Chhattisgarh report phd

ChhattisgarhAN INVESTMENT OPPORTUNITY IN FOOD PROCESSING SECTOR

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Dr. RAMAN SINGH

CHIEF MINISTER

DO. No. ......................./VIP/

DATE ..................................

MANTRALAYA,

NAYA RAIPUR, CHHATISGARHCHIEF MINISTER

Message

It is hearting to know that the PHD Chamber of Commerce and Industry

is organizing “WELCOME TO CHHATTISGARH-INVESTMENT

OPPORTUNITIES IN FOOD PROCESSING INDUSTRY” on 20th August,

2015 in New Delhi, which would give us an opportunity to showcase our

strengths in agro and food processing sectors.

This initiative by the esteemed chamber will de�nitely add a lot of value

and communicate the natural elements that the Chhattisgarh is endowed with,

which is conducive for the industries in the agro and food processing sector to

�ourish in the state. It’s time that the state transcends its own achievement of

being termed as the ‘Rice bowl of Central India’and takes a step towards being

called the ‘Food Bowl of India’ leveraging nature’s bounty to the state in terms

of enriched agriculture and forests . The conference would bring the potential

investors in the particular sector on a common interactive platform with the

representatives of the state government machinery and thus ensure smooth �ow

of information which would be bene�cial for both the stakeholders.

The initiative being taken by PHD Chamber Would be useful to all

stakeholders in agro and Food Processing domain.

I wish the event a grand success.

(Dr. Raman Singh)

3001/Hcm/JS

17/08/2015

Amar AgrawalMinister

Urban Development & Administration,Commercial Tax and Commerce & Industries

Department

C-4, Shankar Nagar Road, Raipur(ChhattisgarhTelephone No. : (Office) : 0771-2221109 0771-2510539(Residence) : 0771-2331020 : 0771-2331021Fax : 0771-2445836No. : PS-/HM/2015/10Date : 17.08.2015

Message

(Amar Agrawal)

I am delighted to know that PHD Chamber of Commerce and Industry is organizing interaction with investors' with the intent to showcase the opportunities available in the state of Chhattisgarh specific to agriculture and food processing sectors. The state has scaled scores of heights and still exploring hitherto untouched or little touched vistas and a lot of growth is to be accomplished by virtue of that.

Chhattisgarh's immense potential which can nurture the sector of food processing is known beyond boundaries. However, such an initiative being staged by PHD Chamber is imperative to communicate state's potential and further consolidating such potential and accomplish growth.

I express my heartfelt good wishes to PHD Chamber for their Endeavour and hope that many more are in the offing.

Chhagan Lal MundhraChairman

CHHATTISGARH STATE INDUSTRIALDEVELOPMENT CORPORATION LTD.(A Government of Chhattisgarh Undertaking)First Floor, Udyog Bhawan, Ring Road No. 1,Telibandha, Raipur 492 006 (C.G.)Ph : 91-771-2583793 Fax : 91-771-2583794Website : www.csidc.inE-mail : [email protected], [email protected]

No. CSIDC/2015/5351Raipur : dated 14/08/2015

MESSAGE

I take this opportunity to applaud to initiative taken by PHD Chamber of

Commerce and industry to provide this platform for interaction with investors in

agro and food processing area. It would be leap towards the state’s agenda of inviting investments in this

particular sector. Nature has endowed the state with plethora of resources which

makes it a sought after destination for investments in this sector once such

potential is communicated to the potential investors. I am very sure that the

upcoming event will be right platform to ensure an effective communication to this

effect. We hereby look forward towards a grand success of the event. All the Best.

(Chhagan Lal Mundhra)Chairman

Government of ChhattisgarhDepartment of Commerce and Industries

Mantralaya, Mahanadi Bhawan, Naya Raipur, Chhattisgarh

Message

The state of Chhattisgarh has accomplished a short yet long journey over last one and a half decade. The journey is short in terms of passage of time and yet long in terms of the achievements. The value proposition of the state has been accepted across wide boundaries and this has generated the need to explore hitherto unexplored boundaries in the quest for growth and development.

The soil of the state has embodied in its productivity and the same is backed by the willingness of the administration to leverage on the potential. The investors' interaction being organized by PHD Chamber of Commerce and Industry in New Delhi is of immense value as it is to create a lot of value in encouraging investments in the state in the field of agro and food processing for which the state enjoys a natural edge.

I commend this venture by the reputed chamber and look forward to many such initiatives.

(Subodh Kumar Singh) Secretary Department of Commerce & Industries

Sunil MishraIFS

Managing Director

CHHATTISGARH STATE INDUSTRIALDEVELOPMENT CORPORATION LTD.(A Government of Chhattisgarh Undertaking)First Floor, Udyog Bhawan, Ring Road No. 1,Telibandha, Raipur - 492 006 (C.G.)Ph : 91-771-2583793 Fax : 91-771-2583794Website : www.csidc.inE-mail : [email protected], [email protected]

No. CSIDC/2015/5352

Raipur, Dated 14/08/2015

MESSAGE

It is a matter of great privilege that PHD Chamber of Commerce and

Industry is organizing a one day conference with the sole objective of exhibiting

unexplored investment opportunities in the state in agro and food processing

sectors. Such an enterprising move will definitely take leaps in bringing the state

to a focal point wherein it would be recognized as a potential investment

destination for food processing sector and ensure growth for both the state as

well as the investors.

I appreciate the Chamber for such an Endeavour and wish them all the

best.

(Sunil Mishra) Managing Director

illl MiM h

Kartikeya GoelI.A.S.

Director

Directorate of Industries,ChhattisgarhUdyog Bhawan, Telibandha, RavigramRing Road No. 1, Raipur (C.G.) 492006Tel: (0771) 2583855, 2583650, 52, 53, 54Fax: (0771) 2583651E-Mail : [email protected]

MESSAGE

No. .......................................

