13 firms to invest Rs68,000 crore in food processing, says govt
New Delhi: The Indian government has received commitments from 13 global and domestic companies to invest a cumulative Rs68,000 crore in food processing over the next few years. The ministry of food processing industries signed in-principle agreements with the 13 companies at the World Food India 2017 event in New Delhi.
PepsiCo Inc. committed an investment of Rs13,340 crore for setting up beverage and food manufacturing units over the next five years. Rival Coca-Cola Co. said it will invest Rs11,000 crore in the supply chain as part of its plan to increase use of Indian fruits in its beverages.
ITC Ltd, the Kolkata-based maker of cigarettes and packaged consumer goods, said it will invest Rs10,000 crore in food processing over the next five to seven years. Yoga guru-turned businessman Baba Ramdev’s Patanjali Ayurved Ltd, which has challenged established packaged goods companies in the past couple of years, also signed a memorandum of understanding that proposed investment of Rs10,000 crore to set up food processing units across the country.
“Food processing is a priority sector under the Make in India programme,” Prime Minister Narendra Modi said at the inauguration of World Food India 2017.
Steps such as allowing 100% foreign direct investment in food retail, a single-window facilitation cell for foreign investors and attractive incentives from central and state governments have made India a preferred investment destination, Modi said.
“Increasing urbanization, and a growing middle class are resulting in an ever-growing demand for wholesome, processed food,” Modi said, citing as an example the fact that over 1 million passengers have a meal on a train in India everyday and each is a potential customer of the food processing industry.
Farmers, Modi said, are central to India’s efforts in food processing. “We have a stated target of doubling farm incomes within five years... we launched a national level programme, the Pradhan Mantri Kisan Sampada Yojana, to create world-class food processing infrastructure.”
He added that this is expected to leverage investment of $5 billion, benefit two million farmers and generate more than half a million jobs over the next three years.
Most of the investments proposed by the companies named above are not new. Most of these companies, including PepsiCo, Coca-Cola, ITC, Patanjali, Amazon and Metro Cash and Carry, had earlier announced their investment plans in India until 2020, and the investment figures proposed on Friday are part of those previously declared plans.
Other proposals include Rs5,000 crore of investments by Saraf Group in farm produce and processing, Rs4,000 crore by Yes Bank Ltd for financing food processing projects across the back-end infrastructure and Rs3,450 by US-based online retailer Amazon.com Inc., which will invest in food retail, according to a statement by the ministry of food processing industries.
Hyderabad-based Janani Food Pvt. Ltd (Rs2,000 crore), German retailer Metro Cash and Carry (Rs1,690 crore), Cargill Inc. (Rs1,500 crore), biscuit maker Britannia Industries Ltd (Rs1,500 crore) and US-based chocolate maker The Hershey Co. are among the other prominent investors.
“Metro is convinced of India’s potential and strongly committed to expansion in your country. We prepare with innovative solutions on various levels from supporting farmers as key factors in supply chain to empowering the competitiveness of traditional kirana stores while retail monetization for sizing these opportunities and playing our role in the transformation of India’s food market,” said Pieter Boone, chief operating officer of Metro AG and chief executive officer, Metro Cash and Carry.
Amanda Sourry, global president, foods, at Unilever Plc, said the company is committed to bringing its global expertise to India. “We, at Unilever, are excited about India foods opportunity. Unilever has globally loved portfolio of food and refreshment brands—Kissan, Brooke Bond, Knorr, Kwality Walls, to name a few. Some of these brands have been present in India for over 70 years. We are committed to bringing our expertise and experience in identifying emerging needs, educating people on making informed food choices and providing the highest quality products that are sourced and distributed sustainably,” added Sourry.
Food processing minister Harsimrat Kaur Badal said the $600 billion retail sector is set to treble by 2020. “The government is helping set up 42 mega food parks where common facilities can be used by companies instead of setting up individual plants… Our goal is to transform India’s food economy and double farmer incomes,” she added.
Finance minister Arun Jaitley said over 250 highways were under construction, 35-40 new airports were being added and 400 railway stations being modernized. “Each village is being connected through a road. By 2019, every village home will be connected to electricity. This will raise the quality of life.”
Gireesh Chandra Prasad, Harveen Ahluwalia and Saumya Tewari contributed to this story.