Download - Food Processeing - August 2013
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2nd largest arable land
in the world
India holds 2nd largest arable land in the world. With 20 agri-climatic regions, all 15 major
climates in the world exist in India. The country also possesses 46 of the 60 soil types in
the world
Largest producer of
pulses, milk, tea etc.
India is the largest producer of pulses, milk, tea, cashew and mangoes, buffalo meat; and
the second largest producer of tea, wheat, sugarcane and rice
Largest livestock
population
Globally, India has the largest livestock population of 470 million, which includes 205
million cattle and 90 million buffaloes
Rising consumption
expenditure
Consumption expenditure is likely to reach USD3.6 trillion by 2020, up from an estimated
USD1.0 trillion in 2010.
Source: World Travel and Tourism Council, Aranca Research
Favourable location for
exports
Strategic geographic and proximity to food importing nations, makes India favourable for
export of processed foods
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The engineering sector is delicensed;100 per cent FDI is allowed in thesector
Due to policy support, there wascumulative FDI of USD14.0 billion intothe sector over April 2000 February2012, making up 8.6 per cent of totalFDI into the country in that period
Growing demand
Notes: 2020E Estimate for 2020; Estimates are from Flavours of Incredible India (Ernst & Young, 2009)
FDI Foreign Direct Investment
Strong demand growth
Demand growth for processed foodhas been rising with growingdisposable income, urbanisation, ayoung population and nuclearfamilies
Household consumption is set todouble by 2020
Changing lifestyle and increasingspend on health and nutritionalfoods
Food processing hub
India benefits from a largeagriculture sector, abundantlivestock, and cost competitiveness
Investment opportunities will arisein agriculture, food infrastructure,and contract farming
Diverse agro-climatic conditionsmaking it suitable for practicingdifferent crops
Policy support
Sops to private sector participation;100 per cent FDI under automatic
route Agri Export Zones have been set up;
under the governments Vision 2015plan, mega food parks to beestablished
Approval of National Mission on FoodProcessing
Increasing investments
Government expects USD21.9billion of investments in food
processing infrastructure by 2015 Investments, including FDI, will rise
with strengthening demand andsupply fundamentals
Launch of InfrastructureDevelopment scheme to increaseinvestments in food processinginfrastructure
2009
Domestic
food
spending:
USD181
billion
2020E
Domestic
food
spending:
USD318
billion
Advantage
India
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Source: Indiabusiness.nic.in, Ministry of Agriculture, APEDA,
Meat & Poultry Processing Board, FAOSTATNote: FY Indian Financial Year (April March)
MT - Million Tonnes, * - Data mentioned is for FY12
Foodprocessing
Fruits and vegetables
Milk and milk products
Meat and poultry*
Marine products
Grain processing
Consumer food
India is the worlds second largest producer of fruits and
vegetables
With 127.3 MT in FY12, India is the largest producer of milk in the
world
India is the largest producer of buffalo meat (1.5 MT*) and thesecond largest producer of goat meat (0.6 MT*)
With 8.9 MT production in FY12, India is the second largest
producer of fish in the world
India produced about 259.3 MT of food grains in FY12
Among the fastest growing segments in India; it includes
Packaged
food
Aerated soft
drinks
Packaged
drinking
water
Alcoholic
beverages
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Contribution of food processing industry in
manufacturing (FY12)
Source: Ministry of Food Processing Industries ( MOFPI),
Annual Report MOFPI (2012-13), Aranca Research
The food processing industry is among one of the largest industries in India and ranks 5th in terms of production,
consumption and exports
With an estimated value of USD121 billion in FY12, Indias food processing industry accounts for 32 per cent of the total
food market
Food processing segment and market
share (FY12)
9%
91%
Food Processing
Other
40%
5%11%
20%
25%
Meat, Fish, Fruits,Vegetables and Oils
Dairy products
Grain Mill products
Beverages
Other food products
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Source: Ministry of Food Processing Industries ( MOFPI), Aranca Research.
