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Compendium of financing options for the food processing sector
Investment Environment & Opportunities in Food Processing
Bihar
Knowledge Partner National Event Partner
Government of India Ministry of Food Processing Industries
Table of contents
State Introduction 2
Why Bihar 2
Raw Material Base 3
Production Clusters 6
Agricultural Marketing 8
Processing Clusters 10
Infrastructure 12
State Government Initiatives 15
Snapshot of Investable Projects 19
Contact Us 22
Investment Environment & Opportunities in Food Processing: Bihar
State IntroductionModern Bihar is divided in two halves by the river Ganga, and thus has the benefit of being located entirely on the fertile Gangetic plain. It is also the third most populated state bordered by Uttar Pradesh, Jharkhand and West Bengal.
Bihar - key highlights
State capital Patna
Geographical area1 94,163 km2
Population2 (Census 2011)
10.4 Crores (104 million)
Gross state domestic product (GSDP)3
(at current price, base year 2011-12)
INR 4.13 Lakh Crores (USD 60.542 billion) in 2015-16
Per capita income4
(Measured as Per Capita NSDP at current prices for 2013-14)
USD 427.38
FDI inflows5 USD 88.873 million- FY00-FY17 (Includes Bihar and Jharkhand)
Total road length (kms)6 (National Highways + State Highways)
9,127
Rail length (route kms)7 3,639
Airports8
International: Gaya Domestic : Munger,
Muzaffarpur, Patna,Jogbani and Raxaul
Why Bihar
One of the top producers of fruits, vegetables and meat in India
Extensive road and rail network, one international & five domestic airports.
More than 55 % of total land put to agricultural use in the state
Presence of a robust infrastructure – with three Mega food parks and 12 agri-export zones
1
2
3
4
Patna Bihar
3
Investment Environment & Opportunities in Food Processing: Bihar
Raw material base (1/3)
Bihar’s topography can be easily described as a fertile alluvial plain occupying the Gangetic Valley with rich farmland and lush orchards extend throughout the state
There are four agro-climatic zones in the state as shown below:
Rice, Wheat and Maize are the major crops produced in Bihar. It produces a large variety of pulses and is the largest producer of Mesta and Jute. Bihar has a huge base of livestock and is the 10th largest producer of milk. The total vegetable production in 2015-16, comprised potato, onion, tomato, cauliflower, cabbage, brinjal, bottle gourd and radish. The seven major fruits in Bihar in 2015-16 were: mango, guava, lychee, banana, pineapple, papaya and Indian gooseberry (Amla)
Bihar’s economy is fundamentally agricultural and rural with about 25% of the state GDP being contributed by agriculture sector (including forestry and fishing). The state being located on the flood plains of a major river makes agriculture easy
Snapshot of Land Under Cultivation(Year 2013-14)
Gross Cropped Area (‘000 Ha)
7580
Net Sown Area (‘000 Ha)
5252
Agriculture is the key to the overall development of the State economy. Agriculture employs 77% of workforce in Bihar, as a percentage this is significantly higher than the national average. The soils are light, alluvium - derived soils mostly khaddar (recent alluvium) and hanger (Old alluvium)
North East Alluvial Zone: Araria, Katihar,Khagaria, Kishanganj, Madhepura, Purina, Saharsa and Supaul
South West Alluvial Zone: Rohtas, Bhojpur, Buxar, Bhabhua, Arwal, Patna, Nalanda, Nawada, Jehanabad, Aurangabad, Gaya
North West Alluvial Zone: West Champaran, East Champaran, Siwan, Saran, Sitamarhi, Sheohar, Muzaffarpur, Vaishali, Madhubani, Darbhanga, Samastipur, Gopalganj, Begusarai
South East Alluvial Zone: Sheikhpura, Munger, Jamui, Lakhisarai, Bhagalpur & Banka
4
Investment Environment & Opportunities in Food Processing: Bihar
Total production of 14.09 million tonnes of food grains
o Rice – 6.49 million tonnes
o Wheat – 4.7 million tonnes
