- Madhya Pradesh has huge potential in the food processing sector due to its abundant agriculture and various crops produced. The state accounts for around 32% of total industrial output from food processing. - There are over 650 food processing units in the state with an estimated investment of INR 91 billion. The state produces a variety of grains, fruits, and vegetables that can be further processed. - Initiatives by the government and upcoming investments from major companies are expected to boost the food processing industry in the state. PHD Chamber of Commerce is organizing a conference on the food processing investment opportunities in Madhya Pradesh.

4. MESSAGE
(Shivraj Singh Chouhan)

6. (Anthony de Sa)
Chief Secretary
MESSAGE
Madhya Pradesh, with huge potential in Food Processing Sector, offers
enormous opportunities for investors across the entire food value chain. Several
initiatives taken by the Government of Madhya Pradesh has resulted in bringing
more investment in the state. However there is still a lot of untapped potential to be
utilized.
We appreciate the effort of PHD Chamber of Commerce and Industry in
nAnoecnerefnoCagnizinagro MAKE IN INDIA - MADHYA PRADESH :
Investment Destination for Food Processing Sector on 3 July 2015 at Indore,
MadhyaPradesh.
The conference is timely and important for the growth of the food
processing sector in the State. I am sure that such initiative will be well received
bythestakeholdersofthesector.
Iextendmy allthebestwishesforthesuccessoftheprogramme.

7. MESSAGE
PHD Chamber of Commerce and Industry, a leading Industry Chamber of India,
ever since its inception in 1905, has been an active participant in the India Growth
Story through its Advocacy Role for the Policy Makers and Regulators of the
Country. As a true representative of the Industry with a large membership base,
PHD Chamber has forged ahead leveraging its legacy with the Industry
knowledge across sectors, representing the interests of all local, national,
regional, bilateral and trans-national industry and provides a platform for
exchange to better serve and promote SME members worldwide.
Agriculture has always been the focus point for the development of Indian
economy as it caters to the basic need for the existence of the human race. The
processing is essential for controlling heavy post harvest losses.
Despite its importance the level of food processing is merely 2 percent. This fact
highlights the need to promote the processing in the country. To have inclusive
growth of the food processing sector, the states should be included.
As a consequence, PHD Chamber has taken this initiative of organizing the
Conference on MAKE IN INDIA- MADHYAPRADESH:An Investment Destination
for Food Processing Sector on 3 July 2015 at Indore, Madhya Pradesh.
I am sure the efforts of PHD Chamber will lead to strategic investments and policy
developments in the sector in Madhya Pradesh.
I wish the Conference a grand success.
ALOK B. SHRIRAM
President
PHD Chamber
Alok B. Shriram

8. MESSAGE
:noecnerefnoCeht MAKE IN INDIA - MADHYA PRADESH An Investment
Pradesh
invest in food processing sector in the State. In Madhya Pradesh, there are several
large and small scale food processing units contributing to the growth of the State
and giving ample opportunities of employment. Focus on Food Processing Sector
inclusive growth. There is a huge untapped potential which can catalyze the
economicgrowth.
To further promote investment in the sector in Madhya Pradesh, PHD Chamber has
taken the initiative. PHD Chamber has always strived to take knowledge to the
grassroots so as to facilitate capacity building among the different sectors of the
economy.
Iwishtheconferenceallthesuccess.
MAHESH GUPTA
Sr. Vice President
PHD Chamber
MAHESH GUPTA

9. MESSAGE
India with around 127 agro-climatic conditions offers immense opportunities for
production of varied agriculture crops. This potential can be best capitalized with
food processing. Food processing adds value to the agriculture product and
enhances shelf life.
Chamber has been actively involved in various promotional activities in the sector
both at State level and Central level. For its sincere efforts, it has been conferred
various accolades from the State Governments and Central Government.
This Conference on MAKE IN INDIA - MADHYA PRADESH: An Investment
Destination for Food Processing Sector on 3 July 2015 at Indore, Madhya
Pradesh is one such effort.
I am sure this platform would be well acknowledged by the stakeholders.
GOPAL S. JIWARAJKA
Vice President
PHD Chamber
GOPAL S. JIWARAJKA

10. MESSAGE
With a large agricultural sector, abundant livestock and cost
competitiveness, India is fast emerging as a sourcing hub of processed
food. Liberalization and the growth of organized retail have made the
Indian market more attractive for global players. Now, consumption in
India is driven towards packaged and ready-to-eat foods and
favourable economic and cultural transformation and a shift in
attitudes and lifestyles have consumers experimenting with different
cuisine, tastes and new brands. Processed food exports and related
products have been rising steadily.
This implies the need to increase the food processing in the country
and involve all the states to contribute towards this mission.
In this context, it is a matter of great pleasure to note that PHD
Chamber of Commerce and Industry is organizing a Conference on
MAKE IN INDIA - MADHYA PRADESH: An Investment Destination
for Food Processing Sector on 3 July 2015 at Indore, Madhya Pradesh.
I wish this event a great success.
N.M. KEJRIWAL
Chairman-Agribusiness
N.M. Kejriwal

11. MESSAGE
As we are aware that a strong and dynamic food processing sector plays a vital
life, ensuring value addition to agricultural produce, generating employments,
enhancing income of farmers and creating markets for export of agro foods.
Systematic investment in the potential areas with the favourable policy support
will create a conducive environment for healthy growth of the food processing
industry in Madhya Pradesh.
Government of India has taken several developmental initiatives such as
creation of modern infrastructure for growth of food processing sector through
Mega Food Parks, Integrated Cold Chain and providing assistance to food
processing industries under various plan schemes etc.
With the support of State Government, Food Processing Sector will surely
achieve the new heights in the State.
To contribute towards this great cause, PHD Chamber is organizing this
Conference on MAKE IN INDIA - MADHYA PRADESH: An Investment
Destination for Food Processing Sector on 3 July 2015 at Indore, Madhya Pradesh.
I am sure that this initiative of PHD Chamber shall be a grand success.
ASHWANI ARORA
Chairman,
Ashwani Arora

