Compendium of financing options for the food processing sector

Transcription

1 Investment Environment & Opportunities in Food Processing HARYANA Compendium of financing options for the food processing sector Ministry of Food Processing Industries Government of India Knowledge Partner National Event Partner

2 Table of contents State Introduction 2 Why Haryana 2 Raw Material Base 3 Production Clusters 6 Agricultural Marketing 8 Processing Clusters 9 Infrastructure 12 State Government Initiatives 15 Snapshot of Investable Projects 20 Contact Us 23

3 2 State Introduction Haryana ranks 21st in terms of area and 18th in terms of population when compared to other Indian states in the country. The state has 21 administrative districts with union territory of Chandigarh as its capital, which is also administrative capital of the state of Punjab. The state surrounds the national capital city, New Delhi, from three sides with around 40% of the National Capital Region (NCR) falling in Haryana. State capital Chandigarh Haryana - key highlights Geographical area 1 44,212 km 2 Population 2 (Census 2011) 25,351,462 Gross state domestic INR crores** (USD 64.6 product (GSDP) 3 Billion 1 ) (at current price, base year ) Per capita income 4 (Measured as Per Capita NSDP at current prices for ) FDI inflows 5 (FY2000- FY2017) Total road length (kms) 6 Per Capita Income INR (USD 2063) Percentage change in Per Capita Income over previous year was 11.34% INR 6576 Crores * (USD 962 Million) Rail length (route kms) Ports 8 Airports 9 One ( Chandigarh) Haryana Chandigarh Why Haryana 1 2 The gross cropped area of the state is 6.51 million Ha and net cropped area is 3.64 million Ha with a cropping intensity of %. Haryana is the leading contributor to the country s production of milk and food grains. 3 The State is also ideally located nearer to NCR with access to a range of big markets and the international Airport. 4 The state is one of the most economically developed regions in South Asia, and its agricultural and manufacturing industries have experienced sustained growth since the 1970s 1 in at current price, base year as on *1 Million= 10 lakhs ** 10 Million = 1 crore

4 3 Raw material base (1/3) Haryana is primarily an agricultural state. About 65% of population resides in rural area and is engaged in agriculture, which is the leading occupation for the residents of the state. Haryana is also one of the most economically developed regions in South Asia and its agricultural and manufacturing industry has experienced sustained growth since 1970s. Haryana, with its rich cultural heritage, is a land of warriors and hardworking farmers. Mixed farming is a way of life and the State is known for its famous breeds of Murrah buffalo and Haryana cattle. Also the climate of Haryana is uniquely favorable for Basmati rice cultivation. About two-third of the State has assured irrigation, most suited for rice-wheat production system, whereas rain fed lands (around one-fifth) are most suited for rapeseed & mustard, pearl millet, cluster bean cultivation, agro-forestry and arid-horticulture. The State is also ideally located nearer to NCR with access to a range of big markets and the international Airport. Rice, wheat, rapeseed & mustard, bajra, cotton and sugarcane are the major crops with considerable scope for agricultural diversification as well as off farm opportunities. SNAPSHOT OF LAND UNDER CULTIVATION 12 Arable land 3.7 Net sown area 3.64 Gross cropped area 6.51 ( , Million hectare) There are two agro climatic zones 10 in the state. The north western part is suitable for rice, wheat, vegetable and temperate fruits and the south western part is suitable for high quality agricultural produce, tropical fruits, exotic vegetables and herbal and medicinal plants. Haryana s agriculture land-use and contribution snapshot: The total geographical area of the state is 4.42 million Ha, which is 1.4 % of the geographical area of the country. The cultivable area is 3.7 million Ha, which is 84% of the geographical area of the state out of which 3.64 million Ha i.e. 98% is under cultivation. The gross cropped area of the state is 6.51 million Ha and net cropped area is 3.64 million ha with a cropping intensity of %. Agriculture including crop husbandry and dairy farming is the main component contributing about 93 percent in Gross state value added (GSVA) of Agriculture and Allied Sector. The main crops of Haryana are wheat, rice, sugarcane, cotton, oilseeds, pulses, barley, maize, and millet. There are two main types of crops in Haryana: Rabi and Kharif. The major Kharif crops of Haryana are rice, sorghum, pearl millet, maize, cotton, jute, sugarcane, sesame and groundnut. For these crops the ground is prepared in April and May and the seeds are sown at the commencement of rains in June. The crops are ready for harvesting by the beginning of November. The major Rabi crops are wheat, tobacco, pulses, linseed, rapeseed and mustard. The ground is prepared by the end of October or the beginning of November and the crops are harvested by March.