Raipur, Dated 14/08/2015

“Success comes when opportunity meets preparation". The State of Chhattisgarh is a "hidden jewel" and full of opportunities. The upcoming event organized by the PHD Chamber of Commerce and Industry will lay a new foundation of preparedness to leverage on such opportunities.

The basic intent behind the event is to showcase the opportunities prevailing in the State of Chhattisgarh, specific to the field of Agro cum Food Processing. Such an event will certainly attract the attention of potential investors to accomplish their vision of growth. The State has a lot to offer to such . fraternity of investors and in its turn aspires to industrialise harmoniously, thus ensuring inclusive growth.

The move by the Chamber deserves applause and I wish them all the best. .

Director - Industries(Kartikeya Goel)

................................................................ ........................... ................. .............

K eya GoelDirector

PHD Chamber of Commerce and Industry, a true representa ve of the Industry, over past 110 years has forged ahead leveraging its legacy, promo ng knowledge across industries with key focus to represent the valid interests of all local, na onal, regional, bilateral and trans-na onal industry and their issues. Today the Chamber stands tall and provides the desired pla orm for exchanges between the industry and the policy makers. Especially in the States, the Chamber has reached a point where acknowledgment of these contribu ons is now fairly proven, though s ll more is to be done.

The leadership of the state of Chha sgarh spearheaded by the Hon'ble Chief Minister Dr. Raman Singh is extremely commendable and logical, amongst states of India. I have had the good fortune of discussing with him on behalf of PHD Chamber on his progressive agenda. The outcome has started to evolve and his invita on to us to promote the state ini a ves and to take the Chha sgarh state's growth endeavor as an extended arm of the government has started to take progressive shape. Today's event which is to show-case the state amongst industrialists and business houses from across northern and central India and a ract/offer investors to pitch base in the state, is an example of this endeavor. The state's promo onal track record coupled with untapped poten al makes it a sought a er des na on for Food Processing Industries. The state government machinery is leaving no stone unturned to promote Chha sgarh in this respect, alongside the other significant industries in the sectors of mining and allied manufacturing industries and IT.

In today's event's context, a structured promo on of the vital Food Processing industry shall benefit the state and the investors commonly, and auger well for the Indian economy overall.

I compliment the secretariat of the Chamber and its concerned commi ees who have given shape to this agenda. I am delighted to welcome and host the state government departments to Delhi, at the Chamber's premises, and specially extend my gra tude to all state officials for entrus ng their faith and belief in PHD Chamber.

I wish today's delibera ons including B2B Mee ngs between the industry stake-holders and the state government all success.

ALOK B. SHRIRAMPresident

MESSAGE

Alok B. Shriram

PHD House, 4/2, Siri Ins ea, August Kran g, New Delhi - 110 016 (India)Tel. : +91-112686 3801-04, 49545454, 49545400 * Fax : +91-11-2685 5450

E-mail : [email protected] * Website : www.phdcci.in

Connect with us :

“Skilling India for Global Competitiveness”

PHD House, 4/2, Siri Ins ea, August Kran g, New Delhi - 110 016 (India)Tel. : +91-112686 3801-04, 49545454, 49545400 * Fax : +91-11-2685 5450, 4954 5451


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Veenu JainChairman, Chha eePHD Chamber

A strong and dynamic food processing sector plays a vital role In diversifica and commercializaof the food produces, enhancing shelf life, ensuring value to the produces, generate employment, and enhance the Income of stakeholders. The e taken by the Government of Chha arh have created an organized pla orm for a investment. This is a welcome move and all credit goes to the Hon'ble Chief Minister Dr. Raman Singh for its Implementa

It is a pleasure to note that the State Government has taken several developmental es such as crea of modern infrastructure, se up of Mega Food Parks and integrated cold chains etc. in order to provide assistance to the food processing industry under various plans and schemes. With the support of the State Government, the food processing industry will surely achieve new heights.

To contribute towards this progress the PHD Chamber's e to organize An Evening for Business Linkage with Chha arh : Welcome to Chha arh - A Showcase by the Government "Investment

in the Food Processing Industry" today at PHD House, New Delhi, is praise-worthy. On this momentous occasion I am pleased to find a very relevant Knowledge Report being unveiled.

I convey my compliments to the State Government of Chha arh and PHD Chamber for conduct of this meaningful programme. It shall help industry stakeholders from all across other states to do business in Chha arh.

Veenu Jain


PHD House, 4/2, Siri Ins ea, August Kran g, New Delhi - 110 016 (India)Tel. : +91-112686 3801-04, 49545454, 49545400 * Fax : +91-11-2685 5450, 4954 5451


Connect with us :

It is a ma er of great pleasure that PHD Chamber of Commerce and Industry is organizing An Evening for Business linkage with Chha arh : Welcome to Chha arh - A Showcase by the Government "Investment

in the Food Processing Industry" on 20th August, 2015 at PHD House, New Delhi.

The sector of food processing industry is developing across India in leaps and bounds. The State Government of Chha arh has created a significant con and provided for further enhancing this sector. The Government's offer to meet and interact with stakeholders from this sector and invite them to do business with ease in the State of Chha arh is a further step which will encourage industrial growth, create employment and enrich technology. The Indian economy will therefore grow rapidly.

India is fast emerging as a sourcing hub of processed food. Liberaliza and the growth of organized retail have made the Indian market even more a e for domes and global players. India's food market stands well poised due to favourable economic paradigm in a and life styles of consumers. Processed food brands and related products have also been rising steadily and have captured the domes market's fancy. This implies the need to increase food processing in the country, involve superior technology and packaging etc.

is in the States of India, to contribute towards this mission.

On behalf of the PHD Chamber and being the Chairman of the Agri-Business ee, it is my deep pleasure to welcome the Chha arh Government amidst us, and for their focus on progressive growth of this important sector.

