacturing zone and to provide high quality food products, the
warehousing space is proposed to be developed with temperature control and other critical
infrastructure facilities.
9.2.3 Irradiation facility
The facility is used in the food processing industry to increase the shelf-life of the food by
preventing microbial spoilage. Through irradiation, food is exposed to ionizing radiation, thus
destroying micro-organisms, bacteria, viruses, or insects that might be present in the food.
Further applications include sprout inhibition in vegetables and pulses, delay of ripening of
fruits and vegetables, increase of juice yield in fruits, and improvement of re-hydration of air or
freeze-dried food.
9.2.4 Support infrastructure
The support infrastructure in the processing zone would comprise various facilities such as
administrative wing, common facilities and other utilities. Administrative wing is expected to be
vertically developed as a G+3 or G+4 facility. It would accommodate a bank, food court,
conference hall, forex agents, trade facilitation desks, space for corporate office of industrial
units, insurance agents, courier companies, facility managers office etc.

9.2.5. Utilities zone
Utilities are proposed to be spread over 1.7 acres of land and shall comprise the following:
Effluent Treatment Plant (ETP): As the food processing industry is water intensive, it is
essential to build an ETP for treatment of waste water released from the processing units.
The water treatment plant would also be utilized by the units using water as an input for
processing.
Water supply system and fire fighting: The water supply source for the food-processing
park is contemplated through external source from the MP government for long-term
sustenance as understood by MPSAIDC. It is proposed to be sourced from the nearest
available river for long term sustainability of the park. The water supply system in the park
comprises raw water storage and treatment plants pumping mains to underground water
sumps. Water would be sourced from bore wells which would be dug within the site to
ensure continuous supply. Water supply network, fire hydrants and booster pumps along
the common roads and at strategic locations would be provided.
Over-head tanks, tanks for gardening water and drinking water could be connected to the
pumping system with adequate pipe lines. A portion of the water shall be treated and
filtered for drinking purposes by high purity water plants.
The plumbing & fire fighting system could comprise of sanitary fixtures & C.P fittings,
internal & external water supply & drainage, water treatment system, fire pumps, fire
hydrants, sprinkler system and panel.
Mass storage for water at the park is also provisioned so that water may be stored and bore
well pumps can be taken out for repairs or maintenance without affecting the supply to the
units. This storage reservoir will also be used as strategic reserve to supply to industries in
case of any unforeseen problems like pilferage or leak.
It is also proposed to systematically implement rainwater harvesting procedures and

practices for effective enhancement of ground water level and to arrest ground water
depletion.
It is understood from industry sources that 5-10 kilolitre of water per day is required by a
food and agro processing unit. Considering around 35 units in the food park, around 300
kilolitre per day is estimated for daily water requirement for all the units. Additionally
around 50% of this requirement could be expected for the support infrastructure.
Therefore, a total of 450 KLD of water requirement is estimated for the food park.
Table 9.2: Water demand estimation in Food Park

Water requirement Total water
Expected no. of
Area (In acres) per unit (Kilolitre requirement
Industry units
Per day)* (Kilolitre per day)
Food processing
50 35 5 - 10 175 - 350
industries
*Source: Dharwad District Industrial Development Plan: 2006-11

Power: Power supply to the food park is understood from MPSAIDC to be provided by the
Madhya Pradesh State Electricity Board (MPSEB). The user industries shall enter into
contract with MPSEB and pay the contract demand and consumption charges. The following
components shall contribute to the power supply for the park:
Dedicated unitized sub-station: A dedicated substation is to be provided for the entire

project to facilitate uninterrupted power supply. It would house a diesel generator for
back up with HT metering, transformer with built-in stabilizer, LT isolator, HT cables,
conduits and cabling
Electrical & fire detection system including power points, cables, cable trays,
raceways, main LT panel, capacitor panel, sub & final distribution boards, earthing &
lighting protection system, lighting fixtures, computerised central control system, fire
alarm control panel, repeater panel, smoke & heat detectors is also provided.
As peak demand will vary from unit to unit, it is unlikely that concurrent peak demands
will occur in all units at the same time. A diversity factor, which relates peak demand
to rated load demand or calculated demand, is utilized in computation of maximum
demand.
As per government sources, the power demand per unit in food and agro process
industry is 18 to 25 KVA for small units and 50 - 60 KVA for mid to large sized food
processing units. Around 875 KVA*of overall power is estimated for the food park at
peak demand as illustrated below. However, upto 80% of peak demand ie. 700KVA
could be provisioned for.
Table 9.3: Power demand estimation in Food Park

Average power Total power
Expected no. of
Area (In acres) requirement per unit requirement
Industry units
(KVA)** (KVA)
Food processing
50 35 25 875
industries
**Source: Dharwad District Industrial Development Plan: 2006-11
* Indicative and needs to be verified independently depending on size and number of units.

Solid waste management: Solid Waste Management is one of the most essential services
for maintaining the quality of life in the food park for ensuring high standards of health and
sanitation. Waste is not a useless resource but a re-cyclable and re-usable one given the
right economic framework. If the collection is proper at source, it will reduce a number of
downstream problems in transportation and disposal.
Solid waste generated in the Industrial areas can be broadly categorized as under:
Domestic waste: Kitchen and wood waste, plastic, paper, floor sweepings etc.
Industrial waste: Sludge generated during production process, effluent treatment,

chemical waste, burnt fuel waste, oil slurry, packing waste etc.
Road sweeping & sanitary waste: Leaves, human waste etc.
Garden and agriculture waste: Leaves, branches, plants etc.
Roads/building construction waste: Earth, asphalt, concrete, brick, plaster, wood,

glass, stones etc.
All bio-degradable waste from the food processing units could be mixed to undergo
composting to produce saleable fertilizer. Composting, a green concept, involves controlled
biological decomposition, which turns organic matter into humus. This can be used in
vegetable and flower gardens, landscaping and many other applications.
Telecommunication: In order to establish a reliable network in the park at the earliest,

state telecom department has to be approached for provision of basic telecom lines.
Various types of value added services such as electronic mail, ISDN facilities can be
provided in the park. It is proposed that private sector franchisees come in, set up the
facilities and charge the customers directly.

9.3 Open area
The park would include reserved space for open areas such as
roads, parking areas, parks and green areas, which would be
spread across different parts of the zone. Thus, to create an
eco friendly environment area of around 10 acres is proposed
to be apportioned for the open spaces.
Roads : The proposed food park would have an internal road

system of arterial, primary, secondary and tertiary roads
connected to the proposed access. The internal roads within
the processing zone are proposed to be adequately wide (60-
75 feet) with landscaped sidewalks, ample parking space and
access control points, loading, unloading docks/ points.
Aesthetically designed walkways shall be provided along with lush green environment on either
side. Adequate circulation and green belt corridors which include pedestrian walkways,
approach roads for industrial cluster as well as service corridors, green belt, plantation
schemes, path ways, water supply, sewage mains, fire hydrants and storm water drains could
be provided.
9.4 Support infrastructure
Support infrastructure is proposed to comprise residential and

commercial facilities. The residential infrastructure is
estimated to be developed across 5.0 acres of land comprising
group housing catering to the housing requirements of
employees across different income groups.
The demand for residential is expected to be driven primarily

by the low mid segment employees of the companies
operating in the food park, preferring a walk to work culture.
The demand for residential units has been derived from expected employment generated within
the food park. The estimation of total workforce in the proposed food park is mentioned below:
Table 9.4: Estimated employee inflow in the food park

Area allocated Estimated number of Projected employees
Industry
(Acres) employees per acre in the food park
Processing zone 27.5 50 1,375
Top
Mid segment Low segment
Management
Expected employees (a) 2% 20% 78%
Target residential
- 10% 20%
infrastructure (b)
Expected residential units
- 28 215
(a*b)
Total approx. 240

Based on the employment profile in the food processing industry, 20-25% of the work force in the
food park is expected to be from Middle Income Group (MIG) and 70-80% of the work force in the
Low Income Group (LIG) segment. The food park could target providing residential facilities for
around 20% of the total workforce. Hence, around 240 residential units could be developed in the
food park.
A broad affordability assessment for the LIG employees of the food park is outlined below:
Table 9.5: Affordability analysis for a LIG employee in the food park in Bhopal
Estimated salary range of an employee in food processing industry (INR lacs per annum) 1.2 - 1.8
Estimated affordability - capital value of the residential unit affordable (INR lacs) 58
Assumptions for affordability analysis:

% of salary available for EMI towards home loan 40%
Down payment (% of the total capital value of the residential unit) 20%
Average tenure of loan (years) 20

Annual interest rate (average) 10%
The mid end residential units and the low segment units configured as 1 BHK/ studio units could
attract interest from companies for their guest houses and could also be utlised for dormitories
for workers, creche etc .
The retail units are proposed be supported by around 22,500 sq. ft. of retail space spread over
0.5 acres. This would primarily be a shopping centre catering to the daily needs of the
residents. It could accommodate a hypermart, supermarket, milk booth, which could also be
retail outlets for products produced in the food park.
To ensure adequate comfort, security and convenience for residents, employees and visitors,
provision for ample support infrastructure is proposed in the residential zone. Further, the
proposed Park would have all provisions which are critical to the smooth functioning of an
integrated development.
Support infrastructure for the proposed residential zone of the park would include an array of
facilities such as:
Post office/ courier service facility
Administration and security block
Green spaces
While the basic utilities such as power and water are proposed to be sourced from the
government bodies, provision for collection and distribution of the same is to be made in the
residential zone. Other infrastructure to be provided includes water supply, power distribution
unit, solid waste management, sewage treatment plant and telecommunication.

Table 9.6: Area statement Bhopal food park
Area zoning Area in acres Saleable area (in sq.ft.)
Processing zone 27.5 1,123,852
Plots 25.8 1,123,852
Plots developed sale (including plots for BTS) 25.8 1,123,852
Utilities 1.70 -
Electrical transmission / substation (building for DG

0.20 -
sets)
Effluent Treatment Plant 1.00 -
Water Sump 0.50 -
Common infrastructure zone 7.5 335,851

Industrial infrastructure 2.35 105,567
Primary processing, collection and packaging

0.39 17,520
centre
Post production processing 0.38 17,070
Quality testing laboratory 0.38 17,070
Weigh bridge 0.20 8,985
Irradiation and sterilization facilities 1.00 44,922
Logistics zone 4.65 207,823
Warehouse & distribution centre 2.83 126,067
Warehousing space 1.57 70,527
Semi processing & value added services 1.00 44,922
Open yard 0.26 10,618
Cold storage 1.82 81,756
Support infrastructure 0.50 22,461
Administrative and cafeteria / food court / social 0.50 22,461

Approx.
Area in Saleable area Unit
Area zoning no. of
acres (in sq. ft.) size
units
Support infrastructure 5.0 224,609 Sq. ft. -

Residential (including car park) 4.5 202,148
Apartment - 2BHK 2.25 101,074 1,000 101
Apartment - 1BHK 2.25 101,074 800 126
Commercial (including car park) 0.50 22,461 - -
Retail 0.5 22,461 - -
Open area 10.00 - - -

Road and other area 7.00 - - -
Open area 3.00 - - -
TOTAL 50.00 1,684,312

Chapter ten Organization structure
10. Organization structure
The management and organization structure of the park has been developed in line
with the vision, objective, focus areas and the operation of the park. The management
team would comprise technical and scientific professionals with relevant experience in
agricultural science and food processing industry, to create a favourable ecosystem
and render quality services to the tenants of the food park. This section broadly defines
the roles and responsibilities at each level of the organization structure and their
reporting relationships.
10.1 Management and organization structure

The management and organization structure of the proposed park is set out in the
illustration below:
Fig 10.1: Organization structure of the food park
Board of Directors
Chief Executive Officer (CEO)
Head- Business Head- Finance and

Head- Operations
development administration
Manager- Manager- Manager- Manager- Manager- Manager-

Sales Marketing Administration Finance Facilities Technical
Support staff
10.1.1 Board of Directors (BoD)
The food park would be governed by the Board of Directors (BoD) of the park, which
would comprise State Government representatives and the private partner. The Chief
Executive Officer (CEO) of the park, a representative of the private partner/developer,
would report to the BoD. The BoD could appoint a project consultant for the proposed
food park.

