Food processing industry’s 2004 wish list
The food processing industry of India is eagerly hoping that the government
will lower, if not do away, with taxes. At the prevailing levels, tax
evasion has been pretty high in the unorganised sector. The minimisation
of taxes in the food channels is a dominant theme in the recommendations
to the government in the run up to the Budget, according to YC Deveshwar,
Chairman, ITC, and Chairman, CII Agriculture Council. The industry feels
that the minimisation of taxes in the food channels will encourage the
organised sector and create assets. The All India Food Processors’ Association
(AIFPA) has also urged the Centre to reduce the 16 per cent excise duty
on package material to the lowest level possible. According to Nagaraj
Rao R Jagdale, President, AIFPA, the higher component of excise duty
on packaging material has burdened the industry and inhibited growth
of the processed foods market. The Centre should enact a uniform legislation
for all laws (including food) that govern the industry as well as put
in place a uniform sales tax structure, which currently ranges from
10 per cent to 26 per cent, recommended Mr Jagdale. The Tamil Nadu Chamber
of Commerce and Industry has also requested the Union Ministry of Food
Processing to remove the excise levy imposed on concentrated milk, edible
oil and vanaspati and increase the import duty differential between
crude and refined palm oil to protect indigenous industries. The Chamber
has further pointed out that imposition of the excise duty has added
to the woes of the ailing edible oil industry. With reference to import
duty differential, the chamber has pointed out that the recent slash
of import duty on refined edible oil from 85 per cent to 70 per cent
has made domestic refining of crude oil an unviable exercise.
Redefining
Kutch: India’s edible oil refining hub
The
Kutch district of Gujarat is all set to surface as the edible oil refining
nerve centre of India over the next few months. As per the present schedule,
the desert outpost will boast an annual edible oil refining capacity
to the tune of 23.75 lakh during the next fiscal. This would mean that
almost 37 per cent of the entire country’s consumption, at 65 lakh tonnes,
would be generated from Kutch. At Rs 50,000 per tonne, this would translate
into an annual turnover of Rs 11,875 crore for the district that was
ravaged by the killer quake less than three years ago. By June 2004
as many as six new big refineries would be up and running in and around
Gandhidham in Kutch and this will see an additional refining capacity
of 6,200 tonnes per day getting created in a single district in India.
Some of the big players that are creating new refining facilities include
Cargill India with its Nature Fresh brand, Parakh Foods (Gemini), Ruchi
Industries (Ruchi), Param Industries (Mahakosh) and Gokul RefOil (Gokul).
With the new industrial policy of the Gujarat Government offering an
excise duty holiday for five days, the major players in the edible oil
refining business will have to put up their refineries by June 30, 2004
in order to climb on the duty waiver bandwagon. The annual excise duty
waiver of Rs 237.5 crore is expected to create a massive oil refining
base in the country. While the five-year duty sop will cost the Government
Rs 1,187 crore in entirety, the net gain would come by way of Rs 11,875
crore each year from the refined oil business.
Importing
milk powder costs NDDB a whopping Rs 78 crore
Mother dairy, a subsidiary of the National Dairy Development Board (NDDB),
has incurred a total cost of Rs 78 crore (on cost, insurance, freight
basis) in the import of milk powder. According to the Minister of State
for Agriculture, Mr Hukumdeo Narayan Yadav, the Board had placed orders
for import of about 9,460 tonnes of milk powder under the tariff rate
quota system to augment domestic supplies and the contracts were awarded
between end- August and mid-September last year. Most of the imported
milk powder consignments have already reached the country. According
to Mr Yadav, the actual average landed cost of imported skimmed milk
powder in Delhi was around Rs 101 per kg, inclusive of customs duty.
And the landed cost of indigenous powder procured by Mother Dairy in
Delhi during August- September was between Rs 100 and Rs 106 per kg.
The need for import of powder arose due to an acute shortage of milk
resulting from drought conditions during the last three years in various
states, poor calving of milch animals, and shortage of fodder and feed.
Rasna
emerges a winner in Most Trusted Brand survey
In a survey conducted by AC Nielson ORG-Marg, Rasna – currently commanding
a 90-per cent volume share of the soft drink concentrate segment – has
been voted as the Most Trusted Brand in the beverages category, above
majors including Pepsi, Coca Cola and Horlicks. Moreover, Rasna has
also been declared the 15th Most Trusted Brand in the country, rising
four places from the 19th place last year. In achieving these laurels,
Rasna’s main ingredients have been quality products to suit every socio-economic
segment and a widespread distribution network comprising over 11 lakh
outlets. Rasna consumption increased to 2 billion glasses per year in
2003 and its products are available in 6 million households in the country.
Trent:
planning a foray into food retail
Trent, which has already established a name in the lifestyle retail
business with its Westside stores, is planning to foray into the food
business. A retail venture owned by the Tatas, the new project would
entail an estimated investment of up to Rs 40 crore over a five-year
period. The Tata Strategic Management Group has already chalked out
a detailed plan for its proposed foray into the new business. “We have
reached the final stage and have short-listed a number of segments for
the foray”, said Himanshu Chakrawarti, General Manager (Marketing),
Trent. The stores are expected to be on the pattern of service supermarkets,
selling food and nonfood items, including wet groceries. Trent has already
established Westside departmental stores in Mumbai, Bangalore, Hyderabad,
Chennai, Pune, New Delhi and Kolkata.
Cadbury
ropes in Big B to gain back consumer confidence
To
lure the customers back and to regain that lost confidence, which was
shaken after the worm controversy, Cadbury India has signed Amitabh
Bachchan as the brand ambassador for the next 2 years. The company was
in the thick of controversy late last year during the festive season
because worms were discovered in some stocks of its Dairy Milk chocolates.
The chocolate major is now hoping that its association with Mr Bachchan
will help consumers forget the bad press the company got on account
of the discovery. Cadbury has taken corrective measures since then –
the association with the big Bachchan is another step in this direction.
Mr Bachchan, of course, has played a leading role in helping turn around
the fortunes of the then struggling television channel Star Plus by
anchoring the Indian version of ‘Who Wants to be a Millionaire’.
US-based
Del Monte may set up manufacturing unit in India
Del Monte Pacific (DMP), an affiliate of the US-based Del Monte Corporation,
is planning to set up a manufacturing facility in India to produce canned
fruits and vegetable products. The company had earlier hired Bain and
Company as consultants to form a plan for a foray into the Indian and
Russian markets, besides restructuring its troubled European business.
The food giant has approached the Foreign Investment Promotion Board
(FIPB) seeking permission to set up the plant. The proposal says DMP
will set up a processing unit to manufacture, distribute and market
processed food and beverage products in the country. The products in
the pipeline include ketchups, sauces and condiments, juices, jams and
processed fruits. The plant is likely to be located either in Andhra
Pradesh or somewhere in North India, depending on the availability of
fresh farm produce. However, the total investment Del Monte Pacific
will fork out to set up the Indian facility is not known. Also, whether
the company makes India a springboard to export to neighbouring countries
such as Pakistan and Nepal is unclear.
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