Note: NCMSL - National Collateral Management Services Limited
Farmers,cooperatives and
Private
companies
Warehouses,cold storage and
silos
Retail shops,malls, cash and
carry
Farmers, Amul,
ITC, Pepsi,
Hindustan
Unilever Lever Ltd
Food Corporation
of India, NCMSL,
Arshiya
International
Kirana shops,
Bharti-Walmart,
Future Retail,
Aditya Birla RetailLimited
Inputs ProductionProcurementand storage
Processing Retailing
Seeds, Fertilizersand Farm
equipments
Grading, sorting,milling and
packing
National Seeds
Corporation
Limited, Cargill
and Advanta IndiaLtd
ITC ltd, Cargill,
Adani Enterprises,
Olam International
Key
activities
Major
p
layers
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GDP (USD billion) and growth of food processing
industry in India
Source: Ministry of Food Processing Industries ( MOFPI),
Annual Report MOFPI (2012-13), Aranca Research
During FY06-11, the food processing industry expanded at
a CAGR of 4.8 per cent; in FY11 alone, the industry grew
7.1 per cent
Food processing is an important segment in terms of
contribution to GDP, and share in the agriculture and
manufacturing sectors
In FY11, India had as many as 35,838 registered food
processing units with total capital investment of
approximately USD52.1 billion
According to MOFPI in FY11, capital investments in Indias
food processing sector have increased a significant 28.6 per
cent over the last year
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
10.0
11.0
12.0
13.0
14.0
FY07 FY08 FY09 FY10 FY11
GDP- Food processing industry Growth - right axis
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Annual growth of food products and beverages
from IIP (%)
Notes: ASI Annual Survey of Industries
IIP Index of Industrial Production
Although figures for output of food products and beverages
from ASI are not available post FY10, data from the Index of
Industrial Production (IIP) suggest strengthening growth
momentum in food products and beverages in FY11-12
Growth for food products and beverages shot up to 14.8
per cent in FY12 from 8.9% in FY11; the sector was the
second-fastest growing sub-segment within manufacturing
in FY12 and its growth far outpaced that of the overallmanufacturing sector in the fiscal year
Source: Ministry of Statistics and Programme Implementation
(MOSPI), Aranca Research-10
-5
0
5
10
15
20
FY06 FY07 FY08 FY09 FY10 FY11 FY12
Annual growth of Food products & beverages as per IIP
Annual growth of overall manufacturing sector as per IIP
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Unorganised sector has the largest share in the
sector (FY11)
Source: Ministry of Food Processing Industries ( MOFPI),
Annual Report MOFPI (2012-13), Aranca Research
The unorganised sector accounts for 42 per cent of Indias
food processing industry
The sizeable presence of small scale industries points to
the sectors role in employment generation
42%
25%
33%
Unorganised sector
Organised sector
Small scaleindustries
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Shares in production by value and volume (FY11)
Source: Ministry of Food Processing Industries, Aranca Research
Rice mills account for the largest share of processing units
in the organised sector
The governments focus on infrastructure is likely to see a
sharp rise in the number of cold storage units in the years
ahead
70%
50%
30%
50%
By Volume By Value
Unorganised sector Organised sector
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Healthy contribution to employment generation
(FY09)
Source: Ministry of Food Processing Industries,
Aranca Research
In FY09, the sector employed 48 million people
Policymakers have identified the food processing sector as
a key one in encouraging labour movement from agriculture
to manufacturing
Notes: FY Indian financial year (April March) Food processing
industry
Directemployment
(13 million)
Indirectemployment
(35 million)
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Changing consumer
tastes
Wide array of products, coupled with increasing global connectivity has led to a change in
the tastes and preference of domestic consumers
This trend has been bolstered by rising incomes, increasing urbanisation, a young
population, and the emergence of nuclear families
Entry of international
companies
Liberalisation and growth of organised retail have made the Indian market more attractive
for global players