The project consultant could advise the Board during the development of the park and
also in the post development stage.
Table 10.1: Responsibilities of the project consultant
Stages Responsibilities
During the Provide recommendations to the Government on incentives and

development stage support required for the park.
Suggest policy amendments and strategic initiatives on an ongoing

basis for the Government to achieve the objective of developing the
food park.
To assist the Board in appointing the Chief Executive Officer (CEO)

of the park.
Post development
stage
To provide strategic inputs and plan for the food park.
Periodically monitor and review the comprehensive performance of

the food park.
To review the business plan annually.
The role and responsibilities of the Board would be as outlined below:
To set goals and objectives of the park and govern the organization by setting
board policies and objectives.
To appoint the CEO of the park.
To provide strategic inputs and assist in planning with reference to the food park.
Periodically monitor and analyse the performance of the park.
To review/ validate/ approve the proposals of the tenants who are willing to
locate themselves in the park.

10.1.3 Chief Executive Officer (CEO)
The role and responsibilities of the CEO of the park would be:
To maintain overall control of the SPV undertaking the development and

maintenance of the food park.
To design and prepare the business plan.
To head operations of the project.
To report to the Board of Directors.
To supervise and coordinate the project planning, implementation and operations.
To create awareness about the food park at a regional and national level.
To ensure that the facilities and infrastructure of the food park are of global
standards.
To ensure continuous up-gradation of the state-of-the-art infrastructure and

facilities of the food park.
To ensure high occupancy rates at the food park, via targeted marketing.
Liaise with the State and Central Government to ensure incentives for the units.
10.1.4 Head- Finance and administration
The role and responsibilities of the Head of finance of the park would be as outlined
below:
Mobilization and utilization of financial resources.
Negotiation of commercial terms and conditions with contractors and suppliers.
Statutory compliance and financial reporting etc.
Co-ordination with banks and financial institutions.
Monitor the Management Information System (MIS).
Review of quarterly cash-flow system.
Preparation of annual budget and budget variance.
Administration of the park.

10.1.5 Head- Marketing/ business development
The role and responsibilities of the Head Marketing of the park would be as outlined:
To market the park to the identified target food processing companies at a regional and
national level.
To identify and develop strategic partnerships that would act as a catalyst for the growth
and development of the park.
10.1.6 Head- Operations
The Head- Operations of the park would have the following role and responsibilities:
To ensure smooth functioning of the construction process on the site.
To ensure timely supply of building material and plants and machinery on the site.
Post completion of the project, ensure smooth functioning of the day-to-day building
operations.

Chapter eleven Marketing plan
11. Marketing plan
In order to design a suitable marketing plan for the proposed food park, it is essential to
understand the approach adopted by various food parks across the globe, especially in India, to
market similar infrastructure. As the proposed park focusing on food processing, is still a
relatively new concept in India, therefore the best practices of successful food parks are
undertaken for broader understanding of marketing strategies.
11.1 Best practices adopted
Some of the identified best practices that were adopted by the various parks /cluster to meet the
global standards are illustrated below:
11.1.1 Focused approach
Most of the parks had a focused approach for marketing, wherein, they identified the niche
segments and high growth segments in the sector. Further, they identified and approached the
companies present in target segments on their own.
11.1.2 Innovative Tenant attracting schemes
Some of the parks have adopted novel tenant attracting schemes to increase the occupancy
rates in the park. Some of the innovative schemes are mentioned below:
Step-up rentals
This is a scheme in which the rental value of a space increases in a predefined manner.
Step-up rentals assist SMEs and new entrants in setting up their facilities. It provides them
a convenient option of paying an affordable rent during the initial stage. This practice
would encourage entrepreneurs and SMEs in the development.
Start-up seed funding
This option is important for parks, which have a high concentration of start-up companies
as the requirement for seed capital is imperative in the early stage of any venture.
Entrepreneur mentoring
Proper mentoring at the early stage of any venture, increase the probability of discovering
a viable business opportunity. Food parks can mentor entrepreneurs through the entire life
cycle of their growth.

11.1.3 Partner with local government authority
The parks/clusters generally partner with the local government authorities like State
Government and other departments. This model helps the parks in receiving subsidies from
the government and enables the development and maintenance of the support infrastructure
required to make the parks sustainable over the long term.
11.1.4 Proactive marketing
Proactive marketing is characterized as an integral part of the growth and success of any
cluster. The proactive marketing involves identifying the upcoming segments and targeting
the companies in the early phase. This effort would attract more companies, thereby
providing the parks an edge over other competing parks.
11.2 Target market
Attracting an appropriate mix of target tenants is one of the most critical factors for the success
of the proposed food park. Hence the parks explicitly defines its target market in line with the
availability of raw material and resources in the catchment area and various other supporting
and enabling factors for the production of identified raw material.
Fig 11.1: Target tenant mix for food park
Focus on value-added products

Startup companies
Small size companies Companies focusing on Agri R&D

Target tenants
Medium size companies Food processing R&D companies
Large size companies
Agri biotech R&D service providers

11.3 Marketing strategy for the proposed cluster
11.3.1 Marketing approach
The marketing strategy of the proposed park would be invariably driven by the two factors:
Attracting the right tenant mix
Retaining the tenants, to create positive feedback
The same has been elaborated below:
11.3.1.1 Attracting tenants
The ability to attract the right mix of tenants would be decisive for its long-term success. This
necessarily means that the food park should adopt the right marketing strategy to attract
companies, discussed as below:
Identifying anchor tenant The food parks main focus area would be on processed
food, therefore it is imperative for the cluster to attract anchor tenant with strong
operational and financial credential to set up its plant in the park. Brand value of anchor
tenant would be critical in attracting other small and medium sized tenants.
Apart from being provided with well integrated facilities like research institute, bio
processing unit for incubating new ideas, testing centre for validating the market
potential, anchor tenant would be invited to partner in the design and conceptualization
stage of the floor plan, thus providing customized solutions.
Following are some forums through which the park could be marketed towards
attracting anchor tenant and other small and medium enterprises.
Chambers of Commerce, Confederation of Indian industry (CII), APEDA and

Business Councils of various countries
Regional business forums
Local business forum, business councils, trade associations and professional

bodies.

Further, if the park is proposed to be developed through private sector partnership, then as part
of selection criteria, the potential bidder may be asked to indicate an anchor tenant for the park
and the bidder may be awarded higher weightage based on type of anchor tenant suggested by
the bidders.
Identifying high potential prospects- As anchor tenants would be fully able to leverage the
benefits of R&D synergies; the main focus of the park would be on attracting high potential
prospects. There could be about 2-3 anchor tenants in the park, therefore majority of the
tenants could be SMEs (Small and Medium Enterprises) or startup companies which are in
the field of food and agri products and food processing.
Identifying key SMEs and startup companies through proper market segmentation and
developing an in house MIS system, that keeps record of all the companies which have
declared their plans to expand would be a critical factor in determining the appropriate
tenant mix.
The food park would offer SMEs and startup companies a strong value proposition by
offering innovative lease/sale arrangements and value added services. The park would
formulate a flexible lease/sale policy based on differential rentals for tenants, depending
upon the capabilities and business proposition of the retail prospect.
Target units: It has been observed that while setting up a manufacturing base, it is critical
to identify the geographical location based on various factors such as connectivity,
infrastructure availability, manpower base etc. Considering such factors, it is expected that
the potential tenants in the proposed park would be tapped in various phases as defined
below:
Short term (1-2 years): The proposed park would generate substantial demand from the
existing industrial base in the catchment. Such industrial base is likely to leverage the
current raw material availability in the defined catchment/cluster. Owing to the operational
experience of market dynamics in the catchment these units are well positioned to leverage
the benefits of the proposed park. Further, most of the existing companies involved in food
processing are small and mid scale. They are expected to benefit and gain significantly over
other stand alone units on account of the integrated offerings of the proposed food park.
Medium to long term (3-5 years): The proposed park is expected to be in operational stage
and would have gained visibility amongst the food processing industry players in the
country. It is expected that in the medium to long term the proposed park would attract key
regional and national food processing players. Such players may leverage raw material,
which though currently not produced in large quantities, yet have potential for large scale
production.

Regularly providing information of interest to prospective tenants - A proactive approach
would be followed wherein brochures/ white papers/ publications would be sent to the
target companies in order to generate goodwill and educate the prospects on relevant
subject matters, in addition to the regular advertisements and participation in exhibitions,
seminars, etc. Based on the above, the Business Development team at the park would
prepare an Information Memorandum for interested parties with the following details:
Facilities offered in the park ( fiscal and non fiscal)
Information on the existing tenants in the cluster
Unique Selling Proposition (USP)
Key research development in the agri food products
Advantages of locating in the park vs. setting up the facility outside
Marketing to retail prospects A dedicated business development team could give

presentations to the interested companies and further, send them a customized proposal
that would include the offerings of the park, along with the land specifications and rates.
During the preliminary presentation the park will highlight the food processing facilities at
the park. Bio processing unit and testing centre along with advantages of research
institutes in the cluster, world class common support services, warehouses, cold storage
would be the key parts of the preliminary presentation.
11.3.1.2 Retaining tenants
The park would ensure to retain the tenants for its long-term
sustainability and would need to constantly reinvent and renew
itself in terms of positioning and marketing strategy. The park
would make continuous efforts towards reinforcing its value
proposition to the tenants and to create long lasting
relationships for mutual benefit. With this end in view, the park
would follow the steps discussed as under:
Share market intelligence (industry trends, new entrants,

profiling etc.) with tenants, as this would be useful in terms
of keeping them abreast with the latest happenings in the
industry.
Agri related services such as Intellectual property rights

(IPR) assistance, finance and Insurance facilities along with
consulting from institution zone would complete the R&D
cycle and provide key incentive in retaining the tenants.
Tenants would not be requiring assistance from outside the
park, be it the first stage of incubating an idea to final stage
of patent filing.

Maintain a designated Tenants Relations Cell, which would act as a conduit for open
dialogue with tenants and feedback from them. The Cell would provide the tenants a
forum, through an internal newsletter or periodic meetings, for discussing issues of
common interest to the tenant community. Besides providing an open forum, the
Tenants Relations Cell would maintain one-to-one interaction with the tenants of the
cluster. This would enable the tenants to voice their complaints and grievances with
much greater ease.
11.3.1.3 Pricing framework
The pricing strategy for the proposed food processing park has been developed based on the
nature of products and services which would be offered. In addition, the pricing strategy also
includes inputs from industry experts such as marketing, project management team, consultants,
master planners etc. In order to diversify the source of income, multiple revenue streams have
been proposed, in alignment with the planned development formats, which have been elaborated
below.
Developed Plots
Refundable deposits: The developers would collect an amount which would be

refunded when the unit holder exits from the proposed zone. Such revenues would aid
the developer in generating capital for the development of subsequent phases.
Monthly lease rental: In order to generate the cash flow during the operations of the
park, a nominal monthly lease rental would be collected from the unit holders. It is
expected that the units would be disbursing the monthly lease rental from their
operational income which would not block their cash flow during initial investment.
Built-to-suit facility:
The development format would allow units to start the operations without undertaking
construction activity. Such development format would generate revenue through:
Refundable deposits
Monthly lease rentals
Other developments formats:
Multi-tenanted and support facility would either be developed by the developer and earn the
revenue as per developed plots or would be leased out to third parties. Such third party
would develop the infrastructure and would share the revenue with the developers as per
the terms agreed.
The multiple revenue streams would be an important tool in the pricing strategy of the proposed
park, as it would leverage on the investment made in the development and would provide
flexibility to units with payment options. Further, prices offered would be based on the analysis of
existing pricing prevalent in select similar developments in central India and the catchment.

