Millennium Post

Agro-products & textiles set to be Modified

Roti Kapda aur Makan’ is the eternal cry from the patriotic politician to the poverty-stricken people at the grassroots level in India whose population is set to touch 1.5 billion in the near future. Even as the government makes desperate efforts to meet these needs, the industry struggles to make those efforts a reality through their contributions in various sectors of life and business in the country. Last year’s monsoon season witnessed an incredible rise in onion prices – bringing tears to the eyes of its consumers and the poorly-paid farmers – while middlemen and hoarders rejoiced at this moment of raking in the big bucks. This year’s monsoon too is witnessing the same scenario — although it’s the tomato prices aiming for the skies — and bringing tears of joy for the hoarders.

India and Japan joined hands last year in a bid to highlight the tomato production and its usage by tapping the 17 million tonne per annum Indian tomato market with Ruchi Soya Industries Limited of India signing a joint venture with Kagome Co Ltd and Mitsui & Co Ltd (both of Japan) to enhance tomato farming and related products in India with a manufacturing plant in Maharashtra by June 2014, according to Dinesh Shahra, Managing Director, Ruchi Soya.

‘While India is the world’s second largest producer of tomatoes and also one of the major importers of processed tomato products, lack of market awareness, poor harvest management and value chain inefficiency  has obstructed Indian trade,’ he said, adding ‘Ruchi Kagome will work closely with Indian farmers to drive a tomato revolution in the country through higher yielding seed, sharing global knowledge to educate local tomato producers and setting up local support centers for farming community in India.’

Hidenori Nishi, president, Kagome, said the joint venture is a strategic fit in their global expansion plan to also contribute to wellbeing and longevity of people in the rapidly-expanding Asian market. ‘We strongly believe that radical improvement in purchasing power of Indians, health consciousness and change in their consumption pattern are some of the potential future business drivers for us in entering India,’ he said.

It was noted that despite India being a top tomato producer, it had the lowest processing record compared to countries like China, Russia and Brazil. While India is becoming a new ‘Fast Food Destination,’ 30 per cent of its tomato crop is destroyed by mismanagement in the supply chain even as the global demand for it is 100 billion tonnes with growth expected to double this figure, they said.
Spices were considered worth their weight in gold in ancient times and draw demand even today.

The African continent views India importantly in this regard and recently, the President of Zanzibar in Africa came to India to add spice to both countries’ relations.

‘Zanzibar and India’s historical, trading and cultural relationship – within the United Republic of Tanzania — over the centuries has ensured a win-win situation for both countries in areas of business with Zanzibar exporting goods worth 6.4 billion shillings and imports of 1.4 billion shillings from India, besides over 15,000 tonnes of cloves being exported to India between 2009 and 2013,’ Dr Ali Mohammed Shein, President of Zanzibar and Chairman of the Revolutionary Council (Zanzibar) said while signing an MOU between Zanzibar and Everest Spices company in Mumbai — for setting up of a special plant in Zanzibar to process spices — as part of his official nine-day trip to India on invitation of Vice-President Hamid Ansari.

 ‘We also had discussions with Mahindra and Mahindra and have signed an MOU with the company for our +Green Revolution+ in which they will be assisting us in the tractors and agriculture modernisation process,’ he said while highlighting the relationship between the two countries in which rice, spices, cloves have been traded since the 18th century.

The fruit of the Vine is also in the limelight as those who savour their wine with their meals look for the best of wines in local earthy flavor instead of the expensive ones coming into the country. While in some foreign countries, wine is cheaper than water, India witnesses the opposite trend even though the country’s wine exports are likely to get a boost following rising demand, which is witnessing about 2.3 million cases (comprising 10 million litres bottles) worth Rs 800 crores being exported yearly, according to Jagdish Holkar, Chairman, Indian Grape Processing Board.