5 4 Raw material base (2/3) Major strength of Haryana s food processing industry lies in the following: Coarse cereals- Wheat, Pearl Millet, Barley Oilseeds- Sunflower, Rapeseed-Mustard ( R&M) Fruits- Kinnow, Mango, Guava, Strawberry, Bael (Aegle marmelos), Peach, Ber (Ziziphus mauritiana) Spices- Fennel, Fenugreek Vegetables- Carrot, Cucumber, Onion Food Grains: Key production highlights ( ) Total production of 163 Lakh* MT of food grains o o o Wheat 11.3 million tonnes Pearl Millet- 652 thousand tonnes Barley- 140 thousand tonnes Horticulture products: Key production highlights ( ) Total production of 69 lakh* MT of horticulture products o o o Fruits 0.7 million tonnes Vegetables 6.1 million tonnes Spices 82.8 thousand tonnes

6 5 Raw material base (3/3) Livestock: Key production highlights ( ) 11 Haryana is the 8 th largest producer of milk with production of 7.06 million tonnes (5% of National production) Haryana is in top egg producing states of the country Haryana ranks 1st in the country in Inland Fish Productivity per hectare-per year, yet data is to be revised which is 7200 kg/hectare/year and would be raised to 10000kg/hectare/year by the end of CROPS ( 000 tonnes) Wheat Pearl Millet 652 Barley 140 FRUITS ( 000 tonnes) Strawberry 1.65 Peach 3.5 Ber( Ziziphus mauritiana) 39 VEGETABLES ( 000 tonnes) Carrot 372 Radish 471 Cucumber 161 Livestock Eggs Meat Lakh* Numbers 4027 Lakh* kg

7 6 Production Clusters The major production clusters 12 of Haryana are given below: Egg Wheat Panchkula, Ambala, Karnal, Jind Sirsa, Hisar, Jind, Fatehbad Brinjal Kurukshetra, Karnal, Panipat, Sonipat Mango Yamunanagar, Ambala, Kurukshetra, Karnal Onion Panchkula, Ambala, Yamunanagar, Sonipat Milk Kaithal, Sirsa, Jind, Hisar Potato Livestock Ambala, Kurukshetra, Karnal, Sonipat Karnal, Jind, Hisar, Kaithal Geographical Indication for Agricultural Products in Haryana 13 : Ambala: Maize, rice and, wheat Yamunanagar: Maize, sugarcane, and, wheat Sonipat: New quinoa(jowar), rice, wheat and, mustard Jind: Rice, wheat, pearl millet, and, barley

8 7 Production Clusters

9 8 Agriculture marketing Haryana has the following marketing facilities 14 in the state: Food Processing Units: Around 2600 companies are registered as food processing units which are engaged in processing of food grains and fruits and vegetables. The processing of food grains and oil mills which includes millings of various cereals like rice and wheat, mustard and rapeseed, contribute 75 percent of the total processing industry in terms of the number of units. The state has 106 principal market yards, 178 sub-market yards and 187 other market yards. Haryana State Agricultural Marketing Board (HSAMB) is responsible for creation, maintenance and regulation of agri-marketing infrastructure in the state. The state has approximately cold storages with a total capacity of approximately 4 Lakh* MT. Haryana State Warehousing Corporation (HSWC) is operating 108 warehouses with a total storage capacity of over lakh* MT Central Warehousing Corporation (CWC) has a current storage capacity of approximately 3.37 lakh* MT in the state Three labs recognized by The Agricultural and Processed Food Products Export Development Authority( APEDA) in the state of Haryana for food processing 3 labs recognized by APEDA 2248 companies registered as Food Processing units Agricultural markets in Haryana 106 principal market yards, 178 submarket yards and 187 other market yards CWC storage capacity lakh* MT HSWC maintains 108 warehouses wuth capacity of over 18.7 lakh* MT cold storage units

10 9 Processing Clusters (1/2) Spices & Condiments Processing Kurukshetra, Karnal, Sirsa Fruits & Vegetables Processing Kaithal, Rewari, Sonipat Milk Processing Mewat, Karnal, Kaithal Pulses Processing Faridabad, Panipat Bakery Products Faridabad, Gurgaon Sweeteners Panipat, Sonipat, Panchkula Rice Mills Kaithal, Fatehbad, Karnal Prepared Foods Kaithal, Gurgaon Famous Ethnic foods of Haryana: Kachri ki Sabzi: Made with a wild variety of Cucumber and spices such as turmeric, red chili etc. The dish is usually served with famous Indian bread- poori Hara Dhania Choria: The recipe is a combination of Chickpea made with coriander and spices.. The dish is usually served with bread (Roti) Kheer: A sweet dish that is made with Rice, milk and, dry fruits.

