AgriBusiness & Food Industry w December 2012
5
6
AgriBusiness & Food Industry w October December2012 2012
AgriBusiness & Food Industry w December 2012
7
inside...
Cover Story
...12
10 16
EDITORIAL
RICE EXPORTS
Export tax on rice can be counter-
– Tejinder Narang & Rakesh Singh
22
productive
TRADITIONAL FOODS
Soyabean for Nutrition Enhancement of Traditional Food Products – Dr. Sumedha Deshpande
BRANDWATCH
26
Nestle
– Paul Bulcke
28
Yum!
Overwhelming presence of
Indian food companies – M B Naqvi Interview
...18
Indian rice will always be at the top due to its superior quality, says Rajen Sundaresan Agri Affairs
30
The brand that heard the unheard
– Sravanthi Challapalli & Vinay Kamath Coca-Cola
India is definitely a key market – Carlos Olmos
MARINE FOODS
32
Seafood Chains in Asia
33
36 l l l
Integrated duck & fish farming pays good dividends – M J Prabu Retail NEWS We are investigating allegation of corrupt practices: Wal-Mart Rajdhani to open 13 new outlets across states Change APMC Act to let farmers enjoy benefits of FDI: S. Shivkumar
l l
Agriculture marketing reform
43 l l l
Food & Beverages NEWS Cadbury invents temperature-tolerant chocolates FSSAI appoints Intertek for quality audit Pepsi Chips lose markets to local players
— Sanjeev Chopra
48 l l
dairy news Amul sets up its largest dairy near Delhi Import duty on milk powder restored
AgriBusiness & Food Industry w December 2012
41 l
Offering major export opportunities
Corporate NEWS Hyderabad to host food industry leadership program FDA warns Indian exporters to get registered MTR Foods to expand its breakfast menu
A three-pronged strategy for Delhi 8
...20
Infrastructure, power and education are main problems in India
AgriBusiness & Food Industry w December 2012
9
orial Edit
Chief Editor
S. Jafar Naqvi
Consulting Editors
T.V. Satyanarayanan K Dharmarajan
Chief Co-ordinator
M.B. Naqvi
Editorial Co-ordinator Syed M K News Editor Anwar Huda General Manager Lalitha V. Rajan Layout & Design Faiyaz Ahmad Mohd. Iqbal Head Office New Delhi: +91-11-26682045 / 26681671 / 64521572 Fax : +91-11-26681671 mediatoday@vsnl.com Other Business Offices Hyderabad 9248669027 hyderabad@mediatoday.in Mumbai 9702903993 mumbai.office@mediatoday.in Pune 9881137397 pune@mediatoday.in Bangalore
9342185915 / 9341473494 Bangalore.office@mediatoday.in bangalore@mediatoday.in
Ahmedabad
9727866249
Admn. & Marketing Office
MEDIA TODAY PVT. LTD. T-30, Ist Floor, Khirki Extn., Malviya Nagar, New Delhi- 110017 (India) Phone : 91-11-26682045 Fax : 91-11-26681671 E-mail: mediatoday@vsnl.com Web. : www.mediatoday.in
Subscription
India : Rs. 1000/- for 1 Year / Rs. 1950/- for 2 Years Overseas : US$ 120 for 1 Year / US$ 230 for 2 Years Single Copy in India : Rs. 50/Single Copy Cost for Overseas : US$10
Printed, published and owned by M.B. Naqvi, Printed at Everest Press, E-49/8, Okhla Industrial Area Ph-II, New Delhi - 110 020 and Published from E-11/47 A, New Colony, Hauz Rani, Malviya Nagar, New Delhi-110017 (INDIA)
Editor : S. Jafar Naqvi
Vol 9....... Issue 12 ...... December 2012
10
While a rallying call in India today is for transforming agriculture into agri-business, the latest Agriculture Census figures on land holdings come as a damper. The number of small and marginal holdings that have been a bane of Indian agriculture continues its upward curve. Needless to emphasize that the size of farms should not shrink beyond a point, making it difficult for operators to find full time employment for them and their family and to secure minimum consumption needs. Such holdings nullify the benefits that can accrue from economies of scale. The Agriculture Census for 2010-11, held after a gap of six years, reveals that the average size of operational holdings in the country has fallen from 1.23 hectares in 2005-06 to 1.16 hectares at present. That the downtrend has been continuous is clear from the fact that the size of average holdings way back in 1970-71 was 2.3 hectares. Going by the planners’ classification of farm holdings -- less than one hectare termed as ‘marginal’, less than two hectares as ‘small’, holdings of 2 to 10 hectares as ‘semimedium’ and ‘medium’, and above 10 hectares as ‘large’ – the latest census data points to the fact that 85 per cent of the farmers in India are cultivating small farms of less than two hectares in size. The previous census had placed this percentage at 83.2. The small and marginal holdings account for a slightly larger proportion of total cultivated area, with the percentage going up to 44, as against 41 earlier. The figures indicate that far from moving towards consolidation, the holdings are proliferating, the number having gone up to 138 million from 129 million six years ago. Compared to the figure four decades ago, the increase has been almost double. The proportion of farmers operating medium and large holdings has also come down. State-wise figures show that in the agriculturally advanced states of Punjab and Haryana, the average holding size is 3.77 hectares and 2.25 hectares respectively – well above the national average. On the other hand, the corresponding figure for Kerala is 0.22 hectares and for West Bengal 0.77 hectares. It is noteworthy that leftist parties wedded to the cause of land reforms were in power for long in Kerala and West Bengal. The continuing trend of fragmentation of holdings in the country is attributed to rising population on the one hand and inadequate growth in avenues of off-farm employment on the other. Obviously, high GDP growth and alternative employment opportunities created in industry, construction and other services in the past four years have not helped to wean away a sizeable number of people from their traditional occupation in farms. The land holding pattern in India, consequent to declining farm sizes, underscores the need for a re-look at the land ceiling laws in force in the states. The ceiling laws in states are losing their relevance in the present context of an awareness to make agriculture a profitable agribusiness activity. Alongside, there is an urgent need to draw up growth strategies aimed at promoting off-farm employment in rural areas. It is also high time that land leasing laws in states were framed and implemented in an effective manner to enable owners of small holdings to lease them to those interested in having larger units. The lease law should also protect the right of leasers to get back the land, if they need it, at the end of the leasing period. All these issues need to be thoroughly debated and incorporated in the 12th Five- Year Plan’s agriculture development programmes. Through proper leadership, small land holders may also be encouraged to form cooperatives so that they can jointly make their operations more profitable and secure benefits of economies of scale. Comments are welcome at: mediatoday@vsnl.com Views expressed by individuals and contributors in the magazine are their own and do not necessarily represent the views of “AgriBusiness & Food Industry” editorial board. AgriBusiness & Food Industry does not accept any responsibility of any direct, indirect or consequential damage caused to any party due to views expressed by any one or more persons in the trade. All disputes are to be referred to Delhi Jurisdiction only. .....Editor
AgriBusiness & Food Industry w December 2012
AgriBusiness & Food Industry w December 2012
11
CoverStory
Overwhelming presence of
Indian food companies – M B Naqvi
T
hanks to a solid reputation on the international stage and the food industries’ strong competitive edge rooted in innovation, SIAL exhibition enabled all the prominent and potential stakeholders of high-potential food and hospitality sector to converge under a single roof. This is in fact the sole viable SIAL trademark. The largest food exhibition in the world was held from 21 to 25 October, at the Parc des Expositions de Paris-Nord Villepinte convention centre.
12
Massive Indian Participation This edition of SIAL was unique as witnessed, for the first time, an incredible presence and exposure of Indian food companies. Indian pavilions were formerly inaugurated by Indian Ambassador to France, Rakesh Sood along with Minister of State for Food Processing Mahant Charan Das. APEDA pavilion, which attracted shoals of curious trade visitors and entrepreneurs and also became the venue for the MoU signing ceremony, was awesomely conceptualised and led by Sunil Kumar, Secretary, APEDA with
AgriBusiness & Food Industry w December 2012
U. K. Vats, Deputy General Manger, APEDA. Interestingly, the placement of the Indian pavilions was very strategic, surrounded by powerful players like Turkey, Egypt, and Brazil etc. Indian pavilions stood clear and attracted impressive numbers of visitors, delegates and participants. The display, presentations, layouts and visibility of these pavilions of basmati and other food products which were sponsored by Indian Participants were amazing. Major attractions of Indian pavilion were display of Indian Basmati under
CoverStory
the banner of All India Rice Exporters’ Association (AIREA), display of various types of spices under the Spices Board India, Varieties of cashew under the Cashew Board of India. This was the first time that various kinds of roasted cashew were presented in an attractive manner. Apart from Indian pavilion, over 50 companies from meat, snacks, biscuits, honey, basmati, cereals, fruit beverages, fresh-frozen products, ready-to-eat foods were showcased in different attractive manner in various product-category subhalls. Allanasons which has recently won APEDA Diamond Trophy apart from winning 17 Gold Trophies in the past also showcased Frozen Halal Meat, Frozen Fruit and Vegetable Products, Beverages, etc. at different product specific halls. Overall, as per trade sources, exhibitors were more than satisfied with the exposure and enquiries generated during this mega show. It is noticed that world recognises India now as not only a commodity supplier but also a fullfledged, reliable exporter of processed food products as well.
Hundreds of Indian trade visitors were present at the iconic show, and used the platform to meet trade visitors of other countries for mutual benefits and opportunities, and to explore exports grounds in EU, US and South American markets. An MoU (Memorandum of understanding) was also signed between Indian and France to strengthen the mutual cooperation in agri-food exportimport segment, transfer of technologies, knowledge sharing, and to create further opportunities between manufacturers and exporters of food products and technology. A small MoU signing ceremony took place at APEDA pavilion where Charan Das and his French counterpart signed the cooperation agreement.
affirm SIAL’s positioning as global leader in the cross-cutting agri-food markets.
Fast jump in attendance Attendance had risen by 10.2% compared with 2010, confirming SIAL’s role as a catalyst for global trade with 150,192 professional visitors (versus 136,381 in 2010), of whom 62.8% were international visitors from 200 countries. These preliminary statistics clearly
Addressing market challenges In the current gloomy economic climate, the exhibition’s strategic dimension – demonstrated by the 200 events and conferences at the heart of today’s economic and political preoccupations – undoubtedly left its mark. Guillaume Garot,
When Paris became the Food Planet The quasi-tangible effervescence and enthusiasm in the aisles showed that language was no barrier in creating solid business leads. Through the impetus of XTC World Innovation, TNS Sofres and the 29 SIAL d’Or partners, the Innovations corner undeniably consolidated SIAL’s expertise as a laboratory and observatory of supply and demand in food innovation. For five whole days, SIAL made Paris the capital of the food planet where all the agri-food channels were food connected.
AgriBusiness & Food Industry w December 2012
13
CoverStory
French Deputy Minister of Agrifood noteworthy for his daily involvement, together with numerous ministers and political and scientific personalities, opened the debate on key issues relating to the future of the food industry in France: food challenge, anti-waste programme announcement, Made in France, nutrition, and more; and all these themes were programmed by SIAL TV. The 2012 show, fully attuned to the mainstream market challenges, highlighted the dynamism of the agri-food industry on a global scale. A high-performing business arena, the flow of international visitors at SIAL had a global offering at their fingertips. “Our aim was to strengthen the proximity between the sector players present. It’s now ‘mission accomplished’. SIAL played a pivotal role with a view to the challenges of today and the issues of tomorrow”, remarked Valérie Lobry, Managing Director of Comexposium's Agriculture and Food Industry Division.
14
Attractive statistics SIAL 2012 saw participation of 5,900 exhibitors from 100 countries, 140,000 visitors from over 200 countries, 62% of whom were international, more than 200 conferences, talk shows and debates throughout the exhibition. Top 15 SIAL 2012 exhibitor countries were FRANCE, ITALY, TURKEY, SPAIN, CHINA, HOLLAND, BELGIUM, GERMANY, BRAZIL, GREECE, U.S.A, INDIA, UNITED KINGDOM, ARGENTINA, and POLAND. France remained the leading exhibitor country with 1,000 French exhibitors, 22 French regions represented in 2012, including a newcomer, Corsica. Innovation & Awards 1002 products displayed by exhibitors at the SIAL Innovation event (reserved exclusively for SIAL exhibitors, free of charge), 403 products selected for their innovative characteristics (new consumer benefits) by 3 professional juries, 18 SIAL Innovation Awards, 1 Jury Special Award, 1 SIAL Innovation Web Award 2 innovations rewarded by a Disney SIAL
AgriBusiness & Food Industry w December 2012
Award, 12 SIAL Intermarché Award. And 20 companies have been given the “SIAL Intermarché Selection” title. Once again this year also, SIAL was held in conjunction with IN-FOOD (Semiprocessed Food Products, Ingredients and Outsourcing) and IPA (the Food Processing and Packaging Exhibition) to offer the richest experience of the year. As a multi-specialist exhibition, SIAL brought all the food channels together under one roof, in 19 clearly identified sectors: Bakery, Pastry and Confectionery, Beverages, Cured meats, Dairy products, Delicatessen products, Frozen foods, Fruit and vegetables, Gourmet foods, Grocery products, Health products and food supplements, IN-FOOD/Semiprocessed food products, ingredients and outsourcing solutions, Meat, Organic products, Poultry, Seafood, Tinned and preserved products, and Wine. The forthcoming SIAL exhibitions are: SIAL Toronto, 30 April to 2 May 2013 SIAL Shanghai, 7 to 9 May 2013 SIAL São Paulo, 25 to 28 June 2013 SIAL Montreal, 2 to 4 April 2014
CoverStory
Indian Exhibitors at SIAL 2012 (Paris) AB MAURI INDIA PVT LTD
DEEJAY DISTILLERIES PVT. LTD.