However, this figure represented a minute portion of the potential needed to be exploited in the national and international market where Indian wines were making a headway, especially in being paired with Indian cuisine, he said while stating that about 25 per cent to 30 per cent production goes towards domestic consumption, and barely 10 per cent of the total production is exported.

‘We plan to export to about 15 countries including France after learning from the experience of a small country like Chile, whose wines are to be found in almost all wine festivals of the world,’ he said while pointing out that the Indian wine industry is still in the nascent stage — where revenue generation is concerned -- but is being greatly appreciated across the globe. ‘There is immense potential to develop this industry and generate revenues including through wine tourism to Nasik – known as the ‘valley of wines’ in India with its 40 to 50 vineyards – to promote wine culture which is popular in other countries and a potential big industry in India today,’ he said.

Wine festivals -- which are aimed at promoting grape processing, raisins, Indian wines, wine tourism, food pairing, cooking in wine, art and accessories – are being highlighted and supported by private industry and the State Government including Maharashtra Tourism Development  Corporation, Maharashtra Industries Development Corporation, Ministry of Food Processing Industries, National Horticulture Mission, NABARD  and ITDC.

‘Most of Indian wines are famous throughout the world and such wine festivals  aim at drawing wine-lovers and aficionados, tourists from India and around the world through unique activities like +Moonlight Musical Harvest,’ Grape-stomping and crushing, freelance musical performances by tourists and visitors with their own instruments, honeymoon rides including helicopters, tents stay and so on.’

The Agro-chemical sector too is playing its part in supporting the Agricultural industry in India and one of the key players is Rashtriya Chemicals and Fertilisers Limited, which produced 29.45 lakh MT fertilizers, compared to 27.59 lakh MT in 2011-12, according to R G Rajan, Chairman and Managing Director, RCF.

Consumption of phosphatic, potassic and complex fertilizers decreased – from 25.59 tonnes in 2011-12 to 18.64 tonnes  in 2012-13, while consumption of urea increased in the same period from 28.2 million tonnes to 3016 million tonnes — due to higher prices in international markets, rupee depreciation and drought, he said adding that fertilizer consumption is getting skewed, affecting soil fertility, besides depressed demand for specialty fertilizers across the company’s markets.

The Indian Government has signed an MOU with Ghana Government for setting up fertiliser plant of 2200 MTPD capacity and urea plant of 3850 MTPD capacity at cost of Rs 6,000 crore jointly by Indian and Ghanaian companies.

The company achieved significant milestones in 2012-13 including: installing production facility for Neem-Coated UREA at Trombay, changeover of Solid Lignite-based Biola to liquid-based Biola with improved shelf life, development and dispatch of soil conditioner, commissioning of third phase of Thal Ammonia revamp scheme leading to daily production of Urea crossing 6,000 MT, and commissioning of Bio-Gas Plant funded by RCF at Shatabdi Hospital.  .

Multinationals too are making a ‘beeline’ to India to get involved in the agro-related industry. BASF SE opened its Global Research Center in Mumbai recently with an initial investment of two million Euros to accommodate more than 60 scientists in the first phase as part of its plans to conduct – by 2050 – 50% of its research activities outside of Europe with one quarter in Asia Pacific. ‘By establishing a global research presence in Mumbai, we will be able to work directly with a wide range of scientific talents in India and take steps towards our strategic goal to innovate from Asia Pacific, for Asia Pacific and the world,’ said Dr Harald Lauke, President, Biological &Effect Systems Research at BASF.

‘India is a core country for us and will be reflected in our scientific and R&D footprint which covers modern agro-chemicals.  We recently established an Agronomical Research and Development Field Station in Pune for its agricultural business as India is a core market for us with a strong scientific community and by enhancing our local R&D presence, we can realize advances which go beyond the scope of today’s solutions,’ said Dr Raman Ramachandran, Head South Asia and Chairman, BASF Companies in India.

‘With India representing a tremendously talented pool of scientists and opportunity, we are trying to incentivise Indian researchers and scientists to not leave the country but instead work with us in finding solutions for agro-chemicals, alongside others, for meeting the needs of the growing Indian population,’ he said.

