Presentation by - Investment Opportunities in Mega Food Parks
31.10.2014 Jaipur
Slide 2
Objectives and Envisaged Outcomes To provide state-of-the-art
infrastructure in food processing sector Conceptualized on an
Industrial Park Model and customized to the need of food processing
sector Focus on both backward and forward integration addressing
the entire supply chain Aimed at increasing sector size, processing
level of perishables, value addition and countrys share in global
food trade Creation of high quality processing infrastructure and
efficient supply chain following a cluster-based approach Increased
realization for farmers Wastage reduction of perishables Capacity
building of producers and processors Employment creation Food
processing realized as the crucial link between agriculture and
industry
Slide 3
A Hub and Spoke Model Mega Food Park CPC CC PPC 2 CC PPC 3
Farmer Groups Self Help Groups Primary Processing Centres (PPCs):
Pre-cooling, Grading pulping Sorting, waxing, packing, Temporary
storage. Supply to CPC or direct market Collection Centres (CCs):
Aggregation Points CPC: Core, Basic Enabling, Non-core
infrastructure, SDF sheds, Processing units Farmers Fresh produce
and Value added products for domestic market and exports CC PPC 1
Raw Material Suppliers
Slide 4
Key Project Components Core Processing at CPC and PPCs (incl.
SDF Sheds) Sorting & grading, packaging, warehouses &
Specialized storage, Pre-cooling and Ripening chambers, IQF, Cold
chain infrastructure, Steam generation, QC Lab etc. At least 25% of
the eligible project to be allocated Features that may be used my
more than one unit in the Park and should be capital intensive SDF
Sheds for MSEs plug and play. Max. 10% of Park area Plots for Units
Enabling Basic Infrastructure at CPC and PPCs Roads, drainage,
water supply, electricity supply including captive power plant, ETP
& STP, weighbridges etc Cost of captive power plant, not
exceeding Rs.10 Crore, shall be considered as eligible project cost
for grant assessment Non Core Infrastructure Admin buildings,
training centres, canteen, workers hostel, trade/display centre
etc: Cost not exceeding 10% of the eligible project cost would be
eligible for grant purpose Plots to be leased out to food
processing units Food products fit for human and animal consumption
Ancillary industries like packaging, bottling etc
Slide 5
5 Financial Assistance from the Government Large scale projects
- capital intensive - with long gestation periods. Hence, decided
to provide financial assistance to entrepreneurs Financial
assistance for creation of processing infrastructure, enabling
basic infrastructure and support/non-core infrastructure at CPC and
PPCs Typical Project Cost Rs. 110 Crore (USD 17-18 Mn) to Rs. 140
Crore (~USD 22-23 Mn) in general areas and Rs. 75 Crore (USD 12-13
Mn) to Rs. 100 Crore (USD 17 Mn) crore in hilly/diff. areas
Assistance from Ministry 50% of the eligible project cost limited
to Rs 500 Mn (~USD 8.40 Mn) in general areas 75% of eligible
project cost limited to Rs 500 Mn (~USD 8.40 Mn) in difficult &
hilly areas and ITDP notified areas Eligible project cost is
defined as total project cost minus the cost of land, pre-operative
expenses and margin money for working capital.
Slide 6
Project Land Minimum Area Requirement for CPC: 50 Acres
(contiguous) Land should have government permission for industrial
use Land may either be outright purchased or taken on lease of at
least 25 years GoI financial assistance shall not be used for
procurement/purchase of land Sale of land to units not permissible.
Land to be given only on lease basis
Slide 7
Special Purpose Vehicle (SPV) SPV Responsibility of project
execution & ownership vests with SPV - Registered under the
Companies Act Promoter holding maximum equity in the SPV: lead
promoter Combined net worth of the promoters = or > Rs.50 Cr
Each member in SPV must have a net worth at least 1.5 times of its
equity holding Mandatory for lead promoter to set up a unit with
min Rs. 10 Cr investment Not applicable to state Govt.
entities/cooperatives Key revenue sources: user charges for common
facilities and lease rentals from leased out plots and SDF
sheds
Slide 8
Agencies Assisting in Scheme Implementation and Role of State
Government Programme Management Agency - PMA Assist MoFPI in
disseminating info. And & sensitizing potential stakeholders
Assist Ministry in inviting EoI Assist in selection of projects EoI
and DPR Appraisal stages Assist the Ministry in release of grant to
SPVs Assist SPVs in financial closure To assist Ministry in the
evaluation amendments to the projects/DPRs Monitor & report
progress Role of State Government State government nominee to be on
SPV Board (greater participation of state Govt. envisaged)
Providing assistance to SPVs in land procurement and obtainment of
all requisite clearances Assist in obtainment of any other benefits
as per the states Industrial / Food Processing Policy Project
Management Consultant - PMC PMC to be appointed by the SPV from
list of Professional Agencies empanelled by MoFPI PMC Fee (not
entire amt) part of eligible project cost PMC to assist SPV in DPR
Prep., detailed design, engineering and master planning, bid
process management, obtainment of clearances, documentation for
grant release, construction supervision etc
Slide 9
The Selection Process Submission of EoI Evaluation of EoI
In-Principle Approval Submission of DPR and other requisite
documents Appraisal of DPR Final Approval to Project by IMAC
Release of GoI grant PMA on 100 points and TC on 50 points promoter
profiles, land, project plan and business plan CoI, DPR, land reg.
With CLU, SSA, PMC Agreement, Term loan sanction. 6 months given
PMA and TC as per Scheme Guidelines Timeline : 30 months from
release of 1 st installment In 4 installments IMAC:
Inter-Ministerial Approval Committee, TC: Technical Committee, CoI:
Certificate of Incorporation, CLU: Change in Land Use, SSA: Share
Subscription Agreement
Slide 10
State-wise Distribution of Parks StateIPAFATotal Andhra
Pradesh022 Telangana101 Assam011 Bihar112 Chhattisgarh022
Gujarat112 HP011 J&K011 Jharkhand011 Karnataka011 MP011
StateIPAFATotal Maharashtra022 Mizoram101 Punjab011 Rajasthan011
Tripura011 UK022 WB011 Odisha011 Total42125 19 states to which
Parks have been allotted IPA: In-principle Approval and FA is Final
Approval Uncovered States: Ker., TN, Goa, Arunanchal Pradesh,
Manipur, Meghalaya, Nagaland and Sikkim, Har. and UP Total 42 Parks
in 11 th and 12 th Plan. 25 Approved and 17 vacancies. 72 proposals
received
Slide 11
State-wise Distribution of Parks Graphical Presentation
Projects accorded Approval (Both Final and In-principle)
Slide 12
Big Picture of Scheme Implementation: Impact on Food Processing
Landscape Total project cost of approved projects: Rs. 2400
crore/Rs. 24000 Mn/~USD 400 Mn Grant component: ~Rs. 1100 crore/Rs.
11000 Mn/USD 185 Mn Released till date: Rs. ~370 crore/Rs. 3650
Mn/~USD 61 Mn Private sector investment: Rs. 1300 crore/Rs. 13000
Mn/USD 215 Mn Funds mobilized: Rs. ~450 crore/Rs. 4150 Mn/USD 69
Mn
Slide 13
Big Picture of Scheme Implementation: Land area Available
Slide 14
14 Investment Opportunities Through SPV Participation and
Setting up Units Investment through Special Purpose Vehicle (SPV)
Opportunity to join project SPVs as co-promoter(s): Investment in
the form of equity participation 42 projects taken up in three
phases (~17 yet to get approval) As partners in SPV, the members,
collectively, would be responsible for development, implementation
and ownership of common facilities 100 percent FDI under automatic
route is permitted Investment in Units Each Park shall provide
developed infrastructure for setting up about 30 processing units
Total 42 parks have been taken up. Hence, ~1250 units to be set up
Various incentives for setting up units (both by central and state
governments) Details later
Slide 15
15 Investment Opportunities Projects nearing completion Name of
Mega Food Park Leasable Area for Plots (Acres) Core Processing
Facilities Available Srini Food Park, AP~35 (15 left) Sorting and
grading, Multi fruit Aseptic Pulping Line, IQF facility, Deep
freeze & Cold Storage, warehouse, ripening chambers, testing
lab and Tetra Pack facility etc Integrated Food Park, Kar~51
Warehouses, silos, sorting and grading, ripening, IQF, pre-coolers,
cold storage, boiler, flour mill etc Indus Mega Food Park, MP~23
Value added extrusion line for grains and soya bean, warehouse,
cold storage, QC lab In addition to the above, each of these parks
have SDF sheds for MSE units, reefer vans, enabling basic
infrastructure like roads, drainage, water, power, ETP and STP
facilities and non-core infrastructure like admin building, canteen
etc
Slide 16
16 Investment Opportunities Projects nearing completion Name of
Mega Food Park Leasable Area for Plots (Acres) Core Processing
Facilities Available International Mega Food Park, Punjab ~26 Cold
chain infra, warehouses and silos, reefer vans, dairy processing,
sorting and grading, IQF etc Patanjali Mega Food Park, UK~36 (7
available) Sorting and grading, warehouses, tetrapak, cold storage,
grain milling, IQF, state-of-the-art lab, packaging facilities etc
Jangipur Bengal Mega Food Park, WB 44 (~40 available)Cold storage,
warehousing, IQF, packaging etc Mega Food Park coming up in
Rajasthan in Rupangarh, Ajmer with ~40 acres of leasable area In
addition to the above, each of these parks have SDF sheds for MSE
units, reefer vans, enabling basic infrastructure like roads,
drainage, water, power, ETP and STP facilities and non-core
infrastructure like admin building, canteen etc
Slide 17
Brief Profile: Location: Village Mogili, District Chittoor,
Andhra Pradesh Date of Final Approval: 27.03.2009 Project Cost: Rs.
121.10 Crore CPC Area: 142.80 Acres
Slide 18
18 Incentives on Offer Andhra Pradesh VAT reimbursement on
purchases made during the construction period for two years for
Mega Food Park up to Rs 1.8 crore and 75 per cent VAT reimbursement
on sales - both for the park and the units proposed to be located
in the park, for five years Mega food parks will be reimbursed at
25 per cent cost of external infrastructure limited to Rs two crore
and will also be considered for tailor-made benefits on case to
case basis Food processing declared as seasonal industry: relief
from minimum electricity charges during the closure (non-seasonal)
period 50% refund of stamp and documentation duty on land
registration charges to food processing industries/units 5%
interest subsidy on total working capital loan subject to a ceiling
of Rs. 2 lakh per unit Electricity costs reimbursement @ Rs. 1/unit
for 5 years for units (including cold storages)
Slide 19
Brief Profile: Location: Village Padartha, District Haridwar,
Uttarakhand Date of Final Approval: 27.03.2009 Project Cost: Rs.
95.08 Crore CPC Area: ~71 acres
Slide 20
20 Incentives on Offer Uttarakhand All new industrial units and
existing industrial units (on substantial expansion) eligible for
Capital Investment Subsidy @ 15% of investment of Plant &
Machinery. Ceiling of Rs. 30-50 lakh 100% Income Tax exemption for
first 5 years and 30% for next 5 years (with conditions like date
of commencement of operations) Exemption from entry tax on Plant
& Machinery Land use conversion and development charges and
regime will be rationalized Stamp duty concession in respect of
land in specialized commodity parks 75% of the Total Expenditure
subject to a maximum of Rs. 2 Lakh incurred in obtaining
national/internationally approved quality marks such as ISO series
certificate etc
Slide 21
Brief Profile: Location: Village Vasanthanarsapura, District
Tumkur, Karnataka Date of Final Approval: 19.03.2011 Project Cost:
Rs. 144.33 crore CPC Area: 110 acres Integrated Food Park
Slide 22
22 Incentives on Offer Karnataka Exemption from Stamp Duty
Concessional Registration Charges Exemption from Entry Tax
Incentives for Export Oriented MSME, Large and Mega agro based
industries Exemption of APMC cess/fees for MSME, Large and Mega
agro based industries Subsidy for setting up ETPs by MSME, Large
and Mega agro based industries and agri infrastructure Interest
Free Loan on VAT for Large and Mega agro based industries 100%
exemption of electricity duty/tax for the initial period of 5-3
years depending on zone Interest subsidy at 5% on term loans for
certain sized industries Agro based industry - Anchor unit subsidy
of Rs. 100 lakh shall be offered for the first two agro based
industries with minimum employment of 100 members and minimum
investment of Rs. 50 crore in each of the taluk coming in specific
zones.
Slide 23
Brief Profile: Location: Jangipur, Murshidabad, WB Date of
Final Approval: 16.03.2010 Project Cost: Rs. 132.70 Crore CPC Area:
82.11 Acres Jangipur Bengal Mega Food Park
Slide 24
24 Incentives on Offer West Bengal Interest subvention for a
period of 5 to7 years at the rate of 6 to25 percent, maximum of Rs.
175 lakh/ year Capital Investment subsidy from 15 40 percent
maximum upto 50 lakh 100% exemption on land conversion subject to
maximum of 100 acres Exemption from Land Cost for MSME upto 75 100
percent Electricity costs reimbursement at the rate of Rs. 1.00 -
Rs. 1.50/ Kwh for a period of three years limited to Rs. 20-30 lakh
for food and agri based industries
Slide 25
Brief Profile: Location: Fazilka, Punjab Date of Final
Approval: 25.05.2011 Project Cost: ~Rs. 134 Cr CPC Area: ~55 acres
International Mega Food Park
Slide 26
26 Incentives on Offer Punjab Stamp Duty Exemption Registration
of new products relating to agro industries & agriculture are
provided an assistance of 50 percent subject to a ceiling of Rs.2
lakh per patent 5% back ended subsidy for 5 years on the interest
on term loan subject to a ceiling of Rs.20 lakh per year per unit
i.e. maximum of Rs. 100 lakh in five years Interest subsidy will be
available to agro industrial units making fixed capital investment
ranging from Rs. 10 crores to less than Rs.25 crores and availing
term loan upto Rs. 15 crores MSME are provided with 5 percent back
ended subsidy for 5 years on the interest on term loan for agri
infrastructure project subject to a ceiling of Rs. 20 lakh per year
per unit Interest subsidy will be available to existing
small/medium agro industrial units undertaking modernization and/or
technology up-gradation for installing new equipment and availing
term loan upto Rs. 5 crores for the purpose.
Slide 27
27 Incentives on Offer Punjab Mega Projects Scheme for Agri
Projects 100% exemption from payment of Mandi Fee, Rural
Development Fee and Infrastructure Cess on purchase of fruits &
vegetables directly from farmers for processing by the unit for 10
years. 75% exemption from payment of Mandi Fee, Rural Development
Fee and Infrastructure Cess on purchase of non-FCI grade food
grains, barley and maize (except custom milling of paddy) directly
from farmers for processing by the unit for a period of 10 years.
Exemption from basic stamp duty at the current applicable rate on
purchase of land for the designated purpose Declaration of factory
premises of the unit as private Mandi yard and permission for
direct purchase of food grains/maize/ barley/ fruits/ vegetables
required for processing by the unit. 100% exemption on electricity
duty on captive consumption of power generated by the unit. 50%
exemption on electricity duty on purchase of power from PSEB for 5
years from the date of release of connection.
Slide 28
Brief Profile: Location: Rupangarh, Ajmer, Rajasthan Date of
Final Approval: 19.02.2014 Approved timeline: 19.08.2016 Project
Cost: Rs. 113.56 Cr CPC Area: ~75 acres Leasable Area: ~35 acres
Facilities: WH, Silos, Cold Storage, Deep Freeze etc Incentives on
Offer by State Government RIPS 2014 Investment subsidy of 30
percent of VAT and CST which have become due and have been
deposited by the enterprise for 7 yrs Employment generation subsidy
up to 20 percent of VAT and CST Exemption from payment of 50
percent of electricity duty for 7 yrs Exemption from payment of 50
percent of land tax for 7 yrs Exemption from payment of 50 percent
of mandi fee for 7 yrs Exemption from payment of 50 percent of
stamp duty on purchase or lease of land Exemption from payment of
50 percent of conversion charges in CLU process 50 percent
exemption on payment of entry tax on capital goods for setting
up/un-gradation of dairy units Policy for Promotion of
Agro-Processing and Agri-Business 2010 Incentive for Market
Development and Diversification Incentives for quality and
standards Concessions of direct purchase and market fee Greentech
Mega Food Park Pvt. Ltd.
