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Maharashtra –Food and AgricultureSectorNovember 2014

www.midcindia.org

Knowledge Partner

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Knowledge Partner

Preface

§ The Maharashtra Food & Agriculture Sector Profile has been developed by Ernst & Young India LLP, the Knowledge Partner to Maharashtra IndustrialDevelopment Corporation to provide hand holding assistance to investors.

§ The intention is to provide executives a quick overview to the Food & Agriculture Sector in the State.

§ The complex decision-making process involved in undertaking foreign operations requires an intimate knowledge of a country’s and a State’s commercialclimate as well as recognition of the fact that this climate is continuously evolving. Companies doing business in India, or planning to do so, would be well-advised to obtain current and detailed information from experienced professionals. The information presented in this book has been validated w.e.fSeptember 2014.

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7.58.6

10.412.0

13.7

2008-09 2009-10 2010-11 2011-12 2012-13

Maharashtra's GSDP in INR Lakh Crore

Macroeconomic Profile- Economy

§ The manufacturing sector contributes a significant 18.51 per cent to the state’s GSDP. Amongst the 10 states with the highest GSDP (GrossState Domestic Product) in India, Maharashtra is one of the leading states in terms of contribution of manufacturing share to the GSDP.

§ Maharashtra has a Per Capita Income (PCI) of INR 1,07,670. The state has the highest per capita income amongst the 10 states with the highestGSDP in India.

8.43%

LEADER

Maharashtra has thehighest GSDP inIndia – INR 13.7 LakhCrore (USD 228.3Billion)

CAGR of GSDP atconstant prices overthe last 5 years

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5.206.00 6.24

7.85

10.05

2007-08 2008-09 2009-10 2010-11 2011-12

Maharashtra's Industrial Output in INR Lakh Crore

Macroeconomic Profile- Industry

§ The state recorded the highest Industrial Value Addition in the nation. The Gross Value Added by all industries in the state amounted to INR 1,79,222crore (USD 29.87 billion) in the year 2011-12, which is 59 per cent greater than the value addition of its closest follower.

§ Maharashtra has the second highest number of factories and has one of the lowest number of industrial disputes in the country.

17.41%

LEADER

Highest IndustrialOutput in the nation– INR 10.05 LakhCrore (USD 167.5Billion)

Maharashtra’s sharein India’s totalIndustrial Output

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Macroeconomic Profile- Investments

§ Maharashtra has attracted INR 3,16,082 crore of FDI over the period 2000- 2014, which is almost one-third of the nation’s total FDI inflows receivedover the same period.

§ New investment projects announced in 2013-14 which would be set in Maharashtra are proposed to bring in INR 27,795 crore of investment in the state.

§ In 2013-14, the state contributed 10.86 per cent of the total projects completed in India in terms of investment value. With a total of INR 28,406 crore ofinvestment projects completed in the state, Maharashtra is one of the leading states in the country in terms of project completion (by investment value).

One -Third

LEADERHighest FDI Inflowsin the nation

Maharashtra’s sharein India’s FDI Inflowsover the period 2000- 2014

27,669

44,664 47,359

2010-11 2011-12 2012-13

Maharashtra FDI Inflows in INR Crore

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ROAD AND RAILWAYS§ More than 99 per cent of the villages are well connected with all

weather roads in the state§ 9.3 percent of total railway network in the country§ 2 Major Railway zones§ Dry Ports, Inland Container Depots, Truck terminals and Railway

sidings for easy freight movement

AIR AND WATER PORTS§ 4 International and 7 Domestic Airports§ 6 MIDC airstrips§ 2 Major ports§ 22.45 per cent of the total cargo traffic of the major ports in India is

handled by the Jawaharlal Nehru Port (JNPT) and Mumbai Port (MBPT)§ 53 Minor ports

LAND§ Maharashtra is the second largest state in India, with an area of 30

Million Hectares (307,713 sq. km.)§ MIDC has one of the largest land banks in India, with ‘industrial land’

spanning over 84,000 hectares

ENERGY§ Gross installed capacity of power plants (excluding Central Sector) is

23,726.7 MW. The state has the highest Gross installed capacity(Utilities) at 10.62 per cent of the nation’s total installed capacity.

