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Compendium of financing options for the food processing sector
Investment Environment & Opportunities in Food Processing
KARNATAKA
Ministry of Food Processing Industries Government of India
Knowledge Partner National Event Partner
Table of contents
State Introduction 2
Why Karnataka 2
Raw Material Base 3
Production Clusters 6
Agricultural Marketing 8
Processing Clusters 10
Infrastructure 12
State Government Initiatives 15
Contact Us 20
Snapshot of Investable Projects 18
Karnataka
Bengaluru
Domestic : 5 domestic
Karnataka, a state in southern India, is the 7th largest state in terms of area and 8th largest in terms
of population. It comprises of 30 districts. The state’s capital city is Bengaluru. The State is known to
have a population density of 319 per Sq. Km. The State has a 320 km coast line and is surrounded on
other sides by States such as Maharashtra, Telangana, Andhra Pradesh, Tamil Nadu, Kerala and Goa.
Karnataka - key highlights
State capital Bengaluru
Geographical area1 191,791 km2
Population2 6.1 Crores** (61 million) (Census 2011)
INR 1044717 Crores** (USD Gross state domestic 152.96 billion) in 2014-15 product (GSDP)3 Growth over previous year (at current price, base year 2011-12) 13.5%
Per capita income4
INR 80,884 (USD 1246) (Measured as Per Capita NSDP at current prices for 2013-14)
INR 123,212 crore** (USD 22 FDI inflows5
billion)- FY2000-FY2017
Total road length (kms)6 26,129 Km (state + national highway)
Rail length (route kms)7 3,073 km
11 ports in Karnataka, of
Ports8 which New Mangalore is a major port
International: Bangalore, Airports9 Mangalore
Investment Environment & Opportunities in Food Processing: Karnataka
*1 Million= 10 lakhs
4
17 districts covering 45% of the state to benefit from the industrial corridor development
3
Part of the Bangalore – Mumbai Industrial Corridor (BMIC) and Chennai – Bangalore Industrial Corridor (CBIC)
2 Among top 5 producers in more than 30 food categories in India
1
A state with 10 agro climatic zones and a diverse portfolio of products to select
Why Karnataka
State Introduction
Raw material base (1/4)
Investment Environment & Opportunities in Food Processing: Karnataka
Snapshot of Land under cultivation (Year 2013-14)
Karnataka is agriculturally strong state with large number of crops in which it has national leadership while in other crops as well it has sufficiently large base to support industrial processing.
The presence of rich climatic and soil conditions make
Karnataka a major agricultural belt. Few of the leading
crops produced in the state include Coffee, Sunflower, Gross Cropped Area 12,267 Coarse Cereals, Tomato, Onion, Watermelon, Cucumber, (‘000 Ha) Chilies, Capsicum, pomegranates, Grapes and Sapota.
Karnataka is the largest producer of coffee and cocoa in
Net Sown Area (‘000 Ha)
9,923
the country.
Karnataka has a wide range of climatic zones
In addition to agricultural crops, the state is also strong in animal products. While it is one of the top
five producers of mutton and pork, it also produces process able volumes in other products such as
milk, egg and fish.
Coastal Zone: Udupi, D. Kannada & U.Kannada
Hilly Zone: U.Kannada, Belgaum, Dharwad, Haveri, Shimoga, Chickmangalur, Kodagu & Hassan
Northern Transition Zone: Belgaum , Dharwad, Haveri & Gadagr
Southern Transition Zone: Hassan, Chickmagalur, Shimoga, Mysore & Davanagere
Southern Dry Zone: Mysore, Chamarajnagar, Mandya, Tumkur & Hassan
Eastern Dry Zone: Bangalore Rural, Ramanagar, Bangalore Urban, Kolar, Chikkaballpur & Tumkur
Central Dry Zone: Chitradurga, Davangere, Tumkur, Chickmagalur & Hassan
Northern Dry Zone: Koppal, Gadag, Dharwad, Belgaum, Bijapur, Bagalkot, Bellary, Davangere & Raichur
North Eastern Dry Zone: Gulbarga, Yadgir & Raichur
North Eastern Transition Zone: Bidar & Gulbarga
Raw material base (2/4)
Investment Environment & Opportunities in Food Processing: Karnataka
Major strength of Karnataka’s food processing industry lies in the following:
Cereals & Nutri-cereals– Maize & Rice, Finger millet (Ragi), Sorghum & other small
millets
Pulses- Pigeon pea & Gram
Fruits – Sapota, Grapes, Pomegranate, Mango, Papaya, Custard Apple & Pineapple
Vegetables – Ginger, Capsicum, Chilles-vegetable, Cucumber, Watermelon, Onion,
Tomato, Pumpkin, Beans, Carrot & Musk melon
Spices – Pepper, Cinnamon, Cardamom, Turmeric & Chillies (spices)
Oilseeds- Groundnut, Soyabean, Safflower & Sunflower
Commercial crop- Coffee & Sugarcane
Livestock: Sheep & Pig population
Food Grains: Key production highlights (2015-16)
Horticulture products: Key production highlights (2015-16)
Fisheries: Key production highlights (2015-16)
Total production of 5.8 lakh* tonnes of Fishes
o 320 km long coastline, about 27,000 sq. km of continental shelf area
o About 8,000 hectares of brackish water area
Total production of 195.7 Lakh* tonnes of horticulture products
o Fruits – 70.24 lakh* tonnes
o Vegetables – 78.05 lakh* tonnes
o Plantation – 40.41 lakh* tonnes
o Spices – 3.88 lakh* tonnes
Total production of 99.69 lakh* tonnes of food grains
o Nutri-cereals – 57 lakh* tonnes
o Maize – 33 lakh* tonnes
o Rice – 27 lakh* tonnes
Raw material base (3/4)
Investment Environment & Opportunities in Food Processing: Karnataka
VEGETABLES
‘(000 MT)
Poultry & Meat: Key production highlights (2015-16)
Onion 2696
Tomato 2046
Chilly 570
LIVESTOCK &
FISHERIE
‘(000 MT)
Milk
Fish Meat
6344
580 196
Fruits ‘ (000 MT)
Banana
Mango
Grapes
2371
1726
430
CROPS ‘ (000 MT)
Coarse Grains Maize Paddy
5705 3269 2702
Total production of 47,660 Lakh* of Eggs
o Poultry population of 833 lakhs* with 547 lakh* broilers and 286 lakh*
layers housed in 5,903 broiler farms and 445 layer farms
o Ranks 3rd in poultry meat production with 87,117 tonnes of meat
Total production of 1.9 Lakh* tonnes of meat products
o 95.83 lakhs* of sheep and 47.96 lakhs* of goat
Investment Environment & Opportunities in Food Processing: Karnataka
Karnataka provides: 70% of coffee produced in India,
60% of production of safflower in India
60% of production of Ragi (Finger Millet) in India
Finger millet Maize
Coffee Safflower
Mango
Grapes
Banana
Fisheries
Meat
Milk
Belgaum, Hassan
Mandya, Kodagu, Hassan, D. Kannada, U. Kannada, Shimoga, Raichur, Bellary
Belgam, Bangalore, Gulbarg, Kolar
Kolar, Belgaum, Bijapur, Haveri, Chitradurga
Bidar, Gulbarga, Dharward, Kupal
Chikmanglur, Kodagu, Hassan
Devangere, Belgam, Haveri, Hassan, Bellary, Chitradurga, Shimoga
Tumkur, Ramnagar, Hassan, Bangalore Rural, Chitradurga,
Production Clusters
Bangalore, D. Kannada, Hassan, Kodagu, Udupi, U. Kannada, Dharward, Shimoga
Belgaum, Haveri, Bijapur, Chitradurga, Kolar
Investment Environment & Opportunities in Food Processing: Karnataka
Production Clusters
Investment Environment & Opportunities in Food Processing: Karnataka
Karnataka has the following marketing facilities in the state:
Status of Logistics and warehousing facilities in the State:
Karnataka State Warehousing Corporation (KSWC) at present has 15.22 Lakh* MTs
capacity warehouses
o About 47 warehouse centers are connected to Railway good shed facility
o Warehouse Receipts Pledge Loan facility available through Commercial banks
for the depositors
98 cold storage units having 2.97 Lakh* MT for handling fruits and vegetables.
o KSWC is creating the scientific cold storage facility of 32800 MTs in
Bengaluru (R), Chickballapura, Mysore, Gulbarga, Bijapur, Bagalkote & Bidar
155 main market yards
24 poultry institutions
353 sub market yards
Agricultural markets in Karnataka
4 Agri Export Zones
24 poultry institutions
23 District Agriculture
Training Centres
Agriculture marketing (1/2)
Investment Environment & Opportunities in Food Processing: Karnataka
Farmer Producer Organisation
As a part of the marketing effort the state has developed 92 Farmer Producer
Organisations (FPO) for marketing of various horticultural products directly to the
processors. There are 14 exclusive farmer federations on organic produce and millets.
