food processing 2013 march - ibef · food processing sector mega food parks, agri export zones to...
TRANSCRIPT
1 1
Food Processing
For updated information, please visit www.ibef.org
MARCH
2013
2 2
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: Operation Flood, Amul
Opportunities
Useful information
For updated information, please visit www.ibef.org
Food Processing MARCH
2013
3 3
Food Processing
For updated information, please visit www.ibef.org ADVANTAGE INDIA
Advantage India
MARCH
2013
Advantage India
• Demand growth for processed food has been rising with growing disposable income, urbanisation, a young population and nuclear families
• Household consumption is set to double by 2020
• India benefits from a large agriculture sector, abundant livestock, and cost competitiveness
• Investment opportunities will arise in agriculture, food infrastructure, and contract farming
• Government expects USD21.9 billion of investments in food processing infrastructure by 2015
• Investments, including FDI, will rise with strengthening demand and supply fundamentals
• Sops to private sector participation; 100 per cent FDI under automatic route
• Agri Export Zones have been set up; under the government’s Vision 2015 plan, mega food parks to be established
• Approval of National Mission on Food Processing
Domestic food
spending: USD318 billion
2020E
Domestic food
spending: USD181 billion
2009
Notes: 2020E - Estimate for 2020; estimates are from Flavours of Incredible India (Ernst & Young, 2009)
FDI - Foreign Direct Investment
Strong demand growth Food processing hub
Increasing investments Policy support
4 4
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: Operation Flood, Amul
Opportunities
Useful information
For updated information, please visit www.ibef.org
Food Processing MARCH
2013
5 5 For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
The food processing sector comprises six major segments
Food Processing
Food processing
Fruits and vegetables
Milk and milk products
Meat and poultry
Marine products
Grain processing
Consumer food
India is the world’s second largest producer of fruits and vegetables
India is the largest producer of milk in the world
India was the largest producer of buffalo meat (1.4 MT) and the second largest producer of goat meat (0.5 MT) in FY10
India is the third largest producer of fish in the world
India is estimated to have produced about 250 million tonnes of food grains in FY12
Among the fastest growing segments in India; it includes -
Packaged food
Aerated soft drinks
Packaged drinking
water
Alcoholic beverages
Source: Indiabusiness.nic.in, Ministry of Agriculture, Meat & Poultry Processing Board, FAOSTAT
Note: FY - Indian financial year (April - March) MT - Million Tonnes
MARCH
2013
6 6 For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
→ The food processing industry has emerged as a key component of Indian manufacturing; while the sector’s total output stood at USD93.1 billion in FY10, it accounted for nearly 7.5 per cent of aggregate gross value added of major industries during that year
→ The size of the sector has been growing fast; output expanded at a CAGR of 16.9 per cent over FY05-10
Processed food output
Source: Annual Survey of Industries (ASI) 2009-10, Aranca Research
Source: Ministry of Food Processing Industries ( MOFPI), Annual Survey of Industries 2009-10, Aranca Research
Notes: CAGR - Compound Annual Growth Rate,
Food Processing
0%
5%
10%
15%
20%
25%
30%
0
20
40
60
80
100
FY05 FY06 FY07 FY08 FY09 FY10
Processed food output (USD billion) Growth - right axis
MARCH
2013
Total output of food products and beverages totalled USD93.1 billion in FY10
7 7 For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
→ 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 per cent in FY11; the sector was the second-fastest growing sub-segment within manufacturing in FY12 and its growth far outpaced that of the overall manufacturing sector in the fiscal year
Annual growth of ‘food products and beverages’ from IIP (%)
Source: Ministry of Statistics and Programme Implementation (MOSPI), Aranca Research
Notes: ASI - Annual Survey of Industries IIP - Index of Industrial Production
Food Processing
-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
MARCH
2013
Strong growth in the sector also evident from trends in IIP
8 8 For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
→ Exports of processed food and related products* stood at USD19.7 billion in FY11, thereby recording an average annual growth of 14.7 per cent since FY09
→ Exports of APEDA products have grown to USD17.9 billion in FY12 as compared to USD11.5 bllion in FY11
→ Main export destinations for food products have been the Middle East and South East Asia
Exports of processed food and related items (USD billion)
Source: Agriculture & Processed food products Export Development Authority (APEDA,) Aranca Research;
* includes APEDA products (processed fruits and vegetables, animal products, cereals, and other processed food items) and
Non - APEDA products (oil meals, marine products, spices, sugar and molasses, tea, coffee, etc.)