MPEDA
AEROPLANE RICE
EASTMAN INTERNATIONAL
MRS. BECTORS CREMICA - INDIA
AGRICULTURAL & PROCESSED FOOD PRODUCTS EXPORT DEVE
ECOVINAL INTERNATIONAL
M/S BUSH FOODS OVERSEAS PVT LTD
AL AALI EXPORTS PVT LTD
ELMAC FOODS
MURTUZA FOODS PVT LTD
FAIR EXPORTS (INDIA) PVT LTD (FORMERLY KNOWN AS GIEX FOODS PVT LTD)
NATURAL DEHYDRATED VEGETABLES P LTD
AL-GYAS EXPORTS PVT LTD ALLANASONS LIMITED
FAZLANI EXPORTS PVT
NEO FOODS PVT LTD
ALL INDIA RICE EXPORTERS' ASSOCIATION
FIZA EXPORTS
NEW BHARAT RICE MILLS
ALM INDUSTRES LTD.
FOODS AND INNS LTD
NILON'S ENTERPRISES PRIVATE LIMITED
AL NAFEES FROZEN FOOD EXPORTS PVT LTD; MOHAMMED ATIF
FRISCO FOODS PRIVATE LIMITED
PARI AGRO EXPORTS
AL - NOOR EXPORTS
GAUTAM EXPORT CORPORATION
P. K. OVERSEAS PVT LTD
GLOBAL ENERGY FOOD INDUSTRIES PVT LTD
PREMIER'S TEA LIMITED
G S EXPORTS
PRIYAGOLD
AMROON FOODS PRIVATE LIMITED
HAMMER PUBLISHERS PVT.LTD - FOOD AND BEVERAGE
RADIKAL OVERSEAS
ANIL & COMPANY
HIND AGRO INDUSTRIES LIMITED
AOV EXPORTS PVT. LTD.
HMA AGRO INDUSTRIES LTD
R. K. INDUSTRIES
APEDA
HOLISTA TRANZWORLDS LIMITED
ARICHA TRADING CO. LTD.
INDIA TRADE PROMOTION ORGANISATION
AROMA AGROTECH
JABS INTERNATIONAL PVT LTD
A.S. CASHEW EXPORTERS
JADLI FOODS (INDIA) PVT. LTD.
SHAKTI BHOG FOODS
BAGORA DEHYDRATES
JKH EXPORTS
SHIMLA HILLS OFFERINGS PRIVATE LIMITED
BASIC INDIA
J. S. INTERNATIONAL
SPICES BOARD INDIA
BEST FOODS LIMITED
J V GOKAL & CO PVT LTD
SUNIL AGRO EXPORTS LTD
BEST NATURAL RESOURCES
KAILAS CASHEW EXPORTS
SUNSTAR OVERSEAS LIMITED
BJ INTERNATIONAL
KHEDUT FEEDS AND FOODS
SWANI SPICE MILLS PVT. LTD.
BNAZRUM AGRO EXPORTS
K. SUBRAYA ANANTHA KAMATH & SONS
SWATHY ENTERPRISES
BOGORA DEHYDRATES
LA SHIVE EXIM PVT LTD
THE AMIRA GROUP
BORA AGRO FOODS
LT FOODS LTD
TRIMAX INTERNATIONAL
CAPITAL DEHYDRATION
LUX FLAVOURS
UNICORN PICKLES
CAPITAL FOODS LIMITED
MADHU JAYANTI INTERNATIONAL
VADILAL INDUSTRIES LIMITED, INDIA
CASHEW EXPORT PROMOTION COUNCIL OF INDIA
MAHARAJA DEHYDRATION PVT LTD
VIBRANT DEHYDRO FOODS
CHHATARIYA DEHYDRATES ONION EXPORTS
MIDA AND CO. PVT. LTD.
VISHNUKUMAR TRADERS
MIRHA EXPORTS
WESTERN INDIA CASHEW COMPANY
M.K. OVERSEAS
WHITEFIELDS INTERNATIONAL
MORARKA ORGANIC FOODS PVT. ROAD
WORLD DEHYDRATES FOODS & SPICES
AL-QURESH EXPORTS AMAR SINGH CHAWALWALA
DAKSH FOODS PVT LTD. DASH FOODS
NAVKAR PROCESSORS
RAVI FOODS PVT LTD RUPAREL FOODS PVT. LTD. SARAF TRADING CORPORATION PVT. LTD SARVESHWAR OVERSEAS SHAH NANJI NAGSI EXPORTS
AgriBusiness & Food Industry w December 2012
15
tax
riceexports
Export
on rice can be
counterproductive TEJINDER NARANG & RAKESH SINGH
I
ndia’s rice exports touched 10 million tonnes (mt) in 2011-12, while major rice-exporting nations — Vietnam and Thailand — have trailed with 7 mt and 6.5 mt respectively. The reasons: Free trading environment in India since last year, a price advantage and Thailand’s policy aberration. Short-term uncertainty on continuation of India’s export programme also prompted buyers to source 10-15 per cent more tonnage from India. These elements are pivotal to India’s success story. But prospects of maintaining the same tempo appear doubtful in 2012-13. Policymakers have recently
16
Export tax may provoke traders to underinvoice to their overseas subsidiaries for marginalising duty and re-billing to the buyers. Discounted prices may also be contracted with understanding of appropriate adjustments. Even $10-15/ tonne difference on 10,000 tonne cargo benefits buyers by $100,000-150000 (or Rs 55-80 lakh) or 1-1.5 per cent of f.o.b value. And this is not a trivial amount. Average margin in commodity trade does not exceed 2 per cent in best cases suggested imposition of export tax of 5-7.5 per cent on rice for partial recovery of loss of precious water consumed in paddy production and hidden subsidy in power utilised for irrigation. (Moisture content of rice is 13-14 per cent maximum, but paddy is highly waterintensive). Conservation of water and energy has economic and ecological merits and must be tackled on a priority basis, but regulating them through the tariff route may not be the right way forward. The broad-break up of India’s 10 mt export is — basmati 2 mt; non-basmati 7 mt; 1121 rice variety to Iran 1 mt. Price of basmati and 1121 rice ranges from $1000$1600 f.o.b/tonne. Export duty of, say, 7 per cent works out $70-112/tonne. Non-
AgriBusiness & Food Industry w December 2012
basmati variety is valued between $380 and $450 f.o.b/tonne and corresponding duty component will be $27-32/tonne. ACCOUNTING ADJUSTMENTS Export tax may provoke traders to under-invoice to their overseas subsidiaries for marginalising duty and re-billing to the buyers. Discounted prices may also be contracted with understanding of appropriate adjustments. Even $10-15/tonne difference on 10,000 tonne cargo benefits buyers by $100,000-150000 (or Rs 55-80 lakh) or 1-1.5 per cent of f.o.b value. And this is not a trivial amount. Average margin in commodity trade does not exceed 2 per cent in best cases. Official exports will reflect lower net
THAI ABERRATION India’s export buoyancy of 2011-12 is largely attributed to “Thai aberration” which may be corrected in 2012-13. Commercially, Thai white rice price of $555/ tonne f.o.b is unviable for export by $100/tonne and that too because of cheaper inward flow of paddy from Cambodia and Vietnam. Thailand ‘s annual production is 21 mt. As of November 2012, it is carrying overpriced ballooning stocks of 14 mt of rice (at $780$800/tonne) — 67 per cent of yearly output — which are creating intense “holding” pressure on Thai Government. The balloon has to burst. The only way of liquidating this massive stockpiling would be to align prices closer to Indian and Vietnam quotes or abandon the present format of pledging scheme. Net effect: Thai Government will have to release the discounted paddy sooner than later. This will flood the market and that is when Indian rice exports will be hit. DECLINING DEMAND Iran, the major importer of 1121 basmati rice, is seeing continuous devaluation in its currency. Iranian imports will be automatically rationed in the coming months both due to payment defaults and higher landed prices. Nigeria is flush with excess stocks imported before July to take
advantage of duty increase from 30-50 per cent and now from 50100 per cent from January 2013. About 1.5 mt of excess rice have been shipped and stored in Nigeria on speculation of import duty. Future demand from Nigeria will be subdued. Of late, Pakistan and Myanmar are shipping 25 per cent broken rice at $10/tonne less than Indian offers through MNCs to West Africa. SUSTAINABILITY DOUBTFUL One year’s good performance of India’s rice exports cannot be taken to mean that this is here to stay. Export momentum can be restrained in the coming months. Assuming the continuation of the current conditions (including the Thai aberration), rice exports may not exceed 7-7.5 mt next year. Should Thailand apply a “correction”, exports may dip to 5 mt. Weather, politics and currency movements all over the world are grey areas. Markets swing from one extreme to another. In the unpredictable bureaucratic and political set up, modifying or withdrawing even modest duty of 5-7 per cent when Indian prices are non-responsive, will be difficult and time-consuming. Rice shipments from open market can be allowed, free from any export tax. There has been no “rice inflation” despite exporting 10 mt. Rice inventories with the Government agencies are rising; all exports are from privately-held inventories. Exports are generating economic activity and helping farmers, where central/state procurement is lagging or lacking. Conservation of water and energy may be encouraged by reviewing wheat-rice centric production and procurement policies both at the Central and State level. (Narang is a commodity analyst. Rakesh Singh is a rice trader with Emmsons International Ltd. New Delhi.)
Basmati exports gain steam on rising West Asia demand
B
asmati exports for the first seven months of the fiscal – April to October – have risen 26 per cent in value terms to Rs 10,453 crore, on rising demand from traditional buyers in West Asia. In terms of volume, the exports grew 17 per cent at 1.92 million tonnes (mt) against 1.64 mt in the same period last year. “Higher demand from existing customers and newer markets in Africa contributed to the rise in exports,” said R. Sundaresan, Executive Director, All India Rice Exporters Association (AIREA). For the year-ended March 2012, basmati exports stood at 3.2 mt, a growth of 45 per cent over last year. In value terms, basmati exports in 201112 had touched Rs 15,450 crore.
riceexports
realisation and encourage circular flow of money through alternative channels. If export duty is levied, millers and MNCs will be tempted to tie up with exporters having subsidiary companies in Dubai, Singapore or elsewhere. Alternatively, if direct duty @ $25-30/tonne is applied for nonbasmati and @ $50-80/tonne for basmati, it may induce manipulative declaration of basmati as nonbasmati, and accounting jugglery. Why invent abuse-prone policies that will put both trade and Government agencies in disrepute?
NON-BASMATI EXPORTS Non-basmati rice exports have seen a significant jump this year. The Government opened up exports of non-basmati rice in September last year, after a gap of almost four years. In the current fiscal till October, nonbasmati rice exports stood at 3.42 mt, almost a five-fold rise over the same period last year. The total value of rice exports for the April-October period this year stood at Rs 17,703 crore, almost double the value in the corresponding period last year. Though the export trend in non-basmati rice exports is likely to be sustained for the rest of the fiscal, basmati shipments may slow down on higher prices this year, fear exporters. BASMATI PRICES “The prices of basmati paddy varieties are almost twice that of last year. As a result, buyers may delay or reduce their purchases that may affect the overall shipments,” a leading exporter said. The prices of basmati paddy varieties are ruling at Rs 2,700-3,100 a quintal in mandis of Punjab and Haryana, against Rs 1,500-1,700 last year. Basmati paddy prices are ruling higher on projected shortfall in acreage that may hurt the overall output of the aromatic varieties. The overall production of rice is expected to be around 100 mt on lower kharif output against 104 mt last year.
Courtesy: The HinduBusinessLine
AgriBusiness & Food Industry w December 2012
17
interview
Indian rice
will always be at the top due to its
superior quality, says Rajen Sundaresan
Being the Executive Director of All India Rice Exporters Association (AIREA), what do you feel about overall scenario of global Basmati trade, and India’s position in the international markets? If we see the last three years’ data, the quantum of trade has been increasing which indicates Basmati will always have a market abroad. We’re confident that Indian rice will always be at the top because of its superior quality, larger area under production and no minimum support price (MEP).
