Food Processing 270111

FOOD PROCESSING
November 2010
FOOD PROCESSING November 2010
Contents
 Advantage India
 Market overview
 Industry infrastructure
 Investments
 Policy and regulatory framework
 Opportunities
 Industry associations
2
ADVANTAGE INDIA
Food Processing November 2010
Advantage India
The Ministry of Food Processing Industries (MOFPI) has formulated a Vision 2015 action plan which includes trebling the size of the food
processing industry, raising the level of processing of perishables from 6 per cent to 20 per cent, increasing value addition from 20 per cent
to 35 per cent, and enhancing India’s share in global food trade from 1.5 per cent to 3 per cent.
• India is the largest producer of several

fruits, such as banana, mango and papaya,
• India has the largest livestock population in Vision 2015
and the second-largest producer of
the world, with 98.7 million buffaloes and
Key vegetables such as brinjal, cabbage and
176 million cows (2008). Large producer of onion.
• In milk and milk products, India is the livestock agri–
base • Further, India is the second largest
largest producer, accounting for 20 per commodities producer of rice, wheat, sugar and cotton.
cent of the world’s production
Advantage
India
Favourable
• India’s tropical climate favours the agro-climatic Infrastructure
cultivation of several exotic food and conditions development
flower crops. and strategic The establishment of 60 fully equipped Agri-
• The peninsular coastline drives the location Export Zones (AEZs), in addition to food
growth of the marine industry. Large parks, is expected to attract foreign
• The Middle East and Southeast Asia are consumer base investment.
major export destinations for Indian
agricultural (agri) commodities and milk.
• It has been estimated that the size of the middle to upper classes will increase at more than 300 per cent between 2005 and 2015.
• During the same period the youth population (age group 15 – 25) in India is expected to grow by 11per cent. This will lead to an
increasing demand for food products to meet demands of convenience, variety, health and a changing palate.
Sources: Ministry of Food Processing Industries 2008–09 annual report; Flavors of Incredible India, Ernst & Young, 2009; ―Agri Export Zones of
India,‖ APEDA website, www.apeda.com, accessed 8 November 2010; ―Food Industry,‖ IBEF website, www.ibef.org, accessed 8 November 2010; ―An
appetite for growth,‖ Ernst and Young, 2009
3
Contents
 Advantage India
 Market overview
 Investments
 Opportunities
4
MARKET OVERVIEW
Market overview
The food processing industry in India is at an early Growth in the output of processed food
growth stage, with low penetration levels and high (US$ billion) 75
80 16%
potential. 70
15% 68
14%
62
57
60 53 12%
Y-o-y growth
10%
US$ billion
• The size of the food processing industry in 50 43 46 9% 10%
India has increased from US$ 57 billion (INR 40 10% 8%
2,736 billion) in 2004 to US$ 75 billion (INR 30
7%
8% 6%
3,600) in 2007. 20 4%
10 2%
0 0%
• During this period, the number of registered 2001 2002 2003 2004 2005 2006 2007
operating units increased from 24,000 to
25,725 units. Output of processed food y-o-y growth
Source: Flavors of Incredible India, Ernst & Young, 2009.
5
MARKET OVERVIEW
Market segments
Food
processing
Milk and milk

Agri products Meat, poultry and marine products
products
Fruits and
Beverages Dairy products Meat and poultry Fisheries
vegetables
India is the India is the third- India is the Production of meat Fish production in
second-largest largest market in largest producer in India in 2007–08 India was estimated
producer of fruits the world for of milk in the was estimated at at 7 million tonnes
(50 million tonnes) alcohol and world, 6.5 million tonnes. (2007–08).
and vegetables has 56 alcohol- accounting for
(100 million manufacturing units nearly 15.2 per
tonnes) in the (2007–08). cent of global
world (2007–08). milk production
(2007–08).
Sources: Ministry of Food Processing Industries 2008–09 annual report; Ernst & Young analysis.
6
MARKET OVERVIEW
Overview of processing activities across categories
In the global context, there is ample scope for investment in the processing segment.
Products Level of processing (in per cent)

