Mega Food Parks Scheme 2012

1. !
The!Mega!Food!Parks!Scheme!
And!
Investment!Potential!in!Mega!Food!Park!
projects!
!
!
Ministry!of!Food!Processing!Industries
Government!of!India

2. 2"
Overview!of!India’s!Food!Processing!Sector!

3. 3"
The!Context!and!Overview!
 Food$processing$sector$critical$for$achieving$growth$in$the$
agricultural$sector$which$in$turn$a$pre5requisite$for$healthy$
growth$of$Indian$economy$$
 Growth$ of$ sector$ essential$ to$ meet$ the$ twin$ national$
objectives$of$“inclusive$growth”$and$“food$security”.$
 The$11th$Plan5$signiCicant$progress$of$the$sector$in$terms$of$
both$approach$and$scale$of$the$Government$programmes,$
with$ stress$ on$ appropriate$ backward$ linkages$ and$
emphasis$on$synergy$between$production$and$processing.$$

4. 4"
Source:$Annual$Survey$of$Industries$
Growth!of!Food!Processing!Sector!
Capital$Investment$in$Registered$Units$in$Food$Processing$Sector$(Rs.$in$Crore)$
0! 20000! 40000! 60000! 80000! 100000! 120000! 140000!
1998K1999!
1999K2000!
2000K2001!
2001K2002!
2002K2003!
2003K2004!
2004K2005!
2005K2006!
2006K2007!
2007K2008!
Invested!Capital!!!Working!Capital!!!Fixed!Capital!!!

5. 5"
Contribution!to!GDP!
(%$Growth)$
$
$
GDP$at$2004505$Prices$
Source$:$$National$Accounts$Statistics$2011$
20.91!
14.68!
13.16!
26.30!
0.04!
K5.84!
2.60!
5.19!
2.93!
K4.57!
K10.00!
K5.00!
0.00!
5.00!
10.00!
15.00!
20.00!
25.00!
30.00!
2005K06!2006K07!2007K08!2008K09!2009K10!
Registered!FPIs!Unregistered!FPIs!

6. 6"
Increasing$
Urbanisation$5$Lifestyle$
and$$Aspirations$
Increasing$Nuclear$
Families$and$Working$
Women$
Increasing$$spending$
on$processed$food$
products$$
Food$Processing$
Demand$Drivers$
Changing$
demographics$–$Rise$in$
disposable$incomes$
Demand$for$Functional$
Foods/$Neutraceuticals$
Growth$of$Organised$
Retail$and$Private$
Label$Penetration$
!!!Food!Processing!Sector–!Growth!Potential!

7. 7"
 Shift$in$Demographic$proCile:$A$largely$untapped$domestic$
market$of$1$Billion$Consumers$with$65%$of$population$
below$35$years$of$age.$
 Growing$Middle$Class5$from$its$current$size$of$50$Mn$to$583$
Mn$people$by$2025$$(Source:$McKinsey$&$Co.)$$
 Higher$Disposable$income:$Increase$in$per$capita$$$income$
and$purchasing$power.$
 Increased$ consumer$ awareness$ towards$ quality$ and$
hygiene$aspects$of$the$Food$
Food!Processing!Sector–!Demand!Advantage!

8. 8"
Supply$Chain$Institutional$
Gaps$$(procurement$
dependence$on$APMC$$
markets$)$
Inadequate$link$between$
production$and$
processing$(lack$of$
processable$varieties)$
$Supply$Chain$Infra$Gaps$
(Lack$of$$primary$
processing,$storage$$and$
distribution$facilities)$
Challenges$for$
Food$Processing$
Sector$
Lack$of$product$
development$and$
Innovation$
Seasonality$$of$$operations$$
and$low$capacity$
utilization$
Inadequate$focus$on$
quality$and$safety$
standards$
Food!Processing!Sector–!Impediments!

9. 9"
Source:$A$study$by$CIPHET,$2010$
Wastage!of!Agriculture!Produce!
Crop!$ Cumulative!Wastage!(%)$
Cereals! 3.956.0$
Pulses! 4.356.1$
Oil!Seeds! 6.0$
Fruits!&!Vegetables! 5.8518.0$
Milk! 0.8$
Fisheries! 2.9$
Meat! 2.3$
Poultry! 3.7$
 A$nation$wide$study$on$quantitative$assessment$of$$harvest$and$post$harvest$
losses$for$46$agricultural$produces$in$106$randomly$selected$districts$was$
carried$out$by$CIPHET.$
 Percentage$of$$losses$estimated$$for$major$produces5$