With a large agriculture sector, abundant livestock, and cost competitiveness India is fastemerging as a sourcing hub of processed food
Rising business and
product innovation
Companies have been moving up the value chain; for example, cooperatives are
transitioning from being pure producers of milk to offering a wide range of dairy products
Firms, both domestic and global, have been focussing on product innovation to cater to
domestic tastes, while also introducing international flavours
Notes: FY Indian Financial Year (April March)
Rising demand on
Indian products in
international market
Strategic geographic location and continuous increase in production of raw materials helps
India to supply cheaper products to other countries
Indias exports of processed food and related items rose at a CAGR of 27.3 per centduring FY0812
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Source: Company Website, Aranca Research
Alcoholic beverages
Aerated soft drinks andpackaged drinking water
Packaged food
Fruits, vegetables,processed grain
Milk and milk products
Meat, poultry and marineproducts
Consumer food
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Source: Ministry of Agriculture, Aranca Research
Strong
government
support
Large domestic
market
Growing demandStrong domesticdemand Supply-side advantagesRising exportopportunities
Rising disposable
incomes
Growing middle
class, urbanisation,
a young population
Changing lifestyles
and food habits
Indias greater
integration with theglobal economy
Increasing exportswith advantage ofproximity to key
export destinations
Expected spike in
global demand as
emerging markets
grow at a fast pace
Favourable
climate for
agriculture; wide
variety of crops
Large livestock baseaids dairy and meatprocessing sector
Inland water
bodies, long
coastline help
marine products
Policy support
Vision 2015 plan
targets trebling of
food processing
sector
Mega food parks,Agri Export Zones to
attract FDI and aidinfrastructure
Approval of
National Mission on
Food Processing
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Rising disposable incomes
Strong growth in per-capita income has resulted in
greater demand for food items
Incomes have risen at a brisk pace in India and will
continue rising given the countrys strong economic
growth prospects. Nominal per capita income is
estimated (IMF) to have recorded a CAGR of 11.2 percent over 200012
There has also been a shift in demand
From carbohydrates to meat products (in line
with the various phases of economic growth)
To convenience foods, organic and diet foods
Rising per-capita income in India
Source: IMF, Aranca Research
Note: E - Estimate, F - Forecast
-5%
0%
5%
10%
15%
20%
25%
30%
300
600
900
1,200
1,500
1,800
2,100
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011F
2012F
2013F
2014F
2015F
2016F
2017F
Gross domestic product per capita, current prices Growth
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Growing middle class, urbanisation
Strong economic growth since the 1990s has led to
Rapid urbanisation and a growing middle class
Nuclear families and dual income households
Coupled with a young population and increasing media
penetration, this has led to a surge in demand for
packaged food, alcoholic and non-alcoholicbeverages, snacks, savouries, etc
Changing wealth dynamics of Indias population
Source: McKinsey Quarterly, Aranca Research
1% 3% 7%2%6%
17%12%
25%
29%35%
40%
32%50%
26%15%
Globals (>22065.3) Strivers (11032.7 - 22065.3)Seekers (4413.1 - 11032.7) Aspirers (1985.9 - 4413.1)
Deprived (
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Fruit Juices and Concentrates (USD millions)
Source: Ministry of Food Processing Industries, Aranca Research.
Note MT is Metric Tonnes
Confectioner items (USD millions)
495529 558
588
750
FY07 FY08 FY09 FY10 FY15E
121 131143
154
227
FY07 FY08 FY09 FY10 FY15E
Dairy whiteners/creamers (MT)Soft and aerated drinks (million cases)
359373
388403
479
FY07 FY08 FY09 FY10 FY15E
243
263 284307
450
FY07 FY08 FY09 FY10 FY15E
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Exports of processed food and related items
(USD millions)
Source: Ministry of Food Processing Industries, Aranca Research;
Notes: FY Indian Financial Year (April March)
During FY08-12, India's exports of processed food and
related products increased at a CAGR of 27.3 per cent to
USD24.0 billion
Main export destinations for food products have been the