11 10 Processing Clusters (2/2) Rice production in Haryana 15 : Haryana has more than 100 registered rice producing mills Rice is grown in 18 districts of Haryana. Out of which seven districts are in high productivity group, that is, yield more than 2,500 kg/ha Rice is grown in Haryana under well irrigated system. In fact, more than 99% rice crop is cultivated under irrigated condition and nearly 50% rice area is having high productivity, that is, more than 2,500 kg/ha. More than 55% production comes from high productivity group. Besides, average productivity (2,393 kg/ha) of the State is higher than the national average productivity of 1,947 kg/ha Haryana is host to more than 2,500 companies in the food processing sector. An indicative of key companies and their district of presence in the state is given below. Dairy products and Analogues Wellness Foods, Faridabad Haryana Milk Foods Ltd., Kurukshetra Lotus Dairy, Kurukshetra Prepared Foods Yo China, Gurgaon Bikaner Mishthan Bhandar, Kurukshetra S.K International Foods, Sonipat Bakery Products Aditya Birla Retail Ltd., Gurgaon Wimpy International Ltd., Gurgaon Super Organic Pvt. Ltd., Jhajjar

12 11 Pg Processing clusters Clusters

13 12 Infrastructure (1/2) The status of key physical and agricultural infrastructure in Haryana is as follows: Parameter Status Inland container depots 16 12(three under implementation) Seven operational SEZs, 23 formally approved SEZs, three SEZs with principal approval and 20 notified SEZs(As of July 2016) Existing Industrial Areas/ SEZs 17 Installed power 18 (including allocated shares in Joint & Central Sector Utilities as on 31 Mar 2017) 31 Industrial Estates have been established by Haryana State Industrial and Infrastructure Development Corporation Ltd.( HSIIDC) cold storage units Around 2248 registered food processing companies Thermal MW Hydro: MW Nuclear : MW RES : MW Utilities Electricity cost 19 INR 6.05 (USD 0.09) / kwh upto 5 kw INR 6.75 (USD 0.10) /kwh onwards above 5kW Water rates 20 Industrial/ Commercial/ Institutional -INR 4.00 (USD 0.06) Per Kilo Liter

14 13 Infrastructure (2/2) Industrial Areas & Food parks: A number of industrial areas and food parks are available in the state for investors keen on setting up food processing units in the state. The key food parks in the state include: S. Industrial Park Location Type (Multi/ Total Area Total Area No. single product), ETC. (in Ha) Available (in Ha) Mega Food Park 1 2 Haryana State Cooperative Supply and Marketing Federation Limited Haryana State Industrial and Infrastructure Development Corporation Ltd Mega Food Park Rohtak Multi products Sonipat Multi products IE Rai Ph-I Sonipat Multi products IE Rai Ph-II Sonipat Multi products State owned Food Park 1 IGC Saha Ambala Multi products

15 14 Cold Chains 21 : The objective of the Scheme of Cold Chain, Value Addition and Preservation Infrastructure is to provide integrated cold chain and preservation infrastructure facilities, without any break, from the farm gate to the consumer. Below is the list of cold chains present in the state: S.no Project Type of Product District 1 Aligned Industries Ltd Irradiation Rewari 2 Fresh Food Processing F&V Hissar 3 Hind Terminals Pvt. Ltd Dairy, Meat, Palwal 4 M J Logistic Services Ltd. F&V Palwal 5 Suri Agro Fresh Pvt. Ltd. F&V Sonipat 6 Transport Corporation of India Ltd F&V Gurgaon 7 VSM Food Cold Chain & Processors LLP F&V Mewat 8 Shell Mount Fresh F&V Sonipat 9 Skylark Foods Pvt Ltd Meat Sonipat Total Nine, completed Six, ongoing Three

16 15 Infrastructure

17 16 State government initiatives (1/4) Enterprises Promotion Policy Under the Enterprises Promotion Policy 2015, special incentives have been provided for the thrust areas/ focus clusters i.e. textiles and food processing industry utilizing raw material produced in the State. The Foundation Pillar of Haryana Enterprise Promotion Policy (EPP 2015): Ease of doing business Enhancing competitiveness of the Industry by reducing cost of doing business Balanced Regional Growth through geographical dispersal of industries Focus and support to the MSME Sector Implementation structures/ mechanism to ensure monitoring and implementation of policy along with the promotion, outreach, grievance redressal and constant engagement with the industry. Mission Reposition Haryana as a Preferred Destination by improving on Ease of Doing Business & Cost of Doing Business rankings Facilitate State GDP growth rate in excess of 8% Generate more than 4 lakh* jobs Attract investments over Rs.1 lakh* crore** Increase contribution of secondary sector in the State GDP from 27% to 32% in tandem with the Government of India s National Manufacturing Policy and Make in India initiative Promote balanced regional development through geographical dispersal of industry Increasing the competitiveness of the MSMEs through cluster development and adoption of Zero Defect Zero Effect manufacturing practices