§ Gross Generation of power plants (excluding central sector) is at77,169.9 million KwH

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Infrastructure

Infrastructure

National Highway

Railway

MIDC Airstrips

Key Locations

International Airport

Proposed GasPipeline Network

Major Ports

To Goa

To Madhya PradeshTo Gujarat To Madhya Pradesh

Nanded

Solapur

Sangali

Nasik

Dhule

Wardha

Jalna

Sindhudurg

To Andhra Pradesh

ToChhattisgarh

To Karnataka

To Goa

Amravati

Osmanabad

LaturBeed

Gadchiroli

Gondia

Gangapur

·

Sinnar

Rajgurunagar

Dighi

Shirdi

Karad

Shirpur

To Andhra Pradesh

Ozhar

BaramatiPhaltan

Akola

JalgaonNagpur

Bhandara

YavatmalChandrapur

Kolhapur

Ratnagiri

Satara

Aurangabad

Ahmednagar

Thane

Mumbai

Pune

Raigarh

Juhu

Domestic Airports

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Food and Agriculture Sector inIndia

§ Performance of Food Processing Industry (FPI) improved substantially in 2011-12 registering a record growth of 21.6 per cent. Contribution of foodprocessing sector to GDP has been growing faster than that of the agriculture sector indicating increased agricultural products being converted (in valueterms) to food products irrespective of agricultural production rate.

§ Food Processing Industry also constituted 12.13 per cent of employment generated in all Registered Factory sector in 2011-12., with a total of 17.77 lakhpeople engaged in the registered food processing sector with an Annual Average Growth Rate of 3.79 per cent. Unregistered food processing sectorsupports employment to 47.9 lakh workers as per the NSSO 67thRound 2010-11.

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10.3 9.9 10.412 12.2

9.28 8.5

9.6 9.8

0

2

4

6

8

10

12

14

2008-09 2009-10 2010-11 2011-12 2012-13

Share of FPI in GDP (%)

GDP FPI as a share of GDP in Agriculture

GDP FPI as a share of GDP in Manufacturing

Source: National Accounts Statisitcs-2014; * Agriculture excludes Forestry & Logging . GDP: Sum of GVA (value of output less the value of input used up in the process of production) of all resident producer units of the economy

5.89 5.92

6.47

6.82 6.91

2008-09 2009-10 2010-11 2011-12 2012-13

GDP - Agriculture at 2004-05 Prices (INR LakhCrore)

Food and Agriculture Sectorin Maharashtra

18.9%Gross cropped area(GCA) underirrigation

87 lakhMT

The total milkproduction in 2012-13

§ During 2012-13, the total production of pulses and oilseeds in the state was 2.4 million tonnes and 5.0 million tonnes, respectively. Sugarcane, cotton, onion,soya bean, banana, jowar (sorghum) and rice are some of the key agricultural products of Maharashtra.

§ Total food grain production in the state was about 10.7 million tonnes over 2012-13,

§ Overall fruit production in Maharashtra was around 9.8 million tonnes during 2012-13.

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59,6894,5464,6694,100

1,9603,042

875417

10,6895,017

2,413

Sugarcane

Onion

Soya bean

Banana

Jowar (sorghum)

Rice

Wheat

Bajra (millet)

Total food grains

Total oilseeds

Total pulses

Key Crop production in 2012-13 (‘000 tonnes)

Food and Agriculture HubsIn Maharashtra

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Nagpur

Latur

Sangli

Nashik

Aurangabad

Ahmednagar

Osmanabad

Nanded

Ratnagiri

Pune

•Eight Specialized Food Parks withfacilities as cold storage, warehousing,advanced packaging, tetra packaging &food testing laboratory. The locations are:Butibori (Nagpur), Shendra(Aurangabad), Nevasa(Ahmednagar), Shrirampur(Ahmednagar), Latur (Latur),Osmanabad (Osmanabad), Nanded(Nanded), Chiplun (Ratnagiri)

Food Parks

MIDC has set up three Wine Parks at•Vinchur, near Nashik• Addn Vinchur near Nashik• Palus, near Sangli

Wine Parks

•Three Floriculture Park developed asa world-class facility for production offlowers of different types and varieties.MIDC provides nursery, post harvestinfrastructure and logistics facilities.The parks are located in Talegaon(Pune), Mudkhed (Nanded) andOsmanabad