12. MESSAGE
PHD Chamber has always been proactive to address the issues and concerns that
affect business community as well as society.
Amongst the thrust areas of PHD Chamber, Agriculture and Food processing has
its special place.
India is a richly endowed agricultural nation. It has nearly a tenth of world's arable
the largest food processing countries in the world. Potential for production is also
matched by strong demand for processed food products due to rapid urbanization,
change in preferences and practices in consumption.
Madhya Pradesh is one of the States that offers enormous opportunities for stake
holders across the entire food value chain with huge potential in food processing
sectors. Madhya Pradesh Government has been engaged in taking various
developmental initiatives attracting and bringing more investment in the State.
MAKE IN INDIA - MADHYA PRADESH: An Investment Destination for Food
Processing Sector being organised on 3 July 2015 at Indore, Madhya
Pradesh would surely give a platform to deliberate upon the potential and
the opportunity in the State.
I wish the Conference a great success.
SAURABH SANYAL
Secretary General
PHD Chamber
Saurabh Sanyal

14. 1. India Food Processing Industry Outlook to 2020
Industry Overview
India is the world’s second largest food producer with the potential to be the biggest, backed by its food and
agricultural sector. The total food production in India is likely to double in the next 10 year. With an expansive
agricultural sector, copious livestock, and cost efficacies, India is swiftly emerging as a sourcing hub for processed
food.
Growing at a rate of 12% annually, it is anticipated that the food processing industry of India will transcend INR
16,500 Billion mark by 2020, owing to the rise in middle class income, changing urban lifestyle and modern retail
trade. Moreover, the advancements on the technology front, people seeking more nutritional food products with
variety, and the limited time availability due to fast paced life has further provided tailwind to the food processing
sector.
Figure:1-1
India - Food Processing Industry (INR Billion), 2012, 2015, & 2020
Source: ICAR, RNCOS
Note: e = ICAR Estimates; f = RNCOS Forecast
Exchange Rates: 2012: US$ 1 = INR 54.85; 2015 & 2020: US$ 1 = INR 60.0
2012
6637
11640
16500
2015e 2020f
Market Segmentation
The Indian food processing market was close to INR 4000 Billion in 2014.The organized sector occupies 25% of
the market, and is expected to grow with a CAGR of 16% during 2014-2020. Dairy sector accounts for the largest
share, i.e. 33%, in the Indian food processing market, followed by Grains and Convenience Foods at 10% each.
It is expected that Convenience Foods will exhibit an increase of 4% in share by 2020, owing to its increasing
penetration among the newer generation.
CAGR
12%
Madhya Pradesh: An Investment Destination For Food Processing Sector
14

15. 15
Industry Drivers
• India being an agro-based economy, has abundant resources to support the flourishing food processing
industry
• Globally, India ranks first in milk production and second in the production of fruit and vegetables
• Increasing interest for ready-to-eat food products among young generation and working class
• Tier-I and Tier-II cities exhibiting high demand with rising disposable income
• Consumers are ready to experiment with unique processed food offerings
• Government focus towards setting-up food parks, mega food parks, cold chains, etc. for food processing
industry (projected establishment of 42 mega food parks)
• National program, “Make-in-India” creating prospects for manufacturing industries
42%
33%
10%
10%
5%
Dairy Products
Grains
Convenience Foods
Fruits & Vegetables
Others
Figure:1-2
Indian Food Processing Market (%), 2014
Source: RNCOS
Note: Others include alcoholic beverages, meat and poultry

16. 16
To further boost the new units in food processing industry,
the state is offering various incentives under its Agro & Food
Processing Policy.This includes 15% reimbursement (up to INR
50 Million) on expenditure towards establishment of food parks,
mega food parks and horticulture hubs.
In the Global Investors Summit (GIS) 2014, major business
groups have committed to invest in the food processing industry
of Madhya Pradesh. Future Group is planning to set up a
Mega Food Park with an investment of INR 20 Billion, under
which around 50-60 food processing units shall be established.
ITC Ltd is also planning to set up a world class Agri-Product
Manufacturing Plant in the state. Similarly, Adani Group has
committed to invest in this sector.
In light of the ongoing and proposed investments in the state,
food processing industry is expected to boom.
2. Madhya Pradesh Food Processing Industry
Madhya Pradesh is one of the fastest growing states in terms of food processing industry. The abundance of
variety of crops, government initiatives, and technological advancements are fuelling growth in state’s food
processing industry.MadhyaPradesh is the first state to bring into line its economic development road map
with the Make in India – Make in Madhya Pradesh. It is the only state in the country to plan the establishment
of a separate Ministry for Micro, Small and Medium Enterprises (MSME).
The Gross State Domestic Product (GSDP) from agriculture & allied activities has registered a growth of over
18% in the last three years. Food processing industry forms an average 32% share of state’s industrial output.
There are about 650 food processing and beverages units in the state, with an estimated investment of INR 91
Billion.
KEY HIGHLIGHTS
First state to bring into line its eco-
nomic development road map with
Make in India – Make in Madhya
Pradesh.
State’s Food processing sector
forms an average of around 32%
share of total industrial output value.
Estimated Industrial investment of
INR 91 Billion.
Source: MoFPI
Large to Medium
Scale Units - 23
Large to Medium
Scale Investment-
INR 6 Billion
Small Scale Investment-
INR 85 Billion
Small Scale
Units - 625
Figure:2-1
Food Processing and Beverage Units viz-a-viz Investment

