Compendium of financing options for the food processing sector

Investment Environment & Opportunities in Food Processing

Nagaland

Knowledge Partner National Event Partner

Government of India Ministry of Food Processing Industries

Table of contents

State Introduction 2

Why Nagaland 2

Raw Material Base 3

Production Clusters 6

Agricultural Marketing 8

Processing Clusters 9

Infrastructure 12

State Government Initiatives 15

Snapshot of Investable Projects 18

Contact Us 22

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Investment Environment & Opportunity for Food Processing Sector: Nagaland

State IntroductionNagaland is bordered by Assam in the West, Myanmar (Burma) on the east, Arunachal Pradesh and part of Assam on the North and Manipur in the South. The State consists of eleven Administrative Districts, inhabited by 16 major tribes along with other sub-tribes. Each tribe is distinct in character from the other in terms of customs, language and attire.

Nagaland - key highlightsState capital Kohima

Geographical area1 16,579 Km² Population2 (Census 2011)

1.9 Million

Gross state domestic product (GSDP)3

(at current price, base year 2011-12)

INR 14115 Crore (USD 2.06 Billion) in 2014-15 at constant price, base year 2011-12

Per capita income4

(Measured as Per Capita NSDP at current prices for 2011-12)

INR 85,544 (USD 1252)

FDI inflows5 USD 462 million- FY00-FY17 Total road length (kms)6 1,847

Rail length (route kms)7 12.85 km

Airports8 1

Why Nagaland

One of the largest producer of Paddy which is also the main food crop of the region.

Pineapples and bananas are the main fruits which are grown in the region.

Home of the world renowned, Naga King Chilly which is in high demand all over the world for its pungency being the hottest chilly of the world

Pig Meat or pork is one of the major sources of the meat for the people of the state. Nagaland is one of the largest pig producing states.

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2

3

4

Nagaland

Kohima

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Investment Environment & Opportunity for Food Processing Sector: Nagaland

Raw material base (1/3)

Nagaland has four agro-climatic zones9 beneficial for cultivation of a multitude of crops, vegetables and fruits round the year. Based on soil characterization, rainfall and temperature, the four agro climatic zones in Nagaland have been identified as under:

The topography of Nagaland is full of hill ranges, which break into spurs and ridges. The terrain is mountainous covered by rich and varied biodiversity of flora and fauna. It is one of the 25 hot spots of the world with respect to its biological diversity, and hence can be termed as the state of true Mega bio-diversity.

The state houses the confluence of flora and fauna of the neighbouring regions. Geographically, the state largely has vast undulating terrain and hilly landscape and some low lying areas giving rise to a very conducive climate with presence of perennial water and moisture for truly rich variety of flora and fauna. The potential of this state in terms of the sheer variety of Agro and Horticultural produce including Fiber, Tea, Coffee, Pineapple, Orange etc. is immense.

Nagaland has basically an agricultural economy. Over 70% of the population is dependent on agriculture. The main crops are rice, millet, maize and pulses. Cash crops like sugarcane and potato are also becoming popular. Coffee, cardamom and tea are grown as plantation crops in Nagaland.

Rice is the dominant crop and also the staple diet of the people. Of the gross cropped area under food grains, rice accounts for about 84.4%. Oil seeds is also an important crop. It includes Rapeseed, mustard etc. Coffee cardamom and tea are grown as plantation crops in Nagaland.

SNAPSHOT OF LAND UNDER CULTIVATION

Arable land 539

Net sown area 384

Total area sown 500

(2013-14, ‘000 hectare)

Hot per-humid climate

District: Dimapur, Peren, Wokha, Mokokchung, Mon

Hot moist sub-humid climate

District: Dimapur, Peren, Wokha, Mokokchung, Mon

Warm per-humid climate

District: Dimapur, Peren, Kohima, Phek, Wokha, Mon, Mokokchung,

Kiphire, Tuensang, Longleng, Zunheboto

Warm humid climate

District: Wokha, Dimapur, Peren, Phek, Kiphire, Mokokchung, Mon,

Longleng, Tuensang, Kohima

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Investment Environment & Opportunity for Food Processing Sector: Nagaland

Total production of 608 Thousand Tonnes of food grains

o Paddy – 454 thousand Tonnes

o Maize – 135 thousand Tonnes

Total production of 1.1 Million Tonnes of horticulture products

o Fruits – 414 thousand Tonnes

o Vegetables – 639 thousand Tonnes

o Plantation – 145 thousand Tonnes

Raw material base (2/3)

Major strength of Nagaland’s food processing industry lies in the following: Food Grains: Paddy, Maize

Fruits- Pineapple, Banana, Orange

Pulses- Kidney Beans (Rajma), Pea

Plantation- Sugarcane, Coconut, Tea

Oilseeds- Soyabean, Rape seed/Mustard

Food Grains: Key production highlights (2014-15) 10

Horticulture products: Key production highlights (2014-15)

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Investment Environment & Opportunity for Food Processing Sector: Nagaland

Nagaland produced over 77 thousand tonnes of milk in 2015-16

Nagaland also produced over 46 million eggs in the same year.

