A

Periodic Project Review I (PPR – I)

On

‘Agriculture and Processed Food Industry of South Africa’

Submitted to

750

S. R. Luthra Institute of Management

Under the Guidance of

Ms. Swapna Nair

Assistant Professor

Prepared by: Students of MBA (Semester - III)

Group Identify No. GPRN2017SOUT75000846

Month & Year: September 2017

Prepared By:

Student Registration No Student Enrollment No Student Name

SRN201775004539 167500592013 Brahmbhatt Urvi
SRN201775004546 167500592017 Chauhan Shivanshu
SRN201775004547 167500592018 Chintankumar Patel
SRN201775004560 167500592031 Goyani Prince
SRN201775004589 167500592054 Modi Samirkumar
SRN201775004595 167500592061 Diyora Nirav
 CGBS-PROJECT REVIEW SYSTEM (PRS) for GCSR – Semester III
PERIODIC PROJECT REVIEW (PPR - I)

PPR - 1:

Sr Particulars Worked by (Student

no. Registration No)
1. About selected Country
Overview – Geographic location, languages, currency
SRN201775004560
& exchange rate, religions, flag, national anthem,
ruling party etc.’
2. Latest news/ developments in the country SRN201775004560
3. Overview of Industries, Trade and Commerce in the
Country of study SRN201775004547
List of Industries
4. Contribution of industries in national GDP SRN201775004547
5. Export-Import statistics SRN201775004539
6. Major players of each industry with their market
SRN201775004539
share
7. Details of selected industry w.r.t. Gujarat: Brief
about sub-segments of the industry/ sector,
Contribution of selected industry in national GDP,
Major players of selected industry and its sub-
SRN201775004589
segments with their market share, Local taxes and
duties applicable in selected industry/sector, any
special benefits given by state government to the
industry
8. About selected Industry / Sector of country of
study SRN201775004595
Overview of selected industry
9. Justification for selecting the Industry / Sector in
terms of bilateral trade opportunities with
India/Gujarat (Literature review from published
reports, Ministry of External affairs, National / SRN201775004546
International repute organization or any other
authentic sources for selecting industry/ product/
sector, List of Web sources/ References )
OVERVIEW OF SOUTH AFRICA

South Africa, officially the Republic of South Africa (RSA), is the southernmost
country in Africa. It is bounded on the south by 2,798 kilometers (1,739 mi) of
coastline of Southern Africa stretching along the South Atlantic and Indian
Oceans; on the north by the neighboring countries of Namibia, Botswana, and
Zimbabwe; and on the east and northeast by Mozambique and Swaziland;
and surrounds the kingdom of Lesotho.

South Africa is the 25th-largest country in the world by land area, and with
close to 56 million people, is the world's 24th-most populous nation. It is the
southernmost country on the mainland of the Old World or the Eastern
Hemisphere. About 80 percent of South Africans are of Sub-Saharan African
ancestry, divided among a variety of ethnic groups speaking different Bantu
languages, nine of which have official status. The remaining population
consists of Africa's largest communities of European (white), Asian (Indian),
and multiracial (coloured) ancestry.
 Fanagalo, Khoe, Lobedu, Nama, Northern Ndebele,
Languages
Phuthi, and South African
Currency & South African rand (ZAR)
exchange rate 1 South African Rand equals 4.93 Indian Rupee
Christian churches, Islam, Hinduism, African Traditional
Religions
Religion, Judaism

 Flag

The flag of South Africa was adopted on 27 April 1994, at the beginning of
South Africa's 1994 general election, to replace the flag that had been used
since 1928. The new national flag, designed by the then State Herald of South
Africa Frederick Brownell, was chosen to represent the country's new
democracy after the end of apartheid.

The flag has horizontal bands of red (on the top) and blue (on the bottom), of
equal width, separated by a central green band which splits into a horizontal
"Y" shape, the arms of which end at the corners of the hoist side (and follow
the flag's diagonals). The "Y" embraces a black isosceles triangle from which
the arms are separated by narrow yellow bands; the red and blue bands are
separated from the green band and its arms by narrow white stripes. The
stripes at the fly end are in the 5:1:3:1:5 ratio.
 National anthem

Since 1997, the South African national anthem has been a hybrid song
combining new English lyrics with extracts of the hymn 'NkosiSikelel' iAfrika'
(God Bless Africa) and 'Die Stem van Suid-Afrika' (The Call of South Africa).