Famous Ethnic Food of Karnataka
Korri Gassi: It is a traditional Mangelorean dish, chicken curry in coconut
and tamarind flavour, taken with rice or flat bread (roti)
Mysore Pak: Mysore pak is a traditional sweet prepared by mixing equal
quality of besan (gram powder), sugar and ghee (clarified butter)
Mysore Masala Dosa: The traditional Karnataka dosa (made with batter
of rice and black gram served with mashed potato filling)
98 Cold storages
2.97 Lakh* MT Total capacity of cold
storage
15.22 Lakh* MT
Karnataka State Warehousing Corporation
(KSWC)
Agriculture Marketing (2/2)
Investment Environment & Opportunities in Food Processing: Karnataka
Processing Clusters (1/2)
Karnataka has about 54,905 agro processing units10 with an investment of INR 4429 crores** (USD 651 millions) lakhs as of 2015. There are 80+ food processing companies in the food parks in Karnataka.
Some prominent food processing companies are:
Geographical Indication for Agricultural Products in Karnataka11
Coorg Orange Coorg Green Cardamom Byadagi Chilli
Mysore Betel leaf Dharwad Pedha Udupi Mattu Gulla Brinjal
Nanjanagud Banana Devanahalli Pomello Bangalore Blue Grapes
Monsooned Malabar Arabica Coffee
Monsooned Malabar Robusta Coffee
Appemidi Mango Bangalore Rose Onion
Kamalapur Red Banana
Dairy and analogues products
Nestle India Ltd. , Nanjanagudu
Karnataka Cooperative Milk Producers' Federation
Limited (KMF), Bangalore
Grain and downstream:
ITC (Indian Tobacco Company Ltd. ), Bangalore
Cargill India Pvt. Ltd. , Bangalore
Britannia Industries Ltd. , Bangalore
Fruits & Vegetables
Hector Beverages, Bangalore
Mysore Fruits Products, Mysore
Exotic Agro Pvt. Ltd. , Bangalore
Investment Environment & Opportunities in Food Processing: Karnataka
Processing Clusters (2/2)
Rice processing Spice & Condiment
Beverages Milk Processing
Fruits & Vegetables Processing
Prepared Products
Cereals
Bakery
Prepared Foods
Meat
Processing clusters planned by Government of Karnataka o Sea Food Park near Mangaluru which is in the conceptualization stage
o Rice Technology Park at Karatagi in Koppal district, over 315 acre land
o Maize Technology Park in Haveri district, over 60 acre land
o Spice Technology Park in Haveri district, over 100 acre land
o Favorich Infra Pvt Ltd., Mandya - 120 acres - Mega Food Park supported by GOI
Bangalore, Kodagu
Udupi, D. Kannada and Bangalore
Mysore, Dakshin Kanndan and Gulburga
Udupi, Tumkur and Gulbarga
Bangalore & Belgaum
Bangalore, Belgaum, Tumkur and Dakshik Kannada
Bangalore, Belgaum
Bellary, Chikkaballapura, Belgaum
Yadgir , Bellary, Mysore, Tumkur and Udupi
Mysore, Dakshin Kannada and Gulbarga
Processing Clusters
Investment Environment & Opportunities in Food Processing: Karnataka
Investment Environment & Opportunities in Food Processing: Karnataka
The status of key physical and agricultural infrastructure in Karnataka is as follows:
Inland container depots (ICD)
Two ICDs
one in Bangalore under Control Components India Pvt. Ltd.( CII),
one in Belgaum
Installed power (including allocated shares
in Joint & Central Sector
Utilities as on 31 Jan 2017)
Thermal 8461.58 MW
Nuclear-475.86 MW
Hydro-3599.80 MW
RES- 6104.54 MW
Water rates
Domestic - slab 0-8000-INR 7 (USD 0.11)
Non Domestic - 0-10,000- INR 50 (USD 0.77)
Utilities
Electricity cost Hight Tension (HT) power tariff INR 8:25 per unit for 1st 200,000 units and
beyond that INR 8.35( USD 0.13) per unit13
Existing Industrial SEZs
Areas/
Food Parks
Four Agri Export Zones,
26 SEZs however only one of these is multi product and may be be
suitable for food processing12
There are four food parks in Karnataka and one Mega Food Park in
Tumkur
Parameter Status
Infrastructure
Investment Environment & Opportunities in Food Processing: Karnataka
Food parks in Karnataka
A number of industrial areas and food parks are available in the state for investors keen on setting up food processing units in the state. The key food parks in the state include:
S. No. Industrial Park Location Type (Multi/ single
product)
Total Area
(in Ha)
1. India Food park Tumkur Staples, Fruits &
Vegetables
100
2. Akshaya Food Park Hiriyur Organic cereal, Onion
dehydration, baby foods,
organic millets, organic
spices, etc
106
3. M/S Green Food Park Bagalkot Fruit juices, Dairy
products, Maize,
Groundnut, Pulses,
Bakery etc.