18 17 State government initiatives (2/4) The State Government has provided special incentives under Enterprises Promotion Policy 2015 for food processing sector: Name of Policy Enterprises Promotion Policy 2015 Investment Subsidy on VAT Interest Subsidy Primary Processing Centre Stamp Duty External Development Charges Power Tariff Subsidy Electricity Duty Exemption Excise Duty Exemption Market Fee 75% of VAT/SGST net paid for first 7 years, 35% for next three years in B, C & D category blocks from the date of commencement of commercial production with cap of 100% of fixed capital investment. 75% of VAT/SGST net paid for first 7 years, 35% for next three years in B, C & D category blocks provided at least 50% additional investment in plant and machinery for expansion/ diversification with cap of 100% of fixed capital investment of the expanded 6% for Micro, Small & Medium Enterprises on term loan or maximum upto INR 10 lakh per year for 5 years in B, C & D Categories Blocks & shall not exceed amount of net VAT/SGST paid during the relevant year. Capital 50% of FCI on plant & machinery and technical works, maximum of INR 1.75 crores* (USD Million) for eligible entrepreneurs engaged in washing, grading, waxing, drying, packaging, cold chain and processing of fruits & vegetables using local produce as raw material for bank finance project in B, C and D category blocks. The subsidy will also include 35% grant-in-aid being provided by Government of India 100% refund of stamp duty on purchase/ leasing of land for establishment of enterprises including Industrial Estates developed by HSIIDC/ private developer in C & D, 80% in B category blocks after commencement of commercial production, within 5 years from the date of filing of IEM. 50% exemption of External Development Charges in B, C & D category blocks INR 2 per unit only for Micro and Small Enterprise in C and D Category blocks for 3 years from the date of release of electricity connection and exemption from open excess charges of INR 93 paisa per unit in case of Medium and Large units 100% exemption for 10 years only for new enterprise in B, C and D category blocks from the date of release of electricity connection. Wines/ Liquors/ Brandy etc. made from 100% fruits and Barley produced in the State will be exempted from the Excise Duty in B, C and D category blocks. No market fee would be charged on the vegetables and fruits grown in the State and consumed as raw material by the food processing industry located within the State of Haryana. No market fee would be charged on agriculture and horticulture produce used as raw material by food processing industries within the State except paddy, sugar, oil-seeds, til, toria, taramira. * The other incentives specified for MSME sector would also be permissible for Agro and Food Processing enterprises units

19 18 State government initiatives (3/4) Haryana State Agriculture Policy 23 Vision: To ensure overall progress and prosperity of Haryana farmers by making farming efficient, economically viable, progressive, knowledge based sustainable and respected profession. The proposed policy s targets are as follows: The policy aims at three overarching goals to attain inclusive growth exceeding 4 percent in agriculture: Food, nutrition, employment and livelihood security for all (food and nutrition for all) Linking farmers to markets for increased income (prosperity for all) Sustainable agriculture and environmental security (prosperity in perpetuity). The action points under the policy for Agro-processing sector are: Establishing processing and value addition centers at strategic places in the rural areas/ production areas for fruits, vegetables, dairy, fishery and poultry in public private-partnership (PPP) mode. Establishing agro-processing parks/ agro-processing complexes with multicommodity processing units near big cities/ markets. Establishing food quality testing and phyto-sanitary laboratories. Helping farmers in marketing of their processed products (forward linkages). Special program for skill development, particularly farm women in primary and secondary processing in agriculture. Training in grading and packaging of horticultural crops should be a priority.