o Coarse Cereals – 2.43 million tonnes
Total production of 18.76 million tonnes of horticulture products
o Fruits – 4.23 million tonnes
o Vegetables – 14.4 million tonnes
o Plantation –97.3 thousand tonnes
o Spices –12.54 thousand tonnes
Raw material base (2/3)
Major strength of Bihar’s food processing industry lies in the following: Seed Spices- Garlic, Turmeric, Green Chili, Ginger
Pulses- Green gram (Moong), Gram, Red gram (Tur)
Coarse cereals- Finger millet (Ragi), Barley
Oilseeds- Linseed, Sunflower, Sesamum
Commercial crop- Sugarcane
Food Grains: Key production highlights (2015-16)
Horticulture products: Key production highlights (2015-16)
5
Investment Environment & Opportunities in Food Processing: Bihar
Eggs 10.02 billion Fish 479.8 Meat 301.74
Potato 6345.51 Onion 1247.3 Brinjal 1138
Banana 1535.3 Mango 1464.93 Guava 370
Raw material base (3/3)
Rice 6489
Wheat 4753 Coarse grains 2427 Grains
Fruits ‘ (000 MT)
VEGETABLES ‘(000 MT)
LIVESTOCK & FISHERIES
‘(000 MT)
‘ (000 MT)
6
Investment Environment & Opportunities in Food Processing: Bihar
Bihar leads in production of: Lychee, with 35% of India’s produce from the state
The major production clusters9 of Bihar are given below:
Banana
Nalanda, Muzzafarpur, Vasihali, Samastipur, Patna
Brinjal
Nalanda, Vaishali
Mango
Nalanda, Muzzafarpur, Vasihali, Samastipur, Patna
Potato
Nalanda, Muzzafarpur, Vasihali , Samastipur, Patna
Rice
Buxer, Rohtash, Bhojpur
Milk
Pashchim Champaran, Vaishali
Wheat
Nalanda, Bhabhua, Gaya, Buxer, Rohtash
Tomato
Muzzafarpur, Vasihali
Lychee
Muzzafarpur, Vasihali
Onion
Nalanda, Patna
Production Clusters
7
Investment Environment & Opportunities in Food Processing: Bihar
Production Clusters
8
Investment Environment & Opportunities in Food Processing: Bihar
Agriculture marketing and warehousing
Bihar has the following marketing facilities in the state10: Food Processing Units: There are 407 food processing units in Bihar as of 2015-16, out of
which 278 (68.3 %) were operational. Over two-thirds of the agro-based industries in
Bihar are engaged in processing of cereals
Agri-Export Zones: Total of 12 Agri-Export Zones have been identified in Muzaffarpur,
Samastipur, Hajipur, Vaishali, East and West Champaran, Bhagalpur, Begulsarai, Khagaria,
Sitamarhi, Saran and Gopalganj for focus products like Litchi, Vegetables and Honey.
100 main wholesale agricultural markets in the state
355 Cold Storage Units with a capacity of 23.26 lakh1 MT
Central Warehouse Corporation(CWC) capacity 1.18 lakh1 MT, State Warehouse
Corporation(SWC) capacity 2.6 lakh1 MT, Total storage capacity in the state is 7.19 lakh1
MT
1 10 Lakh= 1 million
Agricultural markets in
Bihar
100 main market yards
12 Agri Export Zones
355 cold storage
3 Food-Parks
407 food processin
g units
9
Investment Environment & Opportunities in Food Processing: Bihar
Processing Clusters (1/2)
Spices & Condiments
Samastipur, Purnia, Motihari,
Patna
Honey & Sweeteners
Gaya, Muzzafarpur, Patna
Prepared Foods
Gaya, Begusarai, Vaishali
Fruits & Vegetables
West Champaran, Patna, Nalanda, Samastipur, Muzaffarpur,
Bakery products
Samastipur, Vaishali, West Chamaparan, Patna
Geographical Indication of Agricultural Products in Bihar15:
Milk
Vaishali, Paschim Chamaparan
Fox Nut (Makhana)
Darbhanga, Madhubani, Purnia, Katihar
Pulses
Bhagalpur, Darbhanga,
Rice
Darbhanga, Bhojpur, Purnia, Lakhisarai
Beverages
West Chamaparan, Vaishali, Patna
Jardalu mango, Katarani paddy, Magahi Paan (betel leaf)
10
Investment Environment & Opportunities in Food Processing: Bihar
Shreya Food Products Pvt. Ltd. Purnia
Anjana Food Industries Pvt. Ltd. Bhagalpur
Aryadeep Silky Rice Mill Pvt. Ltd. Bhojpur
Processing Clusters (2/2)
Chhapolia Agri & Dairy Pvt. Ltd.
Products India Pvt. Ltd.
Pashchim Champaran
Aasma Foods & Beverages Pvt. Ltd.
Vaishali
Archana Food Product Pvt. Ltd. Purnia
Ashok Oil Atta & Masala Mills Pvt. Ltd.
Samastipur
Samriddhi Agro Trading Pvt. Ltd.