Rajen Sundaresan, Executive Director, All India Rice Exporters Association (AIREA), recently attended SIAL-Paris, and a food show in China, where AIREA went to promote Basmati rice. He, in an interview with AgriBusiness & Food Industry, tells his feedback, and why Indian rice will keep on ruling the global rice markets, among other things. Excerpts:
18
Recently, you attended SIAL-Paris. What kind of response did you get there? What was the outcome of India’s participation regarding the exports of Basmati? We received a positive response, as expected, but mostly in the first two days. Many old connections were revived and half-done negotiations completed. Overall, it was a good experience. Recession in Europe is hurting Indian Basmati exports, but at the same time, the demands in other regions in the world are high. Do you think due to this, this recession has negligible impact on Indian Basmati exporters? Our data shows no such downward trend. You also visited China and took part in a food show to explore exports of Basmati. As you know China is not a traditional buyer of Indian basmati, and prefers Pakistan over India due to political compulsions. What feedback did you get there? We have no comment on Chinese preference for Pakistani rice. But China has recently opened doors to Indian Basmati and also finalised the protocol which is extremely encouraging for us. With the entry of western food outlets, I noticed a major shift in the preferences and taste of the younger generation which gives us hope
AgriBusiness & Food Industry w December 2012
that they would also take to our Basmati. Gulf market is a major destination of Indian basmati, but India is facing tough competition from Pakistan. What are your views about this? Not aware if there’s much competition from Pakistan in the Gulf. People from the Gulf are aware that Indian basmati quality is much superior to Pakistani Basmati. There was a time when India didn’t export much to the gulf but that has since changed with the removal of minimum export price. Iraq has been a traditional buyer of India’s Basmati, but according to a news story, recent US political pressure is forcing Iraqi importers to buy US longgrain rice instead of Indian Basmati. Is it a matter of concern for Indian exporters, or do you think government should take some steps in this regard? Iraq is the fifth largest buyer of Basmati rice and has retained this position for the last few months. Iran has been a major buyer of India’s Basmati despite tough US sanctions. But it is facing payment issue. Does it affect the trade badly, or is there any relaxation in regard to payment issue? The LC mechanism had resolved many issues but we expect some hitches with the recent currency drop ("official currency" rate has doubled). The government has approved your demands of reducing Minimum Export Price (MEP) to scale up the quantity of export. Are you now seeking any other help from the government to address other bottlenecks? Only issues are regarding norms and standards that we must adhere to and the government has been supportive throughout. We are trying to get all the standards and norms harmonised.
AgriBusiness & Food Industry w December 2012
19
agriaffairs
Agriculture marketing reform
A three-pronged strategy for Delhi — Sanjeev Chopra
Y
our columnist was asked to give free vent to his thoughts on transforming the ecosystem for the distribution of fruits and vegetables in the National Capital Territory in the short, medium and long run at a meeting convened by Chief Minister Sheila Dixit who is keen to ensure that the citizens of Delhi get access to safe and healthy food, with in- built features for traceability. She also wanted suggestions on making fruits, vegetables and dairy products more accessible and affordable for the sizeable student population in Delhi, besides of course working class population and residents of JJ clusters. In a way, this was a dream come true for ‘yours truly’, as he has been actively engaged in the dialogue on reforms in agricultural marketing , and a strong advocate of changing the present system of licensees in APMC markets with that of registered buyers and sellers, where transactions are recorded, quality parameters clearly laid down and market spaces used as arenas for display and electronic auctions rather than as godowns to hoard stocks and dispose them with the highest possible trade margins . This calls for leveraging existing resources, identifying new opportunities, and avoiding direct confrontation with the extant supply chain. Distribution hub The first of the three suggestions was to treat each of the three hundred odd outlets of Safal (Mother Dairy’s Fruit and Vegetable Initiative) as a ‘hub’ for the distribution of fruits and vegetables in the area. Each of these hubs could be used to extend the reach by extending the supply chain through modern vending carts,
20
(including motorized vending carts), thereby ensuring that the consumers get better value for their money. Existing vendors -- both static and mobile -- could also be linked to these ‘hubs’. Once the forward integration of the supply chain was organized, it would be easy for the Small Farmers Agribusiness Consortium (SFAC) to link supplies with the production clusters through the Farmer Producer Organizations, which are being actively encouraged in peri-urban areas under the Vegetable Initiative for Urban Clusters – a special component of the Rashtriya Krishi Vikas Yojana. Given the volumes in Delhi, it is possible to get produce from anywhere in the country – kiwis from Arunachal, apples from Kashmir, pineapples from Tripura and tender coconuts from Kerala! The CM was informed that the first consignment of Kiwis from Arunachal was being airlifted to Delhi to compete with Kiwis from New Zealand itself! She wanted SFAC and Safal to take up the challenge of ensuring a direct link between large institutional buyers and the primary producers. This would also ensure traceability, and should there be excessive fertilizer/ pesticide use in the fruits and vegetables, remedial and corrective action could be taken.
AgriBusiness & Food Industry w December 2012
The first of the three suggestions was to treat each of the three hundred odd outlets of Safal (Mother Dairy’s Fruit and Vegetable Initiative) as a ‘hub’ for the distribution of fruits and vegetables in the area. Each of these hubs could be used to extend the reach by extending the supply chain through modern vending carts, (including motorized vending carts), thereby ensuring that the consumers get better value for their money. Existing vendors -- both static and mobile -- could also be linked to these ‘hubs’ New terminal market The second point was with regard to the establishment of a new terminal market in Delhi – both to decongest the Azadpur Mandi – as also to showcase an agricultural market with absolute transparency in transactions. This was a terminal market with a difference in that it would have ‘open membership’ for producers, intermediaries, wholesalers, retailers : in other words, anyone and everyone was welcome to get the produce, have it weighed, graded , and certified for quality and put up for auction to whoever was interested. The produce would be released only on release of payment, or a promissory note backed by a Bank Guarantee. Not just Mother Dairy, but any wholesaler of retailer could participate in the auction. Over time, the physical presence of the buyer at the auction cold also be dispensed with by establishing robust video links. Thus a wholesaler or even a large retailer could take a look at the fresh arrivals in the Terminal market from his shop in Khan Market or Chanakyapuri or Okhla – and call for deliveries. Unlike the existing APMC markets where each merchant had a shop, godown and auction space, this market would only have large electronic auction
agriaffairs halls, warehousing facility, including Controlled Atmosphere and Modified Atmosphere, several banks and ATMs, testing centres for inspection of quality of produce and offices of logistics providers, besides of course facilities for the entire range of commercial vehicles – Punjab Body trucks to three-wheelers. Thus it was to be positioned more as a logistics hub with several independent service providers, each offering specialized services ranging from weighments to quality tests, traceability, packaging into wholesale/ retail formats and dispatch to the final sale points. This was something to be looked at in the medium term. Mandi reform Last. but not the least, was the reform of the Azadpur Mandi itself. This was important because as one of the largest vegetable markets in Asia, it had to take the leadership position – not just in terms of market share, but also in adopting technologies that were friendly to all the stakeholders. Your columnist feels that traders should get together and create an Azadpur Vegetable Exchange by monetizing their traditional and hereditary rights to trade in this market. The primary responsibility of this exchange would
also be the conduct of auctions –but they could restrict the auction among their own members. This also afforded the existing traders to convert their profile from being just intermediaries to providing value added services for their stakeholders -- the farmers who supplied them the produce, and the wholesalers who linked them to the consumers. All members of this exchange would be encouraged to establish warehouses, cold stores and ripening chambers closer to the production centres so that they are assured of quality produce, besides some predictability about prices. In fact some enterprising traders had
already taken the lead in establishing a value chain for the commodities in their domain – especially in apples, onions and potato. This would enable the intermediaries bring some ‘predictability’ in the system, thereby ensuring a virtuous cycle. The column ends on this very positive note, and hopes that the three pronged strategy works, and paves the way for other states to follow suit. (The author is Joint Secretary & Mission Director, NHM & NMMI, Union Ministry of Agriculture)
Kerala Vegetables now available in Delhi
K
erala Horticorp inaugurated two mobile vans in Delhi, on November 11, to sell ethnic produce. These go to various colonies at a particular time and day every week. Sivadas, a farmer in Palakkad district, Kerala, is definitely rooting for this initiative. His livelihood depends on it. Thanks to Kerala State Horticultural Products Development Corporation Limited (Horticorp), he is now able to sell produce from his five-acre vegetable farm to them and fetch greater remuneration. "I used to sell my produce to private traders but would get less money and sometimes suffered losses. But for the last one year, I am getting Rs 2 extra on every kilo I sell. A farmer who sells five tonnes annually thereby makes a profit of Rs 1 lakh," says Shivdas. While for the last 20 years, Horticorp directly procured from
farmers only during the festival season and peak harvest time, it's now going in for a major expansion plan to other cities. Horticorp has also entered into an agreement with the railways for four metric tonnes of space in the New Delhibound Kerala Express for the same. Most of the items will be nonperishable such as honey, spices, payasam mixes, pickles, chips, coconuts, yam and tubers, while veggies will be those that can be stored for a week such as jackfruit, bread fruit, pineapples, bananas, tapioca, coconuts and drumsticks. Mumbai and other Indian cities too will be brought within its ambit and by December, there are plans to furrow into the UAE market too. Shivdas already has plans to bring one acre under cultivation every year. Farmers across Kerala have come up with proposals to increase the area under vegetable cultivation, says Manoj Kurup, MD, Horticorp. "We expect this area to go up 2-3 times more," he says.
This is how it works. Earlier, farmers would bring their produce either to Horticorp's 10 district procurement centres, six wholesale agriculture markets owned by the Department of Agriculture or to farmers' markets called Karshaka Vipani, managed by the Vegetable and Fruit Promotion Council, Kerala, where they were auctioned. But from July, under the guidance of agriculture minister K P Mohanan, Horticorp started bidding for these vegetables. Farmers' clusters were formed in places as remote as Munnar and the produce collected by Horticorp. It now plans to increase its district procurement centres in four more districts. While Horticorp has 150 outlets in Kerala, including 20 mobile units, it has initiated 500 franchisee outlets in the state. It's a win-win formula for both farmers and consumers. Horticorp has also changed unfair trade practices.
AgriBusiness & Food Industry w December 2012
21
traditionalfoods
Soyabean for nutrition enhancement of traditional food products — Dr. Sumedha Deshpande, Principal Scientist, APPD, CIAE, Bhopal
S
upplementation of legume flours with cereal flours has great potential for improving the nutritional value of different food products in developing countries. Cereal based foods are formulated with protein sources such as milk or legume flour to improve protein content and quality. In developing countries the most widely used source of protein is soybean, having been considered as one of the least expensive when compared with egg, milk, meat or cowpea. A good number of studies on the supplementary value of legumes, particularly with respect to soybean are available. Soysattu Sattu is a roasted flour mixture of cereal and pulses combination and used as 'ready -to-eat' snack food in most parts of India. It is a convenient and inexpensive food product, containing digestive and dietary constituents of vital importance for human health. Since long, it has remained as one of the most important and popular supplement foods, especially for poor population of rural India owing to its high nutritional balance, adequate shelf life, excellent taste, ease in preparation and use characteristics
22
and local availability. Further, animal protein being beyond the reach of poorer masses, it becomes the only protein source for them. Normally, the ingredients of sattu in India vary region-wise, depending on the availability of local cereals and pulses. Still, by and large, Bengal gram is the essential constituent while other constituents may include - maize, wheat, barley, sorghum, etc. Soybean with its over 40% quality protein and 20% oil and minerals can find a place in traditional Indian sattu along with wheat for the development of proteinrich nutritive soy-sattu. Such a product in all likelihood would have wider acceptability and adoptability being on the pattern of other traditional sattu, commonly used in various regions of India. India is one of the largest producers of coarse cereals with as many as ten crops under cultivation. The basket of coarse cereals includes maize, sorghum, pearl millet, finger millet (ragi), kodo millet, little millet, foxtail millet, barnyard millet, proso millet and barley. The features associated with these crops are low value status, adaptation to poor habitats, poor resource base, production and consumption by the poorer sections of society and stagnant demand and price structure. In many semi-arid parts of Africa and Asia, millions of people
AgriBusiness & Food Industry w December 2012
rely on sorghum grain as their staple food - the main protein source. Sorghum is a staple food for a large section of population living in dry land regions of India Traditionally sattu is prepared using roasted whole Bengal gram. In some, regions small quantity of cereals is also mixed. Commonly used proportion of Bengal gram and cereal is 70:30. To prepare soy-sattu, some quantity of Bengal gram is replaced with soybean and procedure is as follows: Cleaned whole grains of soybean, wheat or any cereal (which is commonly consumed in the specified region) and Bengal gram are separately moisture conditioned to obtain 30% moisture level by soaking the grains in water for about 23 hours followed by shade drying for at least 1-2 hours to facilitate the moisture equilibration. These grains are then roasted in a hot sand bath at 180°C, with continuous stirring, for about 10-15 minutes followed by their dehulling. The dehulled grains then mixed in proportions of soybean, wheat (cereal) and Bengal gram: 25: 35: 40 and milled to powder so as to pass through sieve ISS No. 30 (opening size 0.296 mm) sieve. Soy-sattu thus prepared contains about 22% protein and 7% oil (Table 1), about 50 percent increase in protein and fat and reduction in carbohydrate.