11.4 Benchmarking
11.4.1 Benchmarking for plotted land price
Table 11.1: Land price- benchmark

Estimated Price
Approx. area
Food park/industrial estates State (INR/acre) for 30
available (acres)
years lease
Food Park, Maneri MP 24 710,358
Food Park, Borgaon* MP 20 710,358
Food Park, Choradia (Pune) Maharashtra NA 800,000

Source: Madhya Pradesh Audhyogik Kendra Vikas Nigam and Madhya Pradesh Department of commerce, industry and
employment
To assess an achievable lease/sale rates for various components in the proposed food park,
the park has been benchmarked against existing food parks in Madhya Pradesh and
neighboring states. Payment for developed plots within food parks in MP is in the form of an
upfront payment and an annual lease rent payable during the lease period , typically 30 years
(excluding maintenance and other charges).
Estimate of upfront lease premium payable for developed plots has been arrived as sum of the
upfront payment and present value of annual lease payable (discounted at 8%) during lease
period.
Based on the above analysis, an upfront lease premium for the developed plots in the subject
food park could be INR7,50,000. However, considering saleable area being 60% of the total
area the sale price would factor in the non saleable area. Accordingly the sale price of
developed plots could be around INR1,220,000 per acre.
11.4.2 Pricing benchmarking- other components
Table 11.2: Benchmarking for other components

Particulars Approx. area (sq. ft.) Quoted rentals/capital value
Warehouses (lease rental) 9,600 6.60 (INR/ sq.ft./ month)
Industrial shed (capital values) 2,400 223 (INR/sq.ft.)
Source: Madhya Pradesh Audhyogik Kendra Vikas Nigam and Madhya Pradesh Warehouse and Logistics Corporation
Other components of the food park have either been benchmarked against comparable existing
facilities or have been estimated based on the cost (inclusive of land and construction cost)
plus suitable developer's margin.
It may be noted that indicated prices are probable prices, however the developer of the park
may be able to realise premium over comparable facilities, on account of superior
infrastructure facilities that the proposed food park may offer. The following table illustrates
the pricing for the various components in the food park.

Table 11.3- Pricing
Suggested pricing*
Development component Subcomponents
( INR per sq. ft.)
Processing zone
Plots Developed plots 21
Packaging center 715
Multi-tenanted facilities Post production packaging 715
Quality testing laboratory 715
Logistics zone
Warehouse space 715
Semi processing and value

Warehouse and distribution 715
added services
center
Open yard 82
Cold storage 945
Common infrastructure
Weigh bridge 197

Utilities / industrial Irradiation facility 427
infrastructure
Administration and cafeteria /
1,500
food court / social
Residential Apartment- 1 BHK 1,200
Car park 35,000 per car park
Commercial Retail 1,800

*Note: Pricing excludes any equipment/ plant and machinery cost

149
Table 11.4: Existing industrial areas
Detailed project report on development of Food Park at Bhopal

Source: Madhya Pradesh Audhyogik Kendra Vikas Nigam and Madhya Pradesh Department of commerce, industry and employment
11.5 Marketing channel
A strategic marketing channel is an essential business tool to achieve business objectives. Broad
communication activities that could be undertaken for the subject food park are as follows:
11.5.1 Communication process
Communication
Strategy
Direct Marketing and Public Indirect Indirect marketing through

Relations Marketing third party intervention
Direct marketing and public relations would target the existing and emerging food processing
units, retail chains and logistics players, bringing in measurable results through direct response.
Indirect marketing could target the manufacturers and industry players through public
advertisement, magazines or website, third party influencing agents such as consultants,
auditors, etc who are directly related in decision making process for the manufacturing units.
11.5.1.1 Direct marketing and public relations
Promotion packages could be designed for big domestic

corporate houses, which would lure them into having a
first-hand experience of the development. Advertising in
leading international and domestic travel magazines,
opening kiosks at major national airports, and sponsoring
TV travel shows would further help introduce the brand and
its services to the target market.
Key Initiatives:
Conferences
Food park video/short film
Corporate brochure
Public Relations

Conferences
Conference is amongst the most favoured channel of direct marketing. Proactive participation in
sector specific conferences would aid in showcasing the proposed food park to potential tenants.
Such conferences have been observed to witness high footfalls from industry players who aspire
to expand and diversify in the food processing industry. Sector specific conferences such as Food
Pro by CII, Agri and food investment submit by ICICI and VC Circle etc, would be an ideal platform
to promote the proposed food park.
Food park video/short film
Corporate films or short videos, with a virtual tour of the proposed food park based on the outlay
prepared by master planners, could be an effective way of making a statement about the
development and its high-quality services.
Corporate Brochure
Another marketing strategy is to prepare a corporate brochure as a ready reference tool. Besides
highlighting the entire development it could also include:
USP of the project
Logistics advantages
Amenities offered
Services available for food processing activities
Public Relations
Newsletters: A newsletter, on a quarterly or half-yearly basis, could provide updates on food

processing industry and on the major developments in the food parks. It could also highlight other
events taking place in Bhopal and Madhya Pradesh. The newsletter would be disseminated to the
target audience via mailer as well as through other media.
Further, host of key presentations made to apex level bodies / associations / chambers
representing private business interests in India such as
Chambers of commerce, Confederation of Indian Industry (CII), Federation of Indian

Chambers of Commerce and Industry (FICCI), Ministry of Food Processing Industry (MoFPI)
Agriculture and Processed Food Products Export Development Authority (APEDA), Marine
Products Export Development Authority (MPEDA) etc.
Presentations made to identified potential promising large business houses both from
private sector and the public sector in India.
Regional business forum
Local business forum, business councils, trade associations and professional bodies

11.5.1.2 Indirect marketing
Corporate Advertisements
The marketing for the project can be carried out through corporate advertisements as well as
project-related advertisements in appropriate media (magazines, newspapers, radio, television,
websites, billboards, etc.). Specific magazines could be identified for advertorials/
advertisements, for example, magazines issued by air carriers such as Kingfisher, Jet Airways
and sector specific magazines such as Processed Food Industry, Beverage and Food World, etc.
The Online Medium
Online medium would include a website promoting the project and its facilities. The objective is
to replicate the experience of operation in the proposed food park, even before setting base
there. This would aid in generating interest, resulting in further discussion for identifying the
opportunity available.
The various methods of online are:
Website: Create a virtual food processing, common infrastructure and support

infrastructure of the food park through its stages of progressive development
Online Campaign/Database Marketing: Create an interface for lead generation and

bookings by introducing an option for request for downloading the brochure. This would
aid in evaluating the requirements of prospective tenants for the proposed food park.
Search Engine Optimization (SEO)/Relationship Marketing/E-Customer Relationship

Marketing: Maintain sustained relationship buyers (converted and potential)
Leverage Parentage: Above all, leverage the equity
Online Advertising
Online advertisement includes display banners on web sites which cater to the target segment.
Search engine optimization would also be incorporated to identify the target segment based on
the online bookings for a food park.
MP Agro relationship
The relationship of MP Agro built over the years could be leveraged to identify the key potential
targets. A proactive meeting could be held at the key personnels identified as per the nature of
their business out of the total list of key clients and associates. Such methods would either lead
to a direct target or would provide lead of a potential target.

11.5.1.3 Indirect marketing through third party intervention
Direct mailers, for the launch event, can be sent as physical mail to real estate consultants
dealing with industrial property consulting. These agents/consultants could identify potential
targets for large proportions of sales of processing zone in the proposed food park. Therefore,
one-on-one marketing here is a necessity. Such mailers would also be sent to the strategic
consultants and auditors who focus on food processing industry and are associated with clientele
related to the same industry.
11.5.1.4 Marketing Setup

The proposed SPV would have a marketing department with a dedicated staff to cater to the pre-
sales as well as post-sale marketing requirements. The department would be headed by a full time
executive officer at the helm of its affairs, supported by well qualified staff.
11.6 Marketing program management
The components involved in the different phases of the marketing program are Planning, Pre-
marketing, Marketing products and the Marketing campaign.
Planning
The first stage in the marketing plan involves the concept development for the food park and
associated research. A unique identity is to be established, which would strategically position the
food park as a pioneer in its field. Merchandising the concept would involve multiple planning
reviews and studies.
Pre-marketing
The pre-marketing network involves research, brainstorming and cost/benefit analyses that
provide a basis for developing an effective marketing plan and strategy. The planning and the
pre-marketing components occur in the first phase of the marketing plan.
The following are the heads that would form a part of the pre-marketing stage:
Revenue projections
Marketing budget
Detailed trade mix
Setting up of marketing department
Set up tenant relation cell
Advertising and promotion campaign
Corporate advertisement

11.7 Unique selling propositions (USPs) of the proposed food park
Logistics, Abundant,
warehousing and cold sustainable
Availability of low
storage network and and quality
cost manpower
facilities raw material
availability
Access to cost Quality control

effective and Research &
technologies and USPs Development
equipments (R&D) facilities
Focus on
perishables and
hence the Food Park
Ensuring better Cluster based can avail of VAT and
realization to integrated Central Sales Tax
farmers by development (CST) assistance as
removing Establishing per Madhya Pradesh
intermediaries backward and Food Processing
forward linkages Policy, 2008

Chapter twelve Financial analysis
12. Financial analysis
12.1 Area statement
Out of the total area of 50 acres, processing and common infrastructure zone is 35.00 acres
(70% of total area) whereas rest of the 15.00 acres is earmarked for support infrastructure and
open area.
Area Percent In Acres
Total area 100% 50.00
Processing zone 55% 27.50
Support infrastructure 10% 5.00
Common infrastructure 15% 7.50
Open area 20% 10.00
12.2 Revenue assumptions
The revenues in processing zone are assumed to be earned from the following sources viz.
upfront lease premium to be received on built-to-suit plots and developed plots, multi
tenanted facilities and common processing zone.
The revenue from non-processing zone would be earned through sale of residential and
retail component.
Component INR per sq.ft.