Patna
Farmanze Agri Pvt. Ltd. Patna
Dairy products and Analogues
Spices
Fruits & Vegetables
Cereal processing
Cereals &
Cereals Products
11
Investment Environment & Opportunities in Food Processing: Bihar
Pg clusters Processing Clusters
12
Investment Environment & Opportunities in Food Processing: Bihar
Infrastructure
The status of key physical and agricultural infrastructure in Bihar is as follows:
Parameter Status
Inland container depots (ICD) 11
Two ICDs at Patna and Raxaul
Existing Industrial Areas/ SEZs12
12 Agri Export Zones, with focus on products like Litchi, Vegetables
and Honey, have been identified by State Government in
Muzaffarpur, Samastipur, Hajipur, Vaishali, East and West
Champaran, Bhagalpur, Begulsarai, Khagaria, Sitamarhi, Saran &
Gopalganj
A total of 40 industrial areas present in the state. 20 in Patna
District, 10 in Darbangha, eight in Muzaffarpur and 12 in Bhagalpur
district
Food Parks12
Three Mega Food Parks in the state of Bihar namely: - Mums Mega
Food Park Pvt. Ltd. (in Buxar), Pristine Mega Food Park Pvt. Ltd. (in
Khagaria) and JVL Mega Food Park Ltd (in Rohtas)
Installed power 13
(including allocated
shares in Joint &
Central Sector Utilities
as on 31 Mar 2017)
Thermal: 3205.33 MW Hydro(Renewable): 110 MW RES(MNRE): 292.22 MW
Utilities
Electricity cost 14
INR 270 per KVA per month as fixed charges and INR 5.3 per unit
variable for HT (High Tension) line upto 11KV, INR 5.1 per unit for
HT line upto 33KV and flat rate of INR 5 per unit for HT line above
33KV
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Investment Environment & Opportunities in Food Processing: Bihar
Infrastructure (2/2)
Cold Chains: The objective of the Scheme of Cold Chain, Value Addition and Preservation Infrastructure is to provide integrated cold chain and preservation infrastructure facilities, without any break, from the farm gate to the consumer. Below is the list of cold chains present in the state:
S.no Project Type of product District
1 Ganga Dairy Ltd. Dairy Begusarai
2 Mahua Cooperative Cold Storage Pvt. Ltd.
Fruits & Vegetables Vaishali
3 RK Agri Biz Pvt. Ltd. Fruits & Vegetables Muzaffarpur
S. No. Name Location Type (Multi/
single product),
ETC.
Total Area
(in hectares)
Total Land
Available (in
hectares)
1 Mums Mega Food Park Pvt. Ltd.
Buxar Multi product To be finalized To be finalized
2 Pristine Mega Food Park Pvt. Ltd.
Khagaria Multi products 2328.328 2328.3
3 JVL Mega Food Park Pvt. Ltd.
Rohtas Multi products To be finalized To be finalized
State Government proposes setting up of two food parks in fruits and vegetable clusters in the State : Muzaffarpur-Vaishali region and Bhagalpur-Katihar region. Focus is on fruits and vegetables due to relatively higher level of wastage, but may also promote other food processing units based on grains, milk products etc.16
14
Investment Environment & Opportunities in Food Processing: Bihar
Infrastructure
15
Investment Environment & Opportunities in Food Processing: Bihar
State government initiatives (1/2)
Ease of Doing Business Reforms
The state of Bihar has undertaken key initiatives to enable an investor- friendly business climate for
investors keen on setting up business in the state:
Availability of Information
The 'Udyog Samwad Portal (www.udyog.bihar.gov.in) – A one stop platform for
investors' provides information on acts, rules, policies, circulars, notices,
notifications and various requirements published by all relevant departments of the
state and also has all the relevant detailed procedures/ guidebooks covering all
applicable steps, from application submission to application approval
Institutional strengthening to catalyse industrial development
Empaneled professional project management agencies (PMAs) in the food
processing sector facilitate speedy project appraisal
Defined punitive actions on non-compliance of services are covered under Bihar
Right to Public Service Act
The Udyog Samwad Portal also facilitates grievance redressal. This platform provides
an option to directly interact with the Principal Secretary, Department of Industries
Labour related reforms
Online application for registration and licenses (including renewal) under the Factory
Act & other labour laws
Well defined inspection procedures, including online risk based differential
compliance inspection of registered units including automatic allocation of
inspectors, etc.
