2 India holds 2 - IBEF · 2016-02-22 · 2nd largest arable land in the world • India holds 2nd largest arable land in the world. With 20 agri-climatic regions, all 15 major climates

2nd largest arable land

in the world

• India holds 2nd largest arable land in the world. With 20 agri-climatic regions, all 15 major

climates in the world exist in India. The country also possesses 46 of the 60 soil types in

the world

Largest producer of

pulses, milk etc.

• India is the largest producer of pulses, milk, cashew and mangoes, buffalo meat; and the

second largest producer of tea, wheat, sugarcane and rice

Largest livestock

population

• Globally, India has the largest livestock population which includes more than 300 million

cattle; the segment contributes about 25 per cent of the country’s farm GDP

Rising consumption

expenditure

• Consumption expenditure is likely to reach USD3.6 trillion by 2020, up from an estimated

USD1.0 trillion in 2010

Source: World Travel and Tourism Council, Aranca Research

Favourable location for

exports

• Strategic geographic and proximity to food importing nations, makes India favourable for

export of processed foods

Growing demand

Notes: 2015E – Estimate for 2015; Estimates are from UBM India Pvt Ltd Press Release

FDI – Foreign Direct Investment

Strong demand growth

• 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

• Changing lifestyle and increasing spend on health and nutritional foods

Food processing hub

• India benefits from a large agriculture sector, abundant livestock, and cost competitiveness

• Investment opportunities will arise in agriculture, food infrastructure, and contract farming

• Diverse agro-climatic conditions making it suitable for practicing different crops

Policy support

• Sops to private sector participation; 100 per cent FDI under automatic route

• Agri Export Zones have been set up; Under the government’s Vision 2015 plan, mega food parks to be established

• Approval of National Mission on Food Processing

Increasing investments

• Government expects USD21.9 billion of investments in food processing infrastructure by 2015

• Investments, including FDI, will rise with strengthening demand and supply fundamentals

• Launch of Infrastructure Development scheme to increase investments in food processing infrastructure

2012

Domestic

food

processing

industry:

USD135

billion

2015E

Domestic

food

processing

industry:

USD200

billion

Advantage

India

Source: Indiabusiness.nic.in, Ministry of Agriculture, APEDA,

Indiastat, Meat & Poultry Processing Board, FAOSTAT,

Assocham, Department of Animal Husbandry, Dairying & Fisheries

Notes: FY – Indian Financial Year (April – March), E - Estimate

P – Provisional, MT - Million Tonnes, * - Data mentioned is for FY12

Food processing

Fruits and vegetables

Milk and milk products

Meat and poultry*

Marine products

Grain processing

Consumer food

India is the world’s 2nd largest producer of fruits and vegetables;

production to rise from 227MT currently to 377MT by 2021

With 133 MT (P) in FY13, India is the largest producer of milk in

the world

India is the largest producer of buffalo meat (1.5 MT*) and the

second largest producer of goat meat (0.6 MT*)

With 9.1MT production in FY13, India is the second largest

producer of fish in the world

India produced about 255.4 MT (E) of food grains in FY13

Among the fastest growing segments in India; it includes –

Packaged

food

Aerated soft

drinks

Packaged

drinking

water

Alcoholic

beverages

Contribution of food processing industry in

manufacturing (FY12)

Source: Ministry of Food Processing Industries ( MOFPI),

Annual Report MOFPI (2012-13), Aranca Research

The food processing industry is among one of the largest industries in India and ranks 5th in terms of production,

consumption and exports

With an estimated value of USD121 billion in FY12, India’s food processing industry accounts for 32 per cent of the total

food market

Food processing segment and market

share (FY12)

9%

91%

Food Processing

Other

40%

5% 11%

20%

25%

Meat, Fish, Fruits,Vegetables and Oils

Dairy products

Grain Mill products

Beverages

Other food products

Source: Ministry of Food Processing Industries ( MOFPI), Aranca Research

Note: NCMSL - National Collateral Management Services Limited

Farmers,

cooperatives and

Private

companies

Warehouses,

cold storage and

silos

Retail shops,

malls, cash and

carry

Farmers, Amul,

ITC, Pepsi,

Hindustan

Unilever Lever Ltd

Food Corporation

of India, NCMSL,

Arshiya

International

Kirana shops,

Bharti-Walmart,

Future Retail,

Aditya Birla Retail

Limited

Inputs Production Procurement and storage

Processing Retailing

Seeds, Fertilizers

and Farm

equipments

Grading, sorting,

milling and

packing

National Seeds

Corporation

Limited, Cargill

and Advanta India

Ltd

ITC Ltd, Cargill,

Adani Enterprises,

Olam International

Ke

y

ac

tivit

ies

Ma

jor

pla

ye

rs

GDP (USD billion) and growth of food processing

industry in India


Aranca Research

During FY06-12, the food processing industry expanded at

a CAGR of 7.1 per cent; in FY12 alone, the industry grew

15.7 per cent

Food processing is an important segment in terms of

contribution to GDP, and share in the agriculture and

manufacturing sectors

In FY12, India had as many as 51,877 registered food

processing units with total foreign direct investment of

approximately USD170.2 million, which more than doubled

to USD401.5 million in FY13

According to MOFPI in FY11, capital investments in India’s

food processing sector have increased a significant 28.6 per

cent over the last year

-5.0%

0.5%

6.0%

11.5%

17.0%

10.0

12.0

14.0

16.0

18.0

FY06 FY07 FY08 FY09 FY10 FY11 FY12

GDP- Food processing industry Growth - right axis

Annual growth of ‘food products and beverages’

from IIP (%)

Notes: ASI – Annual Survey of Industries

IIP – Index of Industrial Production

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 FY12-13

Though growth in the ‘Food products and beverages’ sub-

segment slowed to 2.9 per cent in FY13 compared to 15.3

per cent in FY12, it surpassed the growth posted by the

overall manufacturing sector in the fiscal year

Source: Ministry of Statistics and Programme Implementation

(MOSPI), Aranca Research

-10

-5

0

5

10

15

20

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

Annual growth of Food products & beverages as per IIP

Annual growth of overall manufacturing sector as per IIP

Unorganised sector has the largest share in the

sector (FY12)


Annual Report MOFPI (2012-13), Aranca Research

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

42%

25%

33%

Unorganised sector

Organised sector

Small scaleindustries

Shares in production by value and volume (FY11)

Source: Ministry of Food Processing Industries, Aranca Research

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

70%

50%

30%

50%

By Volume By Value

Unorganised sector Organised sector

Healthy contribution to employment generation

(FY09)

Source: Ministry of Food Processing Industries,

Aranca Research

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

Note: FY – Indian Financial Year (April – March) Food processing

industry

Direct employment

(13 million)

Indirect employment

(35 million)

Changing consumer

tastes

• 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

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

Note: FY – Indian Financial Year (April – March)

Rising demand of Indian

products in international

market

• Strategic geographic location and continuous increase in production of raw materials helps

India to supply cheaper products to other countries

• India’s exports of processed food and related items rose at a CAGR of 27.3 per cent

during FY08–12

Source: Company Website, Aranca Research

Alcoholic beverages

Aerated soft drinks and packaged drinking water

Packaged food

Fruits, vegetables, processed grain

Milk and milk products

Meat, poultry and marine products

Consumer food

Source: Ministry of Agriculture, Aranca Research

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

Increasing exports with advantage of 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

Policy support

Vision 2015 targets

trebling of food

processing sector

Mega food parks, Agri Export Zones to attract FDI and aid

infrastructure

Approval of

National Mission on

Food Processing

Rising disposable incomes

• Strong growth in per-capita income has resulted in

greater demand for food items

• Incomes have risen at a brisk pace in India and will

continue rising given the country’s strong economic

growth prospects. Nominal per capita income is

estimated (IMF) to have recorded a CAGR of 9.0 per

cent over 2000–13

• 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

Rising per-capita income in India

Source: IMF, Aranca Research

Notes: E - Estimate, F - Forecast

2%

5%

7%

10%

12%

300

700

1,100

1,500

1,900

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

E

20

14

F

20

15

F

20

16

F

20

17

F

20

18

F

GDP per capita, current prices (USD) Growth

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.

Changing wealth dynamics of India’s population

Source: McKinsey Quarterly, Aranca Research

1% 3% 7% 2% 6% 17%

12%

25%

29% 35%

40%

32% 50%

26% 15%

Globals (>22065.3) Strivers (11032.7 - 22065.3)

Seekers (4413.1 - 11032.7) Aspirers (1985.9 - 4413.1)

Deprived (<1985.9)

2008 2020 2030

Million Household,100%

Income segment

222 273 322

Fruit Juices and Concentrates (USD millions)

Source: Ministry of Food Processing Industries, Aranca Research

Note – MT is Metric Tonnes

Confectioner items (USD millions)

495 529

558 588

750

FY07 FY08 FY09 FY10 FY15E

121 131 143

154

227


Dairy whiteners/creamers (MT) Soft and aerated drinks (million cases)

359 373

388 403

479


243

263 284 307

450


16.3 14.8

20.4

31.8

36.1

FY09 FY10 FY11 FY12 FY13

Exports of processed food and related items

(USD billions)

Source: Ministry of Food Processing Industries, Aranca Research;


During FY09-13, India's exports of processed food and

related products increased at a CAGR of 21.9 per cent to

USD36.1 billion

Main export destinations for food products have been the

Middle East and South East Asia CAGR: 21.9%

Rising demand from rest of the word

• Share of food processing exports in total exports from India stood at 12.0 per cent in FY13

• This has primarily resulted from –

• Greater exports to advanced economies

• More demand from emerging/ developing economies as they experience strong growth

Exports of key processed products (USD millions)

Source: APEDA, Aranca Research


3,217 2,921

1,723

3,355

202

1,128 796

600

3,564 3,292

2,652

3,919

1,934

1,505

912

605

2,149

1,569

1,159 1,176 941

654

453 289

0

900

1,800

2,700

3,600

4,500

Basmati Rice Meat &Preparations

Non-Basmati Rice Guargum Wheat Other Cereals Misc ProcessedItems

Fresh Vegetables

FY12 FY13 Apr-Aug FY14

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)

• The US and Vietnam are the top destinations for

India’s exports of processed food and agriculture-

related products, followed by Iran and Saudi Arabia

Top ten destination countries of India’s exports of

processed food and agriculture related products in

FY13 (USD million)

Source: Ministry of Food Processing Industries,

APEDA, Aranca Research

3,638

1,526 1,412 1,197 1,156

900 891 786

438 416

US

A

Vie

tna

m

Ira

n

Sa

ud

i A

rab

ia

UA

E

Indo

nesia

Ma

lasiy

a

Ba

ng

lade

sh

Th

aila

nd

Ye

me

n

Shares in APEDA exports (FY13)


In FY13E, APEDA products had more than 50 per cent share in total exports; non-APEDA products made up the rest

Within APEDA products, cereals had the highest share (36 per cent) while for non-APEDA products marine products

dominated with a share of about 21 per cent

Shares in non - APEDA exports (FY11)

21%

20%

20%

14%

11%

14% Marine Products

Sugar &Mollasses

Oil Meals

Spices

Tea & Coffee

Others


44%

28%

18%

5% 4%

1% Cereals

Other processedfoods

Animal products

Fresh fruits &vegetables

Processed fruits &vegetables

Floriculture

Note: * Data for Global share is taken from different sources

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) 157.4 2*

Area under

irrigation (million

hectares)

66.8 1*

Coast line ('000

kilometers) 7.5 18**

Cattle (million) 205.0 1**

Source: World bank, FAOSTAT, CIA World Fact book, Aranca Research

Notes: * - For the year 2011; ** - For the year 2012

Production

(million tonnes)

FY12

Global

share* (%) Global rank

Milk (Cow &

Buffalo) 127.3 16.9% 1

Pulses (nes) 7 19.7% 1

Buffalo meat 3.4 42.8% 1

Bananas 29.6 27.8% 1

Mangoes and

Guavas 15.18 39.0% 1

Tea 0.96 23.0% 2

Rice (Paddy) 155.7 23.6% 2

Sugarcane 277.7 ~24.0% 2

Wheat 93.9 ~10.0% 2

Encouragement to

private sector

• 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

Tax incentives and

other sops

• Import duty scrapped on capital goods and raw materials for 100 per cent export-oriented

units

• 100 per cent tax exemption for 5 years followed by 25 per cent tax exemption for the next

5 years for new agro-processing industries

• Full excise duty exemption for goods that are used in installation of cold storage facilities

Relaxed FDI norms • 100 per cent FDI under automatic route (except for alcohol, beer, and sectors reserved for

small scale industries)

• Repatriation of capital and profits permitted

Source: Ministry of Food Processing Industries, APEDA, Aranca Research

Note: FDI – Foreign Direct Investment

Focus on infrastructure

• Assigned priority sector for bank credit

• 60 Agri Export Zones (AEZ) have been set up across the country

• According to Vision 2015, formulated by MoFPI, the government plans to establish 30

mega food parks in public-private partnership mode across the country; out of these 10

have already been approved in the first phase

• Government has also announced setting up of 15 Mega Food Parks in its FY12 Budget,

as part of the third phase of Mega Food Park Scheme

Incentives for

development of storage

facilities

• 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)

Source: Ministry of Food Processing Industries, APEDA, Aranca Research

Focus on R&D and

modernisation

• The government launched initiatives such as the Setting Up/Upgradation of Quality

Control/Food Testing Laboratory, R&D and Promotional Activity scheme and the

Technology Upgradation/Setting Up/Modernisation/Expansion of Food Processing

Industries Scheme


Jammu & Kashmir: Apples,

walnuts

Punjab: Basmati rice,

vegetables

Himachal Pradesh: Apples

Rajasthan: Coriander,

cumin

Gujarat: Mangoes,

vegetables, sesame seeds

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

Assam: Ginger

Cumulative FDI inflows (Apr 2000–Aug 2013)

into the food and agriculture sector (USD million)

Source: Department of Industrial Policy & Promotion, Aranca Research

Between April 2000 and August 2013, FDI in agriculture and

food processing in India stood at USD6.0 billion

Demand growth, supply advantages, and policy support

have been instrumental in attracting FDI

Note: FDI – Foreign Direct Investment

1,629

1,980

1,548

390 337

105 52

0

550

1,100

1,650

2,200

Ag

ri s

erv

ice

s

Fo

od

pro

cessin

g

Fe

rme

nta

tio

n

Ve

ge

table

oil

Ag

ri m

ach

ine

ry

Te

a a

nd C

off

ee

Su

ga

r

0%

10%

20%

30%

40%

Cumulative FDI inflow (USD million)

Share of total FDI inflow (%) - right axis

12th Five Year Plan (2012-17) outlay shares: Food

Processing

Source: Ministry of Food Processing Industries

(2009-10 Annual Report), Aranca Research

The government’s main focus is on supply-chain related

infrastructure like cold storage, abattoirs and food parks

36.3%

45.4%

11.5%

5.5%

1.3% Infrastructuredevelopment

National Mission onFood Processing

Strengthening ofinstitutions

Food Safety, R&D andPromotional Activities

Innovation FundScheme

Plan allocation to the Food Processing

sector: USD2.9 billion

Source: Thompson ONE Banker, Assorted News Articles, Aranca Research

PE investments in the food and agriculture totaled USD229 million during 2011-12

Company Investor Type of business Deal value (USD million)

Godrej Agrovet Temasek Agribusiness 105.0

Nuziveedu Seeds Blackstone Group Floriculture 80.0

Nilgiris Dairy Actis Private Equity Dairy 65.0

Milltec Group Multiples Private Equity

Technology and

machinery developer

for agro mills and plants

43.2

Prakash Snacks Pvt Ltd Sequoia Capital Snacks 30.0

Parag Milk & Milk Products IDFC Dairy 29.0

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

Hangyo Ice Creams Pvt Ltd Capvent Private Equity Manufacturer of milk

products 5.0

Ma

jor

PE

de

als

Ja

n 2

01

0 –

Oct

20

13

Source: Thompson One Banker, Assorted News Articles,

Aranca Research

Note: M&A – Mergers and Acquisitions

M&A activity

Target company Acquirer company Type of business Deal value (USD million)

United Spirits Ltd Relay BV Liquor 2,045

Bush Foods Overseas Pvt Ltd Hassad Food Rice exporter 135.0

GMR Industries Ltd EID Parry Sugar 114.8

Jay Mahesh Sugar Industries NSL Sugars Ltd Sugar 51.99

Olam International Ltd Hemarus Industries Ltd Sugar 73.8

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

Taraori Rice Mills Pvt Ltd Ebro Foods SA Food and Beverage 14.0

Candico India Keventer Agro Candy items 11.2

Jyothi Dairy Private Ltd Hatsun Agro Product Ltd Dairy products 10.6

M&

A d

ea

ls

Ja

n 2

01

0 –

Oct

20

13

Source: Thompson ONE Banker, Aranca Research

Note: JV – Joint Venture

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

Foreign Players Indian Partner Type of business Stake ratio Year

Kagome and Mitsui Ruchi Soya Industries Tomato products 60:40 2013

Starbucks Corporation Tata Global Beverages Beverage 50:50 2012

Molson Coors Cobra India Brewing NA 2011

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: National Dairy Development Board,