20 19 State government initiatives (4/4) Key Highlight: Key incentives for Agro and Food Processing sector as in Haryana Enterprise Promotion Policy (EPP 2015) Name of Policy Sector Nodal Department Capital Subsidy* Interest Rebate/Subsidy Stamp duty & Reg. fee exemption Electricity Duty exemption Land Related Concession/Exemption Reimbursement on Transportation Haryana State Agricultural Policy Agro Industries And Food Processing Government of Haryana Capital 50% of FCI on plant & machinery and technical works, maximum of INR 1.75 Crores** (USD Million) for eligible entrepreneurs engaged in washing, grading, waxing, drying, packaging, cold chain and processing of fruits & vegetables using local produce as raw material for bank finance project in B, C and D category blocks. The subsidy will also include 35% grant-in-aid being provided by Government of India At 6% for Micro, Small & Medium Enterprises on term loan or maximum up to INR 10 lakhs* (USD 15,)370 per year for 5 years in B, C & D Categories Blocks & shall not exceed amount of net VAT/SGST paid during the relevant year 100% refund of stamp duty on purchase/ leasing of land for establishment of enterprises including Industrial Estates developed by HSIIDC/ private developer in C & D, 80% in B category blocks after commencement of commercial production, within 5 years from the date of filing of IEM. New industrial units established within the State of Haryana would be exempt from payment of Electricity Duty for a period of 5 years Change of Land Use (CLU) charges for food processing units would be 50% of normal rates in respect of units established in the B and C category Blocks To make the export oriented units competitive in the global market, the freight subsidy up-to INR 20 Lakhs (USD 30738) have also been

21 20 provided to defray the transportation cost from premises of the unit to the port including other non-fiscal incentives Technology up-gradation and R&D related Incentives Link of policy document Testing 50% maximum of INR 5 Lakhs* (USD 7685), technology up-gradation and assistance for establishment of Effluent Treatment Plant for environment 50% maximum of INR 25 Lakhs* (USD 34823) will be provided Report_on_Haryana_State_Agriculture_Policy_Draft.pdf c1e7c7fdb0.pdf Industrial%20Investment%20%26%20Business%20Promotion%20Policy %202015%20-% pdf Government of Haryana shall launch targeted Agri-Business and Food Processing Policy in November The upcoming policy shall lay equal emphasis on providing the skilled manpower, robust infrastructure and conducive business climate for all round development of sector. New drivers of growth such as Agro-marketing reforms, development of Mega Food Parks and Mini Food Parks, encouragement to Farmer Producer Organizations, support to agri and food cooperatives, promotion of start-ups in agri-business space have been given due emphasis in the policy. This new policy envisions to redefine the benchmarks of growth for Food Processing sector in the State and in the country.

22 21 Snapshot of potential investable projects Haryana offers diverse set of investment opportunities in the food processing sector. An indicative list of potential projects for investments is presented below: Project name 1. Setting up a Health Drink Manufacturing Plant 2. Setting up a Health Drink Manufacturing Plant 3. Establishment of Fruit Processing Unit 4. Establishment of Freeze Dried Fruit Processing Unit Process-able Products/ infrastructure Health Drinks Health Drinks Fruits Fruits Value Proposition Project envisages setting up of Health drink manufacturing plant, which can focus on production, processing, packaging, export, etc. Project envisages setting up of Health drink manufacturing plant, which can focus on production, processing, packaging, export, etc. Manufacturing unit focusing on pulp, squash/ juices, jam & jellies, pickles, etc. Freeze dried food products have some of the highest per unit value and it will also give us the ability to export products and explore markets otherwise inaccessible 5. Malting Unit Coarse Grains Malting is a good option for value adding to coarse grains 6. Development of Cattle Feed Manufacturing Plants 7. Modern Abattoir for sheep and goat 8. Agro & Food Processing Cattle Feed Cattle Feed Manufacturing Plants of capacity 500 MT per day each plant. Modern abattoir for multiple animals Industries in line with Agro and Food Processing Infrastructure and Services by collaboration through PPP Infrastructure Developers

23 22 Infrastructure and Services 9. Establishment of Biodegradable packaging for Food Products 10. Global City, Haryana A strategic initiative to catalyse industrial synergies & enhance investment potential in the region Industries in line with proposed sectors including Agro and Food Processing sectors, Contractors for implementing infrastructure, PPP developers, Master Planners, Equipment suppliers, FIs and PE firmson. It s a Joint Venture Company(JVC, a 50% equity holding company for DMIC and State Government)

24 23 References Statistical Year Book India 2017, MOSPI (includes state highway, national highway, other PWD roads, rural roads, urban roads). 7 As per Ministry of Railways press release it is km (As on ) A. B html

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26 TRANSFORMING THE FOOD ECONOMY 3-5 November, 2017 Vigyan Bhawan, New Delhi, India About World Food India A global event to facilitate partnerships between Indian and international businesses and investors, World Food India (WFI) is a gateway to the Indian food economy and an opportunity to showcase, connect, and collaborate. Write to us at: Ministry of Food Processing Industries, Government of India Panchsheel Bhawan, New Delhi, India. Telephone Number: / / / Find us at: