Establishment of

manufacturing unit for

Instant Vegetables in
Retort Pouches
Agro & Food Processing
Government of Gujarat
Contents

Project Concept 3
Market Potential 4
Growth Drivers 6
Gujarat – Competitive Advantage 7
Project Information 10
- Location/ Size
- Infrastructure Availability/ Connectivity
- Raw Material/ Manpower
- Key Machinery Suppliers
- Potential Collaboration Opportunities
- Key Considerations
Project Financials 14
Approvals & Incentives 15
Key Department Contacts 18

Page 2
Project Concept

The concept
 The proposed project envisions
setting up of a manufacturing unit for
instant vegetables in retort pouches
in Gujarat.
 These pouches are primarily used to
pack Ready to Eat (RTE) foods,
providing longer shelf life and
preservation at room temperature
without the aid of refrigeration.
 With the advent of thermal
processing technology almost all
Indian Foods are now readily
available off the shelf. Properly
cooked and packed food can retain
better taste, flavour and colour.

What is retort packaging?

 A retort pouch is perhaps the most significant advancement in food packaging, used as a
substitute for tin cans as it has sufficient strength and heat resistance.
 Retort pouches offer convenience features such as zipper re-closure, tear notches, peel-off
lids, microwave-safe, and hang hole features. Such innovative packaging designs offer higher
convenience and portability, leading to their augmented demand
 Retort pouches are suitable to pack variety of products including seafood such as fish,
mussels, lobster, crab, prawns, and for cooked rice, soups, mushrooms, vegetables, pasta,
and sauces, and as medical packaging etc.

It is a multi-layer flexible
pouch, made from a
laminate of three materials –
an outer layer of polyester
for strength, a middle layer
of aluminium foil for
moisture, light and gas
barrier and an inner layer of
cast polypropylene as the
heat seal and food contact
material.

Page 3
Market Potential

Global Ready Meals market stood at US$85 billion in 2015 and is

expected to grow at 5% CAGR to reach US$109 billion by 2020

Global Ready Meals market Market share by

(US$ Billion) geographies - 2015 (%)

1.9% North America

108.9 3.7% 1.5%
77.9 79.6 82.1 85.3 5.5% Western Europe
74.0 76.0
Asia Pacific

34.6% Eastern Europe

22.0%
Latin America
2010 2011 2012 2013 2014 2015 2020E 30.8% Australasia
Source: Euromonitor
Middle East and
Africa

 The global ready meals market was valued at US$85 billion in 2015, growing at a CAGR
of 2.9% during 2010–2015. Among ready meals, chilled food segment has the biggest
share of 25.6% (in 2015) by value, followed by frozen ready meals segment, with 24.5%.
 Europe is the largest market for ready meals, accounting for ~36% of the global market
in 2015, followed by North America and Asia Pacific with ~35% and ~22% share
respectively.
 Nestle was the market leader in 2015 with an 8.2% share of the market by value.
 The market is expected to grow at a CAGR of 5.0% during 2015-2020, with Asia-Pacific
anticipated to emerge as the fastest growing market.
 The primary reason contributing to the growth of the market is increasing demand for
convenience and on-the-go food.

Additionally the global retort packaging market is projected to reach

US$41.14 billion by 2020, with a CAGR of 6.7% from 2015 to 2020. Retort
packaging is becoming popular in the frozen food and beverage market due to advantages such
as the growing demand for compact and light weight packaging

Page 4
Market Potential

India Ready Meals market stood at US$128 million in 2015 and is

expected to grow at ~20% CAGR to reach US$322 million by 2020

India Ready Meals market  As consumer preferences are changing,

(US$ million) the demand for shelf-stable products is
321.5 increasing in India. Indian consumers are
rapidly adapting to convenient portion
packs of hygienic, branded and well-
packaged food products.