I compliment the ee of the Chamber and wish this event a great success.mmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmplplppppppplppppppppppppppllpllplppppppplllpppppppppppppppppppppppppp imimimimimmmmmmmmmmimimiiimmmmmmmmmmmmimimimimmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmeneeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee t the


N.M. KEJRIWALee

PHD Chamber

PHD House, 4/2, Siri Ins ea, August Kran g, New Delhi - 110 016 (India)Tel. : +91-112686 3801-04, 49545454, 49545400 * Fax : +91-11-2685 5450


Connect with us :

Amongst the thrust areas of focus of this illustrious Chamber, agriculture and food processing as industries, have a very special place and The Chamber has always risen to the challenges of pr growth of this sector, and today's endeavour is yet another live example of this fact.

I must admit that without the Chha arh state government's e decision to entrust the assignment upon the Chamber for the seamless conduct of today's path·breaking programme, the secretariat of the Chamber and its c ees could not have put their best foot forward. I thank the state government for their e and asking the Chamber to partner Chha arh on this project.

Chha arh is a rapidly developing state and offers enormous for stake-holders across the en e food value chain to capitalize on the available for doing business. The government has been steadily engaged over the past several years in taking various developmental

es and has been bringing in more investments to all pr e areas of business viability.

I am privileged to invite all delegates, poten investors and stake-holders from the sector of Food processing to experience the show-casing of Chha arh's investment friendly policies which is futuris and a e.

The Chamber is proud to partner the state, and I am happy to be a part of this endeavor with our invaluable c ees of the secretariat. I also compliment the Chamber's c ees of Chha arh State and Agri-business for bringing out this 'knowledge report'.

Saurabh SanyalSSSaaaaaaaaaaaauuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuurrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrraaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaabbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh SSannnyal

Saurabh SanyalSecretary General


TABLE OF CONTENTS LIST OF FIGURES

LIST OF TABLES

Table 2-1: Agriculture Production in Major Districts by

Food Type

Table 4-1: Potential Cluster for Storage Infrastructure

Facility

Table 9-1: List of Government Agencies Facilitating

Food Processing Industries

1. India Food Processing Industry Outlook to 2025

2. Chhattisgarh Food Processing Industry

3. Agriculture Overview in Chhattisgarh 3.1 Grains & Cereals 3.2 Fruits 3.3 Vegetables 3.4 Spices

4. Opportunities in Food Processing Industry 4.1 Horticulture 4.1.1 Mango 4.1.2 Banana 4.1.3 Papaya 4.1.4 Guava 4.2 Agriculture 4.2.1 Maize 4.2.2 Rice 4.3 Small & Medium Scale Allied Industries

5. Upcoming Mega Food Parks 6.1 Indus Best Mega Food Park 6.2 Raipur Mega Food Park 6.3 Dhamtari Mega Food Park

6. Regulatory Framework for Food Processing Industry

7. Industry Roadblocks 7.1 Inadequate Industrial Infrastructure 7.2 Lack of Awareness for Improved Quality Farming 7.4 Insufficient Research & Development Centres

8. Food Processing Industry – Future Prospects

9. Government Agencies Facilitating the Food Processing Industry

Figure 1-1: India - Food Processing Industry (Billion

INR), 2012, 2015, 2020 & 2025

Figure 1-2: India - Food Processing Market by

Segment (%), 2014

Figure 3-1: Agricultural Production by Type (%),

FY2014

Figure 3-2: Grains & Cereals Production (Million

Metric Tons), FY2011 to FY2014

Figure 3-3: Grains & Cereals Production by Type (%),

FY2014

Figure 3-4: Fruits Production (Million Metric Tons),

FY2011 to FY2015

Figure 3-5: Fruits Production by Type (%), FY2015

Figure 3-6: Vegetables Production (Million Metric

Tons), FY2011 to FY2015

Figure 3-7: Vegetables Production by Type (%),

FY2015

Figure 3-8: Spices Production (‘000 Metric Tons),

FY2011 to FY2015

Figure 3-9: Spices Production by Type (%), FY2015

Figure 4-1: Mango - Potential for Processing (‘000

Metric Tons), FY2015

Figure 4-2: Banana - Potential for Processing (‘000


Figure 4-3: Papaya - Potential for Processing (‘000


Figure 4-4: Guava - Potential for Processing (‘000


Figure 4-5: Maize - Potential for Processing (‘000


Figure 4-6: Rice Production (‘000 Metric Tons),

FY2011 to FY2014

1. India Food Processing Industry Outlook to 2025

INDUSTRY OVERVIEW

India is the world’s second largest food producer with the potential to be the biggest, backed by its food and agricultural sector, yet barely 2.2% of fruits and vegetables are processed with almost a total of 37,175 registered food processing units1. The challenges of insufficient infrastructure are leading to wastage and undue advantages for the middlemen, at the cost of farmers’ remuneration. The total food production in India is likely to double in the next 10 years, an expansive agricultural sector, copious livestock, and cost efficacies will enable India to swiftly emerge as a sourcing hub for processed food. It is expected that in the coming years the food processing sector will be able to bridge the gap between farmers and consumers.

Government of India has declared development of the food processing industry as a priority and plans to invest in this sector in the near future. Looking at this massive opportunity and government initiative to develop food processing, the sector has fetched FDI inflows (Foreign Direct Investment) of INR 25 Billion (US$ 416.6 Million) till January in FY 20152. Almost 70% of the sector is dominated by the unorganized and small-scale players, indicating the huge potential inherent in the Indian food processing sector. The Indian food processing sector is growing at an average rate of 12.5% per annum and it is anticipated that the industry will transcend an INR 30,600 Billion (US$ 510 Billion) mark by 2025 owing to the rise in middle class income, changing urban lifestyle and modern retail trade. Moreover, advancements on the technology front, people seeking more packaged and nutritional food products with variety, and limited time availability due to fast paced life has provided further tailwind to the food processing industry.