Application tracking facility & clear timelines mandated for issue of registration
certificates and licenses including online facility to download the registration
certificate & other licenses
16
Investment Environment & Opportunities in Food Processing: Bihar
Environment Related Reforms
Online consent management system for Consent to Establish (CTE) and Consent to
Operate (CTO) under Water & Air Act; authorization under Hazardous Waste Rules
Application tracking facility & clear timelines mandated for issue of
CTE/CTO/authorization certificates including online facility to download certificates
Industries under Green category exempted from obtaining CTO & CTE
Validity of CTO increased from 3 years to 5 years
Lowered compliance inspection requirement-Green: once in 5 years, Orange: once
in 3 years &Red: once in a year)
17
Investment Environment & Opportunities in Food Processing: Bihar
State Government Initiatives (2/2)
BIHAR STATE INDUSTRIAL POLICY 2016
State Government is committed to encourage the process of industrialization by assuring an
entrepreneur-friendly regime and an attractive package of incentives for the entrepreneurs. Food
processing has the status of “Priority Sector” under the Bihar State Industrial Policy, 2016.
The following package of incentives is made available to entrepreneurs. Directorate of Industries,
Bihar is the nodal department for facilitation of these incentives.
Type of Incentive Salient Features
Capital Subsidy Grant up to 40% of the project cost, subject to maximum of INR 10 Crores2 for SPV in case of common cluster infrastructure and up to 35% of the project cost subject to maximum INR 5 Crores2 in case of an individual investor. For expansion and capacity increase of existing units, though, the benefits of the Scheme will only be available if the expansion project leads to capacity addition of at least 50 %
Non - Fiscal State Government is committed to develop physical and environmental infrastructure, which includes drainage, water supply, sewerage, power supply including captive power plant, effluent collection, treatment & disposal, hazardous waste management facility, telecommunication lines etc.
Power Reimbursement of 50% capital investment on plant & machinery for captive power generation/Diesel generating set with no upper limit
Tax related incentives • All new units can avail tax related benefits with a maximumlimit of 100% of the approved project cost
• All new micro and small units will be given tax benefits byadditional 30% of the approved project cost.
• All units engaged in generation of solar and/ or renewableenergy for commercial purpose will be given tax benefits byadditional 30% of the approved project cost
Interest Subvention for
promoters availing terms
loans
a) State shall extend ―Interest Subvention‖ to all the eligible unitson the term loan availed by the unit from a scheduled nationalized bank or financial institution approved by RBI/SEBI
b) Rate of interest for interest subvention will be 10% or actualrate of interest on term loan, whichever is lower. For micro and small units, there shall an interest subvention of 12%
2 1 Crore= 10 Million
18
Investment Environment & Opportunities in Food Processing: Bihar
Type of Incentive Salient Features
c) The overall limit of this subvention for food processing sectorunits will be 30% of the approved project cost with The upper limit of this subvention at INR 10 crore2
d) Disbursement of the subvention amount would be ininstalments linked with the term loan repayment schedule stipulated by the concerned bank/financial institutions which extends the term loan to the unit. Interest shall not be payable on promoter‘s contribution in any form in the unit
Stamp duty & Reg. fee
exemption
100% reimbursement of stamp duty/registration fees levied on lease/ sale /transfer of industrial land/shed as also those outside the jurisdiction of Bihar Industrial Area Development Authority would be available to all the new units after the unit commences the commercial production
Electricity Duty exemption All new units are eligible for 100% reimbursement of the electricity duty on power including captive power consumed by the same unit or exported to the BSPHCL from the date of commencement of commercial production for a period of 5 years
Land Related
Concession/Exemption
100% reimbursement of ―land conversion fees/ change in land use fees being levied for conversion of agricultural land after the unit commences the commercial production
Skill Development / Human
Resource Development
State aims at creating 3 regional facilities like library, laboratory, pilot plants, etc., for running Degree / Diploma Courses and Training Programs for Food Processing. It is proposed to have a minimal user fee in the first 5 years and full financial support by the state
Technology up-gradation and
R&D related Incentives
Financial assistance to be provided for upgradation / setting up of around 9 food-testing laboratories at District levels during the vision period. Towards this, 100% grant towards cost of equipment in case of state agencies, universities, and up to 75% to private sector institutions will be provided. It is proposed to provide a 25% subsidy for investment in plant and machinery for all food processing units in the state with special focus on dairy and confectionery etc.
Investment Promotion
Assistance / Marketing
Assistance / Export
Promotion incentives
Market linkages and development to be promoted with state government budgeting INR 20 Crores2 as total grant available for the private sector.