Processing zone
Developed Plot (including plots for Built to suit) 21
Multi- tenanted facilities 715
Warehousing Space 715
Semi Processing & Value Added Services 715
Open Yard 82
Cold Storage 945
Weigh Bridge 197
Irradiation Facility 427
Administrative and Cafeteria / Food Court / Social 1,500
Residential
Apartment - 2BHK 1,200
Apartment - 1BHK 1,200
Retail 1,800

Revenue from processing zone:
The built-to-suit and developed plots are expected to be leased on upfront lease
premium of INR21 per sq.ft. whereas multi-tenanted facilities are expected to be
leased at INR715 per sq.ft. of built-up area (BUA). The upfront lease premium is
staggered to be received in two equal annual installments.
The upfront lease premium in case of warehousing space and semi processing & value
added services space is expected to be INR715 per sq.ft. and in case of open yard it is
expected to be INR82 per sq.ft., in FY2011. The cold storage area is expected to be
leased at INR945 per sq.ft. whereas weigh bridge and irradiation facilities are
expected to be leased at INR197 and INR427 per sq.ft. respectively.
Revenue from non-processing zone: The capital values for the residential and retail zones
are expected to be INR1200 and INR 1800 per sq.ft. for FY2011 which are assumed to
increase at 7% annually. The proceeds from the sale of support infrastructure zone are
assumed to be received in two equal annual installments.
12.3 Cost assumptions

The cost of land is assumed as INR4.75 lac per acre, thus total cost of land amounting to
INR2.38 crore for 50 acres of land.
The total expenditure to be incurred during first four years on land development, compound
wall and infrastructure development expenses amounts to INR0.51 crore, INR1.20 crore
and INR0.80 crore respectively.
The total expenses towards manpower and administration is INR7.19 crore and INR0.58
crore respectively.
The preliminary expenses would be on account of expenses incurred towards the formation
of a new company to manage the Park, expenses towards project launch, and
environmental studies etc. The total preliminary expenses are assumed as INR0.70 crore.
Land and land development expenses Fig in INR Crore
Particulars Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16

Land cost 2.38 - - - - -
Land development cost 0.13 0.20 0.18 - - -
Compound wall 1.20 - - - - -
Infrastructure development cost
Storm water and rain water
harvesting - 0.04 0.08 0.04 - -
Water infrastructure - 0.08 0.15 0.08 - -

Treatment plants- water
- 0.09 0.18 0.09 - -
and sewage
Master planning/ architect
- 0.40 0.20 0.20 - -
fees
Preliminary expenses 0.70 - - - -

The cost of construction for multi-tenanted space is assumed as INR600 per sq.ft.
Warehousing space, semi processing & value added services are assumed to be constructed
at the cost of INR600 per sq.ft and open yard would be developed at the cost of INR50 per
sq.ft. Cold Storage units are expected to be constructed at the cost of INR800 per sq.ft.
The annual escalation in cost of construction for all the above categories is assumed as 5%.
The current cost of construction for the residential zone is assumed as INR625 per sq.ft.
whereas retail space is expected to be developed at INR800 per sq.ft. The annual escalation
in cost of construction for these are is assumed as 6%.
The provisions for contingencies are made in the above expenses at 5% of the cost of
construction of the project.
Assumptions - Cost of construction
Component INR per sq. ft.
Multi-tenanted facilities 600.00
Warehousing space 600.00
Semi processing and value added services 600.00
Open yard 50.00
Cold storage 800.00
Electrical transmission / substation (Building for DG sets) 350.00
Weigh bridge 150.00
Irradiation facility 350.00
Administrative and cafeteria / food court / social 800.00
Residential apartment 625.00
Retail 800.00

12.4 Development phasing
The entire processing zone is planned to be developed within the timeframe of 3 years till
FY2014. The development of non-processing zone would commence from FY2013 and is planned
to be developed in two phases.
Particulars Period Ended Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16

Processing zone
Built to Suit /Developed Plots
Plot (including plots for built to suit) - developed sale
Phasing %age - Development 100% 25% 40% 35% - - -
Land in acres 25.80 6.00 10.00 9.80 - - -
Multi- tenanted facilities
Packaging center
Phasing %age - Development 100% - 100% - - - -
Area Developed in Sq Ft 17,520 - 17,520 - - - -
Post Production Processing
Quality Testing Laboratory
Logistics Zone
Warehouse & Distribution Centre
Semi Processing & Value Added Services
Open Yard
Phasing %age 100% - 100% - - - -
Cold Storage
Phasing %age 100% - 100% - - - -
Support Infrastructure- Utilities
Electrical Transmission / Substation (Building for DG sets)
Phasing %age 100% - 100% - - - -
Industrial Infrastructure
Effluent treatment plant
Phasing %age 100% - 100% - - - -
Land in acres 1.00 - 1.00 - - - -

Particulars Period Ended Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16
Weigh Bridge
Phasing %age -
100% - 100% - - - -
Development

Irradiation Facility
Phasing %age -
100% - 100% - - - -
Development
Administrative and Cafeteria / Food Court / Social
Phasing %age -
100% - 100% - - - -
Development
Residential (including parking)
Apartment - 2BHK
Phase I
Development %age 50% - - 100% - - -
Area Developed 50,537 - - 50,537 - - -
Phase II
Development %age 50% - - - - 100% -
Area Developed 50,537 - - - - 50,537 -
Apartment - 1BHK
Phase I
Development %age 50% - - 100% - - -
Area Developed 50,537 - - 50,537 - - -
Phase II
Development %age 50% - - - - 100% -
Area Developed 50,537 - - - - 50,537 -
Commercial Retail (along with parking)
Phasing %age 100% - - 100% - - -
Area Developed in Sq Ft 22,461 - - 22,461 - - -
Roads and open area
Phasing %age 100% 25% 40% 35% - - -
Land in Acres 10.00 2.50 4.00 3.50 - - -

12.5 Sale phasing
Lease of processing zone is expected to commence from FY2012 and completed by FY2014
within 3 years. The non-processing zone is phased to be sold between FY2013-2015.
Particulars Period Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16

ended
Processing zone
Plots (including plots for built to suit) developed plots
Phasing (%) 100% - 50% 25% 25% - -
Phasing (area in acres) 25.80 - 12.00 6.00 7.80 - -
Multi tenanted facilities
Packaging center
Phasing (%) 100% - - 50% 50% - -
Phasing (area in sq.ft) 17,520 - - 8,760 8,760 - -
Post production packaging
Phasing (%) 100% - - 50% 50% - -
Quality testing laboratory
Phasing (%) 100% - - 100% - - -
Phasing (area in sq.ft) 17,070 - - 17,070 - - -
Logistics zone
Warehousing and distribution center
Phasing (%) 100% - - 80% 20% - -
Semi Processing & Value Added Services
Phasing (%) 100% - - 50% 50% - -
Open Yard
Phasing (%) 100% - - 100% - - -
Cold storage
Phasing (%) 100% - - 100% - - -

Particulars Period Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16
ended
Weigh bridge
Phasing (%) 100% - - 100% - - -
Irradiation Facility
Phasing (%) 100% - - 50% 50% - -
Administrative and Cafeteria / Food Court / Social

Phasing (%) 100% - - 50% 50% - -

Residential
Apartment 2BHK
Phase-I
Phasing (%) 50% - - 70% 30% - -
Phase-II
Phasing (%) 50% - - - - 100% -
Phasing (area in sq.ft) 50,537 - - - - 50,537 -
Apartment 1BHK
Phase-I
Phasing (%) 50% - - 70% 30% - -
Phase-II
Phasing (%) 50% - - - - 100% -
Phasing (area in sq.ft) 50,537 - - - - 50,537 -
Commercial retail
Phasing (%) 100% - - 10% 40% 40% -
Phasing (area in sq.ft) 22,461 - - 2,246 8,984 8,984 -

12.6 Cash flow statement
Tax and interest rates
Income tax rate is assumed as 33.99% (including surcharge and education cess) as per the
prevailing income tax rates. The interest amount on debt is computed by assuming the rate
of 12% per annum.
Capital structure
The debt-equity ratio is assumed as 1:1. The total project cost of INR49.61 crore is
expected to be funded by equal equity and debt contribution of INR10.91 crore each during
first two years from the commencement of the project. Balance INR27.79 crore are
expected to be generated from internal accruals.
The debt is estimated to be drawn in two tranches of INR3.47 crore and INR7.44 crore in
first two years. Each tranche is estimated to be repaid in four equal annual installments with
one year moratorium on principal repayment.
The cost of equity is assumed as 17% while cost of debt (as mentioned earlier) is 12% per
annum. Thus, the weighted average cost of capital (post tax) is computed to be 12.46%.
Fig in INR Crore

Cash Inflow
Share Issue 3.47 7.44 - - - -
Revenue - 0.63 27.30 20.12 10.34 7.78
Increase in secured debt 3.47 7.44 - - - -
Total (A) 6.94 15.51 27.30 20.12 10.34 7.78

Cash Outflow
Capital Expenses 0.07 0.19 0.19 0.01 - -
Preliminary Expenses 0.70 - - - - -
Operational expenses 4.75 13.15 18.32 6.96 6.01 4.11
Interest during construction 0.42 1.31 1.21 - - -
Interest - - - 0.88 0.55 0.22
Tax - - 0.13 0.61 0.74 1.12
Repayment of Long Term Loan - 0.87 2.73 2.73 2.73 1.86
Total (B) 5.94 15.51 22.57 11.19 10.03 7.32
Opening Balance of Cash and

- 1.00 1.00 5.73 14.66 14.97
Bank
Net Surplus\Deficit (A-B) 1.00 - 4.73 8.93 0.31 0.46
Closing Balance of Cash and

1.00 1.00 5.73 14.66 14.97 15.43
Bank

12.7 Profit and loss statement
Fig in INR crore
Revenues -
0.63 27.30 20.12 10.34 7.78
Operating Expenses 1.12 2.28 24.78 13.68 7.02 4.22
EBIDTA (1.12) (1.65) 2.52 6.44 3.32 3.56
Depreciation - - - 0.01 0.01 0.01
Preliminary expenses
0.14 0.14 0.14 0.14 0.14 -
written off
EBIT (1.26) (1.79) 2.38 6.29 3.17 3.55
Interest (including IDC) 0.42 1.31 1.21 0.88 0.55 0.22
PBT (1.68) (3.10) 1.17 5.41 2.62 3.33
Tax - 0.13 0.61 0.74 1.12 -
PAT (1.68) (3.10) 1.04 4.80 1.88 2.20

12.8 Balance sheet
Fig in INR Crore
Liabilities
Networth 1.79 6.14 7.18 11.98 13.86 16.06
Promoter's Equity 3.47 10.91 10.91 10.91 10.91 10.91
Reserves & Surplus (1.68) (4.77) (3.73) 1.07 2.95 5.15
Long Term Loans 3.47 10.04 7.32 4.59 1.86 -
Total Liabilities 5.26 16.18 14.49 16.57 15.72 16.06
Assets
Land 0.04 0.04 0.04 0.04 0.04 0.04
Gross Block - - 0.03 0.38 0.40 0.41
Less: Acc. Dep. - - - 0.01 0.01 0.02
Net Block - - 0.03 0.37 0.39 0.39
CWIP 0.03 0.21 0.37 0.03 0.01 -
Total Current Assets 4.63 15.51 13.77 15.98 15.28 15.63
Cash and Bank Balance 1.00 1.00 5.73 14.66 14.97 15.43
Inventory 3.63 14.51 8.04 1.32 0.31 0.20
Total Current Liabilities - - - - - -
Trade Creditors - - - - - -
Short Term Borrowings - - - - - -
Advances - - - - - -
Net Current Assets 4.63 15.51 13.77 15.98 15.28 15.63
Misc exp to be w/o 0.56 0.42 0.28 0.14 - -
Total Assets 5.26 16.18 14.49 16.57 15.72 16.06

12.9 Key financial parameters
Fig in INR Crore
Key parameters Consolidated

Net present value (NPV) 2.23
Weighted average cost of capital (WACC) (Post tax) 12.46%
Project IRR* 19.71%
Equity IRR 20.84%
Project Cost 49.61
Equity 10.91
Debt 10.91
Internal Accruals 27.79
* IRR Internal rate of return