Floriculture

Key Growth DriversMagneticMaharashtra

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IndustrialInfrastructure

Policy Support

Rising ExportOpportunities

Doing BusinessSupport

Food andAgricultureSector in

Maharashtra

Supply sideadvantages

SocialInfrastructure

Access to ForeignMarkets

Strong DomesticDemand

Strategic Location

Human Capital

DEDICATED INSTITUTIONSCentral Food Technological ResearchInstitute (CFTRI)

§ CFTRI's Resource Centre Mumbai caters to the technology transferand business development services to the Food Industries and alliedorganizations in Mumbai as well as the Western region of the countrycovering Maharashtra, Gujarat, Goa, Madhya Pradesh and Rajasthan

§ The centre also conducts survey of regional agro resources,preparation of techno-economic feasibility reports on Food Industriespotentials in the region, conducting analysis of samples of foodproducts, carrying out research activities related to regional foodresources and creating awareness of CFTRI services

SKILLED WORKFORCE§ The state has a literacy rate of 82.34 per cent with a large base of

skilled and industrial labour.§ The state has a total of 2298 technical institutions with an intake

capacity of 4,49,121. It also houses 781 ITIs (Industrial Traininginstitutes) with an intake capacity of 1,17,747.

§ There are 20 universities in the State of which four are agricultureuniversities, one university for health science course, one university forveterinary science, one for technology and 13 other generaluniversities.

§ In addition to these, there are 21 deemed universities in the State.§ The state is home to some of the most reputed national R&D

institutes, viz., the Centre for Development of Advanced Computing(C-DAC), the Bhabha Atomic Research Centre, the NationalEnvironmental Engineering Research Institute, the National ChemicalLaboratories and the Tata Institute of Fundamental Research. One ofthe well-known Indian Institutes of Technology (IITs) is located inMumbai.

§ Pune is also an important education hub of India, often referred to asthe ‘Oxford of the East’.

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Policy SupportMagneticMaharashtra

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TechnologyUpgradation Subsidy

Interest Subsidy Stamp DutyExemption

VAT + CSTAbatement

Electricity DutyExemption

Cleaner ProductionIncentives

Water EnergySubsidy

Water conservationIncentives

Royalty Exemption

Fixed Capital Investment Employment Location

DETERMINING FACTORS

Maharashtra Industrial Policy 2013-18FISCAL INCENTIVE BASKET

§ National Mission on Food Processing: Centrally sponsored scheme to create additional food grain storage capacity in the country. Subsidies are fully providedfor effective administration of the proposed Food Security Legislation. 100 per cent FDI under automatic route (except for alcohol, beer, and sectorsreserved for small scale industries) and repatriation of capital and profits permitted. 100 per cent export-oriented units are allowed to sell up to 50 per centof their produce in the domestic market and export earnings are exempted from corporate taxes. Import duty scrapped on capital goods and rawmaterials for 100 per cent export- oriented units, 100 per cent tax exemption for 5 years followed by 25 per cent tax exemption for the next 5 yearsfor new agro-processing industries and Full excise duty exemption for goods that are used in installation of cold storage facilities.

§ Investment-linked tax incentive of 100 per cent deduction of capital expenditure for setting up and operating cold chain facilities, and for setting up andoperating warehousing facilities .

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Key PlayersMagneticMaharashtra

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Industrial PresenceMagneticMaharashtra

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Dairy

§ Aarey§ NDDB

Vineyards and Grape Cultivation

§ Radhakrishna Agri farms§ Sula Vineyards

Processed Food Products

§ Allana Sons§ Hindustan Unilever§ Pepsi Co.§ Mc Cain§ MTR

Agri Input

§ Godrej Agrovet Limited (GAVL)

Baked Other Food Products

§ Britannia§ Agro Tech Foods Ltd.

Confectionery

§ Parrys§ Marico§ Parle Agro§ Barry Callebaut

Food Machinery

§ Boyd

Internal combustion engines

§ Cummins India Ltd.§ Kirloskar Oil engines

Agri Products

§ Murli Industries§ ITC

Animal Feed

§ V. H Group.

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Growth StoriesMagneticMaharashtra

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The proposed unit in Ranjangaon will process Cocoa and manufacture Chocolateswith output capacity of 14,000 MT per annum initially and will be scaled up to 48,000MT per annum.

In addition to manufacturing chocolates, the company undertakes research intochocolate recipes. In recent years it has launched tooth-friendly chocolate, probioticchocolate, chocolate with a high level of antioxidants (sold under the brand nameACTICOA), and "rebalanced" chocolate, which has an improved nutritional profile.