Establishment of 100 Rural Agri-Business Centers (RABCs) / Primary Processing Centers with 25% grant subject to INR 1.25 Crores2 per center
Link of policy document http://industries.bih.nic.in/Acts/AD-01-01-09-2016.pdf
19
Investment Environment & Opportunities in Food Processing: Bihar
Snapshot of Potential Investable Projects
Proposed Project Process-able Products/ infrastructure
Value Proposition
1. Storage Unit
For Fresh
Onions
Onion A lot of produce is wasted due to lack of
proper storage units. Huge potential for
investments in this area
2. Maize Value
Added Unit
Maize The state contributes as One of the top 5
producers of Maize and a maize value
added unit will ensure proper utilisation of
the produce by better preservation
3. Setting up aBottled DrinkManufacturingPlant
Health drink Increasing demand for packed beverages by
the growing Indian population can be
served by the sufficient supply of milk and
fruits in the state
4. Establishmentof Small ScaleFruit ProcessingUnit
Pulp, squash/ juices, jam
& jellies, pickles, etc.
Availability of raw material near fruit belt
and need for controlling wastage through
processing will provide dual benefits
5. Establishment
of Baker’s Yeast
Unit
Molasses The manufacturing unit can focus on
production, processing, marketing, export
of Yeasts. With the increasing demand for
bakery products, demand for yeasts is also
increasing. Requirement of raw material
molasses (by product of sugar mills) and the
state is abundant in raw material.
6. Medical HerbsExtraction Unit
aromatic herbs and
spices
Employment generation, utilisation of raw
material
7. Establishmentof Freeze DriedFruit ProcessingUnit
Dry Fruits Freeze dried food products have some of
the highest per unit value and raw material
available in Bihar will provide the ability to
export products and explore markets
8. Malting Unit Coarse Grains India is currently malt importing and the
applications of malt are both in the brewery
20
Investment Environment & Opportunities in Food Processing: Bihar
industry as well as in instant foods and
health foods. State is abundant in raw
material and has huge potential for
profitability
9. Cattle Feed
Plant
Cattle Feed Growing number of livestock in the state is
a key driver for the demand of cattle feed in
the state, which is ever-increasing and
therefore this sector has a great scope for
growth
10. Modern
Abattoir, small
scale
Livestock Demand for red meat exceeds supply in
India, State is abundant in raw material
required and provides a good opportunity
11. Development of
Fruits and
Vegetables
Cluster
Fruits, Vegetable, Grains,
Spices, etc.
The sheer volume of vegetable and fruits
productions in Bihar means that there’s a
strong need & opportunity for developing a
dedicated mega Food park to support the
agriculture sector. The Food Park will be set
up by a Special Purpose Vehicle preferably
registered as a corporate body with at least
51% equity of the private entrepreneurs,
while the rest of the equity may be with
central and state government agencies,
banks and financial institutions etc.
21
Investment Environment & Opportunities in Food Processing: Bihar
References
1 https://data.gov.in/catalog/land-use-pattern 2 http://censusindia.gov.in/ 3 http://mospi.nic.in/sites/default/files/press_releases_statements/State_wise_SDP-28october2016.xls 4 http://pib.nic.in/newsite/PrintRelease.aspx?relid=123563 5 http://dipp.nic.in/English/Publications/FDI_Statistics/2017/FDI_FactSheet_January_March2017.pdf 6http://rcd.bih.nic.in/Network.htm 7 http://pib.nic.in/newsite/PrintRelease.aspx?relid=155019 8 https://www.aai.aero/ 9 http://mofpi.nic.in/sites/default/files/indicative_list_of_identified_agri-horti_production_clusters_fruits_vegetables_0_0.pdf 10 http://apeda.gov.in/apedawebsite/trade_promotion/AEZ_MARCH_2008.doc 11 http://agriexchange.apeda.gov.in/logistic/inland_container.aspx 12 http://pib.nic.in/newsite/PrintRelease.aspx?relid=174346 13 http://www.cea.nic.in/reports/monthly/installedcapacity/2017/installed_capacity-03.pdf 14 http://app.sbpdcl.in/Portal/TariffRegulation/16-May-2015-17-47Upload%20Tariff%20Scheduled.pdf 15 http://www.ipindia.nic.in/writereaddata/Portal/IPOJournal/1_2559_1/Journal_101.pdf 16 http://www.gov.bihar.nic.in
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TRANSFORMING THE FOOD ECONOMY 3-5 November, 2017 | Vigyan Bhawan, New Delhi, India
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Write to us at:
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