 Ruling party

Party Seats
African National Congress 249
Democratic Alliance 89
Economic Freedom Fighters 25
Inkatha Freedom Party 10
National Freedom Party 6
United Democratic Movement 4
Freedom Front Plus 4
Congress of the People 3
African Christian Democratic Party 3
African Independent Congress 3
Agang SA 2
Pan Africanist Congress 1
African People's Convention 1

LATEST NEWS/ DEVELOPMENTS IN SOUTH AFRICA

 Business confidence in South Africa rose to its highest level in six months
on Tuesday, supported by stronger new vehicle sales and the first interest
rate cut in five years. Data released by the SA Chamber of Commerce and
Industry (Sacci) showed that the Business Confidence Index (BCI) in July
returned to levels last seen in February.
 The agribusiness confidence index declined by two index points during the
review period to 54. The sub index covering confidence regarding net
operating income was down five index points to 63, partly reflecting lower
profitability in agribusinesses operating in the horticulture and wine
industries.

 South African farmers will harvest 16.4-million tonnes of maize in 2017,

marking the largest crop on record, the crop estimates committee (CEC)
says. In its seventh production forecast for 2017, the CEC said the bumper
harvest represented a 2.78% growth on the figures it provided in July and
was more than double the crop that was produced in 2016.

 SA’s steel production recovered by 7.6% in July to 493,000 tons from

June’s 458,000 tons, but this still left steel output down 6.3% from a year
ago, according to the World Steel Association.

 Finance Minister Pravin Gordhan in his 2017 Budget Overview instituted

an upper tax bracket, whereby individuals who earn above R1.5m per year
will be taxed at a rate of 45%.

 Food security in Africa could be met by investing in research and

innovations as one of the pillars for smallholder farmer’s production,
according to experts. This was observed in Kenya last month (30 June)
when Canada’s International Development Research Centre (IDRC) and
Australian Centre for International Agricultural Research (ACIAR) signed a
10-year CAD$25 million (about US$20 million) investment partnership to
support greater food security and improve nutrition in Eastern and
Southern Africa.

 Moving Ethiopian coffee fields to higher ground because of climate change

holds promise to coffee’s resilience due to substantial increase in suitable
production area.

 The rand spiked to R13.10 to the US dollar, giving up all the gains of the
previous session as the dollar rebounded.
LIST OF INDUSTRIES

1. Mining

Mining in South Africa has been the main driving force behind the history
and development of Africa's most progressive and richest economy.
Diamond and gold fabrication may now be well down from their points,
though South Africa is still number 5 in gold but South Africa remains
aabundance of mineral riches.

2. Textile
In 2013, the Clothing, Textiles, Footwear and Leather (CTFL) industry
accounted for about 14% of industrial service and signified South Africa’s
second largest basis of tax revenue. The businesseasesan projected 60 to
80 000 jobs (down from 120 000 jobs) and donates around 8% to the
nation’sGDP.

3. Agriculture, Forestry and Fishing

The agricultural segment of South Africa, like all other African economies
is a key constituent of the economy. The nation is into all segments of
agriculture from subsistence farming to large-scale agricultural projects
that export produce internationally.

4. Machinery and Equipment

The development in construction sector in many of the African countries
has brought about good times for companies in manufacturing
construction machineries and equipment. The improvement in construction
activities in African countries has resulted in a considerable growth of the
demand for concrete mixers, bar-bending and cutting machines,
excavators and backhoes and earth rammers.
5. Manufacturing and Engineering Sector
The manufacturing segment in South Africa is quite well developed,
established and expanded. The manufacturing segment lays pressure on
objective of employment opportunities and encouraging economic
empowerment and also of advancing economic growth in the country.

6. Pharmaceutical and Chemical Industry

The chemical industry in South Africa has develop what it is today by the
political and regulatory environment which created a philosophy of
separateness and protectionism during the apartheid years. This inclined
to promote an inward approach and there was stress on replacement of
imports in the domestic market.

7. Gems & Jewellery

South Africa is well famous for the quality of its gold and diamond products
and has recognized itself as among the leading traders in Tanzanite and
platinum. The gold creation decreased by 7.2% from 272.1 t in 2006 to
252.6 t in 2007.The silver mine production in 2007 was at 69.8% this was
19.7% lower than the 2006 figure of 86.9%. National sales value has
decreased from R11.0 million to R10.9 million due to the higher price,
despite lower sales volume volumes.