Traditionalfoods Traditionally sattu is prepared using roasted whole Bengal gram. In some, regions small quantity of cereals is also mixed. Commonly used proportion of Bengal gram and cereal is 70:30. To prepare soy-sattu, some quantity of Bengal gram is replaced with soybean
moisture content showed that it could be safely stored up to 60 days during summer and rainy seasons. Cost economics of soysattu prepared from soybean: wheat: Bengal gram using the 25% level of soyÂŹfortification was worked out. The analysis revealed that the product (soysattu) thus prepared would provide protein increase of 44.6% with the savings of Rs. 6/kg, taking into consideration the protein content of soybean, wheat and Bengal gram as 40, 11 and 18% respectively. Economic analysis for production of 50 kg/ day soysattu with 25% soy fortification (yearly production of 12,500 kg), at pilot plant level with 30% profit margin, annual net profit was estimated to be Rs. 1,36,125 at the selling price of Rs. 37/kg. Thus, the soybean can be successfully fortified in a traditional, popular and nutritious snack of rural India called sattu. Soy-fortification, up to 25% was found acceptable providing an increase of almost 45% .and 70% in protein and fat content respectively when compared to traditional sattu.
The procedures include: Clean whole grains of Soybean, wheat and Bengal gram Moisture conditioning of each ingredient to 30% moisture level Sand roasting of each ingredient (1800C for 10-12 minutues) Dehulling / dehusking of each ingredients Grinding of mix Sifting of ground mix to pass through IS sieve No. 30 Packaging of soy-sattu in LDPE packages and Metallic tin containers Table 1: Flow Chart for preparation of soy-sattu
Chakli and Shakkarpare In typical Indian homes chakli and shakkarpare are the snacks prepared during not only festive time but also any time throughout the year. To prepare these snacks different proportions of base materials like refilled wheat flour for shakkarpare and rice and Bengalgram pulse for chakli were used. Conventional foods of different regions are prepared using staple cereals of specified region and consumed by the population in their daily diet. In rural India available millets are also used to prepare these snacks. The nutritional quality of millet
Table 1: Nutrient content in soysattu Proportions (Soybean: Wheat:
Protein,
Oil,
is poor due to low lysine content. Conventional readyÂŹ-to-eat (RTE) much popular snack foods can provide high levels of nutrition when blended with millets and defatted soy flour (DFSF) /Medium fat soyflour (MFSF). Medium fat soyflour and defatted soy flour are low in oil and high in protein as well as isoflavones. Hence small amount of supplementation flours of millets or cereals shall give high increase in protein as well as isoflavones in foods. Common millets such as sorghum, pearl millet and finger millets could be used to prepare snack food chakli and Shakkarpare with small quantity of DFSF and MFSF to enhance nutritional value. Soy based chakli To prepare chakli using millets or coarse cereals and DFSF or MFSF, conventional method of preparation of chakli is modified with steaming of flours before making, final product. To prepare chakli, basic ingredients used are millets (sorghum, pearl millet and finger millet) in different proportions. Based on extensive trials, optimum combination (30-80% of millets and 10-30% DFSF / MFSF) is fixed to prepare acceptable and good quality product. To observe the acceptability of millets and DFSF/MFSF for the preparation of good quality product, sensory analysis revealed that product prepared using up to 15-20% DFSF/MFSF with 50 % of millets was acceptable. Product analyzed for its nutritional content revealed
Table 2: Nutrient content in millet + DFSF/MFSF based Chakli
Carbohydrate, Ash,
Bengal gram
(%)
(%)
(%)
(%)
25:35:40
21.7
7.0
53.7
2.69
0:30:70
15.0
4.1
68.0
2.46
Shelf life study of stored sattu in LDPE packages and metallic containers during summer and rainy seasons indicated that total FFA (% oleic acid) increased as the storage period advanced from 0 to 90 days. Values of FFA and
Nutrients, % db Protein Fat Carbohydrate Pearl millet Chakli Protein Fat Carbohydrate Finger millet Chakli Protein Fat Carbohydrate
Sorghum chakli DFSF based 11.58 36.66 48.33
MFSF based 10.47 34.44 50.55
without soyflour 6.35 39.66 50.67
11.91 24.81 57.86
10.8 24.18 59.34
6.78 26.66 61.83
9.18 35.92 51.55
8.33 37.71 49.48
5.35 36.88 54.22
AgriBusiness & Food Industry w December 2012
23
traditionalfoods Table 3: Nutrient content in millet + DFSF/MFSF based shakkarpare
Nutrients, % db DFSF based MFSF based without soyflour Sorghum shakkarpare Protein 9.75 8.9 5.6 Fat 35.6 33.94 34.4 Carbohydrate 50.1 50.66 53.9 Pearl millet shakkarpare Protein 12.17 9.84 5.2 Fat 36.57 37.56 36.23 Carbohydrate 52.55 51.02 54.68 Protein 9.23 Fat 25.14 Carbohydrate 54.22
that chakli containing up to 20% DFSF and MFSF showed protein enhancement in the range of 7580% and 59-64% respectively when compared with conventional product. Procedures: Mixing of flours in ratio Steaming of mixture of flours Addition of spices, oil and water Kneading Shape forming Deep frying
24
Finger millet shakkarpare 8.06 26.69 55.1
4.7 24 56.97
Fig 2: Flow-Chart for preparation of soy-chakli Soy based Shakkarpare Shakkarpare is a sweet snack product traditionally prepared using refined wheat flour. Process has been developed to prepare a product using millets and DFSF/MFSF (Fig 3). In the first step all flours are mixed. Syrup of sugar and required quantity of water is prepared using small amount of oil to make product crispy. Mixture of flour is
AgriBusiness & Food Industry w December 2012
kneaded using syrup. Dough is rolled out and shape of shakkarpare given and deep-fried in refined oil. Procedures: Mixing of flours in ratio Dry steam cooking of mixture of flours Making of syrup from sugar, water and oil Kneading of flour using prepared sugar syrup Shape forming Deep frying Fig. 3: Flow chart for preparation of Shakkarpare Nutritional analysis of acceptable products i.e. 15% DFSF blended and 20% MFSF blended shakkarpare for nutrient contents revealed that protein content ranged from 9.23-12.17% in DFSF blended shakkarpare (maximum of 74-134% protein enrichment), while 20% MFSF supplementation showed 58-89% protein enhancement compared to control products i.e. without soyflour (Table 3).
AgriBusiness & Food Industry w December 2012
25
brandwatch
Infrastructure, power and education are main problems in India – Paul Bulcke, CEO, Nestle
in emerging markets. We are linked to the people because we are in the food business. In that scheme, India is important because you have 1.2-1.3 billion people here.
Focus on emerging markets It is logical when we say emerging markets will account for 50 per cent of our sales in the foreseeable future. By dynamics of mathematics we are going to get 50 per cent, considering that 80 per cent of the world’s population is living
26
The Importance of India India has the potential to be a good growth engine. We at Nestle have been part of that dynamics and have been investing for that opportunity. We have invested half a billion Swiss Francs in the past few years. The potential for growth is huge. But you have to have continuity in policy and there should be a further opening up of the economy. Talking is one thing and doing is another. I think the time of doing is right now. Priorities of Action First of all, you have to have a continuum in policy. For me, the
AgriBusiness & Food Industry w December 2012
Government should make a frame and let entrepreneurship and private initiatives flourish in that frame. In other words, the Government should make a frame and people should do the painting. The problem is when the Government starts to make the painting …then it doesn’t work. Infrastructure is definitely a problem. Power and education are the other problems. You have a very strong educational system. But do we find the right professionals? These are the longerterm problems. In the short term, the economy should be opened up in a meaningful way for foreign investment and also for companies which can bring new inspiration and ideas. Coming in a serious way We are linked with farmers directly for many years. We are quite a sizeable company too and you see Moga milk district in Punjab where we went 50 years ago. We are proud to be part of the development of that region. A company
brandwatch that takes itself seriously, that has a strong set of values and is projected to be in the country for long-term is not going to jeopardise supplies. If you have serious companies coming in a serious way, it’s a win-win situation. Sometimes, we are afraid of some things. You can organise that but we lose out on the bigger dimension. There’s so much lost through inefficiencies in the supply chain from the farm to the table. Inefficiency is never an argument. Leadership should take steps and bridge the today with the tomorrow because people are involved. That may entail some pain. Development has to be given a chance. Key Problems I cannot talk about too many things. In general, supply chain is one thing. Industrial development should go hand in hand with infrastructure. Power availability is another thing. The continuum of these developments is a little bit missing and that’s the criticism we hear from the people. You have been in India for 100 years now. How do you see your presence in India going forward now that it is no longer legally binding for you to have a local listed entity? We still are listed on the exchange. We still see the meaning of that. We still have board members who bring in an understanding of the localities of India. We respect that. For the time being we have our board. Future Plans The total is large. That’s where we are. We can do more in the premium and super premium products. In general potential is here. ‘Out of home’ sales is another opportunity where we can play a role too. It is linked again with the complexities of the supply chain. Then there are institutional sales and catering, which are more of value-added products. It is a big opportunity for value-added products.
Nestle's 1st R & D Centre in India
Minister of State for Agriculture and Food Processing Industries Tariq Anwar visiting the Nestle's R&D Centre at Manesar
FMCG
giant Nestle opened its first research and development centre in the country at Manesar, Gurgaon to gain insights into Indian consumers and develop affordable products. This centre will focus on getting deeper consumer insights in Indian eating habits, and taste preferences of consumers as well as use herbs and spices in its products. It will also focus on providing scientific and technological expertise to other global markets. The centre, which will recruit 40 people, has been built with an investment of 50 million Swiss francs (Rs 288 crore). The company said the centre will specialise in Asian noodles and Indian cooking focussing on developing nutritious as well as affordable products in appropriate serving sizes for lower income consumers. Paul Bulcke, Chief Executive
Officer of Nestle, said, “The opening of our R&D centre is a logical fit and represents our continued commitment to the country. We continue with our tradition to be a local player and learn from local cuisines as well focus on regional adaptation of global technology in the areas of dairy, confectionary, culinary and nutrition.” He added that with all Nestle R & D centres, the Indian centre will also be integrated with all the company’s R & D network and will enable the company to acquire local knowledge and use it on a global scale. For instance, the company has used millet, a traditional cereal from India, which has more iron than wheat in making Maggie noodles which the company believes has helped raise the products nutritional profile. The company also believes this will help nurture local talent as it will hire from the local pool of skilled workforce. The company believes emerging markets such as India and China will contribute nearly 50 per cent to its overall revenues in the next few years. For Nestle, infrastructure is definitely a problem in India. Power and education are the other problems, according to Paul Bulcke, Chief Executive Officer of Nestle. Nestle, world’s largest food processing company, is entering its 100th year of operations in India this year. The Swiss major expects half of its global sales by the end of decade to come from emerging markets including India. After having doubled its sales over the past four years in India, Nestle is set to invest for the next stage of growth.
To subscribe AgriBusiness & Food Industry
Call : 011-64521572 or E-mail : mediatoday@vsnl.com AgriBusiness & Food Industry w December 2012
27
brandwatch
The brand that heard the unheard – Sravanthi Challapalli & Vinay Kamath
I
t’s a mildly cloudy day in Chennai and the grey-blue of the sea seems to intensify through the vast windows of the KFC we are sitting in. It’s easy to be entranced by the vista of Elliot’s beach but we are there to meet Niren Chaudhary, President, Yum! India, for whom it’s an exciting day — this outlet is the first of KFC’s ‘green’ ones. While we wait for Chaudhary to finish his tour of the outlet, our hosts bring us some vegetable and chicken strips with an assortment of dips. Chaudhary’s latest project, which he talks passionately about, is providing equal opportunity employment for the deaf in KFCs across India. The trigger was a young employee at a franchised outlet in Kolkata, who spoke with him in sign language. “The intensity of her dialogue and clarity of vision” set this initiative in motion, he says. “To make it truly equal employment opportunity, we don’t discriminate on the type of job. They should be able to do everything the others can. So we had to redesign our kitchens, our light systems … even the training material. The general managers of the restaurants where these employees work have to learn sign language. We have almost 400 such employees and 14-15 ‘special stores’ where they are the majority,” he says. “Of the differently-abled population in India, I believe 10 per
28
cent is deaf. So 10 per cent of stores on an ongoing basis will create opportunities for deaf candidates. They value the opportunity given to them and tend not to leave,” he explains. (Incidentally, about a week after we meet Chaudhary, KFC is in the news again: live worms allegedly found in the chicken at its Thiruvananthapuram outlet forced it to close but it has now been allowed to reopen after a court order. When we follow up with him on this issue, Chaudhary “strongly refutes” the allegations, saying it is impossible to find live worms as the chicken is prepared at 250 degree C for 14 minutes. No other such claims have come in from anywhere else, and KFC has strict internal and third party audits to keep tabs on quality.