The Indian food processing industry accounts for 32% of the country’s total food market, 14% of manufacturing GDP, 13% of India’s exports and 6% of total industrial investment. In the FY2016, the total budget allocation for the food processing industry is INR 4.87 Billion (US$ 81.16 Million).

2012 2015e 2020f 2025f

CAGR 12.5%

Figure:1-1 India - Food Processing Industry (Billion INR), 2012, 2015, 2020 & 2025

Source: ICAR, RNCOSNote: f = RNCOS Forecast

1Annual Survey of Industries2Department of Industrial Policy and Promotion

11640

16500

30600

6637

14 Chhattisgarh: An Investment Opportunity in Food Processing Sector

INDUSTRY DRIVERSS

• India being an agro-based economy has abundant resources to support the flourishing food processing

industry

• Globally, India ranks first in milk production and second in the production of fruit and vegetables

• Increasing interest for ready-to-eat food products among young generation and working class

• Tier-I and Tier-II cities exhibiting high demand with rising disposable income

• Consumers ready to experiment with unique processed food offerings

• Regional food processing players are tapping the native market

• Currently, 25 projects are under implementation. Out of these, 21 Mega Food Parks have been accorded

final approval and are at various stages of implementation, while 4 Mega Food Parks are progressing

towards meeting the conditions for final approval.

• National program, “Make-in-India” creating prospects for manufacturing industries

The Indian food processing market was close to INR 4,000 Billion (US$ 66.6 Billion) in 2014. The organized sector occupied 25% of the market, and is expected to grow with a CAGR of 16% during 2014-2020. Dairy sector accounted for the largest share i.e. 33% in the Indian food processing market, followed by Grains and Convenience foods at 10% each. It is expected that Convenience Foods will exhibit an increase of 4% in share by 2020 owing to its increasing penetration among the newer generation.

Figure:1-2 India - Food Processing Market by Segment (%),2014

Source: RNCOS Note: Others include alcoholic beverages, meat and poultry

Diary Products

Grains

Convenience Foods

Fruits & Vegetables

Others

15Chhattisgarh: An Investment Opportunity in Food Processing Sector

33%

10%

10%5%

42%

2. Chhattisgarh Food Processing Industry Chhattisgarh is one of the major states that have potential for the food processing industry. The main locations for the existing food processing units are Bilaspur, Raipur, Raigarh, Durg and Dhamtari. The Chhattisgarh state government is taking keen interest to develop its food processing industry, by providing high-tech farming equipments to farmers and subsidy to investors. Moreover, being a power surplus state, Chhattisgarh makes a viable option for setting up food processing unit. Therefore, based on the above factors, it is expected that with abundance of variety of crops, government initiatives, and technological advancements, growth will be fuelled for the state’s food processing industry.

The state government is in process to develop food processing parks in PPP (Public Private Partnership) mode. The government has identified 10 production clusters for setting up the processing plants. The state government has also established 25 production units for value added services such as grading, processing, waxing, extraction and distillation. These units include four cashew processing units, one banana grading and waxing plant, one fruit & vegetable grading unit, four grading units for tomato and potato, 12 distillation units for aromatic crops, and three aloe vera juice/gel extraction units.

Apart from government initiatives, many private sector companies are also investing in the Chhattisgarh’s food processing sector. Recently, over half-a-dozen companies had expressed interest to invest in the food processing sector of Chhattisgarh.

Following are the five major production clusters which have been identified based on the production and presence of cold chain storage units in the mentioned districts.

KEY HIGHLIGHTS

• Chhattisgarh is amongst the only five states in India to grow faster (Gross State Domestic Product (GSDP), 8.4%) than the national average (7.9%) during the 11th plan (2007-2011).

• State government is setting up a 150 Hectare mega food processing park at Dhamtari in Raipur district.

• Apart from that, two other private mega food parks i.e. Indus Best Mega Food Park and Raipur Mega Food Park are being set up in Raipur and Bemetara respectively.

• MoFPI has so far sanctioned two cold chain projects in district Raipur under its “Scheme for Cold Chain, Value Addition and Preservation Infrastructure.”

Source: RNCOS

Horticulture/Agriculture Major Districts

Banana Production Korba, Janjgir Champa, Baloda Bazar, Mahasamund, Bilaspur, Mungeli, Raipur

Mango Production Bilaspur, Koriya, Korba

Guava Production Koriya, Korba, Bilaspur

Papaya Production Bilaspur, Mungeli, Bemetara, Baloda Bazar

Maize Production Koriya, Surajpur, Korba, Dhamtari, Gariaband

Table 2-1: Agriculture Production in Major Districts by Food Type


3. Agriculture Overview in Chhattisgarh

Figure:3-1 Agricultural Production by Type (%), FY2014

Source: Advance Fourth Estimate Commissioner Land Record (SASA), Directorate Horticulture and Farm Forestry, Chhattisgarh

Grains & Cereals

Fruits

Vegetables

Spices

Chhattisgarh is the 10th largest state in India with an area of 13.79 Million Hectare, of which cultivable land area is 4.67 Million Hectare and forest land area is 6.35 Million Hectare. A total of 43% of the entire arable land is under cultivation. Out of this, rice occupies almost 66% of the total cropped area. Other major crops are coarse grains, maize, wheat, pulses etc. The region’s fertile land is also suitable for growing mango, banana, guava & other fruits and a variety of vegetables. The state produced 15.5 Million Metric Tons of agricultural products (food grains, vegetables, fruits and spices) in FY2014. Agricultural production grew at a CAGR of around 5.2% during FY2011 to FY2014.