Organised Unorganised Total
Fruits and vegetables 1.4 0.8 2.2
Milk and milk products 13 22 35
Meat and poultry
Buffalo meat 21 - 21
Poultry 6 - 6
Marine products 8 - 8
7
MARKET OVERVIEW
Exports
• India’s processed food exports constituted 1.5 Exports of processed food (US$ million)
per cent of the global food trade in 2008–09. 2,000 1869.7
1,800
1,600 1390.5
US$ million
1,400
1153.3
1,200
1,000
800 600.1 619.9
600
400
200
0
2003–04 2004–05 2005–06 2006–07 2007–08
Source: Ministry of Food Processing Industries 2008–09 annual

report.
8
MARKET OVERVIEW
Domestic demand
Potato chips
• Potato chips (or wafers), a popular snack item in India, are manufactured on a large scale,
Agri-based not only by big firms but also by cottage industries and home-grown players.
products Ready-to-eat meals
• Societal changes in India (more nuclear families), as well as evolving consumer preferences,
are driving the demand for ready-to-eat foods.
Flavoured milk
• Milk features prominently in the Indian diet. With consumer tastes evolving, flavoured milk
Milk and
is gaining popularity, especially among the urban population. Currently, medium and large-
milk products
scale cooperatives and private companies dominate the manufacture of milk. Popular
flavours include cardamom, saffron and chocolate.
Poultry processing
Meat and • In India, the consumption of chicken is increasing more rapidly than any other category of
marine products meat. Currently, small- and medium-sized firms undertake poultry processing, with the
presence of a few organised players.
9
MARKET OVERVIEW
Growth drivers
By 2015, the Indian food industry is estimated to Household consumption is expected
grow by around 40 per cent over 2007. Two key to double by 2020.
factors are expected to drive this growth: Growth in household consumption
1,400
• Socio-economic changes across India’s 1,235
population base, in terms of growth in the 1,200
number of households in the high-income 1,000 920
category, rising youth population and migration
US$ billion
800
from rural to urban areas 592
600
384
• Evolving lifestyle trends, such as the emergence 400
of nuclear families, increasing health awareness 200
and growing exposure to international markets 0
2005 2008 2015E 2020E
10
MARKET OVERVIEW
Key trends
In addition to a large number of initiatives that the Government of India has undertaken to drive
consumption, increased activity by domestic and international players has boosted the availability of products.
• Indian companies, which previously focussed only on back-end processing and

Increase in manufacturing, have now extended their presence into the processed food segment.
Andhra Pradesh Dairy Development Cooperative Federation Ltd (APDDCF) was
the depth of established in 1981 with the objectives of milk supply and dairy development. APDDCF is
distribution considering the establishment of 1,000 franchisees for retail sales and offering products
such as packed curd, butter, ghee and paneer.
• With the Indian economy opening up, major international food product manufacturers have
entered the market and introduced processed products in the agri products and milk
products categories.
• For instance, Pepsico, India, launched Nimbooz on February 28, 2009. According to
Entry of the company, Nimbooz is India’s first packaged nimbu pani, a popular traditional
international homemade drink in India.
companies • Del Monte has entered the Indian ketchup market. The Bharti Enterprises- Del
Monte Pacific Ltd JV FieldFresh Foods Pvt Ltd launched a range of Del Monte
products including ketchup and sauces in 2009.
• General Mills opened an outlet of ice cream brand , Haagen-Dazs in India in 2010,
under a franchise agreement.
Sources: Flavors of Incredible India, Ernst & Young, 2009; http://www.apddcf.gov.in
11
MARKET OVERVIEW
Key players — agri products

Company Major brands Categories/Products
Dabur India Ltd Dabur, Real Activ, Vatika, Pudin Hara Juice, honey, spices, cooking pastes and coconut milk
Oils and vanaspati, bakery fats, fruit drinks and fruit nectar
Godrej Industries Ltd Godrej, Jumpin’, Xs and non-food items include chemicals and consumer
products
Parle Agro Ltd LMN, Bailey, Appy, Frooti Water, beverages and confectionery
Ready-to-eat and frozen food, spices, dessert mixes, pickle,