12.10 Summary of cost
Fig in INR Crore
Particulars Total
Project cost 49.61*
Construction expenses 40.30
Land, Land development and related expenses 6.38
IDC 2.93
Operational expenses 12.03
Manpower Expenses 7.19
Other Administrative Expenses 0.58
Interest 1.65
Tax 2.61
Total cost 61.64
*Project cost of INR 49.61 crores considers 100% of the processing zone as developed plots .
Construction of built-to-suit development on around 60% of processing zone may increase the project
cost up to INR 80 crores,

12.11 Processing zone summary
Upfront
Asset Class Area Constructed / Construction Construction
Cost INR /
Total
Revenue lease Revenue
(Acres) Saleable area Cost* (INR cr) Sq ft** premium
(INR cr) INR Unit
/ Unit**
Built to Suit 25.80 1,123,852 - - 3.00 - -

/Developed Plots
Plot - developed sale 25.80 1,123,852 - - 3.00 21 Per sq. ft.
Multi tenanted 1.15 51,660 3.26 4.26
facilities
Packaging Centre 0.39 17,520 1.10 600 1.46 715 Per Sq ft
Post Production 0.38 17,070 1.08 600 1.42 715 Per Sq ft
Processing
Quality Testing 0.38 17,070 1.08 600 1.38 715 Per Sq ft
Laboratory
Logistics Zone 4.65 207,823 14.2 18.37
Warehouse & 2.83 126,067 7.33 9.62

Distribution Centre
Warehousing Space 1.57 70,527 4.44 600 5.78 715 Per Sq ft
Semi Processing &
Value Added 1.00 44,922 2.83 600 3.74 715 Per Sq ft
Services
Open Yard 0.26 10,618 0.06 50 0.10 82 Per Sq ft
Cold Storage 1.82 81,756 6.87 800 8.75 945 Per Sq ft
Support
Infrastructure 11.9 85,353 4.0 6.37
Utilities
Infrastructure 0.20 8,985 0.33 -
Development
Electrical
Transmission /
Substation (Building 0.20 8,985 0.33 350 - - -
for DG sets)
Industrial
Infrastructure 3.20 76,368 3.7 6.37
Effluent treatment
plant 1.00 - - - - - Per Acre
Water sump 0.50 - - - - - -
Weigh bridge 0.20 8,985 0.14 150 0.20 197 Per Sq ft
Irradiation facility 1.00 44,922 1.65 350 2.24 427 Per Sq ft
Administrative and
cafeteria/food 0.50 22,461 1.89 800 3.93 1,500 Per Sq ft
court/social
Open Area 8.5 - - -
Road and Other Area 6.00 - - - - - -
Additional
Landscaping 2.50 - - - - - -
Total 43.5 1,468,688 21.47 32.00
*Excludes 5% contingency
**Values for FY2011

12.12 Support infrastructure zone summary
Construction Total Selling

Area Constructed / Construction Revenue
Asset Class Cost INR / Sq Revenue Price
(Acres) Saleable area Cost*(INR cr) Unit
ft** (INR cr) INR / Unit **
Residential 4.5 202,148 14.9 29.29
Apartment -
2.25 101,074 7.45 625 14.66 1.200 Per Sq ft
2BHK
Apartment -
2.25 101,074 7.45 625 14.63 1,200 Per Sq ft
1BHK
Per car
Parking - - - - 0.43 35,000
park
Support Retail 0.50 22,461 2.01 4.45
Retail 0.50 22,461 2.01 800 4.45 1,800 Per Sq ft

Open Area 1.50 - - - -
Road Area 1.00 - - - - - -
Open area 0.50 - - - - - -
Total 6.5 224,609 16.91 33.74
Grand Total
(Processing
and support 50 1,693,297 38.38 65.74
infrastructure
zone)
*Excludes 5% contingency
**Values for FY2011

12.13 Land cost and return scenario
The illustration below shows the cost benefit analysis for the prospective developer of the
proposed food park. Land cost is the cost that the prospective bidder is expected to pay upfront
in lieu of the transfer of 50 acres of land for the proposed development.
35% Fig 12.1: Land price range for target IRR
30%
25%
Target IRR range

20%
Equity IRR
15%
10%
5%
0%
2.0 3.0 4.0 5.0 6.0 7.0 8.0
Land price (INR lacs/acre)
It is estimated that the market price of land in the vicinity is in the range of INR10,00,000-
15,00,000 per acre. However, such price of land if paid upfront, would make the project
unviable from a private investor/bidders perspective. This necessitates innovative project
structuring (staggered payment for land, revenue share with nominal upfront payment etc.) to
ensure project sustainability and healthy return to the bidders. The same would be deliberated
separately along with the stakeholders (MPSAIDC) at a later stage.
The hurdle rate for the equity IRR (internal rate of return) can be defined as the cost of equity
for the prospective developer. Based on the overall risk return of the project, cost of equity for
the project is estimated as 17.38%.
Hence it is expected that a prospective developer may target a post tax equity IRR (internal
rate of return) in excess of 17.38%. It is understood that a desirable IRR range may be 19-23%.
The target IRR range is attainable at a land cost (assumed paid upfront) in the range of
INR4,00,000-5,00,000 per acre.

Annexure I Case studies
I. Case studies
I.I International case studies
Population growth and fluctuation in economies across nations, has become a challenge to use
technology in all forms. As a result there has been sudden surge in popularity of sciences like
biotechnology and there diverse applications, which is acting as catalyst for growth of
knowledge clusters across the world.
Biotech parks/ agro-biotech parks/ food parks across America, Europe and the Asia Pacific are
either University driven or Industry-Need driven. Some of the leading parks in these regions
have been discussed as case studies in this section:
The biotech parks in United States are part of some

of the well known bio-clusters, established in and
around major R&D institutions and universities.
They have fuelled the development and
commercialisation of R&D innovations emanating
from these institutions.
United States/
Canada For instance, the Saskatoon Food Biotech Park in
Canada, Research Triangle Park in North Carolina,
the Baltimore Biotech Park in Maryland, parks set
up around Universities such as Stanford, MIT,
Cornell and many others have come forward to
support the local R&D and biotech start-up
enterprises.

I.I.I Souris Food Park
Souris Food Park is a fully-serviced

48 acres site overlooking Souris
Harbour. It is located in Prince
Edward Island, Charlottetown in
Canada.
The food industry in Prince Edward

Island is the single most important
contributor to the provincial
economy. Due to an abundance of
agricultural and marine resources,
Prince Edward Island is recognized as
a quality raw material and food
producing area.
The province also boasts of favorable location costs for business. Building construction costs
and lease rates are comparatively lower than other industrialized areas of North America and
Europe. This is further substantiated by a study conducted by a consulting organization,
according to which Charlottetown, Prince Edward Island ranked as the third lowest cost city
for food processing industries among several cities surveyed across North America, Europe,
and Japan. This makes it very competitive for businesses to construct or renovate a facility
on one of these sites.
Besides, it also enjoys an available pool of skilled labour accustomed to the strict hygienic
requirements of secondary and tertiary food processing. All these attributes endow Prince
Edward Island with a natural competitive strength in food processing.
In this background, the Prince Edward Island government through its lead business
development agency, Prince Edward Island Business Development, has targeted the food
industry for further growth and development. The establishment of Souris Food Park in the
region is a major initiative in fulfilling this purpose and is designed to target technology-based
businesses specializing in food processing and support services.
Table I.I: Overview
Size Spread over an area of 48 acres

International food product firms involved in agro-food, seafood and
Companies
beverage processing sectors.
Employees are drawn from a quality labour pool of people with
Employees
experience and strong work ethics.
AgraWest (a subsidiary of Idaho Pacific), Babineau Fisheries (a
Key tenants
division of Polar Foods International Inc.)
Construction cost INR242 million (USD5.0 million)
Source: www.peibusinessdevelopment .com

Ownership
The Souris Food Park has been developed by Prince Edward Island business development and
is owned and administered by the Souris Food Park Development Corporation.
Area of focus
Souris Food Park focuses primarily on the area of food processing and support services. It
houses International food product firms involved in agro-food, seafood, and beverage
processing sectors. The key tenants of the park are AgraWest (a subsidiary of Idaho Pacific)
and Babineau Fisheries (a division of Polar Foods International Inc.)
Developmental model
The food park is a privately owned and operated facility. It has sufficient space for five or
more major food processing tenants. The park offers fully serviced business lots, including
both three phase power and fiber optic connections and on-site waste treatment facilities.
Sites include an array of lease space, ranging in size from 3,000 to 30,000 sq. ft. including
on- site management and maintenance services. The total number of lots at SFP is 6.
Prince Edward Island offers excellent technical and financial support to the food industry. It
has a dedicated team of professionals in product development, market research and
development, export development, training, and capital assistance. The town of Souris also
offers several tenant attracting schemes such as municipal tax incentive program and
rebates for the present and future tenants of the Souris Food Park.
Facilities
The park offers state-of-art infrastructure, facilities and allied logistics to support the food
processing industries residing in the park. The food park comprises the following
components:
A federally inspected food processing unit spread over an area of 7500 sq. ft. and
housing facilities for processing, refrigeration, shipping and receiving areas. It includes
cold storage facilities and on-site waste treatment and marine outfall facilities.
2,500 sq. ft. of carpeted office area having centrex phone system, computer network
cabling, high volume copy room and furnished boardroom.
An area of 3,500 sq. ft. has been earmarked for manufacturing bays with shipping and
receiving ports
Additional amenities include 3 phase power, streets and lighting, back up facilities,
maintenance, fire protection, security fencing, parking facilities, water and sewage
facilities etc.

Collaborations and strategic alliances
The provincially owned food technology centre offers product and process development,
food chemistry and microbiology analytical services, nutrition labeling, sensory analysis,
and food safety and quality assurance.
The National Research Council supports food related research and development
activities.
organizations like Holland College, PEI Food Technology Centre, University of Prince
Edward Island, and the Atlantic Veterinary College offer a wide variety of specialized
training program to assist the food industry
The industry also benefits from a strong manufacturers' association, the PEI Food and
Beverage Processors Association.
Prince Edward Island Business Development works closely with the Atlantic Canada
Opportunities Agency, its federal partner in business development.

I.I.II Alberta Food Park (AFP), Leduc, Canada
Alberta Food Park was established in 1984 with prime objective to encourage growth and
expansion of Albertas fundamental industry - agriculture and foray into highly competitive
domestic and global markets. The main focus of the park is activities linked directly to
primary agriculture encompassing food processing, food service and beverage industries.
There are many facilities provided by the park like modern, fully equipped pilot plant and
product development laboratory facility manned by experienced food scientists, engineers
and technologists which is primarily designed to strengthen and expand Alberta's food
processors to meet the challenges of the marketplace through application of new technology
and the development of new or improved products and processes.
Table I.II: Overview
Location The park is situated in Leduc, Alberta and is one

among four processing divisions of Alberta agriculture,
food and rural development.
Total area The area of the park spans across about 260 acres and
all the four units are uniquely situated to provide
research and development facilities for agro-food
processing companies.
Major promoters The park was conceptualized on government

developed model in 1984 and jointly recognized by
Alberta Agriculture, Food and Rural Development
Agency and the Alberta Heritage Savings Trust Fund.
Table I.III: Key tenants
Current players Prospective players
Olymel S.E.C Red - Dear Tyson foods (Lakeside Packers) and Cargill
foods to enhance slaughter facilities in the
Sunterra Meats Ltd. - Innisfail park.
Sunterra Meats Ltd. - Trochu Poultry processors, Lilydale and Maple

Leaf joined by Sunrise Poultry to
Nossacks Fine Meats Ltd. - Red Deer construct a poultry processing plant.
Sepps Fine Foods - Innisfail Two national brewers ,subsidiaries of

InBev and Molson Brewery with facilities
Permolex - Red Deer located in Alberta.