17. 17
3. Agriculture Overview in Madhya Pradesh
Madhya Pradesh is the 2nd
largest state by area in the country. The economy of the state principally depends
on agriculture, with more than 70% of the population involved in agricultural activities.The state is bestowed
with 11 agro-climatic divisions that has been a major precursor for the growth and development of agriculture
in the state. The vast climatic variation has made Madhya Pradesh a suitable place for cultivation of a gamut
of crops needing diverse environmental conditions. The state has around 15.7 Million hectares of land under
cultivation, which produced 46.5 Million Metric Tonnes of agricultural product (food grains, vegetable, fruits and
spices) in FY2014. Agricultural production grew at a CAGR of around 16% during FY2011 to FY2014.
12%
23%
1%
64%
Grains & Cereals
Fruits
Vegetables
Spices
Figure:3-1
Agricultural Produce by Type (%), FY2014
Source: Directorate of Economics and Statistics, Department of Agriculture and Cooperation
3.1 Grains & Cereals
Madhya Pradesh is one of the top performers in the food grains production in India. It is the 3rd largest producer
of wheat in the country. Grain & Cereals accounted over 60% of state’s agricultural produce last year. With new
and reformed government policies and incentives to the agriculture sector, the quality and quantity of production
is foreseen to show further improvement.
Hoshangabad, Chhindwara, Sehore, Harda, Raisen and Vidisha contributed to around 33%1
of the total wheat
production of Madhya Pradesh. Pulses are also one of the major crops of the state. Pulses like Moong, Urad,
Masoor, Gram, Arhar and Kabuli Chana have given a distinct identity to the state. It accounted for around 29% of
the India’s total pulses production. Production of wheat and soybean has declined in past three years, whereas
pulses, rice and maize production has increased.

18. 18
47%
18%
17%
18%
Wheat Soybean
Pulses Others
Figure:3-3
Grains & Cereals Production by Type (%), FY2014
Source: Directorate of Economics and Statistics, Department of Agriculture and Cooperation
Note: Others include Rice and Maize collectively
Figure:3-2
Grains & Cereals Production (Million Metric Tonnes), FY2011 to FY2014
Source: Directorate of Economics and Statistics, Department of Agriculture and Cooperation
Note: *= Fourth Advance Estimates
FY2011 FY2012 FY2014FY2013
29.4
22.5
31.2
29.6
CAGR
10%

19. 19
18%
30%
16%
15%
8%
7%
6%
Banana Orange Guava
Papaya Mango Aonla
Others
Figure:3-5
Fruits Production by Type (%), FY2014
Source: National Horticulture Board
3.2 Fruits
In FY2014, Madhya Pradesh produced 6% of the total fruits produced in India. It is the 8th largest producer
of fruits. A total area of more than 0.16 Million hectares is under fruit cultivation. Indore, Ujjain and Jabalpur
divisions accounted for approximately 71% of total area under fruit cultivation owing to Banana, Citrus fruits and
Papaya as major crops.
Madhya Pradesh accounts for a significant share in total production of Orange (26%), Guava (23%) and Aonla
(30%), in India.
Figure:3-4
Fruits Production (Million Metric Tonnes), FY2011 to FY2014
Source: National Horticulture Board
FY2011 FY2012 FY2014FY2013
3.43.4
5.7
5.5
CAGR
19%

20. 20
22%
18%
15%
28%
8%
5%
4%
Figure:3-7
Vegetables Production by Type (%), FY2014
Source: National Horticulture Board
Onion Potato Tomato
Brinjal Cauliflower Cabbage
Others
Madhya Pradesh accounts for a significant share in total production of Onion (15%), Peas (12%), and Tomato
(10%), in India. All the major vegetable crops exhibited double digit growth rates during FY2011 to FY2014.
3.3 Vegetables
In FY2014, Madhya Pradesh produced 8% of the total vegetables produced in India. It is the 5th largest producer
of vegetables. Ujjain, Indore, Jabalpur and Sagar divisions accounted for about 70% of total area under vegetable
cultivation owing to Onion, Potato, Tomato and Pea as major crops. A sudden rise in vegetable production in
FY2012 was due to addition of five lakh hectares of land under horticulture crops.
Figure:3-6
Vegetables Production (Million Metric Tonnes), FY2011 to FY2014
Source: National Horticulture Board
FY2011 FY2012 FY2014FY2013
10.1
12.6
10.8
3.7
CAGR
43%

