Identification of Focus Industries in Bengal Aerotropolis

Report
Investment Opportunities in
Mega Food Parks
31.10.2014
Jaipur
Presentation by -
Objectives and Envisaged Outcomes
 To provide state-of-the-art infrastructure in
food processing sector
 Conceptualized on an Industrial Park
Model and customized to the need of
food processing sector
 Focus on both backward and forward
integration – addressing the entire supply
chain
 Aimed at increasing sector size, processing
level of perishables, value addition and
country’s share in global food trade
 Creation of high quality processing
infrastructure and efficient supply chain
following a cluster-based approach
 Increased realization for farmers
 Wastage reduction of perishables
 Capacity building of producers and
processors
 Employment creation
Food processing realized as the crucial link between agriculture and industry
A Hub and Spoke Model
Farmer Groups
Raw Material Suppliers
CC
CC
CC
Self Help Groups
CC
CC
PPC
2
PPC
1
Farmers
Raw Material Suppliers
CC
CC
CC
CC
PPC
3
Mega
Food Park
CPC
Fresh produce and Value added
products for domestic market
and exports
Collection Centres (CCs):
Aggregation Points
Primary Processing
Centres (PPCs):
Pre-cooling, Grading
pulping Sorting, waxing,
packing ,
Temporary storage.
Supply to CPC or
direct market
CPC:
Core, Basic Enabling,
Non-core infrastructure,
SDF sheds,
Processing units
Key Project Components
Core Processing – at CPC and
PPCs (incl. SDF Sheds)
Enabling Basic Infrastructure –
at CPC and PPCs
• Sorting & grading, packaging,
warehouses & Specialized
storage, Pre-cooling and
Ripening chambers, IQF, Cold
chain infrastructure, Steam
generation, QC Lab etc.
• At least 25% of the eligible
project to be allocated
• Features that may be used my
more than one unit in the Park
and should be capital intensive
• SDF Sheds for MSEs – plug and
play. Max. 10% of Park area
• Plots for Units
• Roads, drainage, water supply,
electricity supply including
captive power plant, ETP & STP,
weighbridges etc
• Cost of captive power plant, not
exceeding Rs.10 Crore, shall be
considered as eligible project
cost for grant assessment
Non – Core Infrastructure
• Admin buildings, training
centres, canteen, workers
hostel, trade/display centre etc:
• Cost not exceeding 10% of the
eligible project cost would be
eligible for grant purpose
• Plots to be leased out to food processing units
• Food products fit for human and animal consumption
• Ancillary industries like packaging, bottling etc
Financial Assistance from the Government
 Large scale projects - capital intensive - with long gestation periods. Hence, decided to provide
5 financial assistance to entrepreneurs
 Financial assistance for creation of processing infrastructure, enabling basic infrastructure and
support/non-core infrastructure at CPC and PPCs
 Typical Project Cost – Rs. 110 Crore (USD 17-18 Mn) to Rs. 140 Crore (~USD 22-23 Mn) in
general areas and Rs. 75 Crore (USD 12-13 Mn) to Rs. 100 Crore (USD 17 Mn) crore in hilly/diff.
areas
 Assistance from Ministry
 50% of the eligible project cost limited to Rs 500 Mn (~USD 8.40 Mn) in general areas
 75% of eligible project cost limited to Rs 500 Mn (~USD 8.40 Mn) in difficult & hilly areas
and ITDP notified areas
 Eligible project cost is defined as total project cost minus the cost of land, pre-operative
expenses and margin money for working capital.
Project Land
Project Land

Minimum Area Requirement for CPC: 50 Acres (contiguous)

Land should have government permission for industrial use



Land may either be outright purchased or taken on lease of at least 25
years
GoI financial assistance shall not be used for procurement/purchase of
land
Sale of land to units not permissible. Land to be given only on lease
basis
Special Purpose Vehicle (SPV)

SPV
Responsibility of project execution & ownership vests with SPV Registered under the Companies Act