8. Iron and Steel Industry

South Africa's big, well-developed metal industry signifies roughly a third of
all South Africa's manufacturing. It comprises basic iron ore and steel,
basic non-ferrous metals and metal products. The iron and steel basic
industries includes the manufacturing of primary iron and steel products
from smelting to semi-finished stages.

9. Power Sector
Nearly all the electricity created in South Africa is thermal which mainly
produce from coal is. ESKOM makes the maximum amount from a huge
station in Mpumalanga. The artificial fuel derived from coal supplies a
 small proportion of the country’s energy needs, as does imported oil
refined at the ports or whistled to a major inland refinery at Sasolburg.

10. Transport Sector

The road system contains some 300,000 km of roads which ranges from
rural unpaved stretches to multilane freeways. Nearly 2/5th of the roads
are paved. The towns are mostly linked by two-lane highways, multilane
freeway systems extend around the four major urban areas. Though over
long distances only two cities Johannesburg and Durban are attached by
such a highway. The international airport of Johannesburg is the main hub
of the country’s air transportation; the airports at Cape Town and Durban
have aprogressively important roles as international destinations.

11. Financial Sector

South Africa has a well-developed monetary system, centered on the
South African Reserve Bank. The nationwide currency of South Africa is
Rand which is exclusively issued by South African Reserve Bank. It
expresses and implements monetary policy and manages foreign-
exchange transactions. There are many listed banking institutions, a
number of which essence on commercial banking, as well as merchant,
savings, investment, and discount banks.

CONTRIBUTION OF INDUSTRIES IN GDP OF SOUTH AFRICA

Contribution in Contribution in
Industry
GDP 2015(%) GDP 2016(%)
Finance 23 22
Government 19 18
Trade 13 15
Manufacturing 11 13
 Transport & Communication 8 10
Mining 10 7
Professional Services 6 4
Construction 5 4
Utilities 3 4
Agriculture 2 3
http://marketrealist.com

Contrubution to GDP 2015(%)

Finance
23%
Government

10 Trade

8% 19% Manufacturing

11% Transport &

Communication
13%
Mining

Contribution To GDP 2016(%)

Agriculture

4
22% Finance
7
Government

10% Trade
18%
13% Manufacturing

15% Transport &

Communication
The Gross Domestic Product (GDP) in South Africa was worth 294.84 billion
US dollars in 2016. The GDP value of South Africa represents 0.48 percent of
the world economy. GDP in South Africa averaged 131.26 USD Billion from
1960 until 2016, reaching an all time high of 416.42 USD Billion in 2011 and a
record low of 7.58 USD Billion in 1960.

IMPORT EXPORT STATISTICS OF SOUTH AFRICA

Particular 2013 2014 2015

GDP ( Million US $) 367,594 351,305 314572
Import ( Million US $) 103,441 99,893 79591
Export ( Million US $) 95,112 90,612 69631
No. Of Products Imported 4,492 4,483 4409
No. Of Products Exported 4,491 4,490 4394
No. Of Countries from Goods
226 226 225
and Services Imported
No. Of Countries to Goods and
218 223 210
Services Exported

Source: http://wits.worldbank.org

 Top 5 Imported Products by South Africa

2015
Products
(M US $)
Petroleum oils and oil obtained from Bituminous 8474.77
Petroleum oils, etc 4262.98
Transmission Apparatus for Radio Telephonic Incorporation 1836.60
Automobiles with Reciprocating Piston Engine 1143.29
Other Medicaments of Other Mixed or Unmixed Products 1126.83

Source: http://wits.worldbank.org

 Top 5 Exported Products by South Africa

2015
Products
(M US $)
Bituminous Coal not Agglomerated 4094.44
Platinum 2933.37
Petroleum oils, etc 2793.75
Automobiles with Reciprocating Piston Engine 2349.97
Ferro-Chromium Containing by Weight more than 4 2115.46

Source: http://wits.worldbank.org
 Top 5 Countries from South Africa Imported

2015 %Share of Total

Country
(Million US $) Import
China 14603 18.35%
Germany 9424 11.84%
United States 5293 6.65%
Nigeria 4579 5.75%
India 3940 4.95%

