Tamil Nadu: An emerging food processing hub
Vishnu Mahajan, Additional Commissioner, MSME Department at Government of Tamil Nadu, opines that Tamil Nadu is a ripe for investments due to high production volumes, deep industrial culture, skilled manpower, favourable agro-climatic conditions & connectivity.
The agricultural sector of Tamil Nadu contributes 12% to the economy and provides livelihoods to around 40% of its population. Tamil Nadu is India’s leading producer of mangoes, bananas, turmeric, papayas, rice, maize, sugarcane, coconuts, groundnuts, cashews, beans, and grapes. It is the largest producer of tapioca and tamarind, second largest producer of poultry and eggs, third largest producer of tea and coffee, and fourth largest in marine fish production.
With total food grain production regularly exceeding 10 mn MT, the state is home to over 24,000 food processing firms classified as MSMEs as well as 1,100 medium and large units. It is ranked 2nd in terms of food processing units & contributes around 8% to India’s national food processing output.
Tamil Nadu is also among the leading exporters of marine products, rice, cereal products, dairy products, etc. The sector provides exciting business opportunities for developing infrastructure pertaining to agro-processing clusters, food parks, coastal aquaculture parks/cluster, Food Testing & Quality Control Labs and capital goods manufacturing. Tata Coffee, Britannia, Nestle, Pepsico, Lotte, Suguna foods, HUL and ITC are among the leading MNCs present in Tamil Nadu.
The state offers a favourable business habitat for Integrated Storage and Warehouses, Cold Storage Infrastructure, and packaging & barcoding of food products. Tamil Nadu has built a huge talent pool through a network of agricultural colleges and research centres. Companies can explore avenues for technology infusion in fruits, vegetables & marine products, milk products, ready-to-eat products, medicinal herbs & aromatic extraction, edible oil extrusion plants and cashew nut processing.
Currently, the level of processing of food commodities is less than 2%, and the government is working to raise it to 10%. It is setting up 6 mega food parks and 15 small food parks/agro processing clusters where units will be eligible for capital investment subsidy and other incentives as per the new Industrial Policy 2021 for large investors and MSME Policy 2021 for MSMEs.
The policy is focused on promoting innovative measures for group cooperation in adoption of pre- and post-harvest technologies, change in cropping patterns, upgrading processing standards, providing financial assistance to entrepreneurs, speedy infrastructure development and removal of legal/ statutory hurdles to growth.
State infrastructure development agencies SIPCOT and SIDCO offer developed lands and ready to occupy plug-and play facilities along with infrastructural facilities like dedicated power, water, drainage, STP/ETP, telecom, banking etc on long-term lease (99 years) to large industries and on outright sale and short-term lease (30 years) to MSMEs.
In addition to various taxation/ stamp duty/interest payment/market fee exemptions/marketing promotion incentives, necessary technical assistance is provided to food processing industries in branding, exports, packaging, and training. All statutory clearances can be applied and received online through the single window portal. M-TIPB will function as facilitating agency for single window clearance system for new investments for speedy and timely clearances.
Vishnu Mahajan is an Additional Commissioner, MSME Department at Government of Tamil Nadu. In the past, he has served as the Sub-Collector and Sub-Divisional Magistrate at Chidambaram in Cuddalore District Tamil Nadu. Views expressed are personal.
This column was originally published in Fresh – the Indusfood Chronicle 2021. Fresh is the official event magazine for Indusfood, the flagship annual F&B trade show organised by the Trade Promotion Council of India.