17

48%

13%

35%

4%

Chhattisgarh: An Investment Opportunity in Food Processing Sector


Figure:3-3 Grains & Cereals Production by Type (%), FY2014

Source: Advance Fourth Estimate Commissioner Land Record (SASA)

Rice

Wheat

Coarse Cereal

Pulses

Rice production in Chhattisgarh is significantly high. Further, due to increased use of fertilizers and improved production technology, rice has become the most important crop in Chhattisgarh which is grown over an area of 3.7 Million Hectare. 90%

2%4% 4%

3.1 Grains & Cereals

FY2011 FY2012 FY2013 FY2014

7.0 6.8

8.3

7.5

CAGR 2.3%

Figure:3-2 Grains & Cereals Production (Million Metric Tons), FY2011 to FY2014

Source: Agricultural Statistics at a Glance, Ministry of Agriculture, Government of India, Advance Fourth Estimate Commissioner Land Record (SASA)

Chhattisgarh is one of the top performers in the food grain production in India. It is the 6th largest producer of rice in the country. Grains & Cereals accounted for over 48% of state’s agricultural produce in FY2014. With new and reformed government policies and incentives to the agricultural sector, the quality and quantity of production in the state is foreseen to show improvement in future.

Figure:3-5 Fruits Production by Type (%), FY2015

Source: Directorate Horticulture and Farm Forestry, ChhattisgarhOthers include: Orange, Cashew Nut, Custard Apple, Litchi, Water Melon, Ber, Aonla, Sapota, Pomegarante, Grapes

Mango

Banana

Papaya

Guava

Lemon

Jack Fruit

Others

Papaya, Guava, Mango and Banana are the major fruits produced in Chhattisgarh. In FY2014, Chhattisgarh accounted for a significant share in total production of Papaya (5%) and Guava (4%), in India.

3.2 Fruits

FY2011 FY2012 FY2013 FY2014 FY2015

1.6 1.6 1.7

8.3

2.0

2.2CAGR 8%

Figure:3-4 Fruits Production (Million Metric Tons), FY2011 to FY2015

Source: Directorate Horticulture and Farm Forestry, Chhattisgarh; Horticulture Division; Department of Agriculture & Cooperation; Ministry of Agriculture

In FY2014, Chhattisgarh was the 14th largest producer of fruits and it produced 2.13% of the total fruits produced in India. In FY2015, a total area of more than 0.22 Million Hectare was under fruit cultivation. Bilaspur, Raigarh, Korba, Kanker, Jagdalpur and Surguja districts accounted for approximately 45% of the total area under fruit cultivation with Banana, Mango, Papaya and Guava as major fruits.

8%4%

8%

19

18%23%

26%

13%8%

8%

4%



3.3 Vegetables

Figure:3-6 Vegetables Production (Million Metric Tons), FY2011 to FY2015

Source: Directorate Horticulture and Farm Forestry, Chhattisgarh; Horticulture Division; Department of Agriculture & Cooperation; Ministry of Agriculture

FY2011 FY2012 FY2013 FY2014 FY2015

4.24.6

5.0

8.3

5.45.7

CAGR 7.9%

Figure:3-7 Vegetables Production by Type (%), FY2015

Source: Directorate Horticulture and Farm Forestry, Chhattisgarh

Cauliflower

Cabbage

Brinjal

Tomato

Bhindi (Okra)

Potato

Bottle Gaurd

Onion

Other

In FY2014, Chhattisgarh was the 12th largest producer of vegetables, producing 3.35% of the total vegetables produced in India. In FY2015, Bilaspur, Durg, Kondagoan, Surajpur, Surguja and Korba divisions accounted for about 53% of the total vegetable cultivation area with Tomato, Brinjal, Potato, Cauliflower and Onion as the major crops under vegetable cultivation.

Major vegetable produced in Chhattisgarh are Okra, Tomato, Brinjal and Potato. In FY2015, Chhattisgarh accounted for a significant share in total production of Cauliflower (5%) and Okra (4%) in India. The Chhattisgarh’s Brinjal, Tomato and Cabbage contributed 4%, 4% and 3% respectively share of total production in India.

7%6%

11%34%

16%

10%4%

6%

6%

3.4 Spices

Figure:3-8 Spices Production (‘000 Metric Tons), FY2011 to FY2015


FY2011 FY2012 FY2013 FY2014 FY2015

486.6541.4

632.0

617.6640.0CAGR

7%

Figure:3-9 Spices Production by Type (%), FY2015


Ginger

Coriander

Chili

Garlic

Turmeric

Methi

Other

In FY2015, a total area of around 91,115 Hectare is under spice cultivation. Raigarh, Bilaspur, Korba, Kondagoan, Surguja, Durg and Balrampur divisions have accounted for close to 55% of the total area under spice cultivation with Chili, Ginger and Coriander as the major crops.

18.6%

39.2%

17.7%

7.8%2.1%

3.5%

11.0%



4. Opportunities in Food Processing Industry

4.1 Horticulture

4.1.1 MangoMango is the major crop of Chhattisgarh that occupied 30% of the total area under fruit crop production in FY2015. Northern part of Chhattisgarh comprising Koriya, Surajpur, Balrampur, Jashpur and Surguja are the major producer of mango in the state. Dashahri, Langra, Amrapali, Choussa are the key varieties of mango found in Chhattisgarh.

The state’s mango processing plants are mainly situated in Korba and Surajpur. Major processed varieties of mango are mango pulp, mango pickles, beverages, mango powder, mango syrup etc. It has been noticed that over two-thirds of the INR 50 Billion-a-year (US$ 833.3 Million) Indian juice drinks market consists of mango drinks.

Also, it has been observed that there is a huge gap between the state’s mango production and consumption of almost 316.6 Thousand Metric Tons. This gap can be a major opportunity for companies to invest in mango processing plants in the state.

Production Consumption Potential for Processing

386.6

70.0

316.6

Figure:4-1 Mango - Potential for Processing (‘000 Metric Tons), FY2015

Source: Directorate Horticulture and Farm Forestry Chhattisgarh, RNCOSNote: Consumption and Potential for Processing derived by RNCOS

Major Production Hub

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4.1.2 Banana

Banana production constitutes a major share of almost 26% of the total fruits produced in Chhattisgarh in FY2015. TC-Grand-9, Bhusawali, Barasi dwarf and G-9 Sendri are the key varieties of the banana available in Chhattisgarh.