Source: http://wits.worldbank.org

 Top 5 Countries to South Africa Exported

2015 % Share of
Country
(Million US $) Total Export
China 5803 8.33%
United States 5248 7.54%
Germany 4237 6.09%
Namibia 3846 5.52%
Botswana 3792 5.45%

 Export Details of SA

Products 2012-13 2013-14 2014-15 2015-16

Animal & Vegetable Bi- $526M $343M $341M $333M

products
Animal Hides $394M $475M $484M $414M
Animal Products $1.47B $1.64B $1.68B $1.44B
Arts & Antiques $60M $64.8M $63.5M $70.9M
Chemical Products $6.47B $6.18B $6.07B $5.28B
Foodstuffs $3.18B $3.42B $3.43B $2.8B
Footwear & Headwear $70.8M $90M $89.3M $76.4M
Instruments $511M $525M $585M $521M
Machines $8.46B $8.25B $8.19B $6.59B
Metals $14B $13.8B $14.2B $10.1B
Mineral Products $23.5B $21.6B $20.2B $17.1B
Miscellaneous $563M $503M $486M $361M
Paper Goods $1.44B $1.46B $1.57B $1.37B
Plastics & Rubbers $1.89B $1.8B $1.88B $1.33B
Precious Metals $38.1B $38.5B $30.3B $30.2B
Stone & Glass $373M $383M $383M $357M
Textiles $1.3B $1.3B $1.27B $1.09B
Transportation $9.28B $9.29B $9.86B $9.49B
Vegetable Products $4.07B $4.8B $4.74B $4.39B
Weapons $27.2M $28.3M $36.6M $25.1M
Wood Products $396M $286M $459M $409M

 Import details of SA

Products 2012-13 2013-14 2014-15 2015-16

Animal & Vegetable Bi- $1.21B $917M $899M $607M

products
Animal Hides $379M $389M $364M $301M
Animal Products $1.13B $982M $971M $842M
Arts & Antiques $83.6M $35.9M $44.9M $19.3M
Chemical Products $9.57B $9.67B $9.33B $8B
Foodstuffs $2.73B $2.72B $2.39B $2.08B
Footwear & Headwear $1.12B $1.13B $1.1B $1.13B
Instruments $2.57B $2.64B $2.5B $2.17B
Machines $25.5B $26.4B $24B $20.7B
Metals $5.53B $6.09B $5.2B $4.8B
Mineral Products $26.7B $23.8B $24.4B $15.1B
Miscellaneous $1.65B $1.65B $1.56B $1.34B
Paper Goods $1.62B $1.66B $1.64B $1.32B
Plastics & Rubbers $4.14B $4.12B $4.03B $3.41B
Precious Metals $14.5B $7.87B $4.1B $3.15B
Stone & Glass $1.1B $1.09B $1.08B $1B
Textiles $3.25B $3.37B $3.42B $2.98B
Transportation $12.5B $12.8B $13.5B $9.8B
Vegetable Products $2.2B $1.99B $1.86B $1.68B
Weapons $50.8M $75.1M $71.7M $71.4M
Wood Products $383M $368M $365M $322M

MAJOR PLAYERS OF SOUTH AFRICAN INDUSTRY

Industry Major player

Tiger Brands,
Agro processing Pioneer Food Groups,
Tongaat-Hulett
Vehicle Manufacturer:
Automotive
BMW, Ford, Mercedes Benz
BASF,
Chemicals Tata chemicals south Africa(pty)ltd,
Anchor chemicals
Billiton,
Metals Hulett Aluminium,
Non-Ferrous Metal Works Sa Pty Ltd
Trojan Textiles,
Textiles Gelvenor Textiles,
Da Gama Textiles,
 Weave It
Empowered Property Solutions,
Knight Frank,
Services
Dennis Mulumba Property
Professional (Estate Agent)
Wholesalers : Makro, jumbo,
Osman's
Retailers: Shoprite Holdings Ltd,
Wholesale and Retail trade
Pick 'N pay, Enowglo Trading (Pty)
Ltd, Global Delta Co, LTD, Africa
Foundation Development
BHP Billiton,
Sasol mining,
Mining
Xstrata,
Petro sa
Kruger Park Travel,
Tourism Pembury Tours,
Compass Odyssey
DETAILS OF AGRICULTURE AND PROCESSED FOOD
INDUSTRY IN GUJARAT

The agro sector, including animal husbandry, contributed 18% to Gujarat’s

GSDP over 2015-16. Gujarat accounts for the largest share in the total
investments in the food processing sector of India.