Current players Prospective players
RAHR Malting Ltd. - Alix ConAgra Specialty Potato Products and

McCain Foods, located French fry
Banner Pharmacaps - Olds manufacturing plants.
Nestle Purina Pet Care - Innisfail
East Man Feeds - Red Deer
Feed-Rite, Ltd. - Rimbey
Champion Hay Processors - Olds
Dalziel Enterprises - Didsbury
Transfeeder Inc. Olds

I.I.III Saskatoon Food Biotech park (SBP), Canada
Saskatoon Food Biotech Parks key bio-

agricultural segment of Science City is
managed by Saskatoon Regional
Economic Development Authority
(SREDA) Inc, evolved as one of the first
most successful and independent
economic development clusters across
Canada.
Saskatoon's agro-food biotech cluster
expanding upon its history and
reputation as a world-class centre for
canola research and development also
houses diversified strength across
biotechnology, food processing, life
sciences, manufacturing, mining and
technology sectors.
National Research Councils (NRC) agricultural biotechnology cluster evolved from a small
industrial community to a major global player providing more than 1,100 local jobs.
Table I.IV: Overview
Location Centrally located in the province of Saskatchewan, on the

banks of South Saskatchewan River, Canada and is part of
Science City
Total area The Science City spreads across an area of about 2,400
acres; the Agri-bio park occupies 80 acres in the city.
Components 700 Industrial companies in bio-technology, nutraceuticals,

food processing technology and fabricating, green house
space, research infrastructure, bio-processing centre, lab
spaces
Key tenants Bayer CropScience, Dow AgroSciences and Monsanto,

Philom
Bios Inc. Bioriginal Food & Science Corp, Potash
Corporation
of Saskatchewan, Cameco corporation, Saskatoon Health
Region, Yanke Group of Companies, Crestline Coach Ltd,
CP
Distributors Ltd

Major promoters The park is being developed in joint venture by
Concorde Group of Companies, Potash Corporation of
Saskatchewan Inc and key members from University of
Saskatchewan and would house all the privately
developed facilities
Facilities
Over one million square feet of combined office, lab and greenhouse space.
Innovation place bio-processing centre.
Research infrastructure - Four national centers of food biotechnology research excellence-
University of Saskatchewan's College of Agriculture
Saskatchewan Research Centre (SRC)
Western College of Veterinary Medicine (WCVM), and
Agriculture and Agro Food Canada (AAFC)
60 acre agro- value sector development centre.
9 furnished and enriched laboratories.
National research council plant biotechnology institute.
Available square footage includes 40,000 sq. ft. freezer, 3,500 sq. ft. cooler and 36,500
sq. ft. of dry space, with expansion up to 2,40,000 sq.ft.
Up to 34% of the land available for further industrial development
Key highlights:
Powerful catalyst for Saskatoons spectacular cluster growth.
Home to more than 40 companies engaged in groundbreaking agricultural biotechnology

R&D.
Connecting vital players around critical common goals through plant biotechnology
research facility.
Assisting in industrial research and increasing support through centre for Innovation in
value- added plant products.

Houses about 40 Agri-biotech companies, 30 nutraceutical and functional food
companies generating annual revenues of nearly INR2,902 million (USD 60 million).
1,100 staff in the clusters private and public-sector organizations, including 400
research and technology professionals .
Cluster accounts for 30% of Canadas Agri-biotech industry.
Saskatoons investment in genomics alone is INR967 million (USD 20 million).
Nutraceutical market worth INR8,321 million (USD172 million) (Nutrition Business

Journal).
Clusters industry partnership facility houses six tenants and provides labs for non-
tenants.
Critical success factors:
Vast natural resources for experimentation.
Canada's varied landscape offers abundant source of wild plants, marine resources, and
fertile land, which form ideal locations for the cultivation and manufacturing of a wide
variety of functional food and nutraceutical products.
Outstanding R&D Infrastructure:
Its location in proximity to the University of Saskatchewan and the National Research
Council's Plant Biotechnology Institute serves to strengthen collaborative initiatives
among its 115 tenants.
Knowledge generation capacity and service exchange enhanced through a dense

network of companies and organizations, elevating productivity and financial success
within the region.
Located in science city:
User friendly for domain knowledge companies, understanding their business model and
providing incentives in labour and taxes.
Experience and extensive knowledge in working with various firms for site location,
facility planning, employee training, financial packaging, research services, technology
transfer, tax consultation, utility savings analysis, and employee education and
development.
Value added processing:
Industrial capacity in value added processing and extraction.
Companies developing specialized technologies for the processing of raw material such
as legumes, oats and other cereals into starch, protein and fiber.
I.II International food biotech parks
I.II.I Cornell Ag & Food Biotech Park (CABP), US
Cornell Ag & food biotech park was set up with an aim

to emerge as a world leader in horticultural, biotech
and food science research by fostering the creation,
retention and expansion of agriculture, food and
biotechnology businesses. The Biotech park serves as
a financially self-sustaining entity to foster the
expansion of technology based research enterprises
for the benefit of both the state and local economies.
Due to the parks primary focus on technology aspect of agriculture and food related work; the
park has been given the nomenclature- The Technology Farm. Cornell Ag & Food biotech park
aim to strengthen the experiment station by fostering partnerships between the station and
firms seeking commercial applications of research discoveries related to agriculture, food
sciences, and biotechnology.
Table I.V: Overview
Location New York State Agricultural Experiment Station in

Geneva
Total Area 78 acres
Components Incubator Research Building, Green House, Multi-

Tenant Building
Key Tenants The ARS (U.S. Department of Agricultures chief

scientific research agency) , Berrigen Biotechnology
LLC , Cherrypharm, Inc., Terramend, LLC, Vitis
Biosciences Inc.
Major Promoters The Park is being jointly developed by academic,

state and private fraternity. Official of Cornell
University are Geneva IDA, Ontario county IDA,
Geneva area Chamber of commerce and Geneva
growth Inc, the empire state Development Corp and
the state University Construction fund.
Source: www.caftp.org
Facilities:
Designed to be developed over a 10 year period in five two-year increments encompassing

3,75,000 sq ft of research, development and production facilities at an estimated total cost
of INR4,160 million (USD 86 million). Details of first two phases:

Phase I- Flex Technology Building 20,000 sq. ft. of built up space for business in bio-
technology related to agriculture and food production.
Agriculture Grape Genetics Research Center - 85,000 sq. ft. of built up space for United
States Department of Agriculture.
Phase II- Biotech Fund INR16,932 million (USD350 million) for capital access and higher
education capital matching grants program.
State Food Lab developed with a mix of State, federal and private funding to complement
other existing projects (scheduled to be completed in 2009).
Table I.VI: Key tenants
Name of the Tenant Nature of activities
Currently establishing a new Grape Genetics

Research Center at The Technology Farm
Expanding on the agencys existing research unit

The ARS (U.S. Department of
currently housed at Cornells Agricultural
Agricultures chief scientific
Experiment
research agency)
With funding through Congressional appropriations,
the agency would begin construction of a 59,000 sq
ft research facility in 2007
Production of bio-fortified plants to improve its

Berrigen Biotechnology LLC
quality and applications for human health
Development of all-natural cherry juice nutritional

Cherrypharm, Inc. beverage. (With involvement of scientists from
Cornell institute)
Development of products to utilize agricultural

Terramend, LLC
waste products for environmental remediation
Development and sale of virus-resistant grapevine

rootstocks to nurseries servicing the worldwide
Vitis Biosciences Inc.
wine and grape industry. (with investment from
Chile)
Source: www.caftp.org

Critical success factors
Availability of quality knowledge workers
Uniquely located between two metropolitan regions (Rochester and Syracuse).
Recently identified as "America's Super Cities of the Future by Expansion Management

magazine, ranking metro areas exceptionally well placed to attract and nurture high-tech
companies and entrepreneurs.
Business friendly government
New York State implemented success-focused management philosophy which generated

profoundly lower taxes, bolder incentives, unique combination of human and
technological resources available to aid in steering success.
Proximity to the University
More than 500 professors involved in collaborative life sciences research.
World class amenities
Ample opportunities to collaborate with Cornells world-class faculty focused on applied

research and adept at working with industry influencers.
Knowledge-based campus culture exclusively for agriculture, food and bio-based

enterprises
Controlled environmental storage, greenhouses and growth chambers with nearby land
for field research trials along with flexible technology research building, wet labs, high-
end office space and conference rooms designed to help start-ups and established
companies diversify into new areas.

I.III. National food parks
I.III.I Kinfra Food Processing Park, Kakkancherry Kerala
Kinfra Food Processing Park is the first food

park in the country assisted by ministry of
food processing industries Govt of India. It
was established in the year 2003.
The park is set in the zone that caters to

Operational units of KTIP at the park
fruits and vegetables processing industries,
milk products, poultry and meat products,
and the grain-processing industry.
Technopak
Source: Kinfra Food Park website
Fig I.VII: Overview
Location Situated on NH-17 connecting to Mumbai,

proximity to REC and IIM Kozhikode
Total Area 75 acres
Components Incubation centre, quality assurance lab and cold

storage facilities by Central Warehousing
Corporation in 4.21 acres
Key Tenants Parison Foods, Fosters Foods, Merry Times Foods,

Falcon Foods, Rime Rich, Central Warehousing
Corp.
Major Promoters Kerala Industrial Infrastructure Development

Corp., Ministry of Food Processing
Source: www.kinfra.com
Facilities
Power and water supply, modern cold storage facilities for raw materials and finished goods,
fully equipped ultra-contemporary quality control systems are made available in the park. A
hygienic waste disposal system for both solid and water based effluents has also been set up.
Convention facilities and marketing cum exhibition centre are the other supporting
infrastructure at the park.
A hostel for the employees working in the units at the park, bank and a post office, health
centre and social infrastructure to support the working population at the park is in place..

