New Delhi: PureCircle, a Malyasia-based producer of sugar substitutes, plans to invest about $200 million over the next five years in India to cultivate stevia (meethi tulsi), a shrub whose leaf extract is a natural sweetener.
It will also set up a supply chain and eventually a processing unit in the country, the company said on Tuesday.
The London Stock Exchange-listed firm, which won approval from the government in December 2015 for the investment, has already started trials with farmers in six states.
“Over the next five years, we hope to have 5,000 hectares of farm land that would grow stevia. Once we reach the capacity of about 15,000 tonnes of stevia leaf a year in India, we’ll look at putting up a processing plant here," said Jason Hecker, president of group sales and marketing at PureCircle.
Currently the company sources about 25,000 tonnes of stevia leaf from China, which accounts for 90% of the company’s demand annually.
“Our aim is to source 50% of total requirement from markets outside of China by 2020. India, potentially, could be one of our major sourcing markets in future. The scope is huge, and there’s captive demand," said Hecker.
Initially, the company will engage with local third-party partners to get farmers to cultivate stevia. “We’ll provide them technical know-how, give stevia saplings, support with soft loans and buy the final produce," said Ajay Chandran, senior director (south Asia), PureCircle.
Going by its own study, said Chandran, a farmer could potentially earn about ₹ 4 lakh a year by growing stevia on one hectare of farmland.
PureCircle, which already supplies stevia to multinational firms like PepsiCo Inc., Coca-Cola Co. and Danone SA, has started talks with local food and beverages companies to supply them stevia. About 250 companies directly buy stevia from PureCircle, said Hecker.
In the initial years, the company used to take stevia leaves to its China factory for processing and then to Malaysia for final production. Latin America is the largest market for PureCircle.
About four years after a scientific panel on food additives at the Food Safety and Standards Authority of India (FSSAI) recommended the use of stevia, the food regulator gave the final go-ahead on 13 November last year.
It allowed the use of stevia in products such as carbonated water, dairy-based desserts and flavoured drinks, yoghurts, ready-to-eat cereals, fruit nectars and jams.
Last month, PepsiCo launched 7Up Revive, a hydrotonic drink that uses stevia and claims to have 30% less sugar than colas. PepsiCo’s Revive is the first product launched in India that has stevia as an ingredient.