MTR Foods Ltd MTR
papad and beverages
Nestlé India Ltd Nestlé, Maggi, Nescafé Chocolates, snack foods, milk, coffee and infant food
PepsiCo, Inc Pepsi, Frito-Lay Carbonated drinks, juices and snack foods
Cadbury India Ltd Dairy Milk, Perk, Five Star, Gems Chocolates, malt food and cocoa powder
Hindustan Unilever Ltd Brooke Bond, Annapurna, Kissan, Tea, coffee, biscuits, ice creams, atta (flour), instant drinks,
(HUL) Knorr, Kwality Walls soups, jams and squash and other FMCG products
Biscuits, flavoured milk, dairy whitener, ghee, bread, cheese

Britannia Industries Ltd Britannia, Tiger, Bourbon, Goodday
and cake

Note: This is an indicative list.
12
MARKET OVERVIEW
Key players — milk and milk products

Major
Company Capacities Categories/Products
brands
Ice cream, skimmed milk powder, ghee, dairy
Gujarat Cooperative Milk 6.6 million litres per day
Amul whitener, paneer, shrikhand (sweet yogurt), pizza,
Marketing Federation (GCMMF) from 19 dairy plants
cheese and butter
Andhra Pradesh Dairy Table butter, ultra high temperature (UHT) milk,
2.4 million litres per day
Development Cooperative Vijaya skimmed milk powder, ghee, flavoured milk, khoa,
from 12 dairy plants
Federation (APDDCF) pasteurised butter, kulfi and processed cheese
Skim milk powder, paneer (cottage cheese), pure
Karnataka Cooperative Milk 2.13 million litres per
Nandini ghee, badam burfi, gulab jamun, pasteurised butter,
Producers’ Federation (KMF) day from 15 dairy plants
khoa, ice cream, toned milk and curd
Maharashtra Rajya Sahakari
3.8 million litres per day Mahanand
Maryadit Dugdh Mahasangh Pasteurised butter and pure peda
from 29 dairy plants ,Gokul
(Mahasangh)
Punjab State Cooperative Milk
1.6 million litres per day Ghee, flavoured milk, paneer, ice cream, skimmed
Producers’ Federation Verka
from nine dairy plants milk powder, lassi, table butter, sweets and cheese
(MILKFED)
Tamil nadu Cooperative Milk Skimmed milk powder, khoa, milk peda, pure ghee,
Producers’ Federation Ltd Aavain butter, cheese, yogurt, table butter, ice cream, UHT
from 15 dairy plants
(TCMPF) standardised milk, curd and buttermilk
National Dairy Development Mother Milk, cheese, butter, ice cream, ghee, cheese, UHT
Board (NDDB) Dairy milk, curd, lassi and flavoured milk
13
MARKET OVERVIEW
Key players — meat and marine products
Company Capacities Major brands Categories/Products
Fast Prax
Hind Agro Industries Ltd 400 tonnes (fast-food Meat of buffalo, sheep and goat
outlets)
Fish and meat of buffalo and goat
Premier (fruits
and vegetables)
Sale of more than 333,000
Allanasons Limited
tonnes of frozen food in 2008
Processed fruits and vegetables, coffee, cereals,
Saffa (meat)
pulses and spices
194 units across hatcheries
VH Group Venky’s Chicken and eggs
and broiler units
Vegetables and fruits, snacks, meat and poultry,
Al Kabeer Processed meat Al Kabeer
ready-to-eat meals and seafood