AgriBusiness & Food Industry w December 2012
“We welcome people to take a tour of the kitchen any time any day,” says Chaudhary.) Eating-out market We make slow progress on our snacks but our chat is getting along famously. The zeal to be environment-friendly is manifesting itself in stores across many countries. The KFC we are at is the laboratory. The goal is for all new outlets in the works to be 20 per cent more energy- and water-efficient by 2015. Chaudhary, a “Delhi guy”, as he calls himself, graduated in economics from St Stephen’s, Delhi, and has an MBA from FMS, Delhi University’s B-school. Before joining Yum!, where he has been for the last 18 years, he worked
brandwatch with the Tatas’ Indian Hotels (as part of the Tata Administrative Service) as Resident Manager at Taj Palace, Delhi. “It wasn’t easy,” he says, shaking his head, when we ask him how they let him get away. It was a tough choice, but a “great decision in hindsight, a huge adventure and lots of fun”. He started off working in Pizza Hut — this was when it was still owned by PepsiCo — in its India operations, then in the UK and in Europe, looking after the Netherlands and Germany businesses before he returned to India five years ago to head its business here. Yum! hopes to have 1,000 restaurants operating in India by 2015 and 2,000 by 2020. In India, apart from KFC, its other brands include Pizza Hut and Taco Bell; the latter’s still in test mode. The business model is a mix of companyowned and franchised restaurants. He won’t talk hard numbers, citing confidentiality, but says, “We have invested around $100 million in the market and plan to invest another $100120 million in the next five years.” Only an insignificant portion of India’s $90billion eating-out market is organised. “There is enough and more room for everybody, for many more brands for many more years to come.” Uniquely Indian India puts its own, unique spins on value, says Chaudhary. There’s ‘good enough’ value, for one. If, say, a
computer is as good functionally as an Apple or HP product, people are quite happy with it if it’s half the price. They don’t feel the need to spend money on the brand. Then there’s the price point value, ‘this is what I’m willing to spend, not more, tell me what I can get’. Brands have to be seen to be accessible and very, very affordable. The price point at which you can have explosive growth of transaction and bring in a different sort of consumer and fit it into your business model is important. “Global brands have to have a local heart, and we need to understand it well,” he says. As we abandon the snacks and move on to the Crème Ball, an ice-cream, he goes on to list some of the innovations for local tastes: Veg Zinger, a vegetarian burger that was made only for India; a garlic-chilli sprinkle for KFC’s famous Hot Wings; and for the land of the tandoori chicken, the Fiery Grilled chicken. The Streetwise menu is another: “KFC food at college canteen-like prices”, says Chaudhuri. Prices start at Rs 25. In Mexican food brand Taco Bell, there’s even the Kaathito. (Yes, a cross between the kaathi roll and the burrit o!) Hungry to learn Time is running out and not much about Chaudhary the person figures in the conversation. Inspiration comes from Yum!’s Chairman and CEO David
Novak. “He encourages and nurtures an environment in which leaders can think bigger than business.” His ‘Growth With a Big Heart’ mission, Chaudhary explains, is a three-pronged task envisioning growth for the business, for the people working there and involves giving back to the community. China, with its 4,000 Yum! Restaurants, is another big source of inspiration in terms of what is possible and how to do it. He hasn’t worked there “but we have a very good process of know-how building and sharing”. A big reader, he says he has a hunger for learning and is energised by thoughts and ideas and what could be possible. His team is a big source of motivation. In Kochi, his colleagues took up a project to clean the streets, and when the team leader was rewarded for it, he used the cash prize to plant trees at colleagues’ homes on Republic Day. “Igniting compassion in the hearts of leaders, creating their own growth with a big heart collectively … as a team we seem to have begun to own this,” says Chaudhary with a satisfied smile, as he heads back to Delhi after a few hours in Chennai. He has to take in more of the spectacular view of the Bay another time. Courtesy: Hindu Business Line
Karisma Kapoor becomes McCain Foods Brand Ambassador McCain Foods India Pvt Ltd, makers of frozen French fries and potato specialty products, has announced Karisma Kapoor as its first brand ambassador in India. Bollywood actor Karisma will endorse the entire range of McCain’s Indian and International product portfolio. Vikas Mittal, Managing
Director, McCain Foods India said, “Karisma believes in the company’s brand theme of ‘Jhatse banao, kuch tasty khao.’ Being a celebrity homemaker and mother of two kids, she not only manages a busy lifestyle but also whipsup a variety of mouth watering snacks in record time.”
AgriBusiness & Food Industry w December 2012
29
brandwatch
Coca-Cola
India is definitely a key market: Carlos Olmos
B
everage major Coca-Cola, which is committed to India’s growth, says its sales have been rising despite the slowdown. Carlos Olmos, Group Director (Eurasia and Africa) presents his views on firm’s 20-20 vision and Indian consumer behaviour.
About 73 per cent of shoppers in India are aware that they spend more on groceries at present, than during the same period last year. Whilst more than 80 per cent of respondents said this was due to rising prices, more than 25 per cent of shoppers indicated it was also a result of purchasing more items each week.
The 20-20 vision India is definitely a key market, which means doubling sales and transactions in this decade. India stands in the Top Ten in our global business. Given the global environment, the rankings will change. As far as Coca-Cola is concerned, every single channel in India is going to grow from now till 2020, from kirana to big retail. In traditional channels, sales would increase three times, while we expect a five-fold growth through modern retail.
Shopper loyalty In India shoppers prefer walking to a neighbourhood store. However, when it comes to larger stores or weekly shopping trips, they use personal transport. Personal transportation changes the loyalty paradigm vis-à-vis the western market. Compared to South Africa or Turkey, there are fewer people with access to personal means of transportation in India. As choices in catchment areas increase, by definition, the average loyalty to a particular store in that catchment will go down. We found that shoppers were less loyal within cities in India, which have seen hundreds of stores opening in the past few years. Between 75 and 80 per cent of the shoppers we surveyed at different channels across India could not imagine shopping in a different location for groceries at the same time next year. Needs are the foundation of a shopping trip and ultimately the loyalty of shoppers. Shopper loyalty is often measured by market share or share of total expenditure. There are three types
Coco-Cola Study We conducted a study in 92 countries across Eurasia and Africa. Shopper loyalty changes at a particular time of the year and throughout the week. It also varies with occasion. Some of the key findings are that premeditated items account for about 20 per cent of the average basket in the Eurasia and Africa region, and are the foundation of shopper loyalty for any retailer.
30
AgriBusiness & Food Industry w December 2012
of categories that determine this — trip drivers, in-store drivers and basket-fill. Trip driver means specific items or stock keeping units (SKU) that cause shoppers to make a trip to a particular store or channel on that day. These vary by trip and are critical for the store as they drive a whole basket. In-store drivers help drive the trip to a particular store on a particular day of the month, without a specific term or SKU being on the shopper’s mind. Basket-fill is the term for staple and impulse items. While trip drivers and instore drivers account for 20 to 25 per cent of the total basket, the rest is the basket fill-ins. Trip-drivers in India For neighbourhood grocers in India the majority of items — more than 80 per cent — that trigger a shopping trip, are for non-perishable categories. Health and beauty, and household cleaning account for more than 25 per cent, which is the highest. Grains, pulses, oils and fats follow. In Africa, the same holds true for flowers and flip-flops. During the week, trip drivers make up a relatively smaller part of the trip, whilst on weekends, shoppers tend to buy more based on a shopping list. Our survey found that for 75 per cent of the shoppers in India, price was important as was small pack sizes. n
AgriBusiness & Food Industry w December 2012
31
marinefoods
Seafood Chains in Asia
Offering
export
major opportunities
A
sia is the European Union’s largest supplier of seafood products. The last few years have seen a growth in the production and export of products such as tuna, white fish and prawns in some Asian countries. The CBI commissioned LEI Wageningen UR to explore whether CBI could support a number of specific Asian countries towards sustainable growth in their exports to the EU. LEI gathered data on the chains for a number of important seafood products in the following Asian
32
countries: Vietnam, Indonesia, the Philippines, Bangladesh, Pakistan and Sri Lanka. On the whole, there are good opportunities for increasing export in the product chains analysed, but such an increase would require further investment and continuing support. Vietnam Vietnamese exporters of prawns and pangasius are already well on their way to securing a good position on the international
AgriBusiness & Food Industry w December 2012
market. However, the Vietnamese seafood industry is having difficulty responding to the growing demand for sustainably produced fish. Various Dutch organization, including IDH (the Sustainable Trade Initiative), are currently supporting producers and exporters in Vietnam in making their pangasius and prawn more sustainable. The ASC certification scheme for farmed fish is a good example. Vietnam also has potential for exporting lesser-known products such as oysters, muscles and cockles, which are becoming increasingly popular in the EU. Indonesia Indonesia boasts one of the largest seafood industries in the world. The most significant growth potential in terms of aquaculture products comes from improving productivity and lowering the cost price. With regard to capture fisheries, the biggest challenge is to find ways of retaining quality after fish are caught (e.g. better refrigeration and storage facilities). The food safety of Indonesian seafood products is another point of special attention. In addition to the seafood products exported by Indonesia, processed seaweed has huge growth potential as a major export product that can be used as raw material for a variety of products. The Philippines The Philippines is an important producer and exporter of captured tuna. However, production from aquaculture has stagnated and Black Tiger prawns are now the only product being exported to Europe. Exporters of prawns are finding it difficult to obtain EU certification. And those that do manage to obtain certification to supply prawns to the EU often are unable to export at competitive prices. The Philippines will have to find a way of helping exporters to satisfy the European regulations and legislation. The Philippine seaweed sector is strong, but under threat of competition from China and, increasingly, Indonesia. The sector needs to increase domestic seaweed production as well as become more competitive in order to survive. Bangladesh The study showed that the greatest potential is in farmed prawns rather than the naturally sourced variety. Bangladesh traditionally focuses on the European rather than the American and Japanese markets,
marinefoods largely because of the low (and subsidised) price of farmed prawns. Bangladesh can stimulate export by improving product quality and the infrastructure of its prawn sector. Suppliers of fish such as tilapia and pangasius tend to focus on the domestic market. Fish is the main source of animal protein for the Bangladeshi population. Pakistan Although sanctions have had a negative impact on Pakistan’s seafood exports over the last years, Pakistani seafood products have good export potential. Pakistan has a number of
commercially viable products. Despite support the Pakistani government received to help the seafood industry satisfy European regulations and legislation, exports to the EU are not expected to rise in the foreseeable future. Export figures prior to the sanctions show good potential for supplying Pakistani prawns to the Belgian, German and Dutch markets and fish to the English market. If the Pakistani government manages to guarantee sustainability, food safety and product quality, Pakistan could become a more important supplier to the European market.
Sri Lanka Current export levels from Sri Lanka are low in comparison with other Asian countries. In addition, the share of seafood products actually exported is low. The Sri Lankan government intends to boost the fishing industry over the next 10 years by expanding its fleet and increasing production. LEI has advised Sri Lanka to focus on highquality niche markets such as tuna or sustainably produced prawns, and to take the ecological and social consequences of growth in the seafood industry into account.