Thrust areas:
Yeast manufacturing
Soft drinks and mineral water bottling
Spirit from cassava, fruits etc.
Fruit juice, fruit pulp / concentrate
Pappad, pickles, chutney, jam, jelly etc.
Dehydrated /dried vegetable, spices, oleoresins, essential oils, etc.
Breakfast cereals, weaning foods, nutrition foods etc.
IQF for fruits and vegetables
Ready-to-eat snacks/meals etc.
Flour mills, bakery, noodles, vermicelli, confectionery
Tomato sauce, ketchup, powder, paste, juice etc.
Location
Located in Kakkancherry, near the University of Calicut, Malappuram district, the park is
situated on NH-17 connecting to Mumbai. Proximity to the REC and the newly
established IIM at Kozhikode.
Connectivity and accessibility
The park is at a distance of about10 km from Karipur Airport, Kozhikode. Kozhikode

Railway Station is about 20 km from the park.
Road connectivity- Malappuram road, the connecting road to the park is linked by
excellent roads to the rest of Kerala and India.
Efficient supporting infrastructure
Uninterrupted power supply and substation with distribution system
3.5 MLD treated water supply round the clock and
A well maintained communication network

I.III.II Chordia Food Park - Pune
The mission behind setting up of Chordia

food park at Pune was to facilitate setting
up of food processing business units. The
park has infrastructure to support small
and medium scale entrepreneurs in the
food processing industry.
Assistance in assessing the viability of the

project, procurement of machinery and
raw material, setting up assembly line,
packaging, distribution and marketing is
provided to all the constituent units of the
Chordia Food Park- Pune, Layout plan
Chordia food park.
Fig :
Source: Chordia Food Park website
A pilot plant at the park is made available to the occupants, where trials regarding the
commercial viability of the product for national and export markets is executed.
Chordia food park was designed so as to provide the entire back end and front end support
under one roof with common administrative facilities.
Table I.VIII: Overview
Location Located in Shirwal, 55 km from Pune on Mumbai-

Banglore Highway
Total Area 30 acres
Components Incubator, product development centre, pilot plant,

analytical and quality control laboratories
cold storage and warehouse, effluent treatment
plant and IQF line
Key Tenants Chordia Food Products as anchor tenant, Heinz,

Natco of UK, Capital Foods
Major Promoters Chordia Food Product, Mr. Pradeep Chordia
Source: www.chordia.com
Facilities
Product testing labs, quality control facility, assistance in setting up units, cold storage,
effluent treatment plants and frozen food and canning facilities made available.
Common storage facility and warehouse. ASEPTIC (Sterile atmosphere at room temperature
to stay fresh for longer period can be provided).
Marketing network by Chordia Food Park (CFP) as in dealers network, distributor, to push
the products of other operating units in the park with CFPs own network.
List of activities and food processes at the park
Baked products
Fruits and vegetables processing
Cereal processing
Baby-food manufacturing
Extruded products
Health food
Edible oil manufacturing
Milk processing
Food ingredients
Medicinal plant processing
Frozen division:
Recently the food park has gained entry in frozen products. Basic requirements like
infrastructure and machineries are being installed and trials of frozen vegetables, mango
cubes, pomegranate , sweet corn etc. have been taken. Mass production of pomegranate for
ITC and sweet corn grains for Corn Club has been started as well.
Location
The park is located 55 km from Pune on the Banglore-Pune highway (NH-4). It is about
200 km from the international airport and from the all weather seaport at Mumbai
Amidst the fertile belt of Maharashtra and distribution

Raw materials from Pune Shirwal and Satara districts and Shirwal to distributors can
be arranged.
Export trend
Around 40% of the total produce at the park is exported. The Chordia Group products,
under the brand name Pravin has found a large consumer base in the overseas
market with the company directly exporting to the entire Gulf Region, USA, UK etc. The
company has further plans of consolidating its position in other global markets.
Easy availability of skilled and unskilled labour

Labourers can be arranged solely or on mutual basis and can be adjusted as per
requirement for all the operational units.

I.III.III Sudha Ras (Sankrail Food Park)
Sankrali food park, located in Kolkata, is a composite

facility for food processig units. It was established in
the year 2005-06 for West Bengal Industrial
Development Corporation (WBIDC). It is supported by
Ministry of Food Processing, Government of India. It
has 22 fully serviced plots including cold storages,
warehouse and separate common facilities building
housing 16 modules in the park and a standard design
factory for small units.
Current status: All 22 fully service plots were booked

at the time of commencement. The entire land had
been allotted to 17 industrial units. Fourteen units Sudha Ras (Sankrail Food Park-
have commenced project work out of which eight units Howrah, Layout plan
have commenced commercial work.[1]
Table I.IX: Overview
Location Located on NH 6 at Sankrail, District Howrah is around 28 km

from Kolkata
Total area 50 acres
Components Cold storage, warehouse
Key tenants Pepsi (anchor) Expansion plans: Frito -Lays, Favorich Ltd.,
National Moulding company, Gee Pee foods Pvt. Ltd., LMJ
International
Major promoters West Bengal Investment Development Corporation (WBIDC)

Source: www.wbidc.com
Facilities
The park predominantly has an industrial focus and shares the area with a poly park.
Office space: 4,149 sq.ft.
Testing and quality lab: 2,289 sq.ft.
Canteen: 2,343 sq.ft.
Conference hall: 1,525 sq.ft.
Open terrace: 4,390 sq.ft.
Phase I- Sudha Ras 50 acres (2005-06)
Phase II- Kandra 60 acres (2007-08)
[1] Source: WBIDC website

I.III.IV Western Agri Food Parks Private Ltd.
Size of land 75 acres
Current status Under implementation
Year of commencement Under implementation
Chordia Food products, Pravin Masalewale, Akruti,

Promoters Ashoka Builders Nasik Pvt. Ltd., Poona Dal and Besan
Mills, MoFPI
Location Description Shirwal, Satara District, 55kms from Pune
No of Units (Average area per unit) Expected 30-35
Focus Segment Food Processing and Agri Processing
Project Cost 120 crores for common facilities
Common Facility and Support Proposed to develop with fully integrated facility food
Infrastructure park

I.III.V Contract farming- case study of Hindustan Unilever Ltd. in Madhya Pradesh
Contract farming is an emerging concept in

Basic elements of contract farming
MP that provides vast opportunities for
potential investors wherein the production Pre-agreed price
and supply of agricultural/ horticultural Quality or acreage (minimum/maximum)
produce are pre agreed under forward
contracts between producers/ suppliers Time
and buyers. The contract details, the type

of agri commodity required at a time and a
price along with the required quantity.
Contract farming provides a proper linkage

between the farm and the market
Contract farming in MP
(A case study)
Benefit to the farmer
Hindustan Lever Ltd. (HLL), Rallis Assured market for their
and ICICI have come together to produce
undertake contract farming in MP.
The role of each company is as Adequate and quality agri
follows: input supplies
BENEFITS OF CONTRACT FARMING
Agri inputs and the technical Free technical know-how

know-how to the farmers are
provided by Rallis Benefit to HLL
Contract farming assures
The financial support to the supply chain efficiency and
farmers is provided by ICICI hence there are no delays
(farm credit).
or obstacles in their food
HLL is the buyback client as processing industry
the farm produce is used as operations
the raw material by the
company for its food
Benefit to Rallis and
processing industry.
ICICI
The two companies are
benefited through assured
clientele for their products
and services

I.III.VI Existing food parks in Madhya Pradesh
Table I.X: Overview of food parks in Madhya Pradesh

Maneri, Mandla District Borgaon, Chindwara District
Total area 50 acres 50 acres
Total number of plots developed 76 31
7,500 sq.mt., 7,000 sq.mt.,
Plot size 1,500 sq.mt., 5,400 sq.mt.
4,000 sq.mt.
Premium- INR50 per sq.mt. Premium- INR60 per sq.mt.
Land rates for small scale Development- INR50 per
Development- INR40 per sq.mt.
industries sq.mt.
Processing fees- INR2,000 Processing fees- INR2,000
Premium- INR70 per sq.mt. Premium- INR70 per sq.mt.
Land rates for large and medium Development- INR80 per
Development- INR80 per sq.mt.
industries sq.mt.
Processing fees- INR5,000 Processing fees- INR5,000
Lease rent 3% of premium per annum 3% of premium per annum
Support infrastructure Common features

Roads Cold Storage - 6000 metric tonnes
Water supply - (5 MGD) Warehouse - 3000 metric tonnes
Power Sub Station Milk chilling plant - 5000 LPD
Bank Testing Lab
Telephone exchange ETP
Primary health center
Police station
Shopping complex
(Borgaon, Chindwara District)

Annexure II Real estate overview Bhopal
II. Real estate overview- Bhopal
II.I Residential market overview
Table II.I: Residential market details
The residential developments in Bhopal are Average quoted

mainly characterized by independent houses Location capital value
(duplexes and bungalows) and residential plots. (INR per sq.ft.)
The prime residential areas of the city are Arera
Colony, Shyamala Hills, Char Imli and Arera colony 2,600-3,200
Chunabhatti. Hoshangabad Road 1,500-1,800
Hoshangabad Road, along with Raisen Road and Link Road / VIP Road 3,000-3,200
JK Road are the emerging residential clusters..
Raisen Road 1,600-1,950
Source: EY research
II.II Commercial market overview
The commercial development in Bhopal is dominated primarily by unorganized supply and largely
limited to the city center. The demand for office space is mainly from the banking, government
offices, financial services and insurance companies.
The commercial retail developments in the city

Table II.II: Commercial market details
are in the form of traditional high street retail
comprising shopping complexes, plazas, Average quoted rental
showrooms, etc. TT Nagar, New Market, Bittan Category value (INR per sq.ft. per
Market and BPC Road are the upcoming retail month)
markets clustered around Arera colony and NH
High street retail 60-90
12. The traditional unorganized markets are
slowly metamorphosing into new organized retail Malls 70-110
markets. There are around 6 to 8 malls planned
in the city by year 2010, majority of them being Source: EY research
located on the Hoshangabad road.
Table II.III: Agriculture land rates

II.III Land rates
Quoted average capital
Location
The details of land rates prevailing in areas value (INR per acre)
around Adampur Chawni are given in the table
Transport Nagar 60-70lac
alongside.
Patelnagar 60-65lac
Raisen Road 40-45lac
Adampur Chawni 30-50lac
Source: EY research

Annexure III Food processing industry
Table III.I: Key players in India- food and drink segment
Sales Financial No of Year
Company Sub sector (USD year end employees established
mn)
Food - convenience,
Hindustan FY07, end
various and beverages - 3,429* 41,000 1956
Unilever Ltd December
hot and soft
Food - dairy,
confectionery, FY08, end
Amul Dairy 1,325.0 4,800e 1946
convenience and March
beverages - hot and soft
Pepsi Foods Food - snack and
1,100e NA 3,000 1989
Ltd beverages - soft
Food - dairy,
Nestl India
confectionery and 950e NA 3,500 1961
Ltd
beverages - hot and soft
Food - convenience and FY08, end
Tata Tea 886.7 3,200e 1964
beverages - hot and soft March
Britannia FY08, end
Food - biscuits 607.0 2,350 1892
Industries Ltd March
SABMiller
Beverages - alcoholic 485e NA NA NA
India
Food - snacks and
FY08, end
Dabur India* ingredients; beverages - 479.1 2,500 1936
March
soft
United FY08, end
Beverages - alcoholic 639.4 NA NA
Breweries Ltd March
Champagne FY08, end
Beverages - alcoholic 391.4 500e 1982
Indage Ltd March
Food - confectionery
Radico FY08, end
and beverages - 187.4 NA 1943
Khaitan March
alcoholic
Hatsun Agro FY08, end
Food - dairy 186.4 1,100 1970
Products March
Food - processed,
animal feed,
Godrej FY08, end
confectionery, various 180 1,500 1988
Industries June
and beverages - hot and
soft
Food - snacks,
Parle Agro convenience and 150.0e NA 1,000 1985
beverages - soft
Seagram
India (Pernod Beverages - alcoholic 120.0e NA NA 1994
Ricard)
Parry
FY08, end
Confectionery Food - confectionery 18.1 7,500 1897
March
(Lotte)
Crown Beers
Beverages - alcoholic NA NA 150e 2007
India (InBev)
Source: India Food and Drink Report Q309, Business Monitor International