14
MARKET OVERVIEW
Other key players

Processed food
Components Major companies
category
United Breweries Ltd, Shaw Wallace, Radico Khaitan, Mohan
Alcoholic beverages Beers, ciders, spirits and wines Meakins, Sula Vineyards, Seagram India and Mount Shivalik
Group
Carbonated drinks, bottled water, Pepsi Foods, Dabur Foods, Coca Cola, Mother Dairy,
Non-alcoholic
health/energy drinks, (fruit) juices GlaxoSmithKline (GSK), Cadbury, Nestlé, Heinz, Amul and
beverages
and malted beverages Rasna International
Sugar confectionery, chocolates,
gum, cereal bars, cocoa products, Britannia Industries Limited, Modern Industries, Parle Products,
Confectionery bakery products (cakes, biscuits, ITC Foods, United Biscuits, McVities, Cadbury, Nestlé, Nutrine,
bread, pastries and rusk), toffees, Parry’s Confectionary and Parle Products
candies and chewing gum
Potato chips, nuts and seeds,
processed snacks, popcorn; wheat- McCain Foods, Hindustan Unilever Limited (HUL), Nestlé,
Savoury snacks
based products such as noodles, Heinz, Top Ramen, Frito-Lay and Pepsi Foods
vermicelli, macaroni and spaghetti
Packaged flour, semi-
DCW Group, HUL, Godrej Pillsbury, Nature Fresh Food India
Others processed/ready-to-eat food and
Pvt Ltd, ITC, Shakti Bhog, MTR Foods and Marico
edible oil
Source: Ernst & Young research

15
Contents
 Advantage India
 Market overview
 Investments
 Opportunities
16
INDUSTRY INFRASTRUCTURE
Industry infrastructure — Agri Export Zones … (1/2)

State Products
Andhra Pradesh Mango pulp and fresh vegetables, grapes, mangoes, gherkins and chillies
Assam Fresh and processed ginger
Bihar Litchi
Gujarat Mangoes and vegetables, dehydrated onions and sesame seeds
Himachal Pradesh Apples
Jammu & Kashmir Apples and walnuts
Jharkhand Vegetables
Karnataka Gherkins, rose onions, flowers and vanilla
Kerala Horticulture products and medicinal plants
Potatoes, onions and garlic, seed spices, wheat, lentil and grams and
Madhya Pradesh
oranges
Grapes and grape wine, mangoes including Kesar mango, flowers, onions,
Maharashtra
pomegranate, banana and oranges
Orissa Ginger and turmeric
Punjab Vegetables, potatoes and basmati rice
Rajasthan Coriander and cumin
17
INDUSTRY INFRASTRUCTURE
Industry infrastructure — AEZs … (2/2)

State Products The total number of AEZs in India is 60.
Ginger, flowers (orchids) and cherry Distribution of AEZs among states

Sikkim
pepper
Tamil Nadu Flowers, mangoes and cashew nuts Maharashtra
Tripura Pineapples 8 West Bengal
Potatoes, mangoes, vegetables and 20

Andhra Pradesh
Uttar Pradesh
basmati rice 6 Madhya Pradesh
Basmati rice, litchi, flowers, medicinal and Karnataka
Uttaranchal
aromatic plants 5
Uttaranchal
Pineapples, litchi, potatoes, mangoes, Uttar Pradesh
West Bengal 5
vegetables and Darjeeling tea 4
Tamil Nadu
4 4 4
Others
Source: ―Agri Export Zones of India,‖ APEDA website,

www.apeda.com, accessed 8 November 2010.
Source: ―Agri Export Zones of India,‖ APEDA website,