Meat production in the state for 2015-16 stood at around 36 thousand tonnes with

pig meat or pork being the primary source of meat for the state

Raw material base (3/3)

Livestock & Fisheries: Key production highlights11 (2015-16)

Paddy 453 Maize 135 Kidney Beans (Rajma) 18

Pineapple 127 Banana 108 Orange/Mandarin Orange

52

Cabbage 135 Tapioca 70 Potato 61

Sugarcane 189 Tea 33

CROPS (‘000 tonnes)

FRUITS (‘000 tonnes)

VEGETABLES (‘000 tonnes)

PLANTATION (‘000 tonnes)

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Investment Environment & Opportunity for Food Processing Sector: Nagaland

Dimapur, Mon, Peren, Wokha, Zunheboto

Dimapur, Kiphire, Longleng, Mokukchung, Mon, Peren, Phek,

Tuensang, Wokha, Zunheboto

Dimapur, Longleng, Mokukchung, Mon, Peren, Phek, Tuensang,

Wokha, Zunheboto

Kiphire, Longleng, Wokha

The major production clusters of Nagaland are given below:

Pineapple Banana

Paddy Cashew

Pulses Citrus

Sugarcane Passion Fruit

Chilli Spices

Meat Oil Seeds

Geographical Indication for Agricultural Products in Nagaland12:

Dimapur, Mon, Peren, Wokha, Zunhebotoa

Kohima, Tuensang, Wokho, Zunheboto

Production Clusters

Kiphire, Longleng, Mon, Phek, Zunheboto

Dimapur, Kohima, Longleng, Mokukchung, Mon, Peren, Phek,

Wokha

Kiphire, Kohima, Mokukchung, Peren, Phek, Tuensang, Wokha,

Zunheboto

Peren, Phek, Wokha

Kohima, Mokukchung, Mon, Peren, Tuensang

Kohima, Longleng, Mon, Phek, Tuensang, Zunheboto

Naga Tree Tomato

Naga Mircha/Naga King Chilli

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Investment Environment & Opportunity for Food Processing Sector: Nagaland

Production Clusters

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Investment Environment & Opportunity for Food Processing Sector: Nagaland

Agriculture marketing

Nagaland has the following marketing facilities in the state: One export promotion investment park which is located at Dimapur and focusses on agro

& food processing. One food park has been sanctioned in Dimapur. Nagaland Food Private Limited has been established in Dimapur Industrial Estate, which

specializes in bamboo shoot processing, pineapple, passion fruit and orange juiceprocessing.

Ministry of Food Processing Industries has sanctioned one Abattoir Project in Dimapurunder the scheme of Ministry of Food Processing Industries to accelerate the growth offood processing industry in the country through the facilitation of establishment of strongfood processing infrastructure backed by an efficient supply chain.

According to Central Warehousing Corporation, there is a storage capacity of 13000 MTestablished at Dimapur.

There are 19 wholesale markets and 174 primary rural markets in the State. There are two cold storages in Nagaland, one with a capacity of 500 MT owned by private

sector and the other with 1150 MT capacity owned by cooperatives.

Agricultural markets in Nagaland

19 Wholesale & 174 rural

marketsTwo cold storage

units

One Export Promotion investment

Park

One Food Park

One Abattoir

project in Dimapur

Warehousing capacity of 13000 MT

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Investment Environment & Opportunity for Food Processing Sector: Nagaland

Processing Clusters (1/2)

Paddy Processing

Dimapur, Kiphir, Kohima, Longleng, Mokukchung,

Wokha, Zunheboto

Sugarcane Processing

Dimapur, Kiphir, Kohima, Longleng, Mokukchung,

Wokha, Zunheboto

Soyabean

Kiphir, Longleng, Zunheboto

Ginger

Kiphir, Zunheboto

Ready to eat products

Dimapur, Mokukchung

Fruit Processing

Kohima, Mokukchung

Tea

Dimapur, Kiphir

Edible Oil

Wokha

Milk

Dimapur

Meat

Kiphir, Dimapur, Kohima

Famous Ethnic Foods of Nagaland:

Dried Pork: An essential part of every Naga meal, the meat is eaten either dry or cookedin a stew.