128.0  Reduction of heating time by 30-50%,

110.8
86.6 improved food appearance, better
56.7 69.6
46.6 nutrition and taste are the factors driving
the increased utilisation of retort
packaging in India.
2010 2011 2012 2013 2014 2015 2020E
Source: Euromonitor
Market size of different categories in RTE segment (US$ million)
2015 CAGR % 2020
RTE Breakfast Cereals 146.4 17.9 333.5
Shelf Stable Fruit and Vegetables 88.5 12.4 159.1
Processed Frozen Fruit and Vegetables 58.3 16.7 126.2
Processed Meat 32.3 18.5 75.6
Processed Seafood 22.3 19.9 55.4
Shelf Stable Ready Meals 72.2 23.0 203.4
Dried Ready Meals 42.2 14.0 81.5
Frozen Ready Meals 13.6 21.9 36.7
Source: Euromonitor
Shelf Stable Ready Meals Brand Shares – 2015 (in %)

Aashirvaad, 4% Kohinoor Foods, 2%

Kitchens of India, 4%

Gits Ready To Eat, 12%

MTR, 21%
Others, 57%

Source: Euromonitor

Page 5
Growth Drivers

 Changing macroeconomic and demographic trends are fueling the growth

of the semi-/processed food industry in India. Increasing working
population, rising disposable income, rising per capita expenditure on
prepared food and rapid urbanization, have resulted in increasing
willingness to pay a premium for processed food products.
 India will emerge as the world’s fifth-largest consumer market by
Growing 2025
income and  By 2020 , ~35% of India's population will be in urban areas
consumption
 Rise in double-income households, Shift towards nuclear family,
more working women and hectic work schedules
 Availability of wide array of products ( frozen pizza/pasta, diner mixes,
gourmet products, ready-to-cook vegetables and canned fruits ) due to
growing prominence of organized retail, coupled with increasing global
connectivity, has also led to easy availability and change in the tastes and
preference of domestic consumers.

 Increasing penetration of organized retail has helped in raising awareness

Private and availability of RTE products. Retail stores, especially hypermarkets,
are coming up with new consumption categories such as RTE foods
labels
under their own private labels.
venturing
into the RTE  Hypercity has started “meals on the go” concept with its RTE meals under
its “Everyday” brand. Future Group has started sampling the market with
market its RTE meal concept under its private label brand ”Fresh For You” at
certain Big Bazaar outlets.

 Organized retail is currently at a nascent stage in India and accounts for

Growing ~8% share of the retail market and is expected to grow to ~10% retail
penetration share by 2019.
of organized  The presence of retail players such as Big Bazar, Easyday and Reliance
retail Fresh has helped in creating awareness among consumers, contributing
toward increasing the demand for RTE food products in the country.

 Cold storage/freezer space plays a vital role in the growth of the packaged
Increase in food industry. The Indian cold chain industry is expected to grow at a
CAGR of ~23.8% between 2014 and 2019.
freezer
facilities  In May 2015, the Government of India (GoI) sanctioned setting up of 30
new cold chain projects with total investment of INR7.2 billion.

Page 6
Gujarat - Competitive
Advantage
 The Government of Gujarat is following a cluster development approach and

1 strengthening emerging clusters such as food processing that will attract further
industrial investments

Huge Food Processing Industry in Gujarat

2  Gujarat has more than 30,000 operative food processing units, providing
employment to over 1 million people.
 10 cold chain projects are being implemented under MoFPI assistance.
 In 2015 Gujarat government gave approval to set up five new units of agro-food
processing sector in Sabarkantha, Kheda, Rajkot, Kutch and Vadodara district
at an investment of INR1.44 billion
 Ministry of Food Processing Industries (MoFPI) has awarded Final approval to
Gujarat Agro Mega Food Park Pvt. Ltd. (project SPV) for setting up a Mega
Food Park project in Surat district and is under implementation. MoFPI has also
accorded In-principle approval to Adani Ports and Special Economic Zone Ltd.
Mega Food Park project to be set up in Kutch

Agri-Export Zones

3  Under the scheme of Agricultural and Processed Food Export Development

Authority (APEDA), The government of Gujarat has earmarked Agriculture
Export Zones for mangoes and vegetables (Ahmedabad to Valsad) and for
value-added onions (Saurashtra).