100
4. Jewargi Food Park Jewargi Pulses and cereals 105
5. Innova Agri Bio Park Malur Coffee products, Animal
health care products,
spices- oleoresins
87
Cold Chain in Karnataka
Ministry of Food Processing Industries’ Scheme of Cold Chain, Value Addition and Preservation Infrastructure is to provide integrated cold chain and preservation infrastructure facilities, without any break, from the farm gate to the consumer. Below is the list of cold chains present in the state.
S.no
Project
Type of Product
District
1 Atharvass Traders Pvt Ltd. F&V Hassan, Belgam,
Investment Environment & Opportunities in Food Processing: Karnataka
2 Basweshwar Industry F&V Belgaum, Bijapur
3 Innova Agri Bio Park Ltd Irradiation Kolar
4 Vijaykant Dairy & Food Products Ltd Dairy Belgaum
5 Dairy Classic Ice Creams Pvt Ltd Dairy Ramnagara
6 Namdhari Animal Genetics Private Limited Dairy Bangalore
7 Srikrishna Milks Private Limited Dairy Uttar Kannada
8 Supermarket Grocery Supplies Pvt Ltd F&V Bangalore
9 Malpefresh Marine Exports Private Limited. Marine Udipi
Total Nine, completed Four, ongoing Five
Investment Environment & Opportunities in Food Processing: Karnataka
Infrastructure
Investment Environment & Opportunities in Food Processing: Karnataka
Investment Facilitation
"Invest Karnataka Forum" established to promote "Brand Karnataka" globally
and to attract investments to the State
Timelines fixed for providing most of the industry related services under
Karnataka Guarantee of Services to Citizens Act (SAKALA ACT)
Validity of Consent for Establishment (CFE) made 5 years for all categories
Validity of Consent for Operation (CFO) made 10 years for Green Category
Validity of Consent for Operation (CFO) for Red & Orange categories extended
from existing I year to 5 years
Ease of Doing Business
First state in India to pioneer the EODB initiative by introducing the Karnataka
Industries Facilitation Act in 2002
Government has introduced key initiatives across 5 major areas of Single
Window, Land and utilities, Industrial Relations, Pollution Control and
Commercial Taxes
Single Window clearance for projects under Karnataka Facilitation Act, 2002
through online portal including registrations and approvals of II line
departments
"Guide to Investors on setting up of Industrial Enterprise" providing holistic
information on infrastructure, registrations, approvals, etc. on Single Window
Entire State defined as single zone for availing incentives
Investment promotion subsidy @ 35% of fixed assets for MSME (capped at INR 65
lakh).
Interest subsidy to micro enterprises @ 6% per annum for 7 years
Subsidy for technology adoption from recognized national labs, 50% of the cost (max
INR 1 lakh)
First State to establish an unified, e-trading platform - Rashtriya e-Market Services
Limited (ReMS) in 2014
Rashtriya e Market Services Private Limited (ReMS) has been established as a joint
venture company, with Government of Karnataka and the NCDEX Spot Exchange
First State to introduce a Multi-Sector Startup Policy in 2015 which supports new
product development in Agri-business and Food Processing
State Government initiatives (1/2)
Investment Environment & Opportunities in Food Processing: Karnataka
Highlights of Karnataka Agri Business & Food Processing Policy 2015
Highlights
Sector Agriculture, Horticulture, Animal Husbandry, Fisheries and allied sectors
Nodal Department Karnataka Agri Business Development Corp. (KABDC) and Karnataka
Udyog Mitra (KUM)
Capital Subsidy Investment promotion subsidy @ 35% of the value of fixed assets (VFA)
irrespective of zonal and promoter classification up to a maximum of INR
65 Lakhs (USD 100131 ) for MSME
Single Window Clearances The State Government having amended the ‘Rules of Business’ has created three empowered committees to provide all desired clearances in one go. Single application form has been designed for availing the clearances.