 ‘Kapda’ too is in the limelight as textile and clothing manufacturers raise a desperate cry for support from the government and industry-related agencies to rally round them in providing succor to the millions affected due to various reasons.

‘Now that a stable government is in place, we hope the Prime Minister Narendra Modi’s words ‘Good Days Are Coming’ will prove true for our industry,’ said a Clothing Manufacturers Association of India (CMAI) representative while noting that uncertainty that had prevailed in the market before the Lok Sabha elections was dispersing and buyers were coming back to India, despite some issues with China and Bangladesh.

Job generation is being encouraged by the Indian government in various sectors of industry and one such is the CMAI, which is upbeat about its exports -- and also about training 35,000 persons in the 12th Five Year Plan - after being appointed as one of the Lead Implementing Agencies under Component II of the Skill Integrated Development Scheme (ISDS) of the Ministry of Textiles, Government of India. They will be trained in three years for which the Government is bearing 67 per cent costs and the remaining by CMAI.

‘While the Central Government is keen on job creation, there is a lot of pressure in skilled labour availability which is proving to be a stumbling block for the industry. To meet this need, the CMAI plans to set up 50 Apparel Training Centers across India with the first centre coming up at Baramati HI-Tech Textile Park in Baramati,’ Rahul Mehta, President, CMAI said  ‘The Apparel industry continued to grow by 10 per cent to 15 per cent despite overall slowdown and this year we are expecting a 10 per cent to 12 per cent growth. This market is growing at such a phenomenal rate that it is no longer a global players playground as there is such huge potential that provides sufficient space for also domestic brands to succeed.’

Replying to questions, he said ‘Given the present scenario, apparel exports will do well. However, we expect the optional excise duty regime to continue and are asking that the apparel industry remains in the ‘lowest merit slab,’ besides also for e-forms on labour front as lots of clauses in labour laws and impractical rules need to be reviewed.’

Textile Export Promotion Council (TEXPROCIL) too is appealing to the Central Government to intervene urgently in support of the textile industry on issues affecting it such as hoarding of cotton stocks in India, reduction of high duty imposed on Indian cotton in countries like China. ‘Indian cotton prices have been higher than international prices since February 2014 with 70 per cent of sale value of yarn being cotton cost, thus making it extremely difficult even for the highly-efficient spinning sector to export its products,’ Manikram Ramaswami, Chairman, TEXPROCIL, said in Mumbai..

‘Even though our cotton-buying prices are closer to support prices, we urge the Cotton Corporation of India – which has plenty of warehouses — to act as a price stabilisation organisation by procuring cotton stocks from farmers during cheap rates periods – thus depriving hoarders of their hoarding capacity and ability to sell futures in NY market – and offloading it at regular intervals if the domestic prices go high, besides carrying out support price operations to benefit cotton farmers when the prices go down. We are asking the government to re-orient their incentives to industry sectors that deserve it because as it is, we are skating on barely thin ice with our profits being barely 3 per cent to 5 per cent,’ he said.

Highlighting the textile industry’s serious needs, he said Government needs to come out with focused market schemes where export activity should create employment, net foreign exchange, potential for product growth in markets, and compensation being given for extra freight to far off destination markets. ‘The highest incentive should be given to the textiles sector due to it being 100 per cent value addition in creating highest potential employment,’ he said, adding that India pays 10 per cent duty while other countries pay zero duty.

‘Our export target is $13.5 billion and we are right on track to meet it.  So we are asking for the highest incentives being given to garments and lowest duty for yarn. The world needs our products as we have a world class, efficient, cotton spinning industry that will grow if cotton is available at reasonable prices. Last year, our industry grew by 35 per cent, though this year’s figure is barely 15 per cent, even though markets like Portugal, Spain, South Italy are opening up to our products and we have identified markets for higher freight incentives,’ he noted.
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