www.apeda.com, accessed 8 November 2010.
18
Contents
 Advantage India
 Market overview
 Investments
 Opportunities
19
INVESTMENTS
Investments … (1/2)
• The largest inbound deal between January 1, 2009 and August 1, 2010 was the acquisition of the
businesses of Eastern Condiments Pvt Ltd, by McCormick & Co Inc, for US$ 35.0 million (INR
1,680 million).
• In 2010 — Shree Renuka Sugars Ltd acquired Equipav S.A Açúcar e Á lcool for US$ 1,160.0 million
(INR 55.7 billion) in a major outbound deal.
M&A scenario — details Cumulative FDI inflow
Period : January 1, 2009 to November 1, 2010 Period: April 2000 to August 2010
Deal value Amount of FDI inflow
Deal type No of deals Sector
(US$ million) (US$ million)
Inbound 5 43.0 Agricultural services 1,538.18
Outbound 7 1,402.8 Food processing industries 1,086.01
Domestic 17 185.1 Fermentation industries 786.72
Agricultural machinery 150.25
Sources: Bloomberg and Thomson ONE Banker; Ernst & Young
analysis. Vegetable oils and vanaspati 185.65
Tea and coffee 94.57
Sugar 41.74
Total 3,883.12
Source: ―Fact Sheet on Foreign Direct Investment (FDI)‖, Department
of Industrial Policy and Promotion website, www.dipp.nic.in, accessed
8 November 2010.
20
INVESTMENTS
Investments … (2/2)
• The largest domestic deal during the period was the acquisition of Agro Dutch Industries Ltd by Penta
Homes Pvt Ltd,Vishwa Calibre Builders Pvt Ltd and private investors, for US$ 85.4 million (INR 4.1 billion).
Announced
Deal Announcement Target Acquirer
Deal total value Target name Acquirer name
type date country country
(US$ million)
October 12,
Domestic ACQ 11.2 Candico India Ltd India Keventer Agro Ltd India
2010
September 14, Millennium Beer
Domestic ACQ 42.6 India United Breweries Ltd India
2010 Industries Ltd
Eastern Condiments
Inbound ACQ June 29, 2010 35.0 India McCormick & Co Inc US
Pvt Ltd
Tirumala Milk
Inbound PE June 7, 2010 NA India The Carlyle Group US
Products Private Ltd
MP Chini Industries
Domestic ACQ March 22, 2010 24.7 India BK Birla Group India
Ltd
February 22, Equipav S.A Açúcar e Shree Renuka Sugars
Outbound ACQ 1,160.0 Brazil India
2010 Á lcool Ltd
Penta Homes Pvt Ltd,
January 21, Agro Dutch Industries Vishwa Calibre
Domestic ACQ 85.4 India India
2010 Ltd Builders Pvt Ltd and
private investors
November 11, Vale Do IvaíSA Shree Renuka Sugars
Outbound ACQ 240.0 Brazil India
2009 Açúcar e Á lcool Ltd
Sources: Bloomberg and Thomson ONE Banker.
Note: ACQ: Acquisition; DIV: Divestment; PE: Private equity
21
Contents
 Advantage India
 Market overview
 Investments
 Opportunities
22
POLICY AND REGULATORY FRAMEWORK
Policy and regulatory framework … (1/2)
• FDI in the Indian food processing industry is allowed under the automatic route* in agri products, milk
and milk products, and marine and meat products, except the following (broadly):
• Proposals that require an industrial licence and cases where foreign investment exceeds 24 per
cent equity in units that manufacture items reserved for the small-scale industries are
exceptions.
• Proposals in which the foreign collaborator has a previous venture or tie-up in India, as on
January 12, 2005, are exceptions.
• Proposals falling outside notified sectoral policy/caps or those that are generally
restricted/prohibited are exceptions.