Land Conversion Simplified Provision has been made for automatic conversion of land in rural areas upto 5 hectares. If nothing has been heard within 30 days of filing the application complete in all respects from Authority competent for land conversion, the land shall be deemed to have been converted and concerned GM, D.I.C. shall issue a certificate to this effect. Accordingly Tehsildar/Gram Panchayats shall make necessary entries in the land record within 7 days.
Interest Rebate/Subsidy Interest subsidy of 6% per annum on term loans will be provided to Micro enterprises
Stamp duty & Reg. fee
exemption
Exemption from Stamp Duty & Concessional Registration for MSME, Large and Mega agro based industries and Agri-infrastructure
Market Fee Exempted New Agricultural Produce Processing Industries are exempted from payment of market fee for a period of ten years in respect of purchases of agricultural produce by such industries
Land Related
Concession/Exemption
For all loan documents, lease deeds and sale deeds, the registration charges shall be at a concessional rate @ INR0.50 (USD 0.77) per INR1000 (USD 15.40) irrespective of promoter classification for MSME, Category ‘A’, ‘B’ & ‘C’ enterprises
Link of policy document http://www.investkarnataka.co.in/assets/downloads/agriculture-policy-2015.pdf
State Government Initiatives (2/2)
Investment Environment & Opportunities in Food Processing: Karnataka
Project name Process-able Products/
infrastructure Value Proposition
1. Onion cold
storage
Cold Storage Unit For Fresh
Onions
Price difference between off season and
harvest season is 6-7 times
2. Maize
processing
Starch from Maize by wet
milling
States is leading producer of maize
3. Peanut
Butter
Peanut Butter from
groundnut
As a strong producer of ground nut, it
creates a new product opportunity
4. Bottling
plant
Bottling plant focussed on
fruits drinks
As leading fruit producing state, drink
manufacturing and bottling is a high
potential opportunity
5. Jam & Jelly Manufacturing jams & jelly As leading fruit producing state, jam & jelly
manufacturing and packing is a high
potential opportunity
6. Fruits IQF Freeze Dried Fruit
Processing Unit
As leading fruit producing state, freeze
dried fruits is a high value product
7. Fishing
Harbour
Harbour for fishing trawlers As given by the state for taking advantage
of the coast line – for PPP project
8. Malting unit Malting manufacturing from
coarse grains
The state is top supplier of course grains
and malting a good value addition option
9. Cattle Feed Cattle Feed from maize,
coarse grains & de-oiled
cakes
As a major supplier of maize, cattle feed is
good value addition option for the state
10. Abattoir Modern slaughter house for
small ruminants
As a top producer of mutton and pork, the
state needs a network
Snapshot of Potential Investable Projects
Investment Environment & Opportunities in Food Processing: Karnataka
1https://data.gov.in/catalog/land-use-pattern-karnataka 2http://censusindia.gov.in/ 3http://mospi.nic.in/sites/default/files/press_releases_statements/State_wise_SDP-28october2016.xls 4http://pib.nic.in/newsite/PrintRelease.aspx?relid=123563 5http://dipp.nic.in/sites/default/files/FDI_FactSheet_January_March2017.pdf 6 http://www.mospi.gov.in/sites/default/files/statistical_year_book_india_2015/Table%2021.1%20.xlsx 7http://pib.nic.in/newsite/PrintRelease.aspx?relid=155019 8http://commerce.nic.in/trade/ICD_list.pdf 9https://www.aai.aero/ 10Sources in Government of Karnataka 11http://www.ipindia.nic.in/writereaddata/Portal/Images/pdf/Registered-GIs-of-India.pdf 12http://www.sezindia.nic.in/writereaddata/pdf/ListofoperationalSEZs.pdf 13http://www.karnataka.gov.in/kerc/Court%20Orders/Tariff%202017/ENGLISH-Press%20Note.pdf
References
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TRANSFORMING THE FOOD ECONOMY 3-5 November, 2017 | Vigyan Bhawan, New Delhi, India
About World Food India
A global event to facilitate partnerships between Indian and international
businesses and investors, World Food India (WFI) is a gateway to the Indian
food economy and an opportunity to showcase, connect, and collaborate.
Ministry of Food Processing Industries, Government of India Panchsheel Bhawan, New Delhi, India.
Telephone Number: +91 11 -26492216/ 26492174/ 26493227/ 26490933 Find us at: http://mofpi.nic.in/
https://www.worldfoodindia.in/
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