Development of Agriculture

4  The state has witnessed above average growth rate of Gross State Domestic
Product (GSDP) from agriculture and allied activities. During the period 2005-06
to 2011-12, the national average was ~4% while that for Gujarat was 5.5%.

Government support

5 Gujarat government has aggressively pursued innovative agriculture development

by liberalizing markets, inviting private capital, reinventing agricultural extension,
improving roads and other infrastructure.

Page 7
Gujarat - Competitive
Advantage
Other advantages
Ease of doing business
 Only state which comply 100% with the environmental procedures. Gujarat fares
highly when it comes to setting up a business, allotment of land and obtaining a
construction permit.

Gujarat leads in ease of doing business in India

Overall ranking 1
Land allotment and obtaining construction permit 2
Complying with environment procedures 1
Complying with Labour regulations 2
Obtaining infrastructure related utilities 2
Carrying out inspections 2
Enforcing contracts 3
Source: World Bank

Flourishing economy
Gujarat contributes 7.2% of the Nation’s GDP and shows leadership in many areas of
manufacturing and infrastructure sectors. Gujarat’s SDP (State Domestic Product) at
current price registered a growth of 11% during the year 2014-15.

Strategic location and better infrastructure

Located on the west coast of India, Gujarat is well connected to the major cities of the
world by air and sea routes. The state has 45 ports, 12 domestic airports and 1
international airport in addition to an extensive rail and road network.

Easy availability of raw materials

Many key industrial clusters such as foundry & forgings, steel pipes and tubes, steel re-
rolled products and fabricated metal products are located in close vicinity of industrial
hubs such as Dholera Special Investment Region (SIR).

Favourable labour policy

The Gujarat government has recently passed the Labour Laws Bill (December 2015),
to give an impetus to industrialization. The key reform includes a provision for out-of-
court settlement to speed up the process labour related dispute resolutions.

Better social infrastructure

Gujarat has one of the lowest cost of living amongst the Indian states and is relatively
less congested and less polluted, offering better standards of living to the inhabitants
and providing a better environment to work.

Page 8
Project Information

Suggested project location

Gujarat Agro Infrastructure Mega Food Park
Preferred location
Pvt. Ltd.

 The Gujarat Agro Infrastructure Mega Food Park is supported and approved with Central
and State Governments
 Project is approved and Supported as a Mega Food Park by Ministry of Food
Processing Industries, Government of India
 Project is approved and Supported as a Food and Agri Industrial Park by Industries
Department, Government of Gujarat.

Food park is strategically located at Mangrol, near Surat, Gujarat –

catering both domestic and export markets

Gujarat Agro
Infrastructure
Mega Food
Park

Location Distance Road Air Rail Sea

Mumbai 320 Kms Y Y Y Y

Ahmedabad 250 Kms Y Y Y
Surat 50 Kms Y Y Y
Vadodara 130 Kms Y Y Y
Kim, Kosamba 20 Kms Y Y
Hazira port 85 Kms Y Y

Page 9
Project Information

The manufacturing process

Performed
Roll Stock
Pouches
OR

Pouch Forming

Pouch Opening

Instant Vegetable /
Pouch Filling
Processed Food

Air Removal

Closure Sealing

Inspection Point

Packaging

Retort Loading
Continuous
Retorting

Retorting

Retort Unloading
Inspection Point

Drying

Casing

Page 10
Project Information

Sourcing of raw materials

 The proposed project would require various vegetables – Gujarat is the leading producer of
Banana, Mango, Tomato, Cauliflower, Onion, Potato
 Additionally, Gujarat also has competitive advantage with respect to spices as it is the -
 Largest producer of Dill seeds, Cumin seeds, Fennel Seeds and Fenugreek seeds
 2nd largest producer of Garlic and Ginger in India
 4th largest producer of Coriander
 5th largest producer of Turmeric
 7th largest producer of Chilli

Common facilities within food park

Component Distance

Modified Atmosphere type - Multi Commodity 2000 tones (4x250 tones and 2x500
Cold Storage tones)