Banana Processing Plants are mainly present in Bilaspur, Durg and Raipur and these districts account for one third of the total banana available for processing in Chhattisgarh. Banana can be processed for banana flavor, banana puree, banana concentrate, banana pulp, banana beer, banana wine, banana chips, banana wafers, banana powder etc.

There is a huge gap between the production and consumption of banana in the state at almost 484.4 Thousand Metric Tons. This can prove to be a great opportunity for investors to invest in the banana processing plants in Chhattisgarh.


564.4

80.0

484.4

Figure:4-2 Banana - Potential for Processing (‘000 Metric Tons), FY2015





4.1.3 Papaya

Papaya has occupied 5.5% of the total area under fruit crops and has had a production of 13% of the total Chhattisgarh’s fruit production in FY2015. Chhattisgarh produces about 6% of papaya and is the 6th leading producer of papaya in the country. Bemetara, Bilaspur, Mungeli, Raipur and Baloda Bazaar are the major districts for the production of papaya in the state. Taiwan, Pusa, Nanha and CO2 are the key varieties of papaya produced in Chhattisgarh.

Bemetara is best suited district for papaya processing plants. Papaya is processed for its use in fruit candies, papaya concentrate,

pulp & puree, papain etc. Consumption of papaya in the state is quite low in comparison to production, crafting it to be an opportunity for the food processing companies.


275.8

66.0

209.8

Figure:4-3 Papaya - Potential for Processing (‘000 Metric Tons), FY2015



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4.1.4 Guava

Guava occupied 8.7% of the total area under fruit crops in FY2015 in Chhattisgarh. The state produced almost 4.2% of guava in the country. KG Guava, Allahabadi Safed, Lalit and Lucknow 49 are the key varieties of guava present in the state. Janjgir Champa, Bilaspur, Korba, Raigarh are the major areas for producing guava in Chhattisgarh.

Janjgir Champa is a best suited location for a guava processing plant, because of its primary catchment area. Products like guava pulp, guava juice concentrate, guava jelly, guava puree etc. can be made from the processing of guava. Estimated gap between the production and consumption of guava in the state is noticeable, making it an untapped opportunity for the fruit food processing companies.


171.9

6.0

165.9

Figure:4-4 Guava - Potential for Processing (‘000 Metric Tons), FY2015





Maize is the one of the major cereals of the Chhattisgarh. The northern districts of Surguja, Surajpur, Balrampur and the southern districts of Kondagaon, Kanker, and Jagdalpur are the major areas for the production of maize in the state. Both northern and southern districts contribute 30% each of the total maize production in Chhattisgarh.

Maize Processing Plants are coming up mainly in Kondagaon. The products that can be made by the processing of maize are corn starch, dextrin, alcohol, corn flakes, ready-to-eat snacks, corn oil, etc. There is a sufficient gap between production and consumption in Chhattisgarh, making them an untapped potential area in food processing.


745

12

733

Figure:4-5 Maize - Potential for Processing (‘000 Metric Tons), FY2015

Source: RNCOS

4.1 Aggriculture4.2.1 Maize


4.2.2 Rice

4.3 Small & Medium Scale Allied Industries

Chhattisgarh contribute more than 5% of the total Rice production in the country and contributes almost 90% to the total production of the grains and cereals in the state. There are more than 650 Rice mills present across the state.

The high production of rice creates huge opportunity for Rice Wafers, Pasta, Idli Mix, Snacks (Quaker), Cereal Bars (Sweet), Bran Oil etc. The major rice producing districts are Bastar, Durg, Raigarh, Sarguja, Rajnandgaon, Kankar, Dantewara, Bilaspur, Janjgir, etc. Its high production and even higher growth rate

With upcoming mega food parks in Chhattisgarh, there will be ample opportunities for the allied industries, with the scaling up of food parks the network of vendors, buyers, packaging, logistics and companies assisting in servicing of machinery used in processing will gradually expand. There will be huge pressure to align the whole supply chain and forward integration system for assisting mega food parks and processing units across Chhattisgarh. The main industries that will require immediate attention for development are:

• Cold chain & storage infrastructure: Only 76 cold storages are present in Chhattisgarh and a very limited number of minus 20° cold storages, which are highly recommended for storing perishable goods.

Figure:4-6 Rice Production (‘000 Metric Tons), FY2011 to FY2014

Source: Agricultural Statistics at a Glance, Ministry of Agriculture, Government of India Advance Fourth Estimate Commissioner Land Record (SASA)

FY2011 FY2012 FY2013 FY2014

6159

6028

7340

6716

CAGR 2.9%

Table 4-1: Potential Cluster for Storage Infrastructure Facility

creates an immense potential for the food processing sector in the state.

Clusters Districts

Cluster 1 Koriya, Surajpur, Balrampur, Surguja

Cluster 2 Jashpur, Raigarh, Korba, Janjgir Champa

Cluster 3 Bilaspur, Mungeli, Bemetra, Raipur, Baloda Bazar, Mahasamund

Cluster 4 Kawardha, Rajanandgaon, Durg, Balod

Cluster 5 Kanker, Dhamtari, Gariaband, Kondagaon

Cluster 6 Bastar, Dantewada, Sukma, Bijapur



• PackagingIndustry: There is a definite need for a packaging industry in Chhattisgarh for the food processing units. This is because of a growing influence of branding and a necessity for strong packaging as the processed food need to be distributed in neighbouring states. Packaging machinery such as automatic form-filling and sealing machines, Tetra Pak aseptic packaging machines for sterilized filling and packing of liquids, testing instruments, and can making machinery offer considerable business opportunities.