Gujarat has diversified cropping pattern which includes the food grains and
pulses, cash crops and oil seeds. Gujarat is the largest producer of cotton,
groundnut, tobacco and onion. The three main sources of growth in Gujarat's
agriculture are from cotton production, the rapid growth of high-value foods
such as livestock, fruits and vegetables, and from wheat production. Other
major production includes bajra, groundnut, cotton, rice, maize, wheat,
mustard, sesame, pigeon pea, green gram, sugarcane, mango, banana,
sapota, lime, guava, tomato, potato, onion, cumin, garlic, isabgul and fennel.
The state has an agricultural economy; the total crop area amounts to more
than one-half of the total land area.

During 2015-16 (up to December 2015), the state held 213 agriculture
produce market committees (APMCs) & there were 213 main yards & 187
sub-market yards operational in the state.

As of March 2017, on account of higher yield per hectare than Kerala, Gujarat
has established itself as one of the major producers of coconut in India. It is
expected that the state can utilize its 1,600 km coastline, for enhancing its
produce in the forthcoming years.

Gujarat's position in Share of world

Crop
world production production (%)
Castor seeds 1 41%
Fennel 1 67%
Isabgul 2 35%
Cotton 8 3.5%
Under the plan and non-plan expenditure for the Food, Civil Supply and
Consumer Affairs department, an allocation of US$ 157.31 million has been
proposed by the state government during 2016-17.

In budget 2016-17, for increasing the storage capacity of food grains the state
government has planned to construct 124 godowns at taluka and district
levels, for which an allocation of US$ 14.81 million has been made.

Gujarat is keen to promote the agro-processing industry. It is actively

encouraging the production of derivatives based on castor seeds & psyllium
husk.

Sub-Segments of Industry

 Agriculture and Horticulture

Major Fruits Banana, Mango, Citrus and Sapota (Chiku)

Major Vegetables Onion, Potato, Brinjal, Tomato, Okra and Cucurbit
Major Spices Cumin, Fennel, Garlic, Chilly and Ginger
Major Flowers Rose, Marigold, Lilly
Major Kharif crops Cotton, Groundnut, seas mum, Castor, Paddy,
Bajara, Maize, Tur, Green Gram
Major Ravi(Summer) Wheat, Rice, Maize, Mustard, Gram, Ground nut,
Crops Bajara, Sugarcane
(Source: directorate of economics and statistics, Gujarat)

The state has high achievement in production and productivity scenario in

cotton, castor and groundnut. Cotton is an important crop of the state which
covers 27.97 lakh ha. Area under cultivation and produced 98.72 lakh bales
during 2014-15 (as per fourth advance estimate of 2014-15) which is
approximately 1/3 production of the country. State has recognition for highest
area, production and productivity of castor in India. State produced 84% of
total castor production of the country with area of 6.83 lakh ha. and 12.98 lakh
MT production. State has a 30% share in country for production of Groundnut
with 20.37 lakh MT production through area coverage of 14.02 lakh ha.
Gujarat State Horticulture Mission (GSHM), a registered society has been
formed for the implementation of “National Horticultural Mission (NHM)” in the
state.

Sources: Socio-Economic Review 2015-16, Agriculture And Co-operation Department, Government of Gujarat

 Dairy

Gujarat is the 4th largest state in terms of Milk Production in the country which
is about 8.1% of entire country. The state having 18 District Co-op. Milk
Producer Unions has a milk collection of 133.36 LLPD with over 33.37 lakhs
milk producers, affiliated to more than 17846 primary Milk Cooperative
Societies. Gujarat has 51 dairy plants which is 2nd highest in the country.
Gujrat has 8.82 million milch animals as per 19th Livestock Census Milk
contributes to 22% to the Agricultural GDP of Gujarat and is one of the
biggest sectors for supporting livelihood in the state. As per state census data,
out of about 102 lakhs total household of Gujarat, 42.6 lakhs households are
engaged in Dairy and Animal Husbandry sectors as a primary or secondary
source of their income. Though the dairy sector is active in most of the
districts, some of the districts still need to be brought in the active dairy
network. AMUL (Anand Milk Union Limited.) is largest dairy in India which is
big known in world also.