21. 21
4. Status of Food Parks in MadhyaPradesh
The concept of food parks has been
gaining momentum in past few years.
The food processing industry is recording
new levels with reduction in resources
wastage, lesser cost, government
incentives and supportive financial
benefits. Various agro-food parks are
being developed in Madhya Pradesh to
promote medium and small- scale units.
Presently, there are seven food parks in
the state approved by Ministry of Food
Processing Industries. These food parks
in the state are occupied to the high
level of around 90%, majorly occupied
by grain/rice milling, pulses milling, and
spices manufacturing units. Based on the interaction with the food parks governing bodies, major opportunities
lies in the sector of tomato pastes/ketchup/purees, fruit juices, soybean oil, dairy products and wheat and pulse
based products.
In addition to seven food parks, a Mega Food Park (MFP) has been approved in Khargone district by Ministry of
Food Processing Industries (MoFPI), Government of India. MoFPI has also provisionally approved 3 Integrated
Cold Chain projects in the State.
4.1 Nimrani Food Park
Nimrani Food Park is located in District Khargone, near Indore. Being near to Indore, it has good connectivity
with other states through the airways, railways and roadways. Food Park has total area of 27.12 hectares, with
basic infrastructure like internal roads, power, cold storage, common effluent treatment plant, and warehousing,
among others. The sole governance of the food park lies with Madhya Pradesh Audhyogik Kendra Vikas Nigam
(Indore) Ltd.
Existing Units: The major units in the park are Grain Milling, Rice Milling and Bakery.
Prospective Food Processing Units: Food Park is close to districts like Indore, Khargone, Dhar, Dewas, which are
rich in agriculture production of crops like Garlic, Onion,Tomato, Soybean and Wheat.
S.No. Crops Prospective Food Processing Units
1 Garlic Pickle, Paste, Powder
2 Onion Dehydrated Flakes, Snacks (Onion Rings), Onion Dips, Packed Onion
3 Tomato Ketchup, Paste, Sauces
4 Wheat
Bakery & Confectionary Products (Bread, Biscuits/Cookies, Noodles, Pasta, Rusk,
Vermicelli, etc.)
5 Soybean Cheese, Sauce, Oil, Milk, Margarine, Animal Feed

22. Madhya Pradesh: An Investment Destination For Food Processing Sector
22
S.No. Crops Prospective Food Processing Units
1 Garlic Pickle, Paste, Powder
2 Tomato Ketchup, Paste, Sauces
3 Orange Juice, Pulp, Confectionary Products (Candies, Chocolates, Biscuit Creams)
4 Onion Dehydrated Flakes, Snacks (Onion Rings), Onion Dips, Packed Onion
S.No. Crops Prospective Food Processing Units
1 Soybean Sauce, Oil, Margarine, Cheese, Milk, Soy Nuts, Animal Feed
2 Wheat Bakery & Confectionary Products (Bread, Biscuits/Cookies, Noodles, Pasta, Rusk, Vermicelli, etc.)
3 Maize Corn Flakes, Snacks, Popcorn, Starch, Oil
4 Rice Wafers, Pasta, Idli Mix, Snacks (Quaker), Cereal Bars (Sweet), Bran Oil
5 Pulses Namkeen & Snacks
4.3 Borgaon Food Park
Borgaon Food Park is located in District Chhindwara, spread over an area of 21.5 hectares. The nearest city to
the park is Nagpur, at a distance of 55 kilometers, connecting the park to other major districts and states through
well managed modes of transportation. Food Park has all the required infrastructural facilities like internal roads,
power, cold storage, common effluent treatment plants, warehousing, water and surface transportation.The sole
governance of the food park lies with Madhya Pradesh Audyogik Kendra Vikas Nigam (Jabalpur) Ltd.
Existing Units: The major units in the park are Rice Milling, Spices Milling, Baby Food, Papad, Pickles and
Ketchup.
Prospective Food Processing Units: Park is in Chhindwara, which has high production of Maize, Wheat, and
Soybean. It is in close proximity with Betul and Seoni districts, whose major productions are Soybean, Rice,
Wheat, Pulses and Maize. Based upon the raw material availability, following opportunities exist for the players
in the food processing sector.
4.2 Jaggakhedi Food Park
Jaggakhedi Food Park is located in District Mandsaur, near Indore.It has similar advantage in terms of connectivity,
like Nimrani Food Park. It has total area of 20.46 hectares, with basic infrastructure like internal roads, power,
cold storage, common effluent treatment plant, and warehousing, among others. The sole governance of the
food park lies with Madhya Pradesh Audyogik Kendra Vikas Nigam (Ujjain) Ltd.
Existing Units: The major units in the park are Spices Milling.
Prospective Food Processing Units: It is close to districts like Ratlam, Neemach and Indore, which have high
production of Tomato, Onion, Orange, Papaya, and Garlic. Ratlam is one of the districts in Madhya Pradesh,
which produces variety of agriculture and horticulture crops like Kaddu Vargoya, Papaya, Onion Lady Finger,
Peas, Potato, Orange, Brinjal, Cauliflower, and Soybean. Proximity to districts with such diverse production could
be used by upcoming and existing units.