GCMMF (www.amul.com), Aranca Research

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 133 million metric tonnes (mmt) in FY13 from 21.2 mmt in FY1969

India retained its position as the world’s largest milk producer in 2012-13

Dairy cooperatives offer employment opportunities to about 12 million farm families

Source: GCMMF (www.amul.com), Aranca Research

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)

0.9

1.3

1.5

1.7

2.1

2.4 2.5

FY07 FY08 FY09 FY10 FY11 FY12 FY13

GCMMF (Amul) sales (USD billion)

Source: GCMMF (www.amul.com),

thehindubusinessline.com, Aranca Research

Notes: CAGR – Compound Annual Growth Rate

FY – Indian Financial Year (April – March)

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 CAGR: 17.6%

Source: GCMMF (www.amul.com), Aranca Research

Main brand: Amul

Products: milk (including flavoured), butter, margarine, cheese, curd, desserts, infant food

Facts and Features

Producer members (million) 3.18

Village societies 16,117

Milk handling capacity (million litres/ day) 13.67

Total milk collection (FY12, billion litres) 3.88

Daily milk collection (FY12, million litres) 10.6

Milk drying capacity (million tonnes/ day) 647

Notable Awards Authority

Excellent performance in dairy product

exports for 11 consecutive years APEDA

CIO International IT Excellence Award

(2003) for positive business performance

through resourceful IT management and

best practices

IDG’s CIO

Magazine

(USA)

International Dairy Federation Marketing

Award (2007) for Amul’s pro-biotic ice

cream launch

International

Dairy

Federation

Primary focus on crushing and trading activities

Expansion of extraction and refining capacity; focus on

branded products

Focus on developing upstream business; secured access to

185,000 hectares of palm plantation; major expansion of

refining capacity

Source: Ruchi Soya website, Aranca Research

Top edible

oil producer in India with

market share of 18.2 per cent

Strong presence in

Edible oil and meal market

Sales growth at a CAGR of 25

per cent over FY01-12

Market capitalisation of

USD473.05 million

Revenue base of over

USD6,375 million

Organic growth

phase

Strong brands like

Nutrela and Vanaspati

and Sunrich

Focus on R&D

Acquisitions of

companies and

plants facilities

2001-04 2005-08 2008-12

One of the world’s

fastest growing

FMCG company

Aggressive

acquisitions of lands

for soya and palm

plantations

Source: Company Annual Report, Aranca Research

Note: KRBL - Khushi Ram and Behari Lal, FY13 exports though grew in local

currency, it fell in terms of USD due to adverse movement of exchange rate

Salient characteristics

• KRBL is world’s largest rice miller and basmati rice exporter

• It has strong brand presence through global retail giants like Carrefour, Bharti-Walmart, Spencer and Future Group

• It is the largest producer of contract farming basmati rice in the world

• The company accounts for 25 per cent of India’s total exports of branded basmati rice

• KRBL is well-integrated in terms of farming, rice processing, oil production and power generation

Sales (USD million) Exports (USD million)

271.5

333.7 341.0 340.3

383.0

FY09 FY10 FY11 FY12 FY13

178.8

173.0

FY12 FY13

Notes: PPP – Public Private Partnership, AEZ – Agri Export Zones, FDI – Foreign Direct Investment

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

37.5

544.4

1,088.5

10th Five Year Plan 11th Five Year Plan 12th Five Year Plan

Fund allocated for infrastructure development

in food processing industry (USD million)

Government’s focus and launch of various schemes to provide excellent infrastructure facility in food processing sector

opens up various opportunities for private investors

Various schemes launched by government provides capital grant, subsidy, duty free export of products and tax incentives

to the investors

Project wise fund allocated in 12th Five

Year Plan (USD million)

CAGR: 27.2%

677.0

349.0

58.1 Mega Food ParksScheme

Scheme forIntegarted ColdChain

Scheme forModernsiation ofAbattoirs

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: [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]

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

Wherever applicable, numbers have been rounded off to the nearest whole number

Year INR equivalent of one USD

2004-05 44.95

2005-06 44.28

2006-07 45.28

2007-08 40.24

2008-09 45.91

2009-10 47.41

2010-11 45.57

2011-12 47.94

2012-13 54.31

Exchange rates (Fiscal year)

Year INR equivalent of one USD

2005 45.55

2006 44.34

2007 39.45

2008 49.21

2009 46.76

2010 45.32

2011 45.64

2012 54.69

2013 54.45

Exchange rates (Calendar year)

Average for the year

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

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