Integrated duck & fish farming pays good dividends – M J Prabu
A
number of large water bodies and vast stretches of paddy growing in wet lands dot Allepey district, Kerala. Geographically the presence of several ponds and lakes in the region make it ideal for rearing fish and ducks other than the regular, paddy. To double income, farmers were advised by scientists from CPCRI (Central Plantation crop research institute), Kasaragod KVK to grow both fish and ducks in an integrated model. Accordingly, seven farmers from Pachakkad farmers club at Thamarakulam panchayat in Alappuzha decided to try it out in a 110-acre public water body in the village which was a paddy field some 20 years back, now filled with rain water throughout the year. The activities started when a Gulf returned person took a water body on lease from the grama panchayath. He was joined by another six persons and they all approached the scientists for technical advice and visited several
model units before initiating their venture. The water body has one and a half metre depth of water uniformly throughout the year and its bottom is covered with sand naturally, which made it suitable for fish farming. Through their own efforts, the seven partners managed to strengthen the bund on all the sides and solved the acidity problem by adding lime powder to the water. Initially grass carp variety fingerlings were introduced since the water body was filled with algae and grass. This
variety of fish feeds mainly on grass and algae in the water up to seven folds of its body weight. Within three months of the introduction of this fish variety in the pond, the water became crystal clear. Later catla, rohu and mrugal fingerlings were introduced. These three fish species feed in different layers of the water body. “While catla feeds in the upper layer with its peculiar lips, Rohu feeds in the middle portion and Mrugal feeds on the bottom portion of the water body with its parrot beak
AgriBusiness & Food Industry w December 2012
33
marinefoods like lips,” says Dr. S.Ravi, scientist working with the CPCRI, KVK. Since the demand for local varieties was high, varieties such as varal, pearl spot, poomeen (milk fish), thirutha etc., which were present in the reservoir were retained. Recollecting from previous experience, the partners introduced tilapia fish which can be marketed at 4-5 months time. Since the water body was not used for several years the growers did not have to invest money for feeding fishes throughout the season. “For farmers seeing is believing and personal interaction with those who are already in the venture aids in clearing many doubts for them. Hours of talking to them and giving suggestions will not serve much compared to a personal field visit,” says Dr Ravi. The group had invested about three lakhs for the venture that could be recovered only after a period of 10 – 12 months. In the meantime based
on the experts’ advice they planned to rear ducks as it would speed up their income. They attended training on scientific freshwater fish farming and integrated duck and fish farming. As per the standard models developed by KVK, about 150 numbers of low cost duck sheds were erected above the pond and three months old chara and chemballi breed ducks (150 numbers) which are indigenous to the region introduced. During the day time the birds scavenged the water body and at night roosted in the shelters. The birds started laying eggs at 5-6 months of age and the daily egg production was in the range of 100 – 120. The eggs were sold at Rs. five at the site itself providing a daily income of Rs. 500 – 600. Half the money earned through sale of eggs was spent for feeding ducks and the remaining amount was spent towards the labour charges. A total income of Rs. 1.8 lakhs was obtained through sale of duck eggs in
one year (2011-2012). The fish were also ready for netting and marketing by 10 months. Skilled persons were engaged for netting the fishes. Selling commenced everyday in the morning at 6.00 am. Local variety of fishes was sold at Rs. 200 per kg and carp variety for Rs.130/kg. Marketing was not a problem since the consumers preferred the local varieties because of their taste. “They never used ice or ammonia for preserving the fishes” making it more healthy and tastier” says Dr. Ravi. Excess fishes remaining after local sale were transported in a hired vehicle to adjacent local markets and sold within two hours. The group also supplied the fishes based on booking within 10 km surroundings. From the sale of fishes the group collected a total income of Rs.12 lakhs in one year. The entrepreneurs have deposited six lakhs fingerlings this year in the water body for harvesting in 2013. Courtesy: Hindu Business Line
Global warming may shrink fish species in size by up to 24 %
G
lobal warming may shrink fish species in size by up to 24 per cent, with the largest decreases in the Indian and Atlantic oceans, scientists have warned. Researchers from the University of British Columbia modelled the impact of rising temperatures on more than 600 species between 2001 and 2050. The scientists argued that failure to control greenhouse gas emissions will have a greater impact on marine ecosystems than previously thought. GASPING FOR OXYGEN Warmer waters could decrease ocean oxygen levels and significantly reduce fish body weight. Previous research has suggested that changing ocean temperatures would impact both the distribution and the reproductive abilities of
34
many species of fish. This new work suggests that fish size would also be heavily impacted. The researchers built a model to see how fish would react to lower levels of oxygen in the water. They used data from one of the higher emissions scenarios developed by the Intergovernmental Panel on Climate Change (IPCC). Although this data projects relatively small changes in temperatures at the bottom of the oceans, the resulting impacts on fish body size are “unexpectedly large”, according to the paper. As ocean temperatures increase, so do the body temperatures of fish. But, according to lead author, Dr William Cheung, the level of oxygen in the water is key. “Rising temperatures directly increase the metabolic rate of the fish’s body function,” he said.
AgriBusiness & Food Industry w December 2012
“This leads to an increase in oxygen demand for normal body activities. So the fish will run out of oxygen for growth at a smaller body size,” he said. The research team also used its model to predict fish movements as a result of warming waters. The group believes that most fish populations will move towards the Earth’s poles at a rate of up to 36 km per decade. “So in, say, the North Sea one would expect to see more smallerbody fish from tropical waters in the future,” Cheung said. Taking both the movements and the physiological impacts of rising temperatures together, the research team concluded that fish body size will shrink between 14 per cent and 24 per cent, with the largest decreases in the Indian and Atlantic oceans.
AgriBusiness & Food Industry w December 2012
35
Retail
News We are investigating allegation of corrupt practices: Wal-Mart
W
orld's largest retailer Wal-Mart today said it is investigating allegations of corrupt practices against it in foreign markets, including India. In March 2011, the US-based company had started a worldwide review of its policies, practices and internal controls for Foreign Corrupt Practices Act (FCPA) compliance. "We have inquiries or investigations regarding allegations of potential FCPA violations in a number of foreign markets where we operate regarding FCPA allegations, including but not limited to Brazil, China and
India. This is in addition to the ongoing investigation in Mexico," the company said in a statement on its website. Foreign Corrupt Practices Act of the US bars bribing officials of foreign governments. Since the implementation of the global review and the enhanced anti-corruption compliance programme, the company has identified or it has been made aware of additional allegations regarding potential violations of the FCPA, the statement said. The company, however, did not specify specific charges of corruption in any of the countries it mentioned.
"As these matters are currently under review, it would be inappropriate for us to comment further on the specific allegations until we have concluded the investigations," the company said about the latest development. The company has made improvements to its compliance programs around the world and has taken a number of specific, concrete actions with respect to our processes, procedures and people, it added. "When allegations are reported or identified, we, together with our third party advisors, conduct inquiries and when warranted, we open investigations," it added.
Rajdhani to open 13 new outlets across states
M
irah Hospitality Group, which operates restaurant chain ‘Rajdhani,’ plans to open 13 outlets across the country by the end of this fiscal at an estimated outlay of Rs 25 crore. Rajdhani is a ‘thali-only’ vegetarian restaurant chain serving traditional Gujrati and Rajasthani food. Apart from Rajdhani, the group also owns other restaurant brands
36
such as Manchester United (sports bar and pub), Cafee Mangii (a fine dining Italian restaurant chain), Falafels (a Lebanese quick service chain) and Ping Pong. It also operates the Citrus Hotel brand. “We have plans to open 13 new Rajdhani outlets across the country by the end of this fiscal. Two of these will be in Kolkata, while we are on the look out in other parts of the country,” Aji Nair, VicePresident – food and beverage division, Mirah Hospitality, said. The new outlets will come up across the country including parts of North India and eastern India. The restaurant chain has a strong presence in South India, with nearly 17 of its existing 37 outlets located in the southern cities of Bangalore, Chennai, Hyderabad and Coimbatore. Apart from south, the eatery’s outlets are located in Mumbai, Delhi, Kolkata and in Tier-II cities like Gurgaon, Ghaziabad,
AgriBusiness & Food Industry w December 2012
Indore, Shirdi, Pune, Bhopal, Nasik and Baroda. Nair, however, ruled out a franchise model for the restaurant chain and would continue with the company-owned outlet format. “It is difficult to maintain a steady quality once you opt for the franchise models,” he added. According to him, Rajdhani is eyeing a turnover of nearly Rs 75 crore this fiscal, compared to the Rs 50 crore of business that it did last fiscal (2011-12). Rajdhani is also firming up plans to foray overseas. Plans are afoot to start operations in Singapore by March 2013 at an estimated investment of nearly Rs 3 crore. Dubai is another probable destination where it intends to foray sometime next fiscal (2013-14). It already has a presence in Oman.
Retail
News Dutch firms to get benefits from retail reforms
R
eforms in the Indian retail sector announced recently could provide an opportunity for Dutch companies in supply chain management, said Alphonsus Stoelinga, the newly appointed Ambassador of the Netherlands to India. “If you look at the supply chain in India, there are a lot of losses of fruits
and meats. In the Netherlands we have very specialised services for optimising and securing, what I call, the supply line systems. If big investors like Walmart or Carrefour come into India, they will have to cater to or have somebody else cater to the needs of the market efficiently. I think what this will mean for the Netherlands is that all big retail companies and investors in Indian retail will have enormous interest in the supply chain,” the Envoy said. The Envoy said Dutch companies getting into supply chain management, “will be fantastic for everybody. Because then the consumer will win, the investor will win, the farmers will win and India
will win,” he said. The Ambassador was of the opinion that investments from the Netherlands were unlikely to flow directly. Stating that there had not been many inquiries by Dutch companies since the retail reforms were announced, the Envoy said there was a constant investment stream between the two countries. “There are 150 Indian companies in the Netherlands. The biggest are Tata Steel and Tata Consultancy Services. On the other side, we have Shell which is building an enormous research and development centre in Bangalore. Philips is already in India,” he said.
Nilgiri’s to expand its private offerings
N
ilgiri’s, the Southern food and grocery retail chain, intends to widen its private label portfolio. The Rs 700-crore chain earns over 30 per cent of its food category revenues from its private labels, which stretch across pulses and cereals to bakery and dairy products. Most retail chains earn under 20 per cent of their revenues from their own brands in foods. The retail chain, says Murali Krishnan, CEO, has increased its offerings under the Nilgiri’s 1905 (the year of its founding) brand in the past few years. While it already had a large offering in branded commodities, the chain also has a wide portfolio of cakes, rolls and breads as well as dairy products from its bakery and dairy in
38
Bangalore. Bakery and dairy contribute to 15 per cent of its revenues from the food category. The Nilgiri’s brand has a strong association with fresh foods and is extendable across the category, points out Krishnan. While it recently launched a range of low-fat fruit yoghurts, it has also unveiled its own brand of gingelly oil, breakfast foods such as oats and multi-grain, sugarfree porridge, and will soon launch its own brand of bottled water as well. With the pooja season on, Nilgiri’s has launched its lamp oil, a blend of five oils meant for prayer lamps. Krishnan says Nilgiri’s will continue to offer its own brand in the food segments where it can add value. It is not in mass market products. Its focus is on continuing to create niche products. He says the trend clearly shows that younger consumers are shopping ‘healthier’ for their foods and Nilgiri’s expects to ramp up its offering in this space. “We are soon launching a range of health cookies as well,” he adds. Nilgiri’s’ CEO says the brand is being rejuvenated with nattier packaging to appeal to younger customers when they make purchase decisions. An exercise is under way to revamp the packaging for its entire range of private labels.
AgriBusiness & Food Industry w December 2012
Krishnan says Nilgiri’s has among the highest average bill sizes in the grocery retail industry and revenues of over Rs 2,000 per sq ft, more than double that of similar retail chains. And, that also makes it one of the few profitable retailers. The chain, which is expanding through a franchisee model, has 128 stores and is expanding fast in the south. It expects to have 150 stores operating by year-end. Actis will exit in good time Private equity fund Actis invested Rs 300 crore around five years ago to take a 67 per cent stake in Nilgiri’s Dairy Farm which manages the back-end for the retail chain, while 33 per cent remains with the family which promoted Nilgiri’s. A retail industry observer says PE funds such as Actis typically stay invested in a firm for five to seven years and it has now crossed the five-year threshold. There are many names being bandied about to take Actis’ stake, including a few foreign retailers. “Conversations happen all the time; anybody who has an interest in Indian retail is talking to Actis,” he says, without divulging the names of possible suitors. However, he says, Actis has given itself a long time frame and will stay invested till it gets to its investment target. “There is a lot of interest around Nilgiri’s, as it’s a profitable retail chain now and a unique brand,” he says.
News
AgriBusiness & Food Industry w December 2012
39
Retail
News Change APMC Act to let farmers enjoy benefits of FDI: S. Shivkumar
F
oreign direct investment (FDI) in retail will not help farmers until the APMC (Agricultural Produce Marketing Regulation) Act is reformed. “As long as you do not do that, farmers will not be able to get benefits from FDI in retail. You need to have competition in the market place. As of now, there is only mechanism where farmers can sell their produce,” S. Sivakumar, Chief Executive Officer
of Agri Business Division of ITC, has said. Talking to reporters on the sidelines of Food 360 conference, organised by the FICCI here on November 5, he said competition would improve efficiencies in the supply chain and help farmers get more income. “Till such time we carry out market reforms, it is only consumers in urban areas who will benefit from investment flows into the retail sector,” Sivakumar, who is also the Programme Chair of Food 360. On the prospects for contract farming in the wake of FDI in retail, he said it was
not a solution for all crops. “One should produce as required and one should not grow depending on the last year’s prices,” he said. On processing, he said there was a need for improved technologies. The second edition of the two-day Food 360 conference will focus on productivity and reducing costs in farming sector. J.A. Chowdary, the Conference Chair, said FICCI would hold this conference annually in order to provide a platform to various stakeholders. Andhra Pradesh Governor E.S.L. Narasimhan inaugurated the meet.
CII organizes ‘Food Safety in Retail Chains’ seminar
Bharat Lal Meena
I
ncreased consumer awareness, globalisation, FDI in retail policy, health concerns of people are some of the key drivers for focussing more on food safety in India in the recent times. Bharat Lal Meena, Principal Secretary, Agriculture Department, Government of Karnataka, said, “Food safety is more relevant now than at any other point of time as the government of India allowed FDI in retail. Educated farmers are using integrated farming of many crops in a
small area and getting increased yields." He also lamented: "Wastage in agro products is over 70 per cent in India and this is a national waste." The event, organised by the CII titled 'Enhancing Food Safety in Food Retail Chains' mulled over various aspects of improving safety standards in the entire value chain of food processing. Speakers opined that it is very important to follow the best food safety norms to sustain the feeding needs of Indian masses and to stave off several epidemics like diarrhea. With sourcing now being globalised, countries like India can become the bread basked of the world if we pay more attention to standards. G Srinivasan, Deputy Director, Food Safety and Standards Authority of India (FSSAI), said, “Globalisation of food trade necessitated transitional standards." Even as India is a major food producer, its productivity is low. Prabodh Halde, vice president-AFST & head regulatory, Marico Industries Ltd, said, “As India has the second largest arable land and has diverse agro-climatic zones that can grow a variety of crops, many global players are coming to India. But, India's share in
global food processing is just 2.3 per cent and lags far behind even Pakistan and Bangladesh." Despite some challenges, food processing industry and food retail chain business in India have been growing and there is a huge investment opportunity in this segment, according to experts, the growth of food retail chains in India as well as anticipated foray of global retail giants into India will require further huge sourcing of food products and this will give a thrust to the food processing industry. Sunil Awari, General Manager, Namdhari Seeds, said, “Investment opportunities in food processing business are huge and if proper measures are in place, regarding quality assurance, India can cater to many global retail chains." As of now, India wastes lot of agro produce. The growth of middle class market, low cost of production; change in consumption patterns; encouragement from government agencies like NHB, APEDA, and MPEDA; and FDI policy and food parks are top five factors that are attracting investment opportunities in food processing, he added.
To subscribe AgriBusiness & Food Industry
Call : 011-64521572 or E-mail : mediatoday@vsnl.com 40
AgriBusiness & Food Industry w December 2012
Corporate
News Hyderabad to host food industry leadership program
W
ith a view to empower processed food professionals with cuttingedge solutions to deal with challenges in the sector, the Centre for Executive Education (CEE), Sathguru Management Consultants, Hyderabad, in association with the College of Agriculture and Life Sciences (CALS), Cornell University, New York, will deliver the first Food Industry Leadership Program (FILP) in Hyderabad from December 17-21, 2012. FILP will reinforce the participants’ knowledge on leadership models in the food sector. It will also address issues related to innovation in product development; excogitate and seize opportunities in product development and supply sectors. FILP will also introduce ideas for developing novel products; tie-up loose ends in supply chain management,
and production and marketing segments. It will help professionals generate optimum output; react to emerging issues as well as develop solutions for ongoing issues to stay competitive in the world market. Since the frequent economic instability requires considerable agility to deal with the market, the programme will facilitate interactions among participants and faculty to initiate ideas to react to such changes. FILP will also facilitate an effective enterprising arena and a place to anticipate and highlight innovation, to interpret the trends and initiate new food fashions. Designed for mid- and senior-level executives, the programme will provide an intensive, interactive and challenging learning experience for present and next generation leaders. According to a press
release, the programme pertinent to executives drawn from various facets of the food industry such as food processing, retailing, marketing, brand management, food product development, research, customer loyalty management, regulatory compliance, public affairs management and strategic planning, the programme will give a competitive edge to all participants connected with the food industry value chain. A faculty comprising industry leaders and subject experts from around the globe would converge to share their knowledge and experiences through relevant case studies, lectures, group assignments and discussion sessions, the release added.
Jubilant FoodWorks to invest Rs. 150-cr on new outlets
J
u b i l a n t FoodWorks , which holds the franchise rights for Domino's Pizza andDunkin' Donuts chains in India, will hike prices of its products by 3% due to continued inflationary pressures, a senior executive from the company said. While announcing its second quarter results on Wednesday, its chief executive told TOI over a conference call the fastfood chain operator will continue with these "nominal" price increases in the
backdrop of a growing economy. The company has effected around 6.5% price hike so far this year, said Ajay Kaul, CEO of Jubilant Foodworks. Last year the company raised prices of its Pizzas by 12% largely on the back on input costs going up unabated. The company reported a 36.63% rise in its net profit to Rs 32.34 crore for the quarter ended September 30, 2012 on the back of the growing consumption story among Indians especially in smaller towns and cities. Kaul said the company has revised its target of opening 100 Domino's Pizza
stores to 110 for the financial year 2013 and will open a total of 10 Dunkin' Donuts stores in the same period. An investment of Rs 150 crore will go in to the opening of these new stores, he said. Same store sales growth, an important yardstick in the retail sector, came in at 19.8%. A few days ago,Morgan Stanley downgraded the Jubilant stock to "equal-weight" from "overweight" saying the company will face increased competition in the delivery business from Yum! Brands' Pizza Hut.
FDA warns Indian exporters to get registered
T
he US may ban import of Indian food and dietary supplements if food companies fail to renew their Food and Drug Administration (FDA) registration by the end of this year. "The US administration, over-cautious about probable acts of terrorism, has made it mandatory for all facilities that manufacture, process, pack or hold food for human or animal consumption in the US to register with the US FDA," said an official of Agricultural and Processed Food Products Export Development Authority (APEDA), a government body
which overlooks exports of agri and food products in the country. The companies will then have to renew their registration every two years to continue their shipment to the US. Food from an unregistered foreign facility would be held at the port of entry unless the FDA directs it to be moved to a secure custody. The new rule effective January 1, 2013, can create a non-tariff barrier for Indian food products companies, which exported more than $3 billion worth of food to the US in 2011.
The fresh registration rules will be applicable to all food products, all processed and manufactured products, and animal products. Under the new Food Safety and Modernisation Act (FSMA), FDA is to establish a "reliable system" that uses third-party audits conducted either by foreign governments or other third parties to help ensure food safety for food destined for the US. It will help FDA conduct investigations and surveillance operations in response to food-related emergencies.
AgriBusiness & Food Industry w December 2012
41
Corporate
News
MTR Foods to expand its breakfast menu
B
angalorebased MTR Foods is cooking up plans to put more on the breakfast plate by introducing regionbased cuisine. Its portfolio, at present, is limited to south Indian breakfast mixes such as dosas and idlis. Going forward, there will be more products targeting western States such as Maharashtra and Gujarat with items such as poha, besan chilla and dalia. Sanjay Sharma, Chief Executive Officer, MTR Foods said, “We are looking at breakfast mixes beyond idlis
and dosas. We are planning to have food relevant to a region and there could be more regional specialities in the future.’’ Considering that Britannia has not made much headway with its breakfast mixes, MTR believes that this segment is still waiting to be tapped with more region-specific offerings. “Taste is crucial when there are regional specialities. Today, most of our competitors are regional players,” added Sharma. The company has recently launched multigrain breakfast mixes at a 25 per cent premium to its existing breakfast mixes. Breakfast mixes is a Rs 120-crore category, while the entire breakfast category is estimated at Rs 800 crore. We expect to innovate and have more
products in this segment and have been repositioning the MTR brand in the past three years to get into the breakfast space, Sharma said. MTR Foods currently reaches out to 1.4 lakh outlets and the company expects to take this up to 2.5 lakh in the next two years. Focusing on three main categories today (spices, ready mixes and snacks), MTR is not letting go of its existing categories such as ready-to-eat as it continues to be a market leader in that segment. “Ready-to-eat is still a Rs 60crore category, and with a 52 per cent share in the category, we are not going to exit it,’’ added Sharma. The company has been growing at CAGR of 25 per cent.
Subway to set up 1,000 restaurants in 5 years
Q
uick service restaurant brand Subway has opened its 300th restaurant in India, at Terminal 2 of the Mumbai International Airport. Fred DeLuca, President and Cofounder of Subway, is bullish on India and plans to open 1,000 stores in India in the coming five years through the franchise route.
42
The Connecticut-headquartered brand is present in 50 Indian cities with 263 franchisee-run restaurants. Globally, the Subway brand has more than 37,000 restaurants spread throughout 100 countries. Robby Gulri, Area Development Manager, said, “Mumbai figures prominently in Subway’s growth plans. The rising inclination of people towards healthy eating has also given an added impetus to Subway’s performance.” Mumbai International Airport, which sees the highest density of travellers in transit, now has its own Subway store. “Subway, as a global brand, has always encouraged developing opportunities in non-traditional locales such as airports, hospitals,collegeanduniversitycampuses,” said Chetan Arora, Development Agent for Subway Mumbai and Maharashtra.
AgriBusiness & Food Industry w December 2012
The chain is now focusing on tier-II and tier- III cities. Subway has adapted its menu to appeal to the Indian consumer. No beef or pork products are served, and in addition to products available at its locations throughout the world, the restaurants in India offer a wide range of local favourites such as Chicken Tandoori and Paneer Tikka. Though the company has only two vegetarian products in its American and European menus, recently, it rolled out its first ever all-vegetarian outlet at Jalandhar-based Lovely Professional University (LPU). The latter is run by a strict Hindu Mittal family and promotes only vegetarian meals on the campus. India is a small part of Subway's business contributing 2.5 per cent to overall revenue.
F&B
News Cadbury invents temperature-tolerant chocolates
N
ew ‘temperature-tolerant chocolates’ that don’t melt even at 40 degree Celsius have been developed by confectionery giant Cadbury, which will soon be available in hot weather countries like India. Scientists at Cadbury’s research and development plant in Bourneville, in the UK said the new chocolate bars stay completely solid even when exposed to temperatures of 40 degree Celsius for more than three hours. Cadbury engineers have set out the method for making breakthrough temperature-tolerant chocolate in an 8,000-word patent application. While standard chocolate has a melting point of 34 degree Celsius, the new bars are ideal for warmer weather. The new recipe will be available in hot countries,
likely to include India and Brazil. The secret to the new bars is a change in the so-called ‘conching step’ — where a container filled with metal beads grinds the ingredients, which usually include cocoa butter, vegetable oils, milk and sugar. Cadbury has developed a way of breaking down sugar particles into smaller pieces, reducing how much fat covers them and making the bar more resistant to heat. “We have found that it is possible to instil temperature-tolerant properties by refining the conched chocolate after the conching step,” Cadbury said in its patent application. “Production of temperature-tolerant chocolate would allow production of chocolate—containing product more
suitable for hot climates, particularly in less economically developed countries where the supply chain is ill-equipped to handle temperature fluctuations,” it said. However, professional chocolatiers are unimpressed with Cadbury’s new invention, claiming it would not taste as good as original chocolate.
FSSAI appoints Intertek for quality audit
F
ood Safety and Standards Authority of India (FSSAI) has appointed Intertek for inspection and audit of Food Business Operators (FBOs). Intertek is a leading provider of quality and safety solutions serving a wide range of
industries around the world. The Intertek Food laboratory in Gurgaon has been accredited by the National Accreditation Board for Testing Laboratories. The work will enable FBOs not only demonstrate compliance to requirements under the FSS Act and regulations, but also lead to issue of FSSAI licence and its
renewal thereafter. Intertek will help FBOs get a test done for their food samples at defined intervals every year. Intertek will also be training new food business operators towards Food Safety Management and Systems, along with verifying complaints filed with the FSSAI.
Pepsi Chips lose markets to local players
T
op snacks maker PepsiCo Foods has started slipping with a slew of smaller and regional brands eating into the market share of its flagship brands Kurkure snacks and Lays potato chips. Kurkure and Lays, which dominate the Rs. 9,400-crore Indian snacks market, have begun losing share to regional players such as Gujarat-based Balaji, Indores Yellow Diamond and DFM Foods Crax in addition to some variants of ITCs Bingo snacks, which are matching the multinational on pricing, variants and regionalisation. Industry official quoting Nielsen data said both Kurkure and Lays market shares slipped 2-3 % in the April-September
period, while some others like ITCs Bingo, Balaji, Parle and even Yellow Diamond have gained. Nielsen data also shows that PepsiCo Foods (FritoLay India) share in overall western snacks has slipped
to 40% last fiscal from 48% in 200910.A PepsiCo spokesperson said the company doesn’t comment on market shares, which fluctuate from quarter to quarter.
AgriBusiness & Food Industry w December 2012
43
44
AgriBusiness & Food Industry w December 2012
Health & Nutrition
News Organic fruits are no better option: Study
P
arents wanting to avoid exposing their children to pesticides may opt for fresh organic fruits and vegetables, but this move may not be any better or worse. According to the American Academy of Pediatrics, science has not proven that eating pesticide-free food makes people any healthier. “Theoretically there could be negative effects, especially in young children with growing brains, but rigorous scientific evidence is lacking,” said Dr. Janet Silverstein, a pediatric endocrinologist at the University of Florida in Gainesville, as well as co-author of the academy’s new report . “We just can’t say for certain that organics is better without long-term controlled studies.” The report, published online Monday, is similar to a Stanford University study released last month. Their research concluded that while eating organic fruits and vegetables can reduce pesticide exposure, the amount measured in grown produce was within safety limits.