23. 23
4.4 Maneri Food Park
Maneri Food Park is located in District Mandla, spread over an area of 30.3 hectares. The nearest city to the
park is Jabalpur, at a distance of 35 kilometers, connecting the park to other major districts and states through
well managed modes of transportation. Maneri Food Park has various infrastructural facilities like internal
roads, power, cold storage, common effluent treatment plants, warehousing, water and surface transportation.
The sole governance of the food park lies with Madhya Pradesh Audyogik Kendra Vikas Nigam (Jabalpur) Ltd.
Existing Units: The major units in the park are Amla, Papad, Badi and Tomato Pulp.
Prospective Food Processing Units: Park is in Mandla, which produces majorly Rice, Mango, Maize, Wheat
and Mustard. Mandla together with surrounding districts like Balaghat, Dindari, Jabalpur and Seoni produces
large quantity of Rice, Wheat, Tomato, Soybean and Pulses. These major crops accounts for about 70% of the
total production around the Maneri Food Park.
S.No. Crops Prospective Food Processing Units
1 Rice Wafers, Pasta, Idli Mix, Snacks (Quaker), Cereal Bars (Sweet), Bran Oil
2 Wheat Bakery & Confectionary Products (Bread, Biscuits/Cookies, Noodles, Pasta, Rusk, Vermicelli, etc.)
3 Soybean Sauce, Oil, Margarine, Cheese, Milk, Soy Nuts, Animal Feed
4 Tomato Ketchup, Paste, Sauces
5 Pulses Namkeen & Snacks
6 Maize Corn Flakes, Snacks, Popcorn, Starch, Oil
4.5 Malanpur Food Park
Malanpur Food Park is located in District Bhind, spread over an area of 62.0 hectares. The nearest city to
the park is Bhopal, the Capital of the state. Being the capital city, the infrastructure is of high standard and
improves connectivity of the park to other major districts and states. The Food Park has various infrastructural
facilities like internal roads, power, cold storage, common effluent treatment plants, warehousing, water and
surface transportation. The sole governance of the food park lies with Madhya Pradesh Audyogik Kendra Vikas
Nigam (Gwalior) Ltd.
Existing Units: The major units in the park are Dairy Products and Grains Milling.
Prospective Food Processing Units: Malanpur Food Park is surrounded by districts like Gwalior, Datia, and
Morena. Gwalior has one of the largest productions of Potato in the state. Other major crops in the surrounding
districts are Wheat, Peas, Garlic and Onion. These major crops accounts for more than 80% of the total
production around the Malanpur Food Park.
S.No. Crops Prospective Food Processing Units
1 Potato Chips, Snacks (Potato Bites), Seasonings
2 Wheat Bakery & Confectionary Products (Bread, Biscuits/Cookies, Noodles, Pasta, Rusk, Vermicelli, etc.)
3 Pea Namkeen, RTE/RTC (Matar Paneer), Packed/Canned Peas
4 Garlic Pickle, Paste, Powder
5 Onion Dehydrated Flakes, Snacks (Onion Rings), Onion Dips, Packed Onion

24. 24
S.No. Crops Prospective Food Processing Units
1 Wheat Bakery & Confectionary Products (Bread, Biscuits/Cookies, Noodles, Pasta, Rusk, Vermicelli, etc.)
2 Soybean Sauce, Oil, Margarine, Cheese, Milk, Soy Nuts, Animal Feed
3 Pulses Namkeen & Snacks
4.6 Babai-Pipariya Food Park
Babai-Pipariya Food Park is located in district Hoshangabad, spread over an area of 50 hectares. The nearest
city to the park is Bhopal, the Capital of the state. Being the capital city, the infrastructure is of high standard and
improves connectivity of the park to other major districts and states. The Food Park has various infrastructural
facilities like internal roads, power, cold storage, common effluent treatment plants, warehousing, water and
surface transportation. The sole governance of the food park lies with Madhya Pradesh Audyogik Kendra Vikas
Nigam (Bhopal) Ltd.
Existing Units: The major units in the park are Rice Milling, Pulse (Tuar and Chana) Milling, and Bakery) Milling,
and Bakery
Prospective Food Processing Units: Babai-Pipariya Food Park is surrounded by districts like Harda, Sehore,
Raisen, Betul, and Narsinghpur which majorly produce Wheat, Soybean and Pulses. The high production of the
Wheat and Pulses in the region surrounding the park has lead to Pulses and Bakery processing units in the park
and opens up multiple opportunities for the upcoming units through the value addition. Also, Soybean Processing
is one of the big prospective opportunities for the food processing companies backed by raw material availability
and health benefits of the product.

25. 25
5. Regulatory Framework for Food Processing in Madhya Pradesh
The Madhya Pradesh government has been taking various steps to promote food processing industry in the
state. The agricultural base of the state is very strong both in food grains and vegetable production, still the
processing is limited.
According to the Chief Minister, Madhya Pradesh, Shivraj Singh Chauhan, agricultural surpluses should
be used for value addition and MSMEs can play a greater role in this endeavor. Ministry has already mapped
Madhya Pradesh to see which commodity is in surplus, and the idea is to create cold chains and storage
capacities, adding value at the local level.
Various benefits have been announced to promote industrial growth under “Industrial Promotion Policy 2014”
and “Agro & Food Processing Policy 2012” in Madhya Pradesh.
Some of the incentives and subsidies on Land, Capital, and Plant & Machinery under the given policies are as
follows:
Industrial Promotion Policy 20142
• Land Concessions: 50% assistance subject to a maximum of INR 10 Million each shall be provided to
medium, large and mega scale industrial units for developing power, water and road infrastructure, if the
investor acquires private land or gets underdeveloped government land for setting up of project.
• Green Industrialization: Small, Medium, Large and Mega industries shall be provided a capital subsidy
of 50% up to a maximum of INR 2.5 Million for investment in setting up of waste management systems,
pollution control devices, health and safety standards etc.
• Capital Subsidy: Subsidy of 15%, subject to a maximum ceiling of INR 1.5 Million on plant & machinery
for micro and small scale industrial units.
• Interest Subsidy: Subsidy of 5%, subject to a maximum ceiling of INR 0.3 Million, INR 0.4 Million, and
INR 0.5 Million on term loan for micro, small and medium scale industrial units.
• VAT & CST Exemption: Eligible enterprises (except textile units) will be given reimbursement after
adjusting the input tax rebate on the amount of value added tax (VAT) and central sales tax
(CST) (excluding the amount of value added tax on purchase of raw materials) deposited by them
to the extent of :
• 50% for a period of 7 years for fixed capital investment of at least INR 10 Million (For districts
having no mega industrial unit) and 5 years for remaining districts
• 75% for a period of 10 years for large and mega scale industrial unit (For districts having no
mega industrial unit) and 7 years for remaining districts
• Mandi Fee Exemption: All Food processing units shall be given exemption from mandi fee for a period
of five years or a maximum of 50% of investment in plant & machinery (whichever is lower). This fee
exemption shall be made available to those units, which purchases agriculture produces of this state.
Agro & Food Processing Policy 2012
• Land allotment at a concessional rate of 25% for MSME units
• 75% Land subsidy on industrial plots and/or undeveloped land
• 15% re-imbursement of project cost of Food Park/Horticulture Hubs, limit INR 50 Million for the expenditure
incurred on establishment of Food Park/Mega Food Park/Horticulture Hub