Middle East and South East Asia
10.9 10.7 10.7
14.0
24.0
FY08 FY09 FY10 FY11 FY12
CAGR: 27.3%
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Rising demand from rest of the word
Share of exports in total output of processed food stood at 19.8 per cent in FY12
This has primarily resulted from
Greater exports to advanced economies
More demand from emerging/ developing economies as they experience strong growth
Exports of key processed products (USD millions)
Source: Ministry of Agriculture, APEDA, Aranca Research
Notes: FY Indian Financial Year (April March)
244
2,329
1,253
78
659305
50
682
2,6282,300
53
858
505 488
3,456 3,234 3,226
1,915
1,154 1,106 746
Guargum Basmati rice Buffalo meat Non basmati rice Other cereals Groundnuts Jaggery andConfectionery
FY10 FY11 FY12
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Supply-side advantages
Growth in food product exports has been aided by
Significant improvements in product and
packaging quality
Greater private sector participation
India has a location advantage it is geographically
close to key export destinations (Middle East, SouthEast Asia)
The US and the UAE are the top destinations for
Indias exports of processed food and agriculture-
related products, followed by Vietnam and Saudi
Arabia
Top ten destination countries of Indias exports of
processed food and agriculture related products in
FY12 (USD million)
Source: Ministry of Food Processing Industries,
APEDA, Aranca Research
3,061
1,490 1,4021,171
852 795 734 576
406 396
USA
UAE
Viietnam
S
audiArabia
Malasiya
Indonesia
Iran
Bangladesh
Kuwait
Nigeria
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Shares in APEDA exports (FY12)
Source: APEDA, Aranca Research
In FY11, APEDA products had 41.6 per cent share in total exports; non-APEDA products made up the rest
Within APEDA products, cereals had the highest share (36 per cent) while for non-APEDA products marine products
dominated with a share of about 21 per cent
Shares in non - APEDA exports (FY11)
21%
20%
20%
14%
11%
14%Marine Products
Sugar &Mollasses
Oil Meals
Spices
Tea & Coffee
Others
36%
17%5%
35%
6%
1%
Cereals
Animal products
Processed Fruits& Vegetables
Other processedfoods
Fresh Fruits &Vegetables
Floriculture &Seeds
Source: APEDA, Aranca Research
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Notes: * Data for Global share is taken from different sources
Indias comparative advantage lies in its favourable climate,
large agriculture sector and livestock base, long coastline,
and inland water resources
India also has an edge in cost of production compared to its
competitors in Asia and the developed world
Units Global rank
Arable land
(million hectares)157.9 2*
Area under
Irrigation (million
hectares)
63.1 1*
Coast line ('000
kilometers) 7.5 18**
Cattle (million) 205.0 1**
Source: World bank, FAOSTAT, CIA World Fact book, Aranca Research
Notes: * - For the year 2009; ** - For the year 2012
Production
(million tonnes)FY12
Global
Share*(%)Global rank
Milk (Cow &
Buffalo)127.3 16.9% 1
Pulses (nes) 7 19.7% 1
Buffalo meat 3.4 42.8% 1
Bananas 29.6 27.8% 1
Mangoes and
Guavas15.18 39.0% 1
Tea 0.96 23.0% 2
Rice (Paddy) 155.7 23.6% 2
Sugarcane 277.7 ~24.0% 2
Wheat 93.9 ~10.0% 2
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Encouragement to
private sector
100 per cent export-oriented units are allowed to sell up to 50 per cent of their produce in
the domestic market
Export earnings are exempted from corporate taxes
Tax incentives and
other sops
Import duty scrapped on capital goods and raw materials for 100 per cent export-oriented
units
100 per cent tax exemption for 5 years followed by 25 per cent tax exemption for the next5 years for new agro-processing industries
Full excise duty exemption for goods that are used in installation of cold storage facilities
Relaxed FDI norms 100 per cent FDI under automatic route (except for alcohol, beer, and sectors reserved for
small scale industries)
Repatriation of capital and profits permitted
Source: Ministry of Food Processing Industries, APEDA, Aranca Research
Notes: FDI Foreign Direct Investment
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Focus on infrastructure
Assigned priority sector for bank credit
60 Agri Export Zones (AEZ) have been set up across the country
According to Vision 2015, formulated by MoFPI, the government plans to establish 30