10. 10"
Mega!Food!Park!SchemeK!The!Need!!!
 Food$ processing$ sector5$ a$ sunrise$ sector,$ is$ capital$
intensive$with$long$gestation$periods$
 Hence,$ incentives$ from$ the$ Govt.$ required$ to$ promote$
private$investment$in$the$sector$$
 The$Scheme$conceptualized$on$an$Industrial$Park$Model$
and$customized$to$the$need$of$food$processing$sector.$Aim$
also$to$overcome$the$weakness$plaguing$the$sector$$
 Grant$ assistance$ to$ be$ provided$ to$ entrepreneurs$ for$
setting$up$common$infrastructure$$
 The$common$infrastructure$to$act$as$the$feeder$point$for$
processing$units$to$be$set$up$in$the$periphery$area$

11. 11"
Overview!of!the!Mega!Food!Parks!Scheme!

12. 12"
Mega!!Food!Park!Model:!An!Illustration!
Field""
Collec4on"Centers"
Primary"Processing""
Centers:"
Pre?cooling,"Grading""
pulping"Sor4ng,"waxing,""
packing",""
Temporary"storage"
"
Central"Processing""
Center:"
Pulping,"Asep4c"packing,"
"CA"chamber,"Cold"Store"
QC"lab,"Logis4cs"center""
etc"
"
""Mega""
Food"Park"
CPC"
Importer"
Exporter""
Value"added"Product"
Domes4c"sales"
Fresh"Products"
PPC PPC PPC
Domes4c""
Retail"sales"
Farmer"Groups" Self"Help""Groups" ""Individual"farmers"

13. 13"
Mega!Food!Park!Scheme!K!Background!
 MFPs!to!provide!stateKofKthe!art!infrastructure!facilities!–!to!
enable!setting!up!of!food!processing!units!
 Setting$up$common$facilities$along$with$processing$units$in$the$periphery$
 Expected!to!facilitate!the!achievement!of!the!‘Vision!2015’!of!
the!MinistryK,!i.e.!to!raise!
 the$processing$of$perishables$in$the$country$from$the$existing$6%$to$20%,$$
 value$addition$from$20%$to$35%$and$$
 country’s$share$in$global$food$trade$from$1.5%$to$3%$!
 Scheme! formed! to! accelerate! growth! of! food! processing!
industry!in!the!country!
 Demand$driven$with$focus$on$both$backward$and$forward$$integration$$
 30$Mega$Food$Parks$to$be$set$up$during$the11
th
$FYP$

14. 14"
Envisaged!OutcomesK!Mega!Food!Parks!Scheme!
Envisaged!outcomesK!!
 Increased$realization$for$farmers,$$
 Creation$of$high$quality$processing$infrastructure$including$
efCicient$supply$chain,$$
 Reduction$in$wastage,$$
 Capacity$building$of$producers$and$processors,$$
 SigniCicant$direct$and$indirect$employment$generation$

15. 15"
Salient!Features!of!the!Scheme!
 Enabling! Infrastructure! Creation! along! the! supply!!
chain!
 Creation$of$CPC,$PPCs$and$CCs$
 Common$Facilities$and$amenities$to$be$assisted$
 Leverage$investments$in$food$processing$units$
 Provision!for!Standard!Design!Factory!and!Plug!&!Play!
facilities!for!Micro!and!Small!Enterprises!
 Project!to!be!implemented!through!a!Special!Purpose!
Vehicle!(SPV):!As!private!led!initiative!!

16. 16"
Special!Purpose!Vehicle!(SPV)!
 SPV,!to!be!a!Body!Corporate!registered!under!the!Companies!Act,!
and! can! be! constituted! by! stakeholders! like! infrastructure!
developers,! FIs/Banks/PE! Firms,! Org.! retailers,! Food! Processors,!
3PL!&!other!service!providers,!Farmer!Orgs.!etc…!
 Each!SPV!to!have!!
 At$least$three$entrepreneurs$/$business$units,$with$the$entrepreneurs$
being$independent$of$each$other$and$business$units$with$no$common$
directors.$
 $At$least$one$should$be$from$the$food$processing$sector$with$at$least$
26%$equity$in$the$SPV$
 SPVs!to!bring!in!at!least!20%!of!the!eligible!project!cost,!including!
the!cost!of!land,!as!their!contributionK!!10%!in!case!of!Difdicult,!hilly!
&!ITDP!notidied!areas!
Eligible'project'cost/'total'project'cost'minus'cost'of'land,'pre/operative'expenses'and'MMWC.'Interest'during'
Construction'(IDC),'a'part'of'pre/operative'expenses,'shall'be'considered'under'eligible'project'cost.'

