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Food Processing
For updated information, please visit www.ibef.org
AUGUST
2012
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 AUGUST
2012
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Food Processing
For updated information, please visit www.ibef.org ADVANTAGE INDIA
Advantage India
AUGUST
2012
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
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
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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 AUGUST
2012
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
AUGUST
2012
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% 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
Total output of food products and beverages totalled USD93.1 billion in FY10
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
10
20
30
40
50
60
70
80
90
100
FY05 FY06 FY07 FY08 FY09 FY10
Processed food output (USD billion) Growth - right axis
AUGUST
2012
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Strong growth in the sector also evident from trends in IIP
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% 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
AUGUST
2012
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% since FY09
→ 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
0
5
10
15
20
25
FY09 FY10 FY11
Export of APEDA products Export of Non APEDA products
Exports of processed food and related products has also been rising steadily
AUGUST
2012
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 (37 per cent) while for non-APEDA products marine products dominated with a share of about 21 per cent
Shares in exports of processed food and related products (FY11)
Food Processing
Shares in non -APEDA exports (FY11)
Source: APEDA, Aranca Research
Shares in APEDA exports (FY11)
Source: APEDA, Aranca Research
21%
20%
20%
14%
11%
14%
Marine Products
Sugar &Mollasses
Oil Meals
Spices
Tea & Coffee
Others
37%
25%
9%
29%
Cereals
Animal products
Processed Fruits &Vegetables
Other processedfoods
AUGUST
2012
10 10 For updated information, please visit www.ibef.org
Large presence of the unorganised sector … (1/2)
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
AUGUST
2012
11 11 For updated information, please visit www.ibef.org
Large presence of the unorganised sector … (2/2)
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
AUGUST
2012
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
Food processing is a key contributor to employment generation in India
Notes: FY – Indian financial year (April – March)
Food Processing
Food processing
industry
Direct employment
(13 million)
Indirect employment
(35 million)
AUGUST
2012
13 13 For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
Notable trends in the Indian food processing sector
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 AUGUST
2012
14 14 For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
Cooperatives dominate dairy sector; private players lead others
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
AUGUST
2012
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 AUGUST
2012
16 16 For updated information, please visit www.ibef.org GROWTH DRIVERS
Strong fundamentals and policy support aiding growth
Strong
government
support
Large domestic
market
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
End goal is to make India a global food
processing hub
AUGUST
2012
17 17 For updated information, please visit www.ibef.org
Source: IMF WEO (April 2012), Aranca Research Note: E- estimate
Income growth is a key driver of growing domestic demand for processed food
GROWTH DRIVERS
Rising disposable incomes
• Strong growth in per-capita income has resulted in greater demand for food items
• 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
-5%
0%
5%
10%
15%
20%
25%
30%
0
500
1000
1500
2000
2500
2001 2003 2005 2007 2009 2011E 2013F 2015F 2017F
Per capita income, USD, LHS Annual growth rate, RHS
Rising per-capita income in India
AUGUST
2012
18 18 For updated information, please visit www.ibef.org
Source: McKinsey Quarterly, Aranca Research
A growing middle class and urbanisation has also aided growth in the sector
GROWTH DRIVERS
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
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
AUGUST
2012
19 19 For updated information, please visit www.ibef.org
Source: IMF WEO (April 2012), Aranca Research
Exporters gaining from rising global demand and location advantages … (1/2)
GROWTH DRIVERS
Rising demand from rest of the world
• 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
Food Processing
%
Growth in key regions of the global economy
-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
AUGUST
2012
20 20 For updated information, please visit www.ibef.org
Source: Ministry of Food Processing Industries, Aranca Research
Exporters gaining from rising global demand and location advantages … (2/2)
GROWTH DRIVERS
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
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
0
200
400
600
800
1000
1200
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
AUGUST
2012
21 21 For updated information, please visit www.ibef.org
India has a distinct competitive advantage over peers
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 (2010)
Milk (Cow & Buffalo)
107.2 1
Pulses (nes) 7 1
Fruits (fresh, nes) 9.6 1
Bananas 31.9 1
Tea 0.9 2
Rice (Paddy) 120.6 2
Sugarcane 277.8 2
Vegetables (fresh, nes)
34.8 2
Wheat 80.7 2
Potatoes 36.6 2
AUGUST
2012
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
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
Strong policy support gives food processing sector a boost … (1/2)
AUGUST
2012
23 23 For updated information, please visit www.ibef.org
Strong policy support gives food processing sector a boost … (2/2)
GROWTH DRIVERS
Food Processing
• Assigned priority sector for bank credit
• 60 Agri Export Zones (AEZ) have been set up across the country
• Setting up of 10 mega food parks with investments worth USD23 million
• Government 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
AUGUST
2012
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
AUGUST
2012
25 25 For updated information, please visit www.ibef.org
→ FDI inflows into agriculture and food processing between Apr 2000 and Feb 2012 stood at USD4.5 billion
→ Demand growth, supply advantages, and policy support have been instrumental in attracting FDI
Foreign investments flowing in; rise in plan expenditure … (1/2)
GROWTH DRIVERS
Food Processing
Notes: FDI – Foreign Direct Investment,
Cumulative FDI inflows (Apr 2000–Feb 2012) into the food and agriculture sector
Source: Department of Industrial Policy & Promotion, Aranca Research
0
200
400
600
800
1000
1200
1400
1600
Agr
ise
rvic
es
Foo
dp
roce
ssin
g
Ferm
en
tati
on
Ve
geta
ble
oil
Agr
im
ach
ine
ry
Tea
and
coff
ee
Suga
r
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
Cumulative FDI inflow (USD million)
Share of total FDI inflow (%) - right axis
AUGUST
2012
26 26 For updated information, please visit www.ibef.org
→ GOI expects USD21.9 billion of investments in food-related infrastructure from the private sector
→ The government’s main focus is on supply-chain related infrastructure like cold storage, abattoirs and food parks
Foreign investments flowing in; rise in plan expenditure … (2/2)
GROWTH DRIVERS
Food Processing
11th Five Year Plan (2007-12) outlay shares: food processing
Source: Ministry of Food Processing Industries (2009-10 Annual Report), Aranca Research
65%
15%
6%
2% 8%
4% Infrastructure development
Technology upgradation
Setting up/ upgradation ofquality control
Human resourcedevelopment
Strengthening ofinstitutions
Quality enhancement ofstreet foodPlan allocation to the food processing sector:
USD0.8 billion
Notes: GOI – Government of India
AUGUST
2012
27 27 For updated information, please visit www.ibef.org
Rising Private Equity (PE) funding; M&A activity stable … (1/2)
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
Food Processing PE
dea
ls
Jan
2010
– A
pr 2
012
AUGUST
2012
28 28 For updated information, please visit www.ibef.org
Rising Private Equity (PE) funding; M&A activity stable … (2/2)
GROWTH DRIVERS
Source: Thompson One Banker, Aranca Research Notes : M&A – Mergers and Acquisitions
Food Processing
M&A activity was steady in 2011; NSL Sugar Ltd’s 100% acquisition of Jay Mahesh Sugar Industries Ltd was one of the highest by value
Target company Acquirer company Type of business Deal value
(USD million)
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 –
Apr
201
2
AUGUST
2012
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
Sector has been attracting foreign JV partners for a long time
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 AUGUST
2012
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 AUGUST
2012
31 31 For updated information, please visit www.ibef.org SUCCESS STORIES: OPERATION FLOOD, AMUL
Operation Flood: India gains self sufficiency in milk production … (1/2)
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 88.1 million metric tonnes (mmt) in FY04 from 21.2 mmt in FY1969
→ India retained its position as the world’s largest milk producer in 2010-11 with an annual production of 121.8 million tonnes.
→ Dairy cooperatives offer employment opportunities to about 12 million farm families
Source: National Dairy Development Board, GCMMF (www.amul.com), Aranca Research
AUGUST
2012
32 32 For updated information, please visit www.ibef.org SUCCESS STORIES: OPERATION FLOOD, AMUL
Source: GCMMF (www.amul.com), Aranca Research
Food Processing
Operation Flood: India gains self sufficiency in milk production … (2/2)
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)
AUGUST
2012
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
The Amul saga: a cooperative movement leads the way … (1/2)
→ 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
CAGR 17.4 %
GCMMF (Amul) sales (USD billion)
AUGUST
2012
34 34 For updated information, please visit www.ibef.org SUCCESS STORIES: OPERATION FLOOD, AMUL
Food Processing
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
Facts and Features
Producer members (million) 3.03
Village societies 15,712
Milk handling capacity (million litres/ day) 13.67
Total milk collection (FY11, billion litres) 3.45
Daily milk collection (FY11, million litres) 9.2
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
AUGUST
2012
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 AUGUST
2012
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
AUGUST
2012
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 AUGUST
2012
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 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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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
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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.
Disclaimer
For updated information, please visit www.ibef.org DISCLAIMER
Food Processing AUGUST
2012