Sub-zero storage 1500 tones (3x500 tones)

Warehouses- Raw Material & Finished Goods 5000 tones

All Type of physical, chemical and micro

Food Testing Laboratory
biological test

Multi Fruit and Vegetable IQF Line 2 tones per hour

4 primary processing centres Sorting, Grading Facility for Vegetables

4 Reefer Vans & 4 Other Vehicles

Vehicles
(normal)

Incentives & financial assistance to industries in Gujarat Agro

Infrastructure Mega Food Park
 Zero stamp duty on land lease
 Term Loan at Concessional Rate of Interest from NABARD under food processing fund
exclusively available to units in Food Parks
 Lower import duty on Imported Machinery
 Exemption from Income Tax for 5 Years from commissioning date
 Benefit under Government of Gujarat's "Scheme Of Assistance To Manufacturing Sector"
 Short Start-up Time – Ready Availability of Non-Agriculture Converted Plots & Sheds

Page 11
Project Information

Logistics & Connectivity

Gujarat Agro Infrastructure Mega Food Park is near Surat, which is well-connected with
other districts in Gujarat as well as other cities in India

Rail Road

 Surat is connected with other districts of the  The city is connected to Delhi Mumbai
state such as Rajkot, Vadodara and Industrial Corridor (DMIC) which links
Ahmedabad by rail. Ahmedabad, Vadodara and Surat.
 Hazira port in Surat is ~16 kms away from  Proximity to NH-8 and NH-6 further
the Surat railway station. In August 2015, enhances connectivity in the city.
Container Corporation of India started  Surat also has very good connectivity with
operating a regular train service connecting other cities of the state such as Vadodara
the port with Pithampur. (154 km) and Ahmedabad (265 km).

Air Port

 Surat domestic airport is well connected to  The nearest port is Hazira which is 25 km
various parts of the country. The city is from Surat, built with a protected harbour
located ~275 kms from the international design and additional waterfront for
airport at Ahmedabad. development of non-LNG cargo handling
 In January 2015, Airports Authority of India terminals.
gave an in-principle approval for cargo
terminal at Surat airport worth INR70 million.

Utilities

Water Power

 Gujarat has a state-wide “water supply grid”  Gujarat has a state-wide “water supply grid”
spread across 1,20,769 km that aims to spread across 1,20,769 km that aims to
serve 75% of Gujarat’s population. serve 75% of Gujarat’s population.
 Gujarat Industrial Development Corporation  Gujarat Industrial Development Corporation
(GIDC) is responsible for ensuring (GIDC) is responsible for ensuring
consistent water supply in industrial areas consistent water supply in industrial areas

Page 12
Project Information

Leading retort packaging suppliers in Gujarat

 Swiss Pac Private Limited
 Location: Vadodara
 Website: http://www.pouchmakers.co.in/
 Karnav Resources
 Location: Ahmedabad
 Website: http://www.karnavresources.com/
 Purity Flexpack Limited
 Location: Tajpura, Halol
 Website: http://www.packaging-pouches.com/

Retort machinery suppliers in India

 Situated in Navi Mumbai, Maharashtra
 Website: http://www.retortsterilizers.com/index.html
 Situated in Ahmedabad, Gujarat
 Website: http://www.packagingmaterialsgroup.com/

 Situated in Ahmedabad, Gujarat

 Website: http://etosterilization.net/

 Situated in Gurgaon, Haryana

 Website: http://www.floeterindia.com/

 Head office: Pune, Gujarat regional office in Ahmedabad

 Website: http://www.floeterindia.com/

Potential collaboration opportunities

 Adani Wilmar Limited  Havmor Ice Cream
 Jammy Art, Kissan  Induben Khakhrawala & Co., Ahmedabad
 Wagh Bakri Tea House  Freshtrop Fruits Limited., Ahmedabad
 Manvar Products, Ahmedabad  Patco Foods Pvt Ltd., Surat
 Vimal Agro Products Pvt Ltd., Gujarat  Annapurna Universal Foods Pvt. Ltd., Rajkot
 Jyoti Industries, Pedhala  Gujarat General Food Chem Pvt. Ltd.,
 Zarina Exim, Borsad, Anand  Khushi Foods Ltd, Ahmedabad
 Samrat Namkeen  United Foods, Talaja