Naga pork with Dry Bamboo Shoots: The signature dish of Nagaland. This is a dish

consisting of fried pork with bamboo shoots and lots of chillies.

Bamboo Steamed Fish: This is local inland fish which is stuffed inside a bamboo and

steamed.

Naga Chilli Sauce: The quintessential part of every Naga meal. Also known as the Raja

Mircha or Naga Ghost Chilly. This is the hottest chilly in the world known all over for its

intense heat.

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Investment Environment & Opportunity for Food Processing Sector: Nagaland

Nagaland currently does not have any major food processing units operating in the state,

it has however been identified as sunrise zone for food processing by ASSOCHAM and

MoFPI.

Endowed with various sorts of fruits, vegetables, and other agro-products, and has the

potential to be a sunrise zone for food processing and other agri-businesses.

Northeastern region with its agro-friendly climate and agrarian roots has the potential for

food processing and other agri-businesses.

Processing Clusters (2/2)

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Investment Environment & Opportunity for Food Processing Sector: Nagaland

Pg clusters Processing Clusters

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Investment Environment & Opportunity for Food Processing Sector: Nagaland

Infrastructure (1/2)

The status of key physical and agricultural infrastructure in Nagaland is as follows:

Parameter Status

Airport 13 One operational Airport in Dimapur

Existing Industrial Areas/ SEZs14

15 Industrial Areas One Export Promotion Investment Park Two Cold storage facilities

Installed power15

(including allocated shares in Joint and Central Sector

Utilities as on 31 Jan 2017)

Thermal: 59.61 MW Hydro(Renewable): 553.98 MW RES(MNRE): 31.17 MW

UtilitiesElectricity cost16 Industrial Rate – INR 6.10 Unit

Water Cost17 INR 150 per 1000 litres

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Investment Environment & Opportunity for Food Processing Sector: Nagaland

Infrastructure (2/2)

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), ETC.

Total Area

(Ha)

Total Land

Available

(Hectare)

Mega Food Park

1 Doys Agri Resource Private Limited

Dimapur Multi products 08 08

Special Economic Zone

1 Agro and Food Processing Special Economic Zone (SEZ)

Dimapur Multi products 40 40

Abattoir

1. Dimapur Municipal Council

Dimapur Meat 0.8 0.8

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Investment Environment & Opportunity for Food Processing Sector: Nagaland

Infrastructure

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Investment Environment & Opportunity for Food Processing Sector: Nagaland

State government initiatives (1/2)

Investor Facilitation Initiatives

Power & Utilities: Connections and permissions are available online for all new andexisting enterprises.

Labour Regulations & Reforms: All permissions, grant and renewal of licenses areavailable online from the portal of the state government.

Industrial Waste Management: All permissions and grants for disposal ofindustrial waste are available online.

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Investment Environment & Opportunity for Food Processing Sector: Nagaland

State government initiatives (2/2)

Key Highlight: Nagaland’s State industrial Policy 2000 And North East Industrial & Investment Promotion Policy 200718

Name of Policy North East Industrial & Investment Promotion Policy 2007

Focus Sector Industries And Infrastructure Development

Nodal Department Department of industrial Policy & Promotion, Government of India

Central Capital Investment

Subsidy Scheme

The North East Industrial & Investment Promotion Policy (NEIIPP) provides for subsidy @ 30% of the investment in plant and machinery or additional investment in Plant and Machinery by way of substantial expansion to all new units as well as existing units which go in for substantial expansion.

Central Interest Subsidy

Scheme

NEIIPP provides for interest subsidy of three percent on the working capital loan availed by an eligible unit from scheduled banks or Central/State financial institutions for a maximum period of ten years from the date of commencement of production.

Central Comprehensive

Insurance

NEIPP provides for reimbursement of 100% insurance premium for a maximum period of ten years from the date of commencement of production.

Subsidy on transportation Reimbursement of 90% of the cost of transportation of raw material and finished products, to and fro from the nearest railhead up to Siliguri, West Bengal.

Income Tax exemption 100% Income Tax exemption for a period of ten years from the date of commencement of commercial production

Exemption of Excise Duty Excise Duty exemption on value addition basis.

Name of Policy State industrial Policy 2000 (Revised 2004)

Focus Sector Industries based on agricultural, horticultural and plantation produce

Nodal Department North Eastern Development Finance Corporation Limited (NEDFI)

Manpower subsidy Government reimburses up to 25% of the actual wage bill for local tribal employees employed by eligible units up to three years from the date of Production subject to a maximum ceiling of INR One Lakh lakh annually for those units where investment in plant and machinery is from INR Five Lakh to INR 25 Lakh, INR 2.50 lakh annually for those units where investment in plant and machinery is from INR 25.00 lakh to INR 100.00 lakh and INR Five lakh annually for those units where investment in plant and machinery is above INR 100.00 lakh.