mega food parks in public-private partnership mode across the country; out of these 10
have already been approved in the first phase
Government has also announced setting up of 15 Mega Food Parks in its FY12 Budget,
as part of the third phase of Mega Food Park Scheme
Incentives for
development of storage
facilities
Investment-linked tax incentive of 100 per cent deduction of capital expenditure for setting
up and operating cold chain facilities (for specified products), and for setting up andoperating warehousing facilities (for storage of agricultural produce)
Source: Ministry of Food Processing Industries, APEDA, Aranca Research
Focus on R&D and
mordenisation
The government launched initiatives such as for the Setting Up/Upgradation of Quality
Control/Food Testing Laboratory, R&D and Promotional Activity scheme and the
Technology Upgradation/Setting Up/Modernisation/Expansion of Food ProcessingIndustries Scheme
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Source:APEDA, Aranca Research
Jammu & Kashmir: Apples,
walnuts
Punjab: Basmati rice,
vegetables
Himachal Pradesh: Apples
Rajasthan: Coriander,
cumin
Gujarat: Mangoes,
vegetables, sesame seeds
Andhra Pradesh: vegetables,
mango pulp, grapes, gherkins
Maharashtra: Grapes, grapewine, mangoes, flowers, onion
West Bengal: Pineapple, litchi,
Darjeeling tea, vegetables
Uttar Pradesh: Basmati rice,
potatoes, mangoes, vegetables
Uttaranchal: Basmati rice,
aromatic and medicinal plants
Madhya Pradesh: Onions,
garlic, seed spices, lentils
Karnataka: Gherkins, rose, onions,
flowers, vanilla
Tamil Nadu: Flowers,
mangoes, cashew nuts
Assam: Ginger
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Cumulative FDI inflows (Apr 2000Jan 2013)
into the food and agriculture sector (USD million)
Source: Department of Industrial Policy & Promotion, Aranca Research
Between April 2000 and January 2013, FDI in agriculture
and food processing in India stood at USD5.2 billion
Demand growth, supply advantages, and policy support
have been instrumental in attracting FDI
Notes: FDI Foreign Direct Investment,
1,489
1,801
1,135
385
223101 52
0
400
800
1,200
1,600
2,000
Agriservices
Foo
dprocessing
Fermentation
Vegetableoil
Agrimachinery
Te
aandCoffee
Sugar
0%
10%
20%
30%
40%
Cumulative FDI inflow (USD million)
Share of total FDI inflow (%) - right axis
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12th Five Year Plan (2012-17) outlay shares: Food
Processing
Source: Ministry of Food Processing Industries
(2009-10 Annual Report), Aranca Research
The governments main focus is on supply-chain related
infrastructure like cold storage, abattoirs and food parks
Notes: GOI Government of India
36.3%
45.4%
11.5%
5.5%
1.3% Infrastructuredevelopment
National Mission on FoodProcessing
Strengthening ofinstitutions
Food Safety, R&D andPromotional Activities
Innovation Fund Scheme
Plan allocation to the Food Processing
sector: USD2.9 billion
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Source: Thompson ONE Banker, Assorted News Articles,
Aranca Research
PE investments in the food and agriculture totaled USD229 million during 2011-12
Company Investor Type of business Deal value (USD million)
Godrej Agrovet Temasek Agribusiness 105.0
Nuziveedu Seeds Blackstone Group Floriculture 80.0
Nilgiris Dairy Actis Private Equity Dairy 65.0
Prakash Snacks Pvt Ltd Sequoia Capital Snacks 30.0
Parag Milk & Milk Products IDFC Dairy 29.0
Amalgamated Beans Coffee
Trading CoDarby Asia Investors
Non-citrous fruit
farming25.0
Bush Foods Overseas Pvt Ltd Standard Chartered Pvt Eq Ltd Rice milling 25.0
Tirumala Milk Products Carlyle Group Milk production 22.0
The CREMICA Group Motilal Oswal Private Equity Advisors General food products 15.0
Nashik Vinters Verlinvest SA Wine and liquor 15.0
Parag Milk & Milk Products Motilal Oswal Private Equity Advisors Dairy products 14.1
Godrej Tea IL&FS Investment Managers Coffee Coffee and tea 13.5
MajorPEdeals
Jan2010M
ar2013
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Source: Thompson One Banker, Aranca Research
Notes: M&A Mergers and Acquisitions
M&A activity
Target company Acquirer company Type of business Deal value (USD million)
United Spirits Ltd Relay BV Liquor 2,045
GMR Industries Ltd EID Parry Sugar 114.8
Jay Mahesh Sugar Industries NSL Sugars Ltd Sugar 51.99
Olam International Ltd Hemarus Industries Ltd Sugar 73.8
Eastern Condiments McCormick & Co Seasonings, sauces 35.0