26. 26
• 15% Capital subsidy for upgradation of food processing units, up to a limit of US$ 50,000 (INR 2.5
Million)
• Food processors with capital investment > INR 5 Million (US$ 0.1 Million) are exempted from Mandi fees
• Subsidized power at INR 1.50 per unit, subject to a ceiling of 25% of the electric units consumed to Cold
Storage, Cold Chamber, Ripening Chamber and Individual
• Quick Freezing Enterprise for 5 years
• 30% re-imbursement on freight charges up to ICD/port, limit INR 0.5 Million/Year (US$ 10,000/Year)
Support by MP State Agricultural Marketing Board
• Concession on Mandi Fee for Banana and Orange produced in the state
• Establishment of value adding centres for sorting, packaging, storage and preservation, processing and
transportation
• Foods and vegetables used for processing by a unit in Madhya Pradesh exempted from Mandi Fees
Benefits for Processing Units in Food Parks
Sailent features & concessions available to the Industrial units established in Food Park are:
• First ten industries would be given rebate in premium in the following manner:-
• Initially 100% premium will have to be deposited by the entrepreneur, setting up their
unit in the Food Park.
• 50% of the premium deposited by the entrepreneur will be returned, if the Industry
commences the production within the stipulated period.
• Industrial Investment Promotion Assistance would be given to the Food Processing Industry having a
fixed capital investment below INR 100 Million.
• Mandi fee for purchasing agriculture produce as raw material would be exempted for the food processing
units to be set up in the food park.
• The food processing units working as seasonal units to be set up in the food parks would be declared
as seasonal industries and be given relaxation in labor laws.They would also be given exemption from
the traffic related to minimum power bills.
• The sales tax paid on purchase of raw material by the units set up in the food park would be adjusted (set
off) into the sales tax payable on the sale of finished product.
• The Agriculture and Horticulture Department would take initiative to promote contract farming around the
Food Park, as per the demand of industries established at food parks.
• Madhya Pradesh Agro Industries Development Corporation and Madhya Pradesh Khadi Gramodyog
Board would extend assistance for marketing of product of the units; set up in the food parks.
• Services of private specialist (consultants) would be taken to promote investment in food parks. They
would widely advertise the food park, and help the entrepreneurs establishing the units there.

27. 6. Opportunities in Madhya Pradesh Food Processing Industry
6.1 Make in Madhya Pradesh - MSME can Reap Benefits
The ‘Make in India’ campaign focuses on the manufacturing sector to generate employment.Through this
campaign the food processing sector aims to raise its growth level from 10% to 25% as this is one of the
focus industries of the ‘Make in India’ Campaign.
On similar lines, in Madhya Pradesh, the improved functioning of food parks and planned setup of Mega
Food Park in Khargone is one of the key opportunities for SMEs. Small and medium food processing unit
or ancillary units can come up in the food parks, and take benefit of the facilities provided by the government
for the SME’s.
6.2 Need for Advanced & Cost Effective Process Technology
Taking into account the increasing agriculture and horticulture production in the state, increasing financial
assistance and incentives by government, food processing sector possess immense opportunities. In
light of the said reasons, a huge requirement for cold chain management and refrigerated vans is arriving
There is a need for advanced technologies to make food processing cost effective. The issues of power,
water, and transportation are few of the main industrial challenges, hence advanced and cost effective
technologies are the need of the hour.
6.3 Potential Food Processing Opportunities
6.3.1 Fruit Juice (Orange and Mango)
The packaged fruit-based beverages market in India has witnessed substantial growth in recent
years on account of rising demand for healthy beverages fueled by growing awareness,
urbanization and an increasing working population. According to our research, the total fruit juice
market in 2014 was INR 70 Billion. Organized sector had 20% market share, valued INR 14Billion
The organized fruit juice segment is poised for 20% growth in next five years. Mango and orange
juices being the most preferred variants are set to grow with a magnificent growth rate as well
Madhya Pradesh accounts for 26% share in India’s total orange production and 2% in mango
production. Currently, state ranks lower in mango production but it is one of the fastest growing
fruit category with a CAGR of about 45% during FY2012-FY2014. The oranges and mangoes
are famous across India for their flavor and quality and so are products derived from them,
however, still the state lags behind in taking full benefit of high raw material availability. Although
state has high production volumes, it is much behind in processing (negligible) and consumption
of processed oranges (0.2% of production) and processed mangoes (5.8% of production)3
.
The high production of oranges and mangoes creates huge opportunity for juices, and other
products like candy, juice powder, canned fruits, dehydrated fruits, etc. The major orange
producing districts are Chhindwara, Mandsaur, Shajapur, Ujjain, Betul, Ratlam, Neemuch,
Hoshangabad, Harda, and Rajgarh. Jaggekhedi Food Park has oranges as one of the major
crops in the surrounding districts, adding potential to this product category for the prospective
manufacturing units in the food park. Although mangoes are not one of the major crops around
any of the food parks, but its high production and even higher growth rate creates an immense
potential in the product.
3
National Horticulture Board, CIPHET, Dept. of
Commerce, Industry & Employment Govt. of
Madhya Pradesh, NSSO, PwC Analysis
Madhya Pradesh: An Investment Destination For Food Processing Sector
27