Potential Cluster for Storage Infrastructure Facility

5. Upcoming Mega Food ParksThe concept of food parks has been gaining momentum in the past few years. The food processing industry is recording new levels with reduction in resource wastage, lesser costs, government incentives and supportive financial benefits. Thus, three agro-food parks are being developed in Chhattisgarh to promote medium and small- scale units.

Presently, there are three food parks in the state approved by the Ministry of Food Processing Industries. Two of them are under private development and one is in Dhamtari which is a state government project. They have all acquired the necessary sanctions and approvals from both Central and State governments.

The Chhattisgarh government has received 162 Food Processing proposals and has sanctioned 141 of them. It has also sanctioned grants of INR 279.6 Million (US$ 4.7 Million) towards food processing and received grants worth INR 133.3 Million (US$ 2.2 Million). The proposed food processing park will have common facilities such as auditorium, canteen, fire-station, medical facilities, logistic hub, weigh bridge, substation, cold storage, warehouse, quality control laboratory and R&D unit.

5.1 Indus Best Mega Food Park

Indus Best Mega Food Park is planning to develop a mega food park at the Bemta and Sarora villages, Tilda taluka in Raipur district of Chhattisgarh.

The mega food park will be developed over 100 Acres with an investment of INR 1.25 Billion (US$ 20.8 Million). Of the total project cost, around INR 500 Million (US$ 8.3 Million) will be funded by MOFPI (Ministry of Food Processing Industry) and the remaining INR 745 Million (US$ 12.4 Million) through proposed investment by promoters (including bank loan).

Indus Best Mega Food Park has already got all the approvals and has also appointed the IL&FS Infrastructure Development Corporation as consultant for the project.

5.2 Raipur Mega Food Park

Raipur Mega Food Park is developing a mega food park in Village Neonara, Tehsil Berla, and District Bemetara over an area of 100 Acres land.

The mega food park is under construction with an investment of INR 1.26 Billion (US$ 21 Million). Of the total project cost, around INR 500 Million (US$ 8.3 Million) will be funded through MOFPI (Ministry of Food Processing Industry) and the remaining INR 761.2 Million (US$ 12.68 Million) from proposed investment by the promoters (including bank loan).

5.3 Dhamtari Mega Food Park

The Chhattisgarh Government is in the process of establishing a ‘Mega Food Park’ in Dhamtari district of the state.

It will be in Kurud Village of the district with a proposal to be spread over an area of 150 Hectare land with total investment catching up to INR 1.5 Billion (US$ 25 Million). The construction work for the Mega Food Park would commence by September or October of 2015.

The Scheme has a cluster based approach based on a hub and spokes model. It includes creation of infrastructure for primary processing and storage near the farm in the form of Primary Processing Centres (PPCs), Collection Centres (CCs), common facilities and infrastructure enabled at the Central Processing Centre (CPC).



6. Regulatory Framework for Food Processing IndustryThe Chhattisgarh government has been taking various steps to promote food processing industry in the state. The agricultural base of the state is very strong both in food grains and fruit & vegetable production; still the existing processing scale is limited.

According to the Chief Minister of Chhattisgarh, Raman Singh, agricultural surplus should be used for value addition and MSMEs can play a greater role in this endeavour. The Ministry has already mapped Chhattisgarh to see which commodity is in surplus, and the idea is to create cold chains and storage capacities, adding value at the local level.

Moreover, various benefits have been announced to promote industrial growth under “Industrial Promotion Policy 2014” and “Agro & Food Processing Policy 2012” in Chhattisgarh. As defined by Government of India, industries based on food processing and agriculture have been classified as priority in Chhattisgarh Industrial Policy 2014-2019.

AGRO & FOOD PROCESSING INDUSTRIES POLICY-2012

Strategies:

• To establish cluster based Agro & Food Processing small industrial areas in consonance with the industrial policy of the state

• Entrepreneurship development and skill development programmes shall be organized in the field of food processing

• Opening degree and diploma courses in the technical sector of food processing and participation of the industries of the state shall be ensured in the national seminars/workshops and Trade Fare programmes

• Food Processing Training Centre shall be established• Cluster approach shall be adopted for improvement of horticulture crops in the state• To ensure availability of the improved seeds and plants easily• To ensure the establishment of cold storage, cold chain and warehouse at district and tehsil level, so that

farmers get the suitable price of horticulture crops• To encourage use of improved irrigation system for assured production of horticulture crops• To provide intensive training to the farmers for use of scientific methods for enhanced production of horticulture

crops Objectives:

• Value addition of the agriculture produce, fruits & vegetables and pulses & oilseeds in the state• Providing opportunities for provision of secured storage for agricultural produce, pulses & oilseeds and fruits

and vegetables• Ensure better price of agriculture produce to the farmers of the state • Reduction in cost of production of the agro and food processing products and to make its marketing easy• Ensure availability of the food materials to the public of the state of good quality at justified prices• To encourage farmers of the state to diversify for farming of fruits & vegetables and other cash horticulture

crops as alternatives of paddy by development of the Agro & Food Processing Industries

Exemption/ConcessionsforPromotionofIndustrialInvestment

• VAT & CST Reimbursement: Maximum Limit 150% of the fixed capital investment for 10 years• Entry Tax: 100% exemptions for a period of 7 years• Mandi Tax Exemption: Maximum 75% of the fixed capital investment for 5 years• Single License System: Sale/Purchase could be done in notified Krishi Upaj Mandies in the whole state with

a single license• Up to 100% exemption on stamp duty• Up to 50% exemption in land premium in land allotment• Up to 10 years of electricity duty exemption• Up to 7 years of entry tax exemption• Interest subsidy• Fixed capital investment subsidy

CurrentstatusofnewfoodprocessingunitssupportedunderNMFPduringFY2013toFY2015:• Total no. of proposals received:162• Total no. of proposals sanctioned:141• Grant sanctioned: INR 279.69 Million (US$ 4.66 Million)• Grant released: INR 133.34 Million (US$ 2.22 Million)

Although, NMFP has been delinked from centrally sponsored scheme by Government of India, the Chhattisgarh government has planned to continue it as a state mission.

MoUssignedinFY2016:• Crystal Logistics Ltd.: Cold Chain Infrastructure• ERC Group: Food Processing• BMS Starch: Maize Processing• Kakar Udyog: Maize Processing• India Agro & Food Industry: Maize & Meat Processing



7. Industry Roadblocks

7.1 Inadequate Industrial Infrastructure

One of the key challenges for the Chhattisgarh food processing industry is inadequate industrial infrastructure. With changing consumption patterns, especially in urban areas, demand for processed food is increasing. This is further drawing foreign investments into the sector. But the infrastructure related to food processing like cold chains, preservation chambers, transportation systems and warehouses are very limited in the state. In order to improve the food processing capacity of the state, there is an urgent need to invest and develop proper industrial infrastructures to provide a backbone to the food processing industry of Chhattisgarh. For example; there is only 1.5% of India’s total cold storage units present in Chhattisgarh. Cold storage having temperature (minus 20°) is needed for concentrated food products, which is not available in Chhattisgarh.

7.2 Lack of Awareness for Improved Quality Farming

Most of the traditionally grown fruits and vegetables are normally meant for direct consumption as they are not fit for processing quality wise. This is due to lack of awareness among the producers regarding quality farming. So there is need for introduction of new seeds in the raw material catchment areas, soil testing to understand for which kind of crop the soil is more beneficial, and adoption of contract farming which is often unsuccessful without government endorsement. So to overcome this challenge it is necessary that the producers be made aware regarding the concept of quality farming inducing necessary government support.

7.3 Insufficient Research & Development Centres

In Chhattisgarh, the Research & Development (R&D) facilities for the agricultural sector are presently ineffective. There is an urgent situation for more agricultural colleges to be set up in the state with proper R&D facilities. R&D facilities will do the necessary research for hybrid seeds, pesticides, insecticides, crop rotation etc. The agriculture scientists will facilitate farmers with their findings and educate them to use the productive land accordingly. These initiatives should be taken up by the government to promote the state’s agricultural sector.

8. Food Processing Industry – Future Prospects• ConceptionofFoodTestingFacilities: Since a lot of attention is given to quality of food, food testing is

one of the major avenues where the potential is still untapped. As India moves forward towards adopting international standards of food processing and other related activities, food testing laboratories come into play as stringent measures are needed to be adopted for approving food items fit for human consumption.

• EncouragingFoodProcessinginUpcomingFoodParks: Chhattisgarh is quite rich in its agriculture and horticulture production amongst which mango, papaya, banana, guava and maize are found in abundance. Also, most of these crops are found in large quantities in districts around various upcoming food parks. Hence, it is recommended that the state government should actively work towards improving the processing of potential processed food opportunities in products like fruit drinks, pickles, fruit pulp, corn starch, corn flakes, fruit jelly, fruit puree, corn-based convenience food items, etc in the food parks. The improvement can be brought about by providing few additional incentives to the upcoming units.

• SpecialSchemesforNewEntrepreneurs: Government has been very supportive towards the industrial units in the state, giving special incentives to food processing units. Various incentives like Reimbursement Concession in Value Added Tax and Central Sales Tax, Electrical Duty exemption, Mandi Tax exemption, Facility on Contract Farming, among others are provided by the government. As Chhattisgarh’s food processing industry mainly consists of SMEs, few special incentives and relaxations for the entrepreneurs will give further push to the industry.

• NeedforNodalAgency: A central or nodal organization to facilitate and connect the investor, entrepreneur, and other stakeholders is one of the key recommendations for promoting the food processing industry in Chhattisgarh. The existence of such an organization would bring clarity in procedures & policies between the industrial unit and investor. It will also bring all the stakeholders on the same platform thereby reducing the communication gap and any kind of misinterpretation of facts. Moreover, it will be a cost and time effective move to manage the resources of upcoming food processing units in the state.

• AwarenessforQualityFarming: The Chhattisgarh food processing industry is in need of accelerated R&D and modern technology adoptions in agriculture. There is a major need of focused programs for improving productivity, technology access, meeting the food safety standards, and new product developments for competitive edge and consumer needs. All these measures will increase output and subdue wastage and nutrition losses throughout the production and processing stages.

• EstablishmentofRobustColdChain/SupplyChainNetwork: Establishing a firm and sound logistics framework is imperative to curtail the post-harvest losses, particularly of perishables. The state government needs to devise novel strategies, and work closely with third party cold chain operators to develop better cold storage systems, ensuring better conditions of warehouses by employing sophisticated refrigerated transportation systems to avoid food wastage.

• ValueAddedProductsatDifferentLevels: The increasing demand for processed food, like fruit-based beverages, pulps, syrups, chocolates, squashes, corn starch, corn flakes, dehydrated fruits & vegetables, among others, creates a large growth area for the food processing units in the state. Increase in disposable incomes and improving lifestyles have a visible impact on the consumption pattern of the population .


9. Government Agencies Facilitating the Food Processing Industry There are various government agencies that are supporting the food processing industry in Chhattisgarh. Major government agencies are as follows:

S.No. Government Agencies

1 Ministry of Food Processing Industries (MOFPI)

2 Department of Agriculture in Chhattisgarh

3 Directorate, Horticulture And Farm Forestry in Chhattisgarh

4 Chhattisgarh State Industrial Development Corporation Ltd

5 Chhattisgarh Food, Civil Supplies & Consumer Protection Department

6 Chhattisgarh State Agricultural Marketing Board

7 Chhattisgarh State Investment Promotion Board

8 Department of Commerce and Industries in Chhattisgarh

9 Food Safety and Standards Authority of India

Table 9-1: List of Government Agencies Facilitating Food Processing Industries


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Chhattisgarh report phd

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