Krishidhan Seeds Summit Partners Agricultural seeds 30.0
Bajaj Hindustan Sugar & Ind Bajaj Hindusthan Sugar, ethanol 14.1
Associated Distilleries Globus Spirits Liquor 14.0
Taraori Rice Mills Pvt Ltd Ebro Foods SA Food and Beverage 14.0
Candico India Keventer Agro Candy items 11.2
M&Adeals
Jan2010M
ar
2013
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Source: Thompson ONE Banker, Aranca Research
Note: JV Joint Venture
Players like McCormick had identified India as a strategic market way back in the 1990s
Global players like Hershey are now keen on entering the increasingly attractive Indian market
Established players like Nestle and Coke are extending their global JVs to India
Foreign Players Indian Partner Type of business Stake ratio Year
Molson Coors Cobra India Brewing NA 2011
Dan Cake Phadnis Group Cake and biscuits 66:34 2011
McCormick Kohinoor Foods Ltd Basmati and food products 85:15 2011
McCormick Eastern Condiments Seasonings 26:74 2010
Nestle, Coca Cola -- Beverage 50:50 2010
Hershey Godrej Chocolates 51:49 2007
McCormick AVT Spices 50:50 1994
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Source: National Dairy Development Board,
GCMMF (www.amul.com), Aranca Research
Operation Flood was initiated in 1970 by the National Dairy Development Board to achieve national self sufficiency in milk
production by creating nationwide milk grids; under Operation Flood
Indias milk production rose to 127.3 million metric tonnes (mmt) in FY12 from 21.2 mmt in FY1969
India retained its position as the worlds largest milk producer in 2011-12
Dairy cooperatives offer employment opportunities to about 12 million farm families
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Source: GCMMF (www.amul.com), Aranca Research
Dairy cooperative
societies (000)
Members (million)
Milk procurement
(million kg/ day)
Liquid milk marketing
(million litres/ day)
Milk drying capacity
(million tonnes/ day) 261
2.9
2.6
1.8
13.3
842
10.0
11.0
9.3
72.5
507.5
5.0
5.8
3.6
34.5
PHASE I
(Jul-1970 to
Mar-1981)
PHASE II
(Oct-1979 to
Mar-1985)
PHASE III
(Jul-1985 to
Mar-1996)
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0.9
1.3
1.5
1.7
2.1
2.4
FY07 FY08 FY09 FY10 FY11 FY12
GCMMF (Amul) sales (USD billion)
Source: GCMMF (www.amul.com), Aranca Research
Notes: CAGR Compound Annual Growth Rate
FY Indian Financial Year (April March)
Gujarat Cooperative Milk Marketing Federation (GCMMF) is
the largest food products marketing organisation in India
Set up in 1967, it is Indias largest exporter of dairy products
and has been accorded tradinghouse status CAGR: 20.8%
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Source: GCMMF (www.amul.com), Aranca Research
Main brand: Amul
Products: milk (including flavoured), butter, margarine, cheese, curd, desserts, infant food
Facts and Features
Producer members (million) 3.18
Village societies 16,117
Milk handling capacity (million litres/ day) 13.67
Total milk collection (FY12, billion litres) 3.88
Daily milk collection (FY12, million litres) 10.6
Milk drying capacity (million tonnes/ day) 647
NOTABLE AWARDS Authority
Excellent performance in dairy productexports for 11 consecutive years
APEDA
CIO International IT Excellence Award
(2003) for positive business performance
through resourceful IT management and
best practices
IDGs CIO
Magazine
(USA)
International Dairy Federation Marketing
Award (2007) forAmuls pro-biotic ice
cream launch
International
Dairy
Federation
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Primary focus on crushing andtrading activities
Expansion of extraction andrefining capacity; focus on
branded products
Focus on developing upstreambusiness; secured access to
185,000 hectares of palmplantation; major expansion of
refining capacity
Source: Ruchi Soya website, Aranca Research
Top edible
oil producer in India with
market share of 18.2 per cent
Strong presence in
Edible oil and meal market
Sales growth at a CAGR of 25
per cent Over FY01-12
Market capitalisation of
USD473.05 million
Revenue base of over
USD6,375 million
Organic growth
phase
Strong brands like
Nutrela and Vansapati
and Sunrich
Focus on R&D
Acquisitions of
companies and
plats facilities
2001-04 2005-08 2008-12
One of the worlds
fastest growingFMCG company
Aggressiveacquisitions of lands
for soya and palm
plantations
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Source: Company Annual Report, Aranca Research
