‘Large-scale investment a challenge in food processing sector’

March 10th, 2008 - 4:06 pm ICT by admin  

A file-photo of KPMG

New Delhi, March 10 (IANS) Large-scale investment in the food processing sector is increasingly becoming a challenge as global firms provide stiff competition to domestic producers, Subodh Kant Sahai, minister of state for food processing industries, said here Monday. “It is heartening that growing levels of investment is pouring into this (food processing) sector both through domestic investors and via the foreign direct investment route,” the minister said while inaugurating Aahar 2008, an annual international exhibition on food processing.

“However, we are trying to achieve a larger investment level by the end of this decade, which is a big challenge since the domestic sector will now be facing increasing competition resulting in higher pressure on margins and the need for conforming to stricter quality control norms,” Sahai pointed out.

He also stressed greater focus on building strategies and developing built-in strength to face the challenge.

“In order to give additional boost to the food processing sector, the government has been laying emphasis on processing of fruits, vegetables, marine products, starch-based products, mushrooms, animal products, ready-to-eat processed and organic food and use of cold chains from farm to processing units and sea ports or airports,” he added.

“Integrated facilities for washing, grading, packing of processed foods and ensuring better availability of road or rail transport and adequate cargo-handling, telecommunication facilitates and testing laboratories have been among the other priority areas of the government,” Sahai said.

Currently, food consumption in India is likely to be worth Rs.860 thousand crore (Rs.8.6 trillion), with share of processed food being Rs.4.6 trillion while primary processed food is at Rs.2.8 trillion, he said.

India is one of the largest producers of fruits and vegetables, but the country’s share in global trade of processed food is less than one percent.

Thus, in order to make the sector globally competitive, the government has envisaged a ‘Vision 2015′ that will seek to enhance the farmers’ income, generate employment and provide affordability to the consumers.

“To achieve these aims, a transparent and industry friendly regulatory regime is proposed to be established, making the sector attractive for both domestic and foreign investors,” the minister said.

Foreign investment in the sector has been steadily rising with as many as 11 deals worth euro 106.4 million being signed in 2007 against euro 4.2 million in 2006, according to KPMG.

Aahar 2008 is on at the capital’s sprawling Pragati Maidan till March 14. Apart from showcasing processed food products, it will exhibit the latest technology in food processing, hotel equipments and supplies.

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