Dairy sector in Gujarat is majorly dominated by 17,846 cooperative societies,

private players have been expanding their production and leverages the
increased domestic demand.

Under Dairy Development Schemes and National Programme for Dairy

Development (NPDD), the central government released US$ 0.2 million for
the growth of dairy processing industries in Gujarat.

Major Private Players of the dairy sector are Amul, Vimal Dairy, Jain Dairy
and Flourish Purefoods

 Animal Husbandry

12 Intensive Poultry Development Projects (IPDP), 5 District Poultry

Extension Centres, 85 Poultry Service Centres and 23 Intensive Cattle
Development Projects (ICDP) are functioning in the state

During the year 2014-15, 7600 Animal Health Camps (Pashu Arogya Mela)
were held in which 4.38 Million animals were treated.

Gujarat has quality livestock like Cattle, Buffaloes, and Goats, Sheep, Horses,
Camels

Major Livestock Products 2013-14 2014-15 2015-16

Milk (In million tonnes) 11.11 11.69 12.26
Eggs (In million numbers) 1555.07 1656.84 1721.59
Wool (In million kilos) 2.58 2.58 2.28

Sources: Socio-Economic Review 2015-16; Gujarat Livelihood Promotion Corporation, Agriculture and Co-operation.
dept. Gujarat
 Fisheries

Gujarat stands first in Marine fish production. Gujarat’s 1600 km long

coastline which is broken by several bays, inlets, estuaries and marshy lands
is available for fishing activities extends from Lakhpat in Kachchh district in
north to Umargaon in Valsad district in south

Important commercial varieties of fish namely Pomfret, Jew fish, Bombay

duck, Shrimp, Lobster, Squid, Cuttle fish, Silver bar, Hilsa, Shark, Catfish,
Mullets, etc. are caught in large quantities.

Export of Fisheries has increased from USD 175.6 million in 2007-08 to USD
560.8 million in 2014-15, a CAGR of 18%; it contributes 23.35% in the
Nation‘s overall value added marine products exports.

Gujarat’s contribution in the National Marine Fish production is 20% in the

year 2014-15 and its share in the GDP of the State is around 0.84%

Gujarat has 1.64 lakh sq. km. (32% of India) long Continental shelf, 2.14 lakh
sq. km. (11% of India) long Exclusive Economic Zone, 121 (7.8% of India)
Fish Landing Centers and 21 Fish Farmers Development Agencies

Sources: Socio-Economic Review 2015-16; Commissioner of Fisheries, Government of Gujarat

 Food Processing Sector

Food processing sector of Gujarat is growing very fast and still there is good
growth potential for the sector in Gujarat. As per the Associated Chambers of
Commerce and Industry of India (ASSOCHAM) out of the total investments
worth over INR 829.40 billion attracted by food processing sector as of
December 2015, Gujarat attracted the highest share at 20 per cent. 353
Large, medium and small scale new Units with investment of INR 48, 040
million have been commenced in Food Processing Sector in the State at the
end of 2015.. The state mainly produces spices viz. Cumin, Fennel, and
Garlic. Gujarat also enjoys monopoly in seed spices. Isabgul is prominent
medicinal crop grown in the State. Sanction of three Mega Food Parks in
three strategic location of Gujarat brings huge opportunities for investors in
Gujarat.

More than 30,000 food processing units are operating in Gujarat providing
employment to over 1 million people. Gujarat has 560 cold storage and fish
processing units with capacity of 20,30,873 MT

Gujarat has a 4th highest share in India's total cold chain storage capacity and
8 projects have been approved by the Ministry in Gujarat.

Major Companies active in Gujarat

 Balaji Wafers Private Limited

Balaji Wafers began as a micro-retail enterprise in 1974, managed by the

Virani brothers at Astron Cinema, Rajkot in Gujarat. By 1982, Balaji Wafers
installed its first fully automatic plant. By 2014, Balaji Wafers captured a 70%
market share in snacks market. Today, the company employs more than 1800
personnel in their Rajkot and Valsad manufacturing facilities. Balaji has the
capacity to manufacture 100,000 kg of potato wafers, along with 500,000 kg
of savouries per day.
 McCain Foods (India)

McCain Foods is the world's largest producer of French Fries and Potato
Specialties. Since 1998, McCain has been engaged in agriculture R&D and in
development of frozen food market in India and subcontinent countries.
McCain products are used by leading fast food chains, hotels, restaurants,
catering companies and are popular for in-home consumption.