28. 28
Orange
Mango

29. 5
Directorate of Economics and Statistics, Department of Agriculture and Cooperation
6
Ministry of Commerce
Madhya Pradesh: An Investment Destination For Food Processing Sector
29
6.3.3 Soybean Oil
In FY2014, India’s total soybean production was 11.99 Million Metric Tonnes. The majority of
soybean produced is crushed, and forms soya meal (~80%) and soya oil (~20%)5
. India has
a huge demand for soybean oil. Close to 60% of the demand for soybean oil is currently catered
by imports. Soybean oil import was 2.32 Million Metric Tonnes in FY2014, which grew at a CAGR
of 44% during FY2012 to FY20146
.
Madhya Pradesh is the largest producer of soybean in the country. It recorded a total production
of 5.37 Million Tonnes of soybean in FY2014, accounting for a share of around 45%. Major
districtsforsoybeanproductionareUjjain,Dewas,Shajapur,Sehore,Mandsaur,Dhar,Chhindwara,
Vidisha, Indore, and Harda. It is also one of the highly cultivated crops around the Nimrani,
Borgaon, Maneri and Babai-Pipariya Food Parks.
Other than Soybean oil, massive production of soybean creates huge opportunity for other soy
based products like Sauce, Margarine, Cheese, and Milk. It should be targeted as premium crop
and area under cultivation should increase.
Figure:6-3
Soybean Production (Million Metric Tonnes), FY2011 to FY2014
Source: Directorate of Economics and Statistics, Department of Agriculture and Cooperation
Note: *= Fourth Advance Estimates
FY2011 FY2012 FY2014*FY2013
6.50
7.80
5.37
6.27
6.3.4 Value Added Dairy Products
Market for Value Added Dairy Products (VADP) is rising gradually across country as operating
margins in value-added products are almost 2x liquid milk business. Demand of various dairy
products like Cheese, Packaged Milk, Butter, Non Dairy CrAeamer, Instant Milk Powder,
Condensed Milk and Flavored Buttermilk are exhibiting high growth.Together with domesti market,
export market for milk and dairy products presents a large opportunity to the SME’s in the state
Indian export of processed dairy products has attained CAGR of around 103% during FY2010
FY2014.

30. 30
In terms of milk production, Madhya Pradesh is the 6th largest producer.The production reached
to 8.84 Million MetricTonnes in FY2014 from 7.17 Million MetricTonnes in FY2010. At district
level, Morena, Ujjain, Mandsaur, Jabalpur and Indore districts produced 3.5%7
of the states’ total
milk production in FY20128
. As per NSSO data, the share of unprocessed consumption of milk in
the state is around 98.19%, whereas only 1.81% of milk is consumed in the processed form
Food parks such as Malanpur, Jaggakhedi, Maneri, and Nimrani can be targeted due to availability
of milk in and around the surrounding districts.
Figure:6-4
Milk Production (Million Metric Tonnes), FY2010 to FY2013
Source: Department of Animal Husbandry, Dairying & Fisheries, Ministry of Agriculture, GoI
FY2011 FY2012 FY2014FY2013
7.51
8.15
8.84
7.17
CAGR
7%
6.3.5 RTE/RTC
According to our research, Indian organized RTE/RTC foods (Noodles, Pasta, Upma, Snacks
etc) market was estimated to be INR 53 Billion in FY2014. It is expected to grow with a CAGR
of around 22% during 2014-2020. The demand of RTE/RTC is gradually rising backed by
various factors like changing lifestyle, increasing adaptability among the consumers of tier-I and
tier-II cities, modern retail chains etc. Wheat based products like upma, noodles, and snacks are
few of the highly demanded products.
Madhya Pradesh is the third largest producer of grains in the country with wheat production
at 13.93 Million Metric Tonnes during FY2014, growing at a CAGR of 15% during FY2011-
FY2014. The majorwheat producing states are Hoshangabad, Chhindwara, Sehore, and
Harda. Together with high production, wheat is one of the majorly produced crops across all
food. High raw material production and remarkable growth in the RTE/RTC foods sector creates
a growth potential in state’s wheat based food processing.

31. 31
Figure:6-5
Wheat Production (Million Metric Tonnes), FY2011 to FY2014
Source: Directorate of Economics and Statistics, Department of Agriculture and Cooperation
Note: *= Fourth Advance Estimates
FY2011 FY2012 FY2014*FY2013
14.37
13.13
13.93
9.22
CAGR
15%

32. 7. Industry Roadblocks
7.1 Inadequate Infrastructure
One of the key challenges for Madhya Pradesh food processing industry is inadequate infrastructure.
With changing consumption pattern, especially in urban areas, demand of processed food is increasing,
which is further drawing foreign investments in the sector but insufficient infrastructure hampers the
expected growth prospects. More than one third of the warehouses in the mandis are not adequate to
handle the volumes they are expected to.On the other hand, advance facilities such as ripening chambers
and cold storages, which have direct impact on transactions and shelf life of horticultural produce, are
absent.
7.2 No Incentive for Quality Production
Due to lack of standardization of quality norms at mandi level,
comparable quality produce can fetch different prices and different
quality produce are sold at similar prices. Farmers adopting
superlative practices and producing quality material usually do
not get incentives for their efforts. If mandis start using equipments
and methods to measure produce characteristics on certain
parameters and prices are determined based on those parameters
it will give a boost to primary processing.
Besides this, existing norms on the processing of food items
areliberal,whichallowsmallandunorganizedplayerstomanufacture
adulterated and low quality products. In light of this, the state
government should take stringent measures to control the quality
of food processing. Regular and strict monitoring of the processed
food quality will create the demand for advanced food processing technologies.
7.3 R&D Not in Line with Industry
In Madhya Pradesh, companies are following the same channels as were adopted in past years, giving
lesser weightage to the upcoming trends across the globe in terms of product attributes, production,
processing, and supplying the product. The growth of an industry depends upon its ability to reach out
end-consumers with the products meeting their demands. Innovations which can create fresh demand,
is needs of the hour. However, the R&D is not going in line with the industry trends and hence, unable to
boost demand.
KEY POINTS
Ripening chambers and cold stor-
age are not adequate
No norms for checking the quality of
production.
Less focus on global trends and
developments
Highly unorganized food processing
industry.
Madhya Pradesh: An Investment Destination For Food Processing Sector
32