Food Processing
6.7 6.2 8.2
8.3 7.4
11.5
FY09 FY10 FY11
Export of APEDA products Export of Non APEDA products
MARCH
2013
Exports of processed food and related products has also been rising steadily
9 9 For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
→ 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
Food Processing
Shares in non-APEDA exports (FY11)
Source: APEDA, Aranca Research
Shares in APEDA exports (FY12)
Source: APEDA, Aranca Research
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
MARCH
2013
Shares in exports of processed food and related products
10 10 For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
→ The unorganised sector accounts for 42 per cent of India’s food processing industry
→ The sizeable presence of small scale industries points to the sector’s role in employment generation
Unorganised sector has the largest share in the sector *
Source: Ministry of Food Processing Industries, Aranca Research * The figures have been taken from MOFPI’s annual report for
FY10 where FY indicates Indian financial year (April - March)
Food Processing
42%
25%
33%
Unorganised sector
Organised sector
Small scaleindustries
MARCH
2013
Large presence of the unorganised sector … (1/2)
11 11 For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
→ Rice mills account for the largest share of processing units in the organised sector
→ The government’s focus on infrastructure is likely to see a sharp rise in the number of cold storage units in the years ahead
Shares in production by value and volume (FY11)
Source: Ministry of Food Processing Industries, Aranca Research
Food Processing
70%
50%
30%
50%
By Volume By Value
Unorganised sector Organised sector
MARCH
2013
Large presence of the unorganised sector … (2/2)
12 12 For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
→ In FY09, the sector employed 48 million people
→ Policymakers have identified the food processing sector as a key one in encouraging labour movement from agriculture to manufacturing
Healthy contribution to employment generation (FY09)
Source: Ministry of Food Processing Industries, Aranca Research
Notes: FY - Indian financial year (April - March)
Food Processing
Food processing
industry
Direct employment
(13 million)
Indirect employment
(35 million)
MARCH
2013
Food processing is a key contributor to employment generation in India
13 13 For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
Changing consumer tastes
Entry of international companies
• Liberalisation and growth of organised retail have made the Indian market more attractive for global players
• With a large agriculture sector, abundant livestock, and cost competitiveness India is fast emerging as a sourcing hub of processed food
Rising business and product innovation
• Companies have been moving up the value chain; for example, cooperatives are transitioning from being pure producers of milk to offering a wide range of dairy products
• Firms, both domestic and global, have been focussing on product innovation to cater to domestic tastes, while also introducing international flavours
• 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
Food Processing MARCH
2013
Notable trends in the Indian food processing sector
14 14 For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
Food Processing
Alcoholic beverages
Aerated soft drinks and packaged drinking water
Packaged food
Fruits, vegetables, processed grain
Cooperative societies: Gujarat (GCMMF), Andhra Pradesh (APDDCF), Karnataka (KMF), Maharashtra (Mahasangh), Punjab (MILKFED), Tamil Nadu (TCMPF), Delhi (NDDB)
Milk and milk products
Meat, poultry and marine products
Consumer food
MARCH
2013
Cooperatives dominate dairy sector; private players lead others
15 15
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: Operation Flood, Amul
Opportunities
Useful information
For updated information, please visit www.ibef.org
Food Processing MARCH
2013
16 16 For updated information, please visit www.ibef.org GROWTH DRIVERS
Strong
government
support
Growing demand Strong domestic demand Supply-side advantages Rising export opportunities
Rising disposable incomes
Growing middle class,
urbanisation, a young population
Changing lifestyles and food
habits
India’s greater integration with the
global economy
Proximity 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 base aids dairy and meat
processing sector
Inland water bodies, long
coastline help marine products
Food Processing
Policy support
Vision 2015 plan targets trebling of food processing
sector
Mega food parks, Agri Export Zones to attract FDI and aid infrastructure
Approval of National Mission
on Food Processing
MARCH
2013
Strong fundamentals and policy support aiding growth
17 17 For updated information, please visit www.ibef.org
Source:, Aranca Research Note: E - estimate, F - forecast
GROWTH DRIVERS
Rising disposable incomes
• Strong growth in per-capita income has resulted in greater demand for food items
• Per capita income is expected to expand at a CAGR of 8.5 per cent over 2010-2017 to USD2,428
• 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
Food Processing
Rising per-capita income in India
-5%
0%
5%
10%
15%
20%
25%
30%
0
500
1,000
1,500
2,000
2,500
3,000
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
E2
01
2F
20
13
F2
01
4F
20
15
F2
01
6F
20
17
F
Per capita income, USD, LHS Annual growth rate, RHS
MARCH
2013
Income growth is a key driver of growing domestic demand for processed food
18 18 For updated information, please visit www.ibef.org
Source: McKinsey Quarterly, Aranca Research
GROWTH DRIVERS
Food Processing
Strivers: annual income
INR500,000 -1,000,000
Seekers: annual income
INR200,000 -500,000
Deprived annual income
<INR90,000
Aspirers: annual income
INR90,000 -200,000
Globals: annual income
>INR1,000,000
0
10
20
30
40
50
60
70
2005 2010 2015 2020 2025
million households
Strivers Seekers Deprived Aspirers Globals
Changing wealth dynamics of India’s population
MARCH
2013
A growing middle class and urbanisation has also aided growth in the sector
Growing middle class, urbanisation
• Strong economic growth since the 1990s has led to -
• Rapid urbanisation and a growing middle class
• Nuclear families and dual income households
• Coupled with a young population and increasing media penetration, this has led to a surge in demand for packaged food, alcoholic and non-alcoholic beverages, snacks, savouries, etc
19 19
-4
0
4
8
12
16
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Emerging & developing economies Central & Eastern Europe
Developing Asia Latin America & the Caribbean
Middle East & North Africa
For updated information, please visit www.ibef.org
Source: IMF WEO (April 2012), Aranca Research
GROWTH DRIVERS
Food Processing
%
Growth in key regions of the global economy
MARCH
2013
Exporters gaining from rising global demand and location advantages … (1/2)
Rising demand from rest of the word
• Share of exports in total output of processed food stood at 21.2 per cent in FY11
• This has primarily resulted from -
• Greater exports to advanced economies
• More demand from emerging/ developing economies as they experience strong growth
20 20 For updated information, please visit www.ibef.org
Source: Ministry of Food Processing Industries, Aranca Research
GROWTH DRIVERS
Food Processing
Top ten destination countries of India’s exports of processed food and agriculture related products
(in USD million)
298 338
401 464 502
591 650 672
967 1,079
Pak
ista
n
Ku
wai
t
Ind
on
esi
a
Vie
tnam Ir
an
Ban
glad
esh
Mal
aysi
a
Un
ite
d S
tate
s
Sau
di A
rab
ia
UA
E
MARCH
2013
Exporters gaining from rising global demand and location advantages … (2/2)
Supply-side advantages
• Growth in food product exports has been aided by -
• Significant improvements in product and packaging quality
• Greater private sector participation
• India has a location advantage - it is geographically close to key export destinations (Middle East, South East Asia)
• United Arab Emirates was the top export destination of processed food and agriculture related products, followed
by Saudi Arabia and the United States
21 21 For updated information, please visit www.ibef.org GROWTH DRIVERS
Food Processing
→ India’s 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 18#
Cattle (million) 210.2 1**
Source: World bank, FAOSTAT, CIA World Fact book, Aranca Research
Notes: * - for the year 2009; # - for the year 2011, ** - for the year 2010
Production (million tonnes)
Global rank (2011)
Milk (Cow & Buffalo)
107.2 1
Pulses (nes) 7 1
Fruits (fresh, nes) 7.6 1
Bananas 29.6 1
Tea 0.96 2
Rice (Paddy) 155.7 2
Sugarcane 342.3 2
Vegetables (fresh, nes)
27.5 2
Wheat 86.8 2
Potatoes 42.3 2
MARCH
2013
India has a distinct competitive advantage over peers
22 22 For updated information, please visit www.ibef.org GROWTH DRIVERS
Notes: FDI - Foreign Direct Investment
Food Processing
• 100 per cent FDI under automatic route (except for alcohol, beer, and sectors reserved for small scale industries)
• Repatriation of capital and profits permitted
Encouragement to private sector
Tax incentives and other sops
• Import duty scrapped on capital goods and raw materials for 100 per cent export - oriented units
• 100 per cent tax exemption for 5 years followed by 25 per cent tax exemption for the next 5 years for new agro-processing industries
• Full excise duty exemption for goods that are used in installation of cold storage facilities
Relaxed FDI norms
• 100 per cent 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
MARCH
2013
Strong policy support gives food processing sector a boost … (1/2)
23 23 For updated information, please visit www.ibef.org GROWTH DRIVERS
Food Processing
• 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
Focus on infrastructure
• Investment-linked tax incentive of 100 per cent deduction of capital expenditure for setting up and operating cold chain facilities (for specified products), and for setting up and operating warehousing facilities (for storage of agricultural produce)
Incentives for development of storage facilities
Notes: MoFPI - Ministry of food processing industry
MARCH
2013
Strong policy support gives food processing sector a boost … (2/2)
24 24 For updated information, please visit www.ibef.org
Agri Export Zones in India
GROWTH DRIVERS
Food Processing
Andhra Pradesh: vegetables, mango pulp, grapes, gherkins
Maharashtra: Grapes, grape wine, 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
Jammu & Kashmir: Apples, walnuts
Punjab: Basmati rice, vegetables
Himachal Pradesh: Apples
Rajasthan: Coriander, cumin
Gujarat: Mangoes, vegetables, sesame seeds
Assam: Ginger
Source: APEDA, Aranca Research
20
8 6
5
5
4
4
4 4
Maharashtra
West Bengal
Andhra Pradesh
Madhya Pradesh
Karnataka
Uttaranchal
Uttar Pradesh
Tamil Nadu
Other States
MARCH
2013
25 25 For updated information, please visit www.ibef.org
→ FDI inflows into agriculture and food processing between April 2000 and August 2012 stood at USD4.7 billion
→ Demand growth, supply advantages, and policy support have been instrumental in attracting FDI
GROWTH DRIVERS
Food Processing
Notes: FDI - Foreign Direct Investment,
Cumulative FDI inflows (Apr 2000 - Aug 2012) into the food and agriculture sector
Source: Department of Industrial Policy & Promotion, Aranca Research
0
200
400
600
800
1,000
1,200
1,400
1,600
Agr
i ser
vice
s
Foo
d p
roce
ssin
g
Ferm
en
tati
on
Ve
geta
ble
oil
Agr
i mac
hin
ery
Tea
and
Co
ffe
e
Suga
r
0%
10%
20%
30%
40%
Cumulative FDI inflow (USD million)
Share of total FDI inflow (%) - right axis
MARCH
2013
Foreign investments flowing in; rise in plan expenditure … (1/2)
26 26
36.3%
45.4%
11.5%
5.5%
1.3% Infrastructuredevelopment
National Mission onFood Processing
Strengthening ofinstitutions
Food Safety, R&D andPromotional Activities
Innovation FundScheme
For updated information, please visit www.ibef.org
→ The government’s main focus is on supply-chain related infrastructure like cold storage, abattoirs and food parks
GROWTH DRIVERS
Food Processing
12th Five Year Plan (2012-17) outlay shares: food processing
Source: Ministry of Food Processing Industries (2009-10 Annual Report), Aranca Research
Notes: GOI - Government of India
Plan allocation to the food processing sector: USD2.9 billion
MARCH
2013
Foreign investments flowing in; rise in plan expenditure … (2/2)
27 27 For updated information, please visit www.ibef.org GROWTH DRIVERS
PE investments in the food and agriculture totaled USD650 million during 2008-11
Company Investor Type of business Deal value (USD
million)
Nuziveedu Seeds Blackstone Group Floriculture 80.0
Prakash Snacks Pvt Ltd Sequoia Capital Snacks 30.0
Amalgamated Beans Coffee Trading Co Darby Asia Investors Non-citrous fruit farming
25.0
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
Bakers Circle India Pvt. Ltd
GEM India Advisors Ltd Frozen doughs and desserts
2.82
Food Processing PE
dea
ls
Jan
2010
- N
ov 2
012
MARCH
2013
Rising Private Equity (PE) funding; M&A activity stable … (1/2)
28 28 For updated information, please visit www.ibef.org GROWTH DRIVERS
Source: Thompson One Banker, Aranca Research Notes: M&A - Mergers and Acquisitions
Food Processing
M&A activity was steady in 2011
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
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
Candico India Keventer Agro Candy items 11.2
M&
A d
eals
Ja
n 20
10 -
Nov
201
2
MARCH
2013
Rising Private Equity (PE) funding; M&A activity stable … (2/2)
29 29 For updated information, please visit www.ibef.org
→ 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
GROWTH DRIVERS
Foreign Players Indian Partner Type of business Stake ratio Year
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
Source: Thompson ONE Banker, Aranca Research Note: JV - Joint Venture
Food Processing MARCH
2013
Sector has been attracting foreign JV partners for a long time
30 30
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: Operation Flood, Amul
Opportunities
Useful information
For updated information, please visit www.ibef.org
Food Processing MARCH
2013
31 31 For updated information, please visit www.ibef.org SUCCESS STORIES: OPERATION FLOOD, AMUL
Food Processing
→ 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 -
→ India’s milk production rose to 127.3 million metric tonnes (mmt) in FY12 from 21.2 mmt in FY1969
→ India retained its position as the world’s largest milk producer in 2011-12 with an annual production of 127.3 million metric tonnes
→ Dairy cooperatives offer employment opportunities to about 12 million farm families
Source: National Dairy Development Board, GCMMF (www.amul.com), Aranca Research
MARCH
2013
Operation Flood: India gains self sufficiency in milk production … (1/2)
32 32 For updated information, please visit www.ibef.org SUCCESS STORIES: OPERATION FLOOD, AMUL
Source: GCMMF (www.amul.com), Aranca Research
Food Processing
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)
MARCH
2013
Operation Flood: India gains self sufficiency in milk production … (2/2)
33 33 For updated information, please visit www.ibef.org SUCCESS STORIES: OPERATION FLOOD, AMUL
Source: GCMMF (www.amul.com), Aranca Research Notes: CAGR - Compound Annual Growth Rate
FY - Indian financial year (April - March)
Food Processing
→ Gujarat Cooperative Milk Marketing Federation (GCMMF) is the largest food products marketing organisation in India
→ Set up in 1967, it is India’s largest exporter of dairy products and has been accorded ‘trading house’ status
0.5 0.6 0.6 0.6
0.8 0.9
1.1
1.4
1.7
2.0
2.4
0.0
0.5
1.0
1.5
2.0
2.5
3.0
FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12
GCMMF (Amul) sales (USD billion)
MARCH
2013
The Amul saga: a cooperative movement leads the way … (1/2)
34 34 For updated information, please visit www.ibef.org SUCCESS STORIES: OPERATION FLOOD, AMUL
Food Processing
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 product exports for 11 consecutive years
APEDA
CIO International IT Excellence Award (2003) for positive business performance through resourceful IT management and best practices
IDG’s CIO Magazine
(USA)
International Dairy Federation Marketing Award (2007) for Amul’s pro-biotic ice cream launch
International
Dairy Federation
Source: GCMMF (www.amul.com), Aranca Research
MARCH
2013
The Amul saga: a cooperative movement leads the way … (2/2)
→ Main brand: Amul
→ Products: milk (including flavoured), butter, margarine, cheese, curd, desserts, infant food
35 35
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: Operation Flood, Amul
Opportunities
Useful information
For updated information, please visit www.ibef.org
Food Processing MARCH
2013
36 36 For updated information, please visit www.ibef.org OPPORTUNITIES
Notes: PPP - Public Private Partnership, AEZ - Agri Export Zones
FDI - Foreign Direct Investment
Opportunities
Food Processing
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
MARCH
2013
37 37
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: Operation Flood, Amul
Opportunities
Useful information
For updated information, please visit www.ibef.org
Food Processing MARCH
2013
38 38 For updated information, please visit www.ibef.org USEFUL INFORMATION
Industry Associations
Agricultural and Processed Food Products Export Development Authority (APEDA) NCUI Building 3, Siri Institutional Area, August Kranti Marg, New Delhi - 110 016 Phone: 91-11-26513204, 26514572, 26534186 Fax: 91-1126526187 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]
Food Processing MARCH
2013
39 39 For updated information, please visit www.ibef.org
Glossary
→ AEZ: Agri Exports Zones → MFP: Mega Food Parks
→ CAGR: Compound Annual Growth Rate
→ FDI: Foreign Direct Investment
→ MT: Million Tonnes
→ IIP: Index of Industrial Production
→ FY: Indian Financial Year (April to March)
→ So FY12 implies April 2011 to March 2012
→ GOI: Government of India
→ INR: Indian Rupee
→ PPP: It could denote two things (mentioned in the presentation accordingly) -
→ Purchasing Power Parity (used in calculating per-capita GDP)
→ Public Private Partnership (a type of joint venture between the public and private sectors)
→ PE: Private Equity
→ APEDA: Agriculture & Processed food products Export Development Authority
→ GCMMF: Gujarat Cooperative Milk Marketing Federation
→ USD: US Dollar
→ Conversion rate used: USD1= INR48
→ Wherever applicable, numbers have been rounded off to the nearest whole number
USEFUL INFORMATION
Food Processing MARCH
2013
40
India Brand Equity Foundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared by Aranca in consultation with IBEF. All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of IBEF. This presentation is for information purposes only. While due care has been taken during the compilation of this
presentation to ensure that the information is accurate to the best of Aranca and IBEF’s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. Aranca and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation. Neither Aranca nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation.
For updated information, please visit www.ibef.org DISCLAIMER
Food Processing MARCH
2013
Disclaimer