Key Consideration
Because pouch structures can be customized to meet a wide range of barrier requirements, a host
of new product applications is emerging: liquid, viscous, powdered, granulated, and particulate.
This growth will cross multiple markets, including food and beverage, cosmetics, healthcare, pet
foods, automotive, pharmaceutical, and agricultural. While pouch-filling speeds are not yet up to
par with those of many conventional container types.
Page 13
Project Financials

 Sample project cost for Ready-to-eat curried food items in retort pouches such as Palak
Paneer, Mutter Paneer, Dum Aloo etc.
 Technology for retort pouch manufacturing is available Food Packaging Technology CSIR-
CFTRI Mysore
 The proposed capacity of the unit is 150 tonnes per year – 300 days, but it can be increased
in the coming years depending upon the success of the project.

Particulars INR Million

Land and Building 12.8

Plant and Machinery 58.3
Fixed assets
(furniture & fixtures, exhaust fans, aluminium top packing tables, 3.5
plastic buckets and tubs, knives, cutters)

Food Testing Laboratory 5

Utilities 1.5
Preliminary & Pre-operative Expenses
2.1
(establishment, professional charges, security deposits)

Contingencies 4.0
Margin Money for working capital 6.2
Total project cost 93.4
Equity Capital 62.3
Term Loan 31.1
Note – the project is eligible for financial assistance from Ministry of Food Processing Industries of India as it has
set up a special fund of INR20 billions in NABARD to make affordable credit available to agro processing units.

A total manpower requirement of 35 people – 5 Supervisory staff, 30 workers

Recent activities by established players

 Mother’s Recipe, which has portfolio of pickles, ready-to-cook mix

and cooking pastes, among others, is planning to foray into the
frozen food category and will set up a dedicated unit in Gujarat.

 Merino Industries' ready-to-cook brand Vegit is looking at setting

up a new manufacturing plant in Gujarat with an investment of
INR50 crore, expected to be operational by 2017.

Page 14
Approvals & Incentives

Approvals

Gujarat Agro Industries Corporation, Ltd. (GAIC) is the nodal agency for the state of Gujarat for
implementing schemes of MOFPI, New Delhi. The entrepreneurs of Gujarat have to submit their
application to the nodal Agency. On receipt of all necessary documents as per guidelines, GAIC
shall process & forward/recommend the application to MOFPI for evaluation & consideration

Setting up and Environmental approvals Authority

License under Food Safety and Standards Act Designated Officer, Food Safety and Standards
2006 for facility at food park in Surat Authority of India, Western Region, Mumbai
 Consolidated consent and authorization Environmental Engineer, Gujarat Pollution
under Water (Prevention and Control of Control Board, Surat, Gujarat
Pollution) Act, 1974 and rules thereunder
 Air (Prevention and Control of Pollution) Act
1981 and rules thereunder
 Hazardous Wastes (Management and
Handling) Rules, 1989

Tax and other approvals Authority

Importer Exporter Code The Joint Director General of Foreign
Trade, Surat
Certificate of registration with the Central Excise Superintendent, Central Excise, Customs and
Department for Service Tax Registration as per Service Tax, STU-I, Div.-I, Surat
Finance Act, 1994 r/w Service Tax Rules, 1994.
Central excise registration certificate for the unit Assistant Commissioner of Central Excise,
Central Excise and Customs Dn-I, Surat
Certificate of registration under Central Sales Department of Commercial Tax, Surat, Gujarat
Tax Act, 1956 for the state of Gujarat.
Certificate of registration under Gujarat Value Commercial Tax Department, Government of
Added Tax Act, 2003 for the state of Gujarat. Gujarat