33. 8. Madhya Pradesh Food Processing Industry - Road Ahead
Creation of Food Testing Facilities: Since a lot of attention is given to the hygiene and quality factors of food,
food testing is one of the major avenues where the potential is still untapped. As India moves forward towards
adopting international standards of food processing and other related activities, food testing laboratories come
in play as stringent measures needed to be adopted for approving food items fit for human consumption.
Promoting Food Processing in Food Parks: Madhya Pradesh is quite rich in its agriculture and horticulture
production amongst which Orange, Tomato, Soybean and Wheat are found in abundance. Also, most of these
crops are found in high quantities in districts around various food parks. Hence, it is recommended that the state
government should actively work towards improving the processing of potential processed food opportunities like
fruit juice (orange), tomato ketchup, soy milk, soy oil, processed milk, honey, starch, wheat-based convenience
food items, etc in the food parks. The improvement can be brought by providing few additional incentives to the
upcoming units.
Special Schemes for New Entrepreneurs: Government has been very supportive towards the industrial units
in the state, giving special incentives to food processing units. Various incentives like on capital, bank loans,
plant & machinery, mandi tax, VAT, among others. As MP’s food processing industry majorly comprises of SME’s,
special incentives and relaxations for the entrepreneurs will give further push to the industry.
Need for Center of Excellence / Nodal Agency: A central or nodal organization to facilitate and connect
the investor, entrepreneur, and other stakeholders is one of the key recommendations for promoting the food
processing industry. The existence of such organization would bring clarity in procedures & policies between
the industrial unit and investor. It will also bring all the stake holders on the same platform thereby reducing the
communication gap and any kind of misinterpretation in facts. Moreover, it will be a cost and time effective move
to manage the resources of upcoming food processing units in the state.
R&D for Product Development: Madhya Pradesh food processing industry is in a dire need for accelerating
R&D and modern technology adoptions in agriculture, and food processing.For instance, at the processing stage,
small scale and unorganized sectors, which claim a major portion of the food processing industry, call for focused
programs for ameliorating productivity, technology access, quality output, meeting the food safety standards, &
new product development for competitive edge & consumer needs. All these measures will increase output and
subdue wastage and nutrition losses throughout the production and processing stages.
Creation of Robust Cold Chain/Supply Chain Network: Establishing a firm and sound logistics framework is
imperative to curtail the post-harvest losses, particularly of perishables.State’s government needs to devise novel
new strategies, and work closely with third party cold chain operators to develop better cold storage systems,
ensuring better conditions of warehouses by employing sophisticated refrigerated transportation systems to
avoid food wastage. In the similar direction, MoFPI has also provisionally approved 3 Integrated Cold Chain
projects in the State.
Increasing Domestic Demand for Soya Oil: The domestic market for soy-based products like soya oil is
growing at double digit. Imports cater around 60% of the demand.With huge production and processing capacity
for soybean, Madhya Pradesh can successfully tap the growing demand.
Increasing Domestic Demand for Soya Milk: Soya Milk is an inexpensive and remarkably versatile high protein
food made from soybeans. It is a white liquid made from the seed. Unlike most other protein foods, milk is entirely
free from cholesterol and low in fat. It is an excellent food for babies, children, elderly people and pregnant and
lactating women since it contains vegetable protein which is very nutritious and easy to digest.
Madhya Pradesh: An Investment Destination For Food Processing Sector
33

34. With the increasing health consciousness among the general people, the use of soybean is getting acceptance
in the form of textured vegetable protein (popularly known as Soya nuggets), Soya fortified wheat flour, Soya
milk, Tofu and Soya curd etc. Being mainly the country of vegetarians, India has indeed a very great potential for
Soya Milk, Cottage Cheese and Curd.The high production of soybean is an additional benefit to the state’s soya
processing industry.
Value Addition at Different Levels: The increasing demand for processed food, like fruit-based beverages,
pulps, sauces, chocolates, flavored milk, flavored yogurt, cheese, honey, starch, dehydrated fruits & vegetables
among others, creates large growth area for food processing units in the state. Increase in disposable incomes
and improving lifestyles has a visible effect on the consumption pattern of the people.
Easy Credit Availability to MSME Segment: Madhya Pradesh food processing industry is majorly unorganized,
comprising of only few regional players. Although government has provided various incentives for the food
processing companies, yet a special credit agency for the SME’s in the sector is the need of the hour. State
has various credit societies and cooperative banks but no dedicated financing institution for the food processing
industry. It is recommended that the Madhya Pradesh government should work upon providing credit assistance
to the SME’s through a credit society or agency for the food processing units specifically.
Madhya Pradesh: An Investment Destination For Food Processing Sector
34

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