Silverstein recommends for parents on a budget to purchase organic versions of foods with the most pesticide residue only, like apples, peaches, strawberries and celery. Organic foods tend to be more expensive than standard produce. Despite this tip for budget-conscious shoppers, the pediatricians group explains higher prices on organic foods might make some parents buy less fruits and vegetables. This is a setback, especially since both fruits and vegetables have numerous health benefits, including reducing risks of obesity, heart disease and some cancers. The report recommends parents to provide their families a diet rich in fruits
and vegetables, as well as plenty of whole grains, low-fat or fat-free dairy products. Foods could be organic or not. The Organic Trade Association reports the US market for organic foods has grown from $3.5 billion in 1996 to $28.6 billion in 2010. Only some products are standardized and regulated.
Fruits & Vegetables are therapeutic for kidney patients
A
dding fruits and vegetables to the diet can improve the health of patients with chronic kidney disease (CKD, according to a study. Alkaline therapy is used to treat CKD patients with severe metabolic acidosis (when there is too much acid in the body). Nimrit Goraya, MD (Texas A and M College of Medicine) and her colleagues looked to see if adding fruits and vegetables, which are highly alkaline, can benefit CKD patients with less severe metabolic acidosis. For the study, 108 patients were randomized to receive added fruits and vegetables, an oral alkaline medication, or nothing. After three years, consuming either fruits
and vegetables or the oral medication reduced a marker of metabolic acidosis and preserved kidney function to similar extents. "Our findings suggest that an apple a day keeps the nephrologist away," said Dr. Goraya. Study co-authors for "Fruits and Vegetables or Oral NaHCO3 Preserve GFR and Reduce Urine Angiotensinogen, a Marker of Kidney Angiotensin II Activity, in Stage 3 CKD" include Chanhee Jo, PhD, Jan Simoni, PhD, and Donald E. Wesson, MD. The finding was presented during the American Society of Nephrology's Annual Kidney Week.
AgriBusiness & Food Industry w December 2012
45
Commodity
News
Multiple exchange rate of Iran to hurt rice exporters
B
asmati rice exports to Iran may take a hit this fiscal. Information trickling in from Indian rice trade sources indicates that Iran has just reworked its multiple exchange rate system to circumvent sanctions and rice importers in Iran will now have access to the open market exchange rate with a 2% discount. This means that the Iranian rice importer will now have to shell out Rs 23,000 to Rs 25,000 rials (or 2,300 to 2,500 toman) against one dollar as compared to 12,600 rials against a dollar a week ago. This will automatically work as a disincentive to import basmati rice from India as imports will become doubly expensive. "We are yet to get an official communication from Iranian authorities. But media reports from Iran say that such a change has been brought in. Even our trade sources have also indicated such a change. This is a matter of real concern to Indian
basmati rice exporters," said MP Jindal, president, All India Rice Exporters Association (AIREA). Iran is one of the major destinations for Indian basmati rice and the country had imported 32 lakh tonne of basmati rice in FY12. The move will affect rice exporters in India and returns to farmers may also dwindle this year. Till October 31, 2012, India has exported 19.8 lakh tonne of basmati rice to Iran. Media reports from Iran say that the country has narrowed the list of export goods which have been banned to 34 items from an initial 52. The Trade Promotion Organisation of Iran has recently released a new list of goods including wheat, sugar, meat, corn, dairy products, livestock, confectionery, iron products, rice, and some specific petrochemicals. Authorities have divided imports into 10 categories based on how essential they are for the Iranian economy and will accordingly provide importers with dollars at a subsidised rate to buy basic goods. Those products which are not
produced domestically will be removed from the list of banned items, but most of the named products are produced in the country and there is no need to import them. Western sanctions over Iran's controversial nuclear activities have caused a shortage of foreign currency in the country sparking a drastic devaluation of the Iranian rial and sending inflation soaring. Iran functions on a multiple exchange rate system to circumvent the sanctions. First, there is the official exchange rate of 12,500 rial (1,250 toman). Then there is the open market exchange rate which varies between 25,000-28,000 rial (2,500-2,800 toman) and finally the unofficial market rate of 28,000 rial (2,800 toman). "We have learnt that Iran has now classified imported goods into three categories," said Jindal. The first category consists of "strategic goods" which have access to the official rate of exchange, which is stable at 12,600 rials (also known as 1,260 toman).
Spices Board offers new trading platform for cardamom farmers
I
n a bid to develop alternate direct marketing system to bypass the oft disturbed cardamom auctions, the Spices Board is offering new trading platforms for farmers. Cardamom growers in Kerala, Tamil Nadu and Karnataka are being provided an opportunity in the forthcoming India International Trade Fair in New Delhi for marketing their produce in the potential North Indian market. The Spices Board will make
46
available facilities for showcasing and entering into marketing tie ups with prominent merchants and dealers of cardamom in the major markets of Delhi and the States of Uttar Pradesh, Madhya Pradesh, Punjab, Haryana and Rajasthan. The Board will be setting up a cardamom theme pavilion at the Pragathi Maidan from November 14 to 27. India International Trade Fair, the iconic annual event of the India Trade Promotion Organisation (ITPO) is the largest trade fair in India.
AgriBusiness & Food Industry w December 2012
Cardamom growers and associations of cardamom growers are being intimated to participate in this event. Upcountry marketers, traders and buying houses are being invited by the Board to visit the pavilion to interact with the growers, a release said.
AgriBusiness & Food Industry w December 2012
47
Dairy
News Bihar’s COMPFED launches Sudha milk in Delhi & NCR
M
aking its foray in Delhi NCR, Bihar State Milk Co-operative Federation Limited (COMPFED) has launched its famous milk brand ‘Sudha’. The taste of Bihar, Sudha, has launched three milk products in Delhi and NCR on November 5.
The COMPFED introduced Sudha Gold (full cream), Sudha Haldi (tond) and Sudha Smart (double tond) at rates of Rs 40, Rs 30 and Rs 26 per litre respectively. Managing Director of COMPFED, Harjot Kaur said that the company is trying to take DMS sales network on rent for selling their milk products. Bihar government has written a letter to the Central Government requesting its wish to acquire DMS network. At present, the DMS is running into huge losses and producing only two and half lakh litre of milk daily contrary to its capacity of five lakh litre. Notably, Gujarat’s cooperative milk
marketing federation, involved in the marketing of Gujarat’s top milk brand Amul, has also sent an application to the Centre for the acquisition of DMS. Harjot Kaur further said that the COMPFED will try to win the confidence of the national capital’s customers through its milk products. In the beginning, the company will try to manufacture and provide two lakh litres of milk per day to the customers, said Kaur. The company is receiving orders for sweets also. It will also try to manufacture ghee in the later stages. The company’s milk products will also be available at capital’s grocery stores, she added.
Amul sets up its largest dairy near Delhi
T
he Gujarat Co-Operative Milk Marketing Federation (GCMMF), which owns the Amul brand, is eyeing a larger slice in the rapidly-growing packaged milk market of the National Capital Region (NCR). Amul has set up its largest dairy with a processing capacity of 30 lakh litres a day (LLPD) at Dharuhera in Haryana to serve the NCR market, consolidate and grow its share in the region. Delhi and the NCR are the largest milk market in the country, where Amul has doubled its pouched milk sales to around 24 LLPD in past three years, said R.S. Sodhi, Managing Director, GCMMF. Amul’s sales in NCR are growing at around 15 per
cent, ahead of the market. “Our sales in NCR have grown much faster than our expectations and that too in market with a large base,” he said. Amul entered the Delhi market in 2003 with sales of one lakh litres a day and has seen rapid growth since then. Delhi accounts for 27 per cent of Amul’s daily sales of 90 lakh litres across the country. “Rising incomes and shift to packaged milk are driving sales” Sodhi said. Amul commands a 46 per cent share in the pouched milk sales in the NCR region followed by Mother Dairy with sales of around 18 LLPD. The new dairy set up with an investment of Rs 450 crore will augment Amul’s processing capacity to 42 LLPD. “There have been no big investments
in the dairy sector in NCR since 1973, when Mother Dairy had set up a facility in Delhi. We have seized the opportunity and will be investing another Rs 250 crore in two dairies of 10 LLPD in the region over next two to three years,” Sodhi said. Amul is targeting sales of about 65 LLPD in the NCR region by 2020 when the packaged milk market is expected to expand to one crore litres a day from the present 50 LLPD. Amul is also increasing its procurement through farmer co-operatives in Haryana, Rajasthan and Uttar Pradesh to meet the rising demand. Presently, Amul procures about 12 lakh litres a day from farmers in these Northern states.
Import duty on milk powder restored
T
he Government has restored the tariff rate quota regime on skimmed milk powder. Under this, it will impose a 15 per cent import duty skimmed milk power for up to 10,000 tonnes in a year. Above this limit, a duty of 60 per cent will be levied. The Centre has also lifted the ban on
48
AgriBusiness & Food Industry w December 2012
export of whole milk powder, baby milk food and dairy whitener. Earlier, there was no import duty on these products. This was done to check on prices. Now, with milk prices crashing the Centre has undone all measures taken to rein in prices.
Dairy
News Pawar inaugurates Dudhmotisagar Dairy
Govt to give assets of DMS to GCMMF, Amul model for all-India
T
he Government is likely to consider handing over assets of loss-making Delhi Milk Scheme (DMS) to the Gujarat Co-operative Milk Marketing Federation (GCMMF) on lease basis. Agriculture Minister Sharad Pawar is meeting GCMMF officials to discuss the modalities of such an arrangement, sources said. GCMMF, which owns the Amul brand, had recently reiterated its willingness to acquire DMS, which comes under the Agriculture Ministry. DMS has around five per cent market share in Delhi’s pouched milk market. When asked, GCMMF Chairman Vipul Chaudhary said: “The Agriculture Minister is positive about our move. We will be seeking a long-term lease of the facilities”. DMS has a milk processing and packaging capacity of six lakh litres a day and has 400 milk vending booths across Delhi. Chaudhary said that modalities of the takeover arrangement are likely to be discussed. “DMS has some 800 employees and their production is about two lakh litres a day, which is unviable. We will also discuss options to accommodate or absorb DMS employees” Chaudhary told reporters after inaugurating India’s largest dairy facility at Dharuhera in Haryana. DMS, launched in 1959 with an objective to provide milk for Delhi citizens, has been running into losses since its inception mainly because it has been operating as a development agency, not as a commercial outfit. Industry sources said DMS currently sells around two to three lakh litres in
pouches in Delhi. The total market for pouched milk in Delhi is estimated at 50 lakh litres, where Amul sells about 24 lakh litres. The acquisition of DMS will augment Amul’s direct presence in Delhi and also expand its processing capacity. Delhi is the largest milk market for Amul, where it has grown its pouched milk sales to around 24 lakh litres a day from around 25,000 litres about six years ago.
Sharad Pawar, Minister of Agriculture and Food Processing Industries, flanked by Bhupinder Singh Hooda , Chief Minister of Haryana, and Vipul Chaudhary, Chairman, Gujarat Cooperative Milk Marketing Federation, at the inauguration of Amul India's Dudhmotisagar Dairy at Dharuhera, Haryana
Amul model for all India Agriculture Minister Sharad Pawar called upon the Gujarat Milk Marketing Co-operative Federation to expand its operations to multiple states. Such a move would help usher in white revolution across the country benefitting farmers in other States too. “You need to look at expanding the Amul co-operative model to other states,” Pawar told members of the GCMMF. He was speaking after inaugurating the country’s largest dairy – Dudhmotisagar Dairy at Dharuhera in Harayana. Dudhmotisagar dairy with a processing capacity of 30 lakh litres per day has been set up by Mehsana District Cooperative Milk Producers Union Ltd, a member union of GCMMF, with an investment of around Rs 450 crore. The dairy can also produce up to 80 tonnes of curd and 2 lakh tonne of buttermilk every day.
Pawar also stressed the need to improve livestock breeds and step up quality and quantity of fodder production in the country. He also asked Amul to step up milk procurement in States such as Haryana and Rajasthan. GCMMF Chairman Vipul Chaudhary said the new facility will help further strengthen Amul’s stronghold in Delhi and the National Capital Region, the fastest growing milk market. Amul sells about 24 lakh litres per day in NCR, where the pouched milk market is pegged at 50 lakh litres per day. R.S. Sodhi, Managing Director, GCMMF, said farmer members of the milk co-operative get as high as 85 per cent of the price paid by the consumer. The spread of Amul’s operations to Haryana will benefit farmers in the region, he added.
AgriBusiness & Food Industry w December 2012
49
Coming Soon
Out of Stock
50
AgriBusiness & Food Industry w December 2012
AgriBusiness & Food Industry w December 2012
51
52
AgriBusiness & Food Industry w December 2012
Reach Over 11000 APEDA Members
Date of Publishing 24-25 Every Month Date of Posting 1-2 Every Month
Postal Regn. No. DL. (S) - 15/3028/2010-12 R.N.I. Regn. No. 2003/11672