The chocolate expertise of Barry Callebaut is most perfectly translated to the designof world class confectionery courses. Their chocolate academy in India is located inMumbai (Maharashtra).

Barry Callebaut is the world's leading supplier of high-quality chocolate and coco. Headquartered in Zurich, Switzerland, the company is represented by over8,500 employees operating out of 30 countries worldwide, through more than 50 production facilities.

Barry Callebaut, chose Maharashtra to establish their new manufacturing unit. This will be the first of its kind factory in India; and will supply chocolates togiants like Cadbury India, Nestle India, Ferrero and others locally and also plans to export to neighbouring countries like Nepal, Sri Lanka, Bangladesh,Pakistan.

Barry Callebaut’s first ever chocolate manufacturing plant in India, will be established in MIDC Ranjangaon industrial area near Pune with an investment cost ofINR 115.25 Crore. The Swiss chocolate maker chose Ranjangoan as it has conducive climate, which is a very important factor, as it is a crucial element ofproduction. Additionally, the requirement for no odour from the Industrial area’s surroundings was important for manufacturing good quality chocolate andwas adequately met.

Barry Callebaut

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Growth StoriesMagneticMaharashtra

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PepsiCo entered India in 1989 and in a short period, has grown into one of the largest food and beveragebusinesses in the country. In India PepsiCo works through its subsidiary - PepsiCo India Holdings PrivateLimited

PepsiCo has been consistently investing in India and has built an expansive beverage and snack food businesssupported by 38 beverage plants and 3 food plants.

PepsiCo and its partners recently announced an additional targeted investment of INR 33,000 Crore in Indiaby 2020 in the areas of product innovation, increasing manufacturing capacity, ramping up marketinfrastructure, strengthening supply chain and expanding company’s agriculture programme. In two decades,the company has been able to organically grow eight brands that generate INR 1000 crores or more inestimated annual retails sales.

Jaipuria Group which is the biggest bottler in India of the global giant Pepsi Co. and controls near about 60per cent of Pepsi’s bottling business in India has set up its bottling plant in MIDC Industrial area in Nagpur,the second capital of Maharashtra.

PepsiCo India currently works with farmers across Maharashtra to procure agri-products from them. Itutilises potatoes for various brands under food business like Lay's and Uncle Chips. For its collaborativefarming initiative, the company works with 3,500 farmers across Pune, Satara and Sangli, covering over 6,500acres of land in Maharashtra. In Satara, the company has ben able to successfully put 1,600 acres of farm landunder drip irrigation for cultivation of potato.

PepsiCo is a global food and beverage leader with net revenues of more than USD 65 billion and a product portfolio that includes 22 brands that generatemore than USD 1 billion each in annual retail sales. Its various business units include Frito-Lay snacks, Pepsi-Cola beverages, Gatorade sports drinks, Tropicanajuices and Quaker foods.

India is a country with hugepotential and it remains anattractive, high-prioritymarket for PepsiCo

- PepsiCo, CEO - Indra Nooyi

PepsiCo

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Contact Us

Shri. Bhushan Gagrani (IAS)Chief Executive Officer - MIDCTel No : 022-26870800, 22616547

Fax No : 022-26871587Email : ceo@midcindia.org

Dr. P. Anbalagan (IAS)Joint Chief Executive Officer - MIDC

Tel : 022-26871462Fax : 022-26870026

Email: jtceo@midcindia.org

Shri. Yuvraj PomanDy. Chief Executive Officer - II

Tel : 022-26870142 ; Fax : 022-26871604Email: yuvrajpoman@midcindia.org

Head OfficeMaharashtra Industrial Development Corporation

Udyog Sarathi, Mahakali Caves Road,Andheri(E), Mumbai-400 093

DisclaimerMaharashtra Industrial Development Corporation (“MIDC”) has engaged Ernst & Young LLP. (“EY”) to prepare this document and the same has been prepared by EY in consultation with MIDC. This document is for information purposes only. While due care has been takenduring the compilation of this document to ensure that the information is accurate to the best of EY knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice.EY does not assume any liability or responsibility to any person for the outcome of decisions taken by such person as a result of any reliance placed on this presentation. EY shall not be liable for any direct or indirect damages that may arise due to any act or omission on thepart of the user due to any reliance placed or guidance taken from any portion of this presentation.© 2014All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by MIDC and Ernst & Young. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronicmeans and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of MIDC.

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