Note: KRBL - Khushi Ram and Behari Lal
Salient characteristics
KRBL is worlds largest rice miller and basmati rice exporter
It has strong brand presence through global retail giants like Carrefour, Bharti-Walmart, Spencer and Future Group
It is the largest producer of contract farming basmati rice in the world
The company accounts for 25 per cent ofIndias total exports of branded basmati rice
KRBL is well-integrated in terms of farming, rice processing, oil production and power generation
Sales (USD million) Exports (USD million
140.5
178.2
FY11 FY12
247.6
285.7
333.1 339.0 340.3
292.4
FY08 FY09 FY10 FY11 FY12 9M FY13
CAGR: 33.4%
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Notes: PPP Public Private Partnership, AEZ Agri Export Zones, FDI Foreign Direct Investment
Untapped market with strong
growth potential
Fragmented market leads
to lower processing levels
and value addition
The government plans to
raise value addition to 35
per cent by 2015 (from 20
per cent in 2005)
PPP modules ideal for the
private sector
Strong demand growth
household consumption set
to double by 2020
Potential global outsourcing
hub
Global supermarket majors
are looking at India as a
major outsourcing hub
India enjoys favourable
supply-side fundamentals
(abundant raw materials
supply, cost advantages)
The government has
helped by investing in
AEZs, mega food parks,
easier credit
Supply chain infrastructure
and contract farming
Both firms and the
government are eager to
boost efficiency and access
to markets
Investment potential of
USD22 billion in food
processing infrastructure;100 per cent FDI in this
area
Firms increasingly taking
recourse to contract
farming in order to secure
supply
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37.5
544.4
1,088.5
10th Five Year Plan 11th Five Year Plan 12th Five Year Plan
Fund allocated for infrastructure development
in food processing industry (USD million)
Notes: PPP Public Private Partnership, AEZ Agri Export Zones, FDI Foreign Direct Investment
Governments focus and launch of various schemes to provide excellent infrastructure facility in food processing sector
opens up various opportunity for private investors
Various schemes launched by government provides capital grant, subsidy, duty free export of products and tax incentives
to the investors
Project wise fund allocated in 12th Five
Year Plan (USD million)
CAGR: 27.2%
677.0
349.0
58.1 Mega Food ParksScheme
Scheme forIntegarted ColdChain
Scheme forModernsiation of
Abattoirs
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Agricultural and Processed Food Products Export Development
Authority (APEDA)
NCUI Building 3, Siri Institutional Area,
August Kranti Marg, New Delhi 110 016
Phone: 9111 26513204, 26514572, 26534186
Fax: 91 11 26526187
E-mail: [email protected]
Marine Products Export Development Authority (MPEDA)
MPEDA House, Panampilly Avenue
PB No 4272, Cochin-682 036
Phone: 91 484 2311979/2311803
Fax: 91 484 2313361
e-mail: [email protected], [email protected]
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AEZ: Agri Exports Zones
MFP: Mega Food Parks
CAGR: Compound Annual Growth Rate
FDI: Foreign Direct Investment
MT: Million Tonnes
IIP: Index of Industrial Production
FY: Indian Financial Year (April to March)
So FY12 implies April 2011 to March 2012
GOI: Government of India
INR: Indian Rupee
PPP: It could denote two things (mentioned in the presentation accordingly)
Purchasing Power Parity (used in calculating per-capita GDP)
Public Private Partnership (a type of joint venture between the public and private sectors)
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PE: Private Equity
APEDA: Agriculture & Processed food products Export Development Authority
GCMMF: Gujarat Cooperative Milk Marketing Federation
USD: US Dollar
Wherever applicable, numbers have been rounded off to the nearest whole number
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Year INR equivalent of one USD
2004-05 44.95
2005-06 44.28
2006-07 45.28
2007-08 40.24
2008-09 45.91
2009-10 47.41
2010-11 45.57
2011-12 47.94
2012-13 54.31
Exchange Rates (Fiscal Year)
Year INR equivalent of one USD
2005 45.55
2006 44.34
2007 39.45
2008 49.21
2009 46.76
2010 45.32
2011 45.64
2012 54.69
2013 54.45
Exchange Rates (Calendar Year)
Average for the year
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