Quality Certification Cost of laboratory equipment for the purpose of quality control and ISI/BIS/ISO 9000 Certification will be reimbursed subject to a maximum ceiling of INR 50,000 in cases where it does not form part of the project cost for SSI and INR one lakh in case of Large & Medium unit

Power subsidy Subsidy on power will be provided at the rate of 30% and 25% for connected loads upto One MW and above One MW respectively for a period of five years from the

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Investment Environment & Opportunity for Food Processing Sector: Nagaland

date of commercial production subject to a maximum ceiling limit of INR Two lakh annually. This will be a reimbursement scheme on actual consumption of power for manufacturing process substantiated with requisite details.

Drawl of Power Line Cost of drawl of 33/11 KV line to eligible units located outside the notified areas shall be reimbursed for one time only subject to a ceiling of INR two lakh (now as per NEIIPP-2007, anywhere in the State)

Interest Subsidy Interest subsidy of three percent on working capital loans, for ten years.

Preparation of project reports

Subsidy will be available at the rate of 50% of the cost of Detailed Project Reports subject to a ceiling of INR One lakh, which shall be eligible only for new units with investment in plant & machinery above INR 25 lakhs provided the report is prepared by a Government approved Industrial Consultants

Website link of policy

document

http://mofpi.nic.in/announcements/north-east-industrial-and-investment-promotion-

policy-neiipp2007-revised

https://www.nagaland.gov.in/Nagaland/UsefulLinks/Industries.pdf

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Investment Environment & Opportunity for Food Processing Sector: Nagaland

Snapshot of potential investable projectsNagaland offers diverse set of investment opportunities in the food processing sector. An indicative list of potential projects for investments is presented below:

Project name Processable Products/ Infrastructure

Value Proposition

Establishment of Fruit Processing Unit

Pulp, squash/ juices, jam & jellies, pickles, etc.

The project is essential as the state government is trying to make use of the avaiability of raw material and need for controlling wastage through processing. As the production increases there will be need for processing facilities and FPU is one of the basic processes required.

Processing of Herbs & Aromatic Plants

Herbs & Spices Availability of raw material with production of over 6000 tonnes of naga chilli and need to incease value addition

Establishment of Freeze Dried Fruit Processing Unit

Fruits & vegetables

With a huge raw material base for Pineapple in Nagaland and large market for the fruit outside. The project is essential as the state government is trying to make use of the avaiability of raw material and need for controlling wastage through processing.

Modern Abattoir for sheep and goat

Meat Small scale abattoir of only 100 heads per shift which can easily be used as job work facility i.e. renting to other traders

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Investment Environment & Opportunity for Food Processing Sector: Nagaland

References

1 https://data.gov.in/catalog/land-use-pattern 2 http://censusindia.gov.in/ 3http://databank.nedfi.com/content/gross-state-domestic-product-nagaland 4 http://pib.nic.in/newsite/PrintRelease.aspx?relid=123563 5 http://dipp.gov.in/sites/default/files/FDI_FactSheet_January_March2017.pdf 6 Statistical Year Book India 2017, MOSPI (includes state highway, national highway, other PWD roads, rural roads, urban roads). 7 As per Ministry of Railways press release (As on 31.3.2016) 8 http://ourairports.com/countries/IN/OR/airports.html 9 http://neriwalm.gov.in/pdfdocument/Agroclimatic_zones.pdf 10 http://databank.nedfi.com/content/pulses-1; http://databank.nedfi.com/content/cereal-crops-0 11 http://dahd.nic.in/sites/default/files/BAH%26amp%3BFS-2017 %5BPDF Format%5D.pdf 12 http://www.ipindia.nic.in/writereaddata/Portal/Images/pdf/Registered-GIs-of-India.pdf 13 http://ourairports.com/countries/IN/NL/airports.html 14 http://databank.nedfi.com/content/nagaland#Industry 15 http://databank.nedfi.com/content/power-and-energy-2 16 http://www.dopn.gov.in/irj/go/km/docs/internet/NAGALAND/Pages/Tariff.html 17 http://phed.nagaland.gov.in/revenue.html 18 http://dipp.nic.in/policies-rules-and-acts/policies/north-east-industrial-investment-promotion-policy-neiipp-

2007

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TRANSFORMING THE FOOD ECONOMY 3-5 November, 2017 | Vigyan Bhawan, New Delhi, India

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