Promoter holding maximum equity in the SPV: lead promoter

Combined net worth of the promoters = or > Rs.50 Cr



Each member in SPV must have a net worth at least 1.5 times of its
equity holding
Mandatory for lead promoter to set up a unit with min Rs. 10 Cr
investment – Not applicable to state Govt. entities/cooperatives
Key revenue sources: user charges for common facilities and lease
rentals from leased out plots and SDF sheds
Agencies Assisting in Scheme Implementation and Role of State Government
Programme Management Agency - PMA
• Assist MoFPI in disseminating info. And &
sensitizing potential stakeholders
• Assist Ministry in inviting EoI
• Assist in selection of projects – EoI and DPR
Appraisal stages
• Assist the Ministry in release of grant to SPVs
• Assist SPVs in financial closure
• To assist Ministry in the evaluation
amendments to the projects/DPRs
• Monitor & report progress
Project Management Consultant - PMC
• PMC to be appointed by the SPV from list of
Professional Agencies empanelled by MoFPI
• PMC Fee (not entire amt) part of eligible project
cost
• PMC to assist SPV in DPR Prep., detailed design,
engineering and master planning, bid process
management, obtainment of clearances,
documentation for grant release, construction
supervision etc
Role of State Government
• State government nominee to be on SPV Board (greater participation of state Govt. envisaged)
• Providing assistance to SPVs in land procurement and obtainment of all requisite clearances
• Assist in obtainment of any other benefits as per the state’s Industrial / Food Processing Policy
The Selection Process
Submission of EoI
PMA on 100 points and TC
on 50 points – promoter
profiles, land, project plan
and business plan
Evaluation of EoI
In-Principle Approval
Submission of DPR and other requisite documents
PMA and TC as per Scheme
Guidelines
Timeline : 30 months from
release of 1st installment
Appraisal of DPR
Final Approval to Project by IMAC
Release of GoI grant
In 4 installments
IMAC: Inter-Ministerial Approval Committee, TC: Technical Committee, CoI: Certificate of
Incorporation, CLU: Change in Land Use, SSA: Share Subscription Agreement
CoI, DPR, land reg. With
CLU, SSA, PMC Agreement,
Term loan sanction. 6
months given
State-wise Distribution of Parks
State
IPA
FA
Total
State
IPA
FA
Total
Andhra Pradesh
0
2
2
Maharashtra
0
2
2
Telangana
1
0
1
Mizoram
1
0
1
Assam
0
1
1
Punjab
0
1
1
Bihar
1
1
2
Rajasthan
0
1
1
Chhattisgarh
0
2
2
Tripura
0
1
1
Gujarat
1
1
2
UK
0
2
2
HP
0
1
1
WB
0
1
1
J&K
0
1
1
Odisha
0
1
1
Jharkhand
0
1
1
Total
4
21
25
Karnataka
0
1
1
MP
0
1
1
19 states to which Parks have been allotted
Uncovered States: Ker., TN, Goa, Arunanchal Pradesh, Manipur, Meghalaya, Nagaland and Sikkim, Har. and UP
Total 42 Parks in 11th and 12th Plan. 25 Approved and 17 vacancies. 72 proposals received
IPA: In-principle Approval and FA is Final Approval
State-wise Distribution of Parks – Graphical Presentation
Projects accorded
Approval (Both Final and
In-principle)
Big Picture of Scheme Implementation: Impact on Food Processing Landscape
Total project cost of
approved projects:
Rs. 2400 crore/Rs. 24000
Mn/~USD 400 Mn
Grant component:
~Rs. 1100 crore/Rs.
11000 Mn/USD 185 Mn
Released till date:
Rs. ~370 crore/Rs. 3650
Mn/~USD 61 Mn
Private sector investment:
Rs. 1300 crore/Rs. 13000
Mn/USD 215 Mn
Funds mobilized:
Rs. ~450 crore/Rs. 4150
Mn/USD 69 Mn
Big Picture of Scheme Implementation: Land area Available
80
70
60
Leasable Area in Acres (~605 acres)
71
66
57
51
50
39
40
30
20
10
0
26
46
38
34
29
26
23
16
26
23
15
17
Investment Opportunities – Through SPV Participation and Setting up Units
 Investment through Special Purpose Vehicle (SPV)
14
 Opportunity to join project SPVs as co-promoter(s): Investment in the form of equity
participation
 42 projects taken up in three phases (~17 yet to get approval)
 As partners in SPV, the members, collectively, would be responsible for development,
implementation and ownership of common facilities
 100 percent FDI under automatic route is permitted
 Investment in Units
 Each Park shall provide developed infrastructure for setting up about 30 processing units
 Total 42 parks have been taken up. Hence, ~1250 units to be set up
 Various incentives for setting up units (both by central and state governments) – Details
later
Investment Opportunities – Projects nearing completion
15
Leasable Area for
Plots (Acres)
Core Processing Facilities Available
~35 (15 left)
Sorting and grading, Multi fruit Aseptic Pulping
Line, IQF facility, Deep freeze & Cold Storage,
warehouse, ripening chambers, testing lab and
Tetra Pack facility etc
Integrated Food Park , Kar
~51
Warehouses, silos, sorting and grading, ripening,
IQF, pre-coolers, cold storage, boiler, flour mill
etc
Indus Mega Food Park , MP
~23
Value added extrusion line for grains and soya
bean, warehouse, cold storage, QC lab
Name of Mega Food Park
Srini Food Park, AP
In addition to the above, each of these parks have SDF sheds for MSE units, reefer vans, enabling basic infrastructure like roads,
drainage, water, power, ETP and STP facilities and non-core infrastructure like admin building, canteen etc
Investment Opportunities – Projects nearing completion
16
Leasable Area for
Plots (Acres)
Core Processing Facilities Available
~26
Cold chain infra, warehouses and silos, reefer
vans, dairy processing, sorting and grading, IQF
etc
Patanjali Mega Food Park, UK
~36 (7 available)
Sorting and grading, warehouses, tetrapak, cold
storage, grain milling, IQF, state-of-the-art lab,
packaging facilities etc
Jangipur Bengal Mega Food Park,
WB
44 (~40 available)
Cold storage, warehousing, IQF, packaging etc
Name of Mega Food Park
International Mega Food Park,
Punjab
Mega Food Park coming up in Rajasthan in Rupangarh, Ajmer with ~40 acres of leasable area
In addition to the above, each of these parks have SDF sheds for MSE units, reefer vans, enabling basic infrastructure like roads,
drainage, water, power, ETP and STP facilities and non-core infrastructure like admin building, canteen etc
Brief Profile:
• Location: Village Mogili, District
Chittoor, Andhra Pradesh
• Date of Final Approval: 27.03.2009
• Project Cost: Rs. 121.10 Crore
• CPC Area: 142.80 Acres
Incentives on Offer – Andhra Pradesh
 VAT reimbursement on purchases made during the construction period for two years for Mega
18 Food Park up to Rs 1.8 crore and 75 per cent VAT reimbursement on sales - both for the park
and the units proposed to be located in the park, for five years
 Mega food parks will be reimbursed at 25 per cent cost of external infrastructure limited to
Rs two crore and will also be considered for tailor-made benefits on case to case basis
 Food processing declared as seasonal industry: relief from minimum electricity charges during
the closure (non-seasonal) period
 50% refund of stamp and documentation duty on land registration charges to food
processing industries/units
 5% interest subsidy on total working capital loan subject to a ceiling of Rs. 2 lakh per unit
 Electricity costs reimbursement @ Rs. 1/unit for 5 years for units (including cold storages)
Brief Profile:
• Location: Village Padartha, District
Haridwar, Uttarakhand
• Date of Final Approval: 27.03.2009
• Project Cost: Rs. 95.08 Crore
• CPC Area: ~71 acres
Incentives on Offer – Uttarakhand
 All new industrial units and existing industrial units (on substantial expansion) eligible for
Capital Investment Subsidy @ 15% of investment of Plant & Machinery. Ceiling of Rs. 30-50
20 lakh
 100% Income Tax exemption for first 5 years and 30% for next 5 years (with conditions like
date of commencement of operations)
 Exemption from entry tax on Plant & Machinery
 Land use conversion and development charges and regime will be rationalized
 Stamp duty concession in respect of land in specialized commodity parks
 75% of the Total Expenditure subject to a maximum of Rs. 2 Lakh incurred in obtaining
national/internationally approved quality marks such as ISO series certificate etc
Integrated Food
Park
Brief Profile:
• Location: Village Vasanthanarsapura,
District Tumkur, Karnataka
• Date of Final Approval: 19.03.2011
• Project Cost: Rs. 144.33 crore
• CPC Area: 110 acres
Incentives on Offer – Karnataka

22









Exemption from Stamp Duty
Concessional Registration Charges
Exemption from Entry Tax
Incentives for Export Oriented MSME, Large and Mega agro based industries
Exemption of APMC cess/fees for MSME, Large and Mega agro based industries
Subsidy for setting up ETPs by MSME, Large and Mega agro based industries and agri
infrastructure
Interest Free Loan on VAT for Large and Mega agro based industries
100% exemption of electricity duty/tax for the initial period of 5-3 years depending on zone
Interest subsidy at 5% on term loans for certain sized industries
Agro based industry - Anchor unit subsidy of Rs. 100 lakh shall be offered for the first two agro
based industries with minimum employment of 100 members and minimum investment of Rs.
50 crore in each of the taluk coming in specific zones.
Jangipur Bengal
Mega Food Park
Brief Profile:
•
•
•
•
Location: Jangipur, Murshidabad, WB
Date of Final Approval: 16.03.2010
Project Cost: Rs. 132.70 Crore
CPC Area: 82.11 Acres
Incentives on Offer – West Bengal
 Interest subvention for a period of 5 to7 years at the rate of 6 to25 percent, maximum of Rs.
24 175 lakh/ year
 Capital Investment subsidy from 15 – 40 percent maximum upto 50 lakh
 100% exemption on land conversion subject to maximum of 100 acres
 Exemption from Land Cost for MSME upto 75 – 100 percent
 Electricity costs reimbursement at the rate of Rs. 1.00 - Rs. 1.50/ Kwh for a period of three
years limited to Rs. 20-30 lakh for food and agri based industries
International Mega Food Park
Brief Profile:
•
•
•
•
Location: Fazilka, Punjab
Date of Final Approval: 25.05.2011
Project Cost: ~Rs. 134 Cr
CPC Area: ~55 acres
Incentives on Offer – Punjab
 Stamp Duty Exemption
 Registration of new products relating to agro industries & agriculture are provided an assistance of
26
50 percent subject to a ceiling of Rs.2 lakh per patent
 5% back ended subsidy for 5 years on the interest on term loan subject to a ceiling of Rs.20 lakh
per year per unit i.e. maximum of Rs. 100 lakh in five years
 Interest subsidy will be available to agro industrial units making fixed capital investment ranging
from Rs. 10 crores to less than Rs.25 crores and availing term loan upto Rs. 15 crores
 MSME are provided with 5 percent back ended subsidy for 5 years on the interest on term loan for
agri infrastructure project subject to a ceiling of Rs. 20 lakh per year per unit
 Interest subsidy will be available to existing small/medium agro industrial units undertaking
modernization and/or technology up-gradation for installing new equipment and availing term loan
upto Rs. 5 crores for the purpose.
Incentives on Offer – Punjab Mega Projects Scheme for Agri Projects
 100% exemption from payment of Mandi Fee, Rural Development Fee and Infrastructure Cess
27
on purchase of fruits & vegetables directly from farmers for processing by the unit for 10 years.
 75% exemption from payment of Mandi Fee, Rural Development Fee and Infrastructure Cess
on purchase of non-FCI grade food grains, barley and maize (except custom milling of paddy)
directly from farmers for processing by the unit for a period of 10 years.
 Exemption from basic stamp duty at the current applicable rate on purchase of land for the
designated purpose
 Declaration of factory premises of the unit as private Mandi yard and permission for direct
purchase of food grains/maize/ barley/ fruits/ vegetables required for processing by the unit.
 100% exemption on electricity duty on captive consumption of power generated by the unit.
 50% exemption on electricity duty on purchase of power from PSEB for 5 years from the date of
release of connection.
Greentech Mega Food
Park Pvt. Ltd.
Brief Profile:
•
•
•
•
•
•
•
Location: Rupangarh, Ajmer, Rajasthan
Date of Final Approval: 19.02.2014
Approved timeline: 19.08.2016
Project Cost: Rs. 113.56 Cr
CPC Area: ~75 acres
Leasable Area: ~35 acres
Facilities: WH, Silos, Cold Storage, Deep
Freeze etc
Incentives on Offer by State Government
RIPS 2014
• Investment subsidy of 30 percent of VAT and CST which have
become due and have been deposited by the enterprise for 7 yrs
• Employment generation subsidy up to 20 percent of VAT and CST
• Exemption from payment of 50 percent of electricity duty for 7 yrs
• Exemption from payment of 50 percent of land tax for 7 yrs
• Exemption from payment of 50 percent of mandi fee for 7 yrs
• Exemption from payment of 50 percent of stamp duty on purchase or
lease of land
• Exemption from payment of 50 percent of conversion charges in CLU
process
• 50 percent exemption on payment of entry tax on capital goods for
setting up/un-gradation of dairy units
Policy for Promotion of Agro-Processing and Agri-Business 2010
• Incentive for Market Development and Diversification
• Incentives for quality and standards
• Concessions of direct purchase and market fee
Incentives on Offer – North East States
 Central Capital Investment Subsidy @ 30% of the value of plant and machinery, without any upper
29
ceiling. The limit of automatic approval of subsidy is Rs. 1.50 crore; Grant of subsidy higher than
Rs.1.50 crore but up to a maximum of Rs. 30 crore would require approval of an Empowered
Committee; Grant of subsidy higher than Rs. 30 crore, would require approval of the Union Cabinet.
 Central Interest Subsidy Scheme provides for Interest subsidy @ 3% on working capital loan
 Central Comprehensive Insurance Scheme provides for 100% reimbursement of insurance premium
paid by an industrial unit.
 NEIIPP, 2007 also provides for fiscal benefits like 100% Excise duty exemption on finished goods
made in NER and 100% Income tax exemption for a period of ten years.
 Transport Subsidy Scheme – 50 to 90 percent of the transportation cost
Incentives on Offer – for project SPVs (Generic/in Various states)
 Ceiling waivers and stamp duty exemptions
30
 Capital subsidy up to some percentage of project cost (subject to limit) to develop MFP
 VAT reimbursement on purchases made during the construction period
 Reimbursement of some percentage of external infrastructure cost (subject to limit)
 Food processing industry declared as seasonal industry to enable the industry to get relief from
minimum electricity charges during the closure (non-seasonal) period
 Electricity costs reimbursements for food and agri based industries including cold storages
 Interest subsidy on working capital loan from the financial institutions
 Subsidy for putting up captive power generation station
 Incentives to encourage adoption of latest quality certification standards
 Reimbursement on DPR preparation charges
 Modifications in APMC Act: Provisions like contract farming and direct purchase
Incentives on Offer – for prospective Units
 VAT reimbursement on sales - for the units proposed to be located in the park for five years
31 (presently in AP) OR The Industrial units in the Mega Food Park shall be eligible for
reimbursement of 100% VAT paid for a period of 10 years Limited to 200% of fixed capital
investment (presently in Odisha)
 Capital investment subsidy of some percent of project cost subject to a limit
 Some percent per annum back ended interest subsidy on working capital loan for first 5 years
from commencement of operations of the units subject to a limit
 Electricity costs reimbursements for a certain period
 Fast-tracking approvals of projects under MoFPI’s National Mission on Food Processing being
implemented by the state government – Modernization/Setting up Scheme, Cold Chain Scheme,
Reefer vans scheme etc
Key Announcements – Budget 2014
 Rs. 2000 cr fund set up in NABARD to provide affordable credit to Agro-processing units in MFPs
32
 Reduction in excise duty from 10% to 6% for Food Processing machinery.
 An amount of Rs. 100 crore has been provided for Agri-Tech Infrastructure fund.
 It is proposed to establish a Rs. 10,000 crore fund to act as a catalyst to attract private capital by
way of providing equity, quasi equity, soft loans & other risk capital for start-up companies in
MSME Sector.
 To establish technology centre network to promote innovation, entrepreneurship and agroindustry, it was proposed to set up a fund with a corpus of Rs. 200 crore.
 Definition of MSME will be reviewed to provide for a higher capital ceiling.
 To accelerate setting up of a National Market, the Central Government will work closely with the
State Governments to re-orient their respective APMC Acts., to provide for establishment of
private market yards/ private markets. The state governments will also be encouraged to develop
Farmers’ Markets in town areas to enable the farmers to sell their produce directly.
Fiscal Incentives
 Automatic approval of FDI up to 100% equity except a few items reserved for SSI
33
 Income Tax exemption on the profit from the business of Fruits & Vegetables, Dairy, Poultry &
Meat Products: 100% for 5 years and 25% for next 5 years
 Deduction of Capital Expenditure from income tax upto 150% for Cold Chain and Warehousing
facilities
 Project imports for Food Product machineries at concessional Custom Duty
 Cold Chain and Dairy Machineries exempted from Excise Duty
Contact
Niraj Kumar Gayagi
Director, MoFPI
Email: [email protected]
Phone: 011-26491808
Ritwik Bahuguna
IL&FS Clusters
Email: [email protected]
Phone: 9971000250
Anand Jha
Grant Thornton Advisory
Email: [email protected]
Phone: 9871772926
Thank You

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