17. 17"
SPV..Contd.!..!
 Combined!net!worth!of!the!shareholders!of!the!SPV!should!not!be!
less!than!Rs.!50!CrK!Food!Processor!should!have!at!least!Rs.!10!Cr!!
of!net!worth!
$
 Each!member!in!the!SPV!must!have!a!net!worth!of!1.5!times!of!
their! proposed! equity! contribution! to! ensure! requisite!
contribution!for!the!project!
 Government!agencies!may!also!become!shareholders!in!SPV,!with!
maximum!equity!of!26%!so!as!to!ensure!private!sector!character!
of!the!SPV!

18. 18"
Salient!Features!of!the!Scheme..!Contd.!!
 Grant!Assistance!for!creation!of!common!infrastructure!facilities!and!
setting!up!of!processing!units!
 Typical!Project!Cost!envisaged!–!Rs.125.00!Cr!to!Rs.!150.00!Cr.!$
 Assistance!from!MinistryK!
 50%$of$the$eligible$project$cost$limited$to$Rs$50.00$crore$in$general$areas$
 75%$of$eligible$project$cost$limited$to$Rs.$50.00$crore$in$difCicult$&$hilly$
areas$and$ITDP$notiCied$areas$
 Cost$of$land,$pre5operative$expenses$and$margin$money$for$working$capital$
not$eligible$for$grant$under$the$Scheme$
The'eligible'project'cost/'total'project'cost'minus'cost'of'land,'pre/operative'expenses'and'margin'money'for'
working'capital.'However,'Interest'during'Construction'(IDC)'is'a'part'of'pre/operative'expenses'and'shall'be'
considered'under'eligible'project'cost.'

19. 19"
!!!!!!Eligible!Project!Components!in!MFP!!
 Core!Processing!Facilities!
 Primary$Processing$Centers:$Sorting$and$grading,$dry$warehouses,$
cold$stores$including$pre5cooling,$reefer$vans,$mobile$pre5coolers$
and$collection$vans$etc$
 Central$ Processing$ Center:$ Sorting$ and$ grading,$ Packaging,$ Dry$
warehouses,$Specialized$storage$facilities,$Pre5cooling$and$Ripening$
chambers$etc,$IQF,$Cold$chain$infrastructure,$Irradiation$facilities,$
Steam$ generation$ &$ sterilization$ units,$ Food$ incubation5cum5
development$centers,$QC$Lab$etc.$
 At$least$35%$of$the$eligible$project$cost$shall$be$towards$creation$of$
above$mentioned$facilities$

20. 20"
Project!Components!in!MFP..!Contd.!!
 Factory!Buildings!
 Provision$For$MSEs$–$A$maximum$of$10%$of$$total$allotable$area$$
for$setting$up$Standard$Design$Factory$Sheds$for$MSEs$
 Enabling!Basic!Infrastructure!
 Roads,$ drainage,$ water$ supply,$ electricity$ supply$ $ including$
captive$power$plant,$ETP$&$STP,$weighbridges$etc$
 Non!–core!Infrastructure!
 Admin$buildings,$training$centers,$canteen,$workers$hostel,$trade/
display$center$etc:$Cost$of$non5core$infrastructure$facilities,$not$
exceeding$10%$of$the$eligible$project$cost,$would$be$eligible$for$
grant$purpose$

21. 21"
Investment!OpportunitiesK!Mega!Food!Parks!
 Investment!through!Special!Purpose!Vehicle!(SPV)! !in!the!Mega!
Food!parks!
 Opportunities$to$join$project$speciCic$SPV$as$co5promoter/s:$Investment$in$
the$form$of$equity$participation$
 15$projects$taken$up$in$1
st
$and$2
nd
$Phases$and$15$projects$in$the$3
rd
$phase$
(status$detailed$in$later$slides)$
 As! partners! in! SPV,! the! members,! collectively,! would! be!
responsible!for!development,!implementation!and!management!
of!common!facilities!to!be!created!in!the!Project!
 100!percent!FDI!is!permitted!in!Food!Processing!Sector:!A!USP!
 The!MFP!would!have!plots!of!varying!sizes!that!FP!companies!can!
take! on! lease! and! make! use! of! the! common! facilities! to!
manufacture!processed!food!!!
$

22. 22"
Investment!Opportunities..!Contd.!!
 Investment!in!the!Processing!Units!in!the!Mega!Food!Parks!
 13$Mega$Food$Parks$under$implementation–$each$Park$shall$provide$
developed$infrastructure$for$setting$up$about$25$to$30$processing$units$
leading$to$a$total$of$about$3505400$units$
 17$more$projects$in$the$pipeline$for$approval5$Shall$provide$for$setting$
up$of$over$400$units$
 Given$leverage$of$investment$envisaged,$these$30$Parks$expected$to$
have$a$combined$investment$of$over$Rs.$7000$crore.$
 Overall,! the! 30! Mega! Food! Parks! shall! provide! for! setting! up! of!
about!750K800!food!processing!including!ancillary!units!
 A$unique$opportunity$for$investors,$including$foreign$investors,$keen$
to$engage$in/enter$the$food$processing$sector$