Slide 29
29 Incentives on Offer North East States Central Capital
Investment Subsidy @ 30% of the value of plant and machinery,
without any upper ceiling. The limit of automatic approval of
subsidy is Rs. 1.50 crore; Grant of subsidy higher than Rs.1.50
crore but up to a maximum of Rs. 30 crore would require approval of
an Empowered Committee; Grant of subsidy higher than Rs. 30 crore,
would require approval of the Union Cabinet. Central Interest
Subsidy Scheme provides for Interest subsidy @ 3% on working
capital loan Central Comprehensive Insurance Scheme provides for
100% reimbursement of insurance premium paid by an industrial unit.
NEIIPP, 2007 also provides for fiscal benefits like 100% Excise
duty exemption on finished goods made in NER and 100% Income tax
exemption for a period of ten years. Transport Subsidy Scheme 50 to
90 percent of the transportation cost
Slide 30
30 Incentives on Offer for project SPVs (Generic/in Various
states) Ceiling waivers and stamp duty exemptions Capital subsidy
up to some percentage of project cost (subject to limit) to develop
MFP VAT reimbursement on purchases made during the construction
period Reimbursement of some percentage of external infrastructure
cost (subject to limit) Food processing industry declared as
seasonal industry to enable the industry to get relief from minimum
electricity charges during the closure (non-seasonal) period
Electricity costs reimbursements for food and agri based industries
including cold storages Interest subsidy on working capital loan
from the financial institutions Subsidy for putting up captive
power generation station Incentives to encourage adoption of latest
quality certification standards Reimbursement on DPR preparation
charges Modifications in APMC Act: Provisions like contract farming
and direct purchase
Slide 31
31 Incentives on Offer for prospective Units VAT reimbursement
on sales - for the units proposed to be located in the park for
five years (presently in AP) OR The Industrial units in the Mega
Food Park shall be eligible for reimbursement of 100% VAT paid for
a period of 10 years Limited to 200% of fixed capital investment
(presently in Odisha) Capital investment subsidy of some percent of
project cost subject to a limit Some percent per annum back ended
interest subsidy on working capital loan for first 5 years from
commencement of operations of the units subject to a limit
Electricity costs reimbursements for a certain period Fast-tracking
approvals of projects under MoFPIs National Mission on Food
Processing being implemented by the state government
Modernization/Setting up Scheme, Cold Chain Scheme, Reefer vans
scheme etc
Slide 32
32 Key Announcements Budget 2014 Rs. 2000 cr fund set up in
NABARD to provide affordable credit to Agro-processing units in
MFPs Reduction in excise duty from 10% to 6% for Food Processing
machinery. An amount of Rs. 100 crore has been provided for
Agri-Tech Infrastructure fund. It is proposed to establish a Rs.
10,000 crore fund to act as a catalyst to attract private capital
by way of providing equity, quasi equity, soft loans & other
risk capital for start-up companies in MSME Sector. To establish
technology centre network to promote innovation, entrepreneurship
and agro- industry, it was proposed to set up a fund with a corpus
of Rs. 200 crore. Definition of MSME will be reviewed to provide
for a higher capital ceiling. To accelerate setting up of a
National Market, the Central Government will work closely with the
State Governments to re-orient their respective APMC Acts., to
provide for establishment of private market yards/ private markets.
The state governments will also be encouraged to develop Farmers
Markets in town areas to enable the farmers to sell their produce
directly.
Slide 33
33 Fiscal Incentives Automatic approval of FDI up to 100%
equity except a few items reserved for SSI Income Tax exemption on
the profit from the business of Fruits & Vegetables, Dairy,
Poultry & Meat Products: 100% for 5 years and 25% for next 5
years Deduction of Capital Expenditure from income tax upto 150%
for Cold Chain and Warehousing facilities Project imports for Food
Product machineries at concessional Custom Duty Cold Chain and
Dairy Machineries exempted from Excise Duty