* Note: The entry of foreign/large players is restricted for a few food items.
23
POLICY AND REGULATORY FRAMEWORK
Policy and regulatory framework … (2/2)
• The repatriation of profits and capital is permitted.
• Automatic approvals are provided for foreign investment and technology transfer in most cases.
• Units based on agri products that are100 per cent export-oriented are allowed to sell up to 50 per cent
in the domestic market.
• There is no import duty on capital goods and raw material for 100 per cent export-oriented units.
• Earnings from export activities are exempt from corporate taxes.
24
Contents
 Advantage India
 Market overview
 Investments
 Opportunities
25
OPPORTUNITIES
Opportunities … (1/3)
• The Indian food processing sector has the potential to become an outsourcing hub for the world by
Potential global
2012. The Ministry of Food Processing Industries is committed to the sector and has announced
outsourcing hub
various incentives and schemes to support new ventures.
• The Ministry of Food Processing Industries’ Vision 2015 action plan includes trebling the size of the
food processing industry, increasing value addition from 20 per cent to 35 per cent, and enhancing
India’s share in global food trade to 3 per cent.
Development of food • The Government of India is actively promoting the concept of mega food parks and is expected to
parks set up 30 such parks across the country to attract FDI. The Government of India has released a
total assistance of US$ 23 million (INR 1,104 million) to implement the Food Parks Scheme. It has,
till date, approved 50 food parks for assistance across the country. The Centre has also planned for
a subsidy of US$ 22 billion (INR 1,056 million) for mega food processing parks.
• India has abundant resources in terms of raw material for food production, including fruits,
vegetables, spices, dairy products and edible oils.
• The presence of a skilled workforce and low labour costs are key factors to be considered while
Establishment of establishing production bases.
production bases
• The Government of India has established few notable institutes for research and training in the food
segment. These include the Central Food Technology Research Institute in Mysore (Karnataka) and
the National Institute of Food Technology Entrepreneurship and Management (NIFTEM) in Sonepat,
Haryana.
26
OPPORTUNITIES
• It is estimated that by 2012, India’s marketable surplus will increase to 870 million tonnes per annum (MTPA), 40 per cent
of which is likely to be accounted for by perishable foods, creating opportunities for the development of storage
infrastructure.
Investment in
infrastructure through • Considerable investment is required in rural infrastructure and components of the supply chain, which is undertaken with
public-private the involvement of all stakeholders on a PPP basis. This is likely to add value and help producers obtain better prices and
partnerships (PPPs) income.
• The Central Government envisages an investment of US$ 21.89 billion (INR 1,050.72 billion) by the private sector in the
food processing industry by 2015.
• Contract farming is an agreement between the food processor (contractor), typically a large organised player, and the
farmer, where the latter is contracted to plant and produce the former’s crop on his land.
• HUL Rallis and ICICI are practicing contract farming in wheat in Madhya Pradesh. Under the system, Rallis supplies agri
input and know-how, and ICICI finances (farm credit) farmers. HUL, which requires the farm produce as raw material
Contract farming
for its food processing division, provides the buyback arrangement for the farm output.
• Scandic Food India Pvt Ltd is planning to increase its presence to 800 cities during 2010–11 from a present 250 through
contract farming, to revive its Sil brand. The company is now taking to contract farming to secure the supply of fresh
fruits and commodities such as chilli, tomatoes etc. for its jams and ketchups.
• There is a considerable scope to use sophisticated techniques and applications in areas such as demand forecasting, data
integration, fund-flow management and information sharing to improve supply chain management.
• In addition, the expansion of storage facilities is expected to help minimize wastage in the production of fruits and
Investment in supply vegetables.
chain infrastructure • The Indian Government has initiated a number of activities to facilitate growth of the logistics and warehousing sectors.
For instance, the Government has announced investment–linked tax incentives for setting up and operating cold chains
and warehousing facilities and permitted 100 per cent FDI in food–related infrastructure such as food parks and cold
chains.
27
OPPORTUNITIES
• The food processing industry, accounting for 32 per cent of the total food market, is one of the
largest industries in India, and is ranked fifth in terms of production, consumption, export and
expected growth.
• Potato chips, confectionery, cereals and bakery, spirits, spreadable fats, processed milk, frozen
and chilled meat and marine products are a few key categories in the processed food space in
the Indian market.
• Currently, India processes more than one-third of its milk, 26 per cent of its fisheries output, one-
fifth of all its buffalo meat, six per cent of poultry, and 2.2 per cent of fruit and vegetables. With the
Processed food necessary investment, these figures could increase to about 40 per cent for fisheries, close to 15 per
cent for poultry, 60 per cent for milk and 40 per cent for buffalo meat.
• Investments worth US$ 30 billion (INR 1,440 billion) are required to increase the volume of
processed food products to 10 per cent of overall output by 2015.
• With urbanisation and disposable incomes rising, the lifestyle of consumers and their eating habits
have evolved, thereby increasing the demand for processed and ready-to-eat food.
• The Government of India has undertaken several initiatives to attract investments in this segment,
such as financial assistance for the establishment and modernisation of food processing units, the
creation of infrastructure, support for R&D and human resource development.
Sources: ―India to become global outsourcing hub by 2012,‖ Confederation of Indian Industry (CII) website, www.cii.in, accessed 8 November 2010;
Ministry of Food Processing Industries 2008–09 annual report; Flavors of Incredible India, Ernst & Young, 2009; ―Investment worth US$ 21.89 billion
envisaged in food processing industry ,‖ IBEF website, www.ibef.org, accessed 8 November 2010, ASSOCHAM report
28
Contents
 Advantage India
 Market overview
 Investments
 Opportunities
29
INDUSTRY ASSOCIATIONS
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: 9111 26513204, 26514572, 26534186
Fax: 91 11 26526187
E-mail: headq@apeda.com
30
NOTE
Note
Wherever applicable, numbers in the report have been rounded off to the nearest whole number.
Conversion rate used: US$ 1= INR 48
31
DISCLAIMER
India Brand Equity Foundation (―IBEF‖) engaged Ernst & presentation to ensure that the information is accurate to
Young Pvt Ltd to prepare this presentation and the same the best of Ernst & Young and IBEF’s knowledge and belief,
has been prepared by Ernst & Young in consultation with the content is not to be construed in any manner
IBEF. whatsoever as a substitute for professional advice.
All rights reserved. All copyright in this presentation and Ernst & Young and IBEF neither recommend nor endorse
related works is solely and exclusively owned by IBEF. The any specific products or services that may have been
same may not be reproduced, wholly or in part in any mentioned in this presentation and nor do they assume
material form (including photocopying or storing it in any any liability or responsibility for the outcome of decisions
medium by electronic means and whether or not taken as a result of any reliance placed on this
transiently or incidentally to some other use of this presentation.
presentation), modified or in any manner communicated
to any third party except with the written approval of Neither Ernst & Young nor IBEF shall be liable for any
IBEF. direct or indirect damages that may arise due to any act
or omission on the part of the user due to any reliance
This presentation is for information purposes only. While placed or guidance taken from any portion of this
due care has been taken during the compilation of this presentation.
32

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FOOD PROCESSING

 Policy and regulatory framework

• India is the largest producer of several

 Policy and regulatory framework

Source: Flavors of Incredible India, Ernst & Young, 2009.

Milk and milk

Overview of processing activities across categories

Products Level of processing (in per cent)

Source: Flavors of Incredible India, Ernst & Young, 2009.

Source: Ministry of Food Processing Industries 2008–09 annual

Source: Flavors of Incredible India, Ernst & Young, 2009.

• Indian companies, which previously focussed only on back-end processing and

Sources: Flavors of Incredible India, Ernst & Young, 2009; http://www.apddcf.gov.in

Key players — agri products

Ready-to-eat and frozen food, spices, dessert mixes, pickle,

Biscuits, flavoured milk, dairy whitener, ghee, bread, cheese

Source: Flavors of Incredible India, Ernst & Young, 2009.

Key players — milk and milk products

Key players — meat and marine products

Company Capacities Major brands Categories/Products

Source: Flavors of Incredible India, Ernst & Young, 2009.

Other key players

Source: Ernst & Young research

 Policy and regulatory framework

Industry infrastructure — Agri Export Zones … (1/2)

Industry infrastructure — AEZs … (2/2)

Ginger, flowers (orchids) and cherry Distribution of AEZs among states

Potatoes, mangoes, vegetables and 20

Source: ―Agri Export Zones of India,‖ APEDA website,

Source: ―Agri Export Zones of India,‖ APEDA website,

 Policy and regulatory framework

 Policy and regulatory framework

Policy and regulatory framework … (1/2)

Source: Flavors of Incredible India, Ernst & Young, 2009.

Policy and regulatory framework … (2/2)

• The repatriation of profits and capital is permitted.

• Earnings from export activities are exempt from corporate taxes.

Source: Flavors of Incredible India, Ernst & Young, 2009.

 Policy and regulatory framework

 Policy and regulatory framework

Agricultural and Processed Food Products Export Development Authority (APEDA)

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