23. 23"
Proposed!Pattern!of!Assistance!During!12
th
!Plan!!
Mega!Food!Parks!
 General!Areas!
 35%$of$eligible$project$cost$subject$to$a$maximum$of$Rs.$
25$crore$per$project$.$
 Interest$ subsidy$ @$ 6%$ per$ annum$ subject$ to$ a$
maximum$of$Rs.$10$crore$per$project.$
 Difdicult!Areas!
 50%$of$eligible$project$cost$subject$to$a$maximum$of$$
Rs.$25$crore$per$project.$
 Interest$ subsidy$ @$ 7%$ per$ annum$ subject$ to$ a$
maximum$of$Rs.$15$crore$per$project$

24. 24"
Proposed!Pattern!of!Assistance!During!12
th
!Plan!!
Mini!Food!Parks!
 General!Areas!
 35%$of$eligible$project$cost$subject$to$a$maximum$of$Rs.$
15$crore$per$project$.$
 Interest$ subsidy$ @$ 6%$ per$ annum$ subject$ to$ a$
maximum$of$Rs.$6$crore$per$project.$
 Difdicult!Areas!
 50%$of$eligible$project$cost$subject$to$a$maximum$of$$
Rs.$15$crore$per$project.$
 Interest$ subsidy$ @$ 7%$ per$ annum$ subject$ to$ a$
maximum$of$Rs.$9$crore$per$project$

25. 25"
Current!Status!
!
of!!
!
Mega!Food!Park!projects!

26. 26"
Current!Status!of!Projects!
$
11
th
!Plan!proposed!for!setting!up! !of!30!Mega!Food!
Park!Projects!:K!!
$
 10$projects$approved$by$CCEA$in$2008509$
 05$projects$approved$by$CCEA$in$2010511$
 15$projects$approved$by$CCEA$in$2011512$

27. 27"
Current!Status!of!Projects!
 Out$of$30$projects,$Final$Approval$has$been$accorded$to$13$
projects$$$
 Out$of$these$13$projects,$7$(Punjab,$Assam,$West$Bengal,$
Tripura,$Andhra$Pradesh$and$Karnataka)$are$at$advanced$
stages$and$rest$$are$at$different$stages$of$implementation.$$
 15$projects$have$been$accorded$lIn5principlez$approval$in$
the$ month$ of$ September,$ 2012$ whereas$ two$ projects$
accorded$lIn5principlez$approval$earlier$are$yet$to$
complete$formalities$for$Cinal$approval"

28. 28"
Location!of!Mega!Food!Parks!
Projects$accorded$
Final$approval$
Projects$accorded$
In5principle$
Approval$(1
st
$$&$2
nd
$$$
Phase)$
Projects$accorded$
In5principle$
Approval$(3
rd
$
Phase)$

29. 29"
The!National!Mission!on!Food!Processing!
 The$ Ministry$ has$ launched$lNational$ Mission$ on$ Food$
Processingz$(NMFP)$w.e.f.$1
st
$April,$2012$in$cooperation$
with$State$Governments$during$12
th
$Five$Year$Plan.$$
 This$ is$ aimed$ at$ ensuring$ better$ outreach$ of$ various$
schemes$/$programmes$of$the$Ministry$and$provide$more$
Clexibility$to$suit$local$needs.$$
 Applications$are$being$received$and$processed$by$the$State$
Governments$

30. 30"
Schemes covered under the Mission (NMFP)
 Scheme for technology up-gradation, setting up/
modernization/expansion of food processing industries
 Scheme for Modernization of Abattoirs
 Scheme for Human Resource Development
 Scheme for Promotional Activities
 Cold chain projects for non-horticultural products

31. 31"
Objectives of NMFP
 To propagate significance of food processing for enhancing agricultural
productivity and farmers income in the Country
 To assist the State Govts. in creating requisite synergy between their
agricultural plans and development of food processing sector
 To assist the State Governments in addressing both institutional and
infrastructural gaps along the Value Chains and thus create efficient Supply
Chains for agricultural produces
 To promote initiatives for skill development, training and entrepreneurship
 To assist MSMEs in setting up/modernization of processing units
 To assist food processing industry to meet requisite standards in terms of
food safety laws and market demand, both domestic and international

32. THANK$
YOU$