Table III.II: Top 25 players in the food processing industry in India- by revenue
Financial year Sales (USD
Company name City
end million)
Ruchi Soya Industries Ltd. 31-Mar-2008 2,911.3 Mumbai
Gujarat Cooperative Milk Marketing
31-Mar-2008 1,304.8 Anand
Federation Ltd
Tata Tea Limited 31-Mar-2008 1,100.3 Kolkata
Nestle India Limited 31-Dec-2007 853.7 Gurgaon/Haryana
Britannia Industries Limited 31-Mar-2008 702.2 Kolkata
Shree Renuka Sugars Limited 30-Sep-2008 517.1 Belgaum
Bajaj Hindustan Ltd 30-Sep-2008 512.8 Mumbai
K.S. Oils Limited 31-Mar-2008 510.7 Morena
REI Agro Limited 31-Mar-2008 461.1 Kolkata
Balrampur Chini Mills Limited 30-Sep-2008 365.7 Kolkata
Mawana Sugars Ltd 30-Sep-2008 275.6 New Delhi
Agro Tech Foods Limited 31-Mar-2008 251.5 Andhra Pradesh
KRBL Ltd. 31-Mar-2008 250.0 Delhi
Sanwaria Agro Oils Limited 31-Mar-2008 234.1 Bhopal
Sakthi Sugars Ltd. 30-Jun-2007 223.1 Coimbatore
Hatsun Agro Products Ltd. 31-Mar-2008 215.9 Chennai
Amrit Banaspati Company Ltd 31-Mar-2008 188.7 Rajapura
Anik Industries Limited 31-Mar-2008 188.3 Indore
McLeod Russel India Limited 31-Mar-2008 174.3 Kolkata
Bannari Amman Sugars Limited 31-Mar-2008 169.4 Coimbatore
Dhampur Sugar Mills Ltd 30-Sep-2008 168.7 New Delhi

Murli Industries Ltd. 31-Mar-2008 161.7 Nagpur
Vimal Oil & Foods Ltd 31-Mar-2008 158.1 Gujarat
Kohinoor Foods Ltd 31-Mar-2008 157.7 New Delhi
Heritage Foods (India) Limited 31-Mar-2008 156.0 Hyderabad
Source: OneSource
Source: India Food and Drink Report Q309, Business Monitor International

Table III.III: Major dairy products manufacturers in India
Company Brands Major Products

Sweetened condensed milk,
Milkmaid, Cerelac,
Nestle India malted foods, milk powder and
Lactogen, Milo, Everyday
dairy whitener
Butter, ghee, milk powder, ice
Milkfood Milkfood
cream, and other milk products
Malted milkfood, ghee, butter,
GlaxoSmithKline Consumer Horlicks, Boost, Maltova,
powdered milk, milk fluid and
Healthcare Viva
other milk based baby foods
Gujarat Co-operative Milk Marketing
Amul Ice cream and other milk products
Federation
Farex, Complan, Glactose,
H.J. Heinz Infant milkfood, malted milkfood
Bonniemix, Vitamilk
Heritage Foods Heritage Milk, curd, ghee, butter milk
Flavored milk, cheese, milk
Britannia Milkman
powder, ghee
Cadbury Bournvita Malted food
Skimmed milk powder, whole milk
Kwality Dairy (India) Indiana, Kream Kountry
powder, dairy milk whitener, ghee
Mother Dairy Mother Dairy Milk, ice cream, milk products
Table III.IV: Major players in India for fruit and vegetable processing

Jams, ketchups, wheat flour, fruit
HUL Kissan, Knorr, Annapurna
beverages, soups
Dabur India Real, Real Activ, Coolers Fruit beverages
Frozen processed fruits and
Mother Dairy (Safal) Safal
vegetables, jam, pickle
Temptation Foods Pure Temptation IQF fruits and vegetables
Godrej F&B Fruit juices, fresh F&V (retail)
Capital Foods Private Label Frozen foods, IQF vegetables
Mafco Mafco Frozen fruits and vegetables
Priya Foods Priya Pickles, fruit juices
Frozen foods, pickles, spices and
MTR Foods MTR
masala
Allana Cold Storage Allana Frozen foods
Source: Indian Processed Food Industry, by Way2Wealth (Sector coverage, April 15, 2008)

Table III.V: Major players in India for grain processing

India Gate, Lion, Doon,
KRBL Bemisal, Nur Jahan, Rice Rice
King, Taj Mahal
Kohinoor Foods Kohinoor Rice, convenience food
Daawat, Heritage, Orange,
LT Overseas Rice, wheat
Josh, Apsara,
Lakshmi Energy and Foods Lakshmi Foods Rice, wheat
Usher Agro Rasoi Raa Rice, cereals
Kasauti, Real Magic, Mr
REI Agro Miller, Hungama, Ikon, Rice
Hansraj, Rain Drop
Table III.VI: Major players in India for meat, poultry and fisheries processing

Arambagh Hatcheries Arambagh Meat, Poultry
Frozen buffalo meat, Chilled/
Hind Industries Sibaco,Eatco
Frozen sheep and Goat meat
Venkateshwara Hatcheries Venky's Poultry products
Alkabeer Exports Limited Alkabeer Frozen buffalo meat
ASF Seafoods ASF Seafoods Seafood
Bell Foods Bell Foods Marine foods
Frigo Refico Allana Allana Frozen buffalo and other meat
Godrej Agrovet Real Good Chicken Poultry products

MAFCO, Mumbai MAFCO Pork and other meat products
Table III.VII: Major players in India for meat, poultry and fisheries processing

Dabur India Hommade
Instant mixes, Puries, Pulihora
Priya Foods Priya
paste, Ready to Eat
Chings Secret, Smith &
Capital Foods Cooking Paste, Sauce & Ketchups
Jones
Packaged bhel puri chats, chana
Haldirams Haldirams masala, samosa, pakoras, among
others.
Aashirvaad Atta, Bingo,
ITC Ready to eat/cook foods.
Kitchens of India
MTR MTR Indian curries, gravies and rice.
Satnam Overseas Ltd Kohinoor Ready to eat Indian delicacies.
Gits Gits Variety of ethnic Indian cuisine
Source: Indian Processed Food Industry, by Way2Wealth (Sector coverage, April 15, 2008)

Table III.VII: Food processing industries in Bhopal cluster
Investment
Product category No. of units End products
(INR crores)
0.25 - 5 1 Fruit juice based beverages
Fruits 5-10 - NA
More than 10 1 Fruit juice based beverages
0.25 - 5 1 Vegetable oil
5-10 - NA
Vegetable
Solvent extraction of vegetable
More than 10 1
oil and refined vegetable oil
Flour milling by power

machining (wheat products),
0.25 - 5 7 soya seed processing, soya
milk, refined oil, melted butter
(ghee) and cattle feed

5-10 5
solvent extraction of oil, soya
Food grains meal refined oil and beer

texturised soya protein,
lactithinated high protein low
More than 10 16
fiber soya meal, soya oil/de-
oiled meal of soybean, beer,
sugar molasses and
hydrogenated vegetable oils
Source: M.P. State Agro Industries Development Corporation Ltd.

Annexure IV SEC classification
IV. Socio-economic classification
(SEC)
For the purpose of analyzing the potential of any consumer market, it is essential to
comprehend the socio economic background of the target consumer section. In order to
achieve this, the households for a particular city could be categorized into various groups based
on occupation and education qualification of the chief wage earner (CWE) of the family. This
categorisation, universally known as the Socio-Economic Classification (SEC), holds good for
almost all segmental markets. The SEC categorization can be divided into five parts: A, B, C, D
and E.
Nearly 50% of the CWEs of households are in executive positions

while the other half comprises of industrialists or businessmen or
SEC A high class shop owners
Almost all the members of the segment are either graduates or
post graduates
Majority of the CWEs of households are primarily employed at

clerical or supervisory level, while a very few as industrialists or
SEC B businessmen or shop owners.
Around 50% are either graduates or post graduates. Of this lot,
only 38% are educated till 10th or 12th grade, while a fraction
have had only some secondary education.
More than one-fourth of the total CWEs of households are

SEC C employed at clerical or supervisory level. Almost one-fourth as
skilled workers, while some section as petty traders or as shop
owners.
Almost three-fourth of the total family units are educated till 10th
or 12th grade while others have not attended school beyond 9th
grade.
Less than half the CWEs of households belonging to the SEC D&E
are unskilled workers. About one-fourth are skilled workers while
SEC D and E a very few are petty traders.
Consequently, half of the CWEs have attended school till a
maximum of the 9th grade and nearly, half of them are illiterate.

IV.I SEC matrix
Matrix for Standards of SEC Classification
Education
Illiterate Schooling Graduate Post Graduate
Profession
Business/ industrialist with >10

A A A
employees
Senior/ middle officers,

B A A
executives
Business/ industrialist with <10

C B A A
employees
Shop owners/ traders D C A A
Junior executives/ officers D C A A
Skilled workers and petty

E D
traders
Unskilled workers E D

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All Rights Reserved.
Ernst & Young is
a registered trademark.

Bhopal 20100215

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Detailed project report

For Madhya Pradesh State Agro

Ernst & Young, 2010

2 Detailed project report on development of Food Park at Bhopal

3 Detailed project report on development of Food Park at Bhopal

4 Detailed project report on development of Food Park at Bhopal

1.1 Details of food parks to be developed under PPP 15

2.1 Food processing segments and sub-segments 18

2.2 Food processing techniques 19

3.1 India food processing industry statistics (2007-08) 25

3.2 India food processing segment wise production (2007-08) 25

3.3 Share of organised sector and key processed products 26

3.4 Prominent players in the organised sector 27

3.5 Key export products 30

3.6 Key agro export zones in India 40

3.7 Major food parks in India 41

5.1 Madhya Pradesh- state snapshot 58

5.2 Power fact file for Madhya Pradesh 60

5.3 Agro climatic regions and horticulture crops in M.P 64

5.4 Current status of food parks across Madhya Pradesh 82

6.1 Investment promotion assistance for VAT and CST 86

6.2 Land concessions based on project cost 87

7.1 Bhopal- District snapshot 94

7.2 Distance of site from key nodes 95

7.3 Distance of site from key landmarks 95

8.1 Districts and areas 100

8.2 Opportunity assessment matrix- Bhopal food park 116

8.3 Existing warehousing facility in Bhopal cluster (June 2009) 118

8.5 Installed capacity in Bhopal District 120

9.1 Developed plots area statement (indicative) 125

9.2 Water demand estimation in food park 128

9.3 Power demand estimation in food park 129

9.4 Estimated employee inflow in the food park 131

9.5 Affordability analysis for food park in Bhopal 132

9.6 Area statement- Bhopal food park 133

10.1 Responsibilities of Advisory Board 137

5 Detailed project report on development of Food Park at Bhopal

Table no. Name of the table Page no.

11.1 Land pricing - benchmark 147

11.2 Benchmarking for other components 147

11.3 Pricing 148

11.4 Existing industrial areas 149

6 Detailed project report on development of Food Park at Bhopal

2.1 Flow diagram of different levels of food processing 20

3.1 Private final consumption expenditure-India 22

3.2 Private final consumption expenditure- India 23

3.3 Food products and beverages factory numbers (2001-02 to 2004-05) 26

3.4 Exports of food processing from India 29

3.5 Indias exports to other countries 29

3.6 Segment wise exports 30

3.8 FDI inflow in food processing industry 35

3.9 Clustering of food processing industries in India 39

4.1 Value chain of food processing industry 44

4.2 Traditional food and grocery supply chain 45

4.3 Cereals and pulses supply chain 47

4.4 Milk and dairy products supply chain 48

4.5 Fruits and vegetables supply chain 49

4.6 Poultry, meat and marine products supply chain 50

4.7 Food supply chain- business models 53

4.8 Illustrative prices from farm gate to consumer 54

4.9 Mark-up from farm gate to consumer 55

5.1 Map showing road network across Madhya Pradesh 59

5.2 Map showing railway network across Madhya Pradesh 59

5.3 Map showing airports across Madhya Pradesh 60