Labor related approvals Authority

Certificate of registration under Employees‘ Employees' Provident Fund Organisation
Provident Funds and Miscellaneous Provisions Regional Office, Surat
Act, 1952 and schemes framed thereunder

Intellectual property related approvals Authority

Certificate of registration of trademark “product The Registry of Trademarks, Ahmedabad
name”

Page 15
Approvals / Incentives

Incentives by Government of Gujarat

Gujarat government announced its Agri Business Policy – 2016 with emphasis on promoting
food processing industry by developing the entire value chain of exporting locally grown farm
produces.
 Capital investment subsidy at 25% of eligible project cost subject to maximum INR50 million for
cold chain, food irradiation processing plants and packaging houses
 Back ended interest subsidy at 7.5% on term loan with maximum amount of INR40 million for a
period of 5 years for setting up infrastructure project in Agro & Food Processing sector
(including packaging houses)

Major components covered in comprehensive Agro Business Policy 2016 - 2021

 Capital Subsidy on investment to agro and food processing industries
 Assistance of Back Ended Interest Subsidy on the Term Loan
 Freight Subsidy will be available to Micro, Small and Medium Enterprises (MSME)
 Assistance in Sample Testing
 Assistance for ‘Quality Certification Mark’
 Financial Assistance for Skill Enhancement
 Reimbursement of VAT and Sales Tax
 Encouragement in Electricity Rate and Duty
 Refund on Registration Fee and Stamp Duty
 Assistance for Research and Development
 Assistance for Patent Registration

Page 16
Approvals & Incentives

Incentives by Government of India

Food processing sector in India has received ~US$6.70 billion worth of Foreign Direct Investment
(FDI) during the period April 2000-December 2015. The Confederation of Indian Industry (CII)
estimates that the food processing sectors have the potential to attract as much as US$33 billion
of investments over the next 10 years and also generate employment of nine million person-days.

Some of the major initiatives taken by the Government of India (GoI) to improve the food
processing sector in India are as follows:
 Union Budget 2016-17 has proposed 100% FDI through FIPB (Foreign Investment
Promotion Board) route in marketing of food products produced and manufactured in India.
 The Food Safety and Standards Authority of India (FSSAI) has issued new rules for
importing products, to address concerns over the entry of sub-standard items and simplify
the process by setting shelf-life norms and relaxing labelling guidelines.
 The Ministry of Food Processing Industries announced a scheme for Human Resource
Development (HRD) in the food processing sector. The HRD scheme is being implemented
through State Governments under the National Mission on Food Processing. The scheme
has the following four components:
 Creation of infrastructure facilities for degree/diploma courses in food processing
sector
 Entrepreneurship Development Programme (EDP)
 Food Processing Training Centres (FPTC)
 Training at recognised institutions at State/National level

 NABARD Loan for Food Processing Industry: In the 2015 Budget, the Finance Minister had
announced the setting up of an INR2000 crore fund in NABARD for providing loans to
entrepreneurs setting up food processing businesses in designated food parks.
 Ministry of Food Processing Industries has launched “Mega Food Park Scheme” to boost
the Indian food processing sector and facilitate creation of modern infrastructure for food
processing such as processing center-cum-cold chain in identified clusters, processing of
intermediate products, centralized infrastructure to take care of processing activities. Going
forward, investments, including FDI, would rise with strengthening demand and supply
fundamentals in India.

Page 17
 Agriculture and Co-operation Department
www.agri.gujarat.gov.in/index.htm

Gujarat Industrial Development Corporation

www.gidc.gov.in/

Industries Commissionerate
www.ic.gujarat.gov.in

This project profile is based on preliminary study to facilitate prospective entrepreneurs to assess a prima facie scope.
It is, however, advisable to get a detailed feasibility study prepared before taking a final investment decision.

Gujarat Agro Industries Corporation Limited

Gujarat State Civil Supplies Corporation Ltd Building
2nd Floor , "B” Wing , Sector 10A,
Gandhinagar – 382010, Gujarat, India
Phone / Fax : 079-23240208
Email: [email protected]
https://gaic.gujarat.gov.in/