 ITC

ITC's Branded Packaged Foods business is one of the fastest growing foods
businesses in India, driven by the market standing and consumer franchise of
its popular brands - Aashirvaad, Sunfeast, Bingo!, Yippee!, Kitchens of India,
B Natural, mint-o, Candyman and GumOn. The Foods business is today
represented in multiple categories in the market - Staples, Spices, Ready-to-
Eat, Snack Foods, Bakery & Confectionery and the newl introduced Juices &
Beverages.

 Capital Foods Limited

Capital Foods one of the leading food processing companies in India based in
Mumbai. Major Processing facilities of capital foods are located in kandla and
Vapi of Gujarat. Kandla plant is largest ready meal plant of India with 100000
sq. feet area. Various brands of capital foods are Ching's Secret and Smith-&-
Jones.

 Parle Products Pvt Ltd

Parle Products Pvt Ltd has been India's largest manufacturer of biscuits and
confectionery for almost 80 years, Company include brands like Parle-G,
Krackjack, Monaco, Hide and Seek, Poppins, Melody and Mango Bite. The
company has a factory at Bhuj, Gujarat.

 Vadilal

Vadilal Industries Ltd is India’s second largest ice cream player with market
share of 25% .The Company is also one of the largest processed food players
in India with significant exports of frozen vegetables and ready to eat snacks,
curries and breads. Vadilal has range of ice creams in the country with 150
plus flavors and they are sold in a variety of more than 250 packs and forms.
The range includes cones, candies, bars, ice-lollies, small cups, big cups,
family packs, and economy packs. It offers something for all tastes,
preferences and pockets.

 Rasna

Rasna was formed in 1984, and has around 93.0% market share in the
powdered Indian soft drink concentrate market. The company has a wide
range of products in the processed-foods category such as fruit jams, energy
sports drink powder, fruit cordial, rose syrup and iced tea. Rasna has the
largest capacity in Asia to make powder concentrates, with seven facilities
spread across India. The company is based in Ahmedabad.

 Havmor ice cream

In the last six decades, Havmor has grown into the most loved ice cream
brand of Western India. It is now available across 30,000 + outlets across
Gujarat, Maharashtra, Rajasthan, Madhya Pradesh, Punjab, Goa, Delhi and
Telangana. Taste, Innovation & Quality are fundamental to Havmor, which
makes Havmor, possibly the most extensive range of over 160 ice creams
The Company has a capacity of producing 200,000 liters per day. Havmor ice
cream products include all kind of variety from candy to choc-bar, ice cream
corn with having 17 - 20% market share.

 Vimal Agro Products Private Limited

A state-of-the-art set up at Bardoli, Gujarat the company manufactures and

exports over 80 different food products ranging from Canned Vegetables,
Fruit Pulp & Slices, Pickles, Chutney, Papads and Ready to Eat Foods. With
over two decades of expertise and experience company supplies their
products to the retail sectors in United States of America, Canada, United
Kingdom, Australia, United Arab Emirates & many other countries under the
brand names VIMAL, SWAD & BIG PANTRY.
 AMUL

Amul is an Indian dairy cooperative, based at Anand in the state of Gujarat,

India. Amul is main reason behind India’s White Revolution, which made the
country the world's largest producer of milk and milk products. Amul became
the largest food brand in India and has ventured into markets overseas.
Amul's product range includes milk powders, milk, butter, ghee, cheese, dahi,
yoghurt, buttermilk, chocolate, ice cream, cream, shrikhand, paneer,
gulabjamuns, flavoured milk, Burundi and others. Amul butter. Amul ice cream
is amongst the top 10 ice cream brands of India. Amul has 85% market share
in Butter. Amul milk, Amul Paneer and Amul Dahi consumption is on the rise.
In fact Amul milk has 26% of market share in the packaged milk segment.

Contribution in National GDP

Agriculture plays a vital role in employment generation in the Indian economy,

with nearly half of the Indian population being dependent on agriculture and
allied activities for livelihood. As per the National Sample Survey Office
(NSSO), in 2011 12, the share of agriculture in employment was 48.9 per
cent.

In 2015 agriculture contributed 17.4 percent to india’s Gross Domestic

Product, as compared to 18.3 per cent in 2013-14. As against the twelfth five
year plan’s (2012-2017) target of 4 per cent growth for the agriculture and
allied sectors, the growth registered was 4.2 per cent in 2013-14, -0.2 per cent
in 2014-15, and an estimated 1.1 per cent in 2015-16.

GDP from Agriculture in India decreased to 3897.32 INR Billion in the second
quarter of 2017 from 4493.13 INR Billion in the first quarter of 2017. GDP
From Agriculture in India averaged 3977.81 INR Billion from 2011 until 2017,
reaching an all time high of 5468.54 INR Billion in the fourth quarter of 2016
and a record low of 2690.55 INR Billion in the third quarter of 2011.
GDP from Agriculture in India is expected to be 3243.71 INR Billion by the
end of this quarter, according to Trading Economics global macro models and
analysts expectations. Looking forward, GDP from Agriculture in India to
stand at 3912.36 in 12 months time. In the long-term, the India GDP from
Agriculture is projected to trend around 4130.00 INR Billion in 2020,
econometric models.

Local taxes and duties applicable in agriculture and

processed food industry

From the 1st july 2017 Goods and Services Tax (GST) is applicable in all over
the India. Before that different VAT rate is applicable on the agriculture
products in a Gujarat and other state. Now there is same GST rate applicable
all over India for particular product. Some example of different GST rates
applicable on different product are listed below
Tax Rates Products
0% Milk, Eggs, Curd, Lassi, Unpacked Food grains, Unbranded Atta,
Unpacked Paneer, Unbranded Maida, Gur, Besan, Unbranded
Natural Honey, Prasad, Fresh Vegetables, Palmyra Jaggery,
Salt
5% Sugar, Packed Paneer, Tea, Coal, Edible Oils, Raisin, Roasted
Coffee Beans, Skimmed Milk Powder, Milk Food for Babies,,
Spices, Mishti/Mithai (Indian Sweets), Coffee (except instant)
12% Butter, Ghee, Processed food, Almonds, Fruit Juice,
Preparations of Vegetables, Fruits, Nuts or other parts of Plants
including Pickle Murabba, Chutney, Jam, Jelly, Packed Coconut
Water
18% Ice-cream, Pasta ,Corn Flakes

State Government Initiatives

 Soil Health Card

Salient features:
 Well monitored report to farmers based on analysis
 Regular monitoring to get a long-term soil health record
 Guidance to improve the quality of the soil
 Crop-wise recommendations of nutrients and fertilizers required

Achievement
 First state to start Soil Health Card Programme
 4.2 Million soil samples analyzed till date
 In 2013-14, 1.14 Million soil samples are collected and of them, 1.12
Million soil health cards are distributed to farmers in 2014-15,
information of which is available online
 Krushi Mahotsav

Salient features:
 1 Month Long Intensive Extension Program since 2005
 Krushi Mela, Exhibition and Seminars/Talks
 Guidance to farmers about Agriculture related information
 Free kit distribution to small farmer

Achievement
 8 Lakh farmers attended KrishiMahotsava2015
 lakh cheque/sanction letter issued under assistance schemes in Krushi
Mahotsav 2015
 10,291 crop kits distributed

 Sardar Sarovar Project (SSP)

 Will be second largest in the world with an aggregate volume of 6.82

million cu.m.
 Expected to provide irrigation benefits in over 74 talukas of 17 districts
in the State
 Provide water for domestic and industrial uses in 9490 villages and 173
townships
 The dam covers 1.84 Mha(75% area drought prone) in Gujarat
benefitting 1 million farmers
 The dam is expected to provide drinking water to 30 Milion Population
by 2021

 Sujalam Safalam Yojana

 Providing water to dry land and dry underground areas with an

estimated investment of ~ USD 10 billion (INR 6500 Crore)
  Sujalam Safalam canal links rivers of the state, spread over a length of
332 km
 4786 villages and 58 Town of 12 district are planned to be covered

 Sauni (Saurashtra Narmada AvtaranIrrigation) Yojana

 Aims to divert one MAFt excess overflowing flood water of Narmada

allocated to Saurashtra Region
 These water will be distributed to 115 reservoirs of Eleven districts of
Saurashtra benefitting10 lakh acre land

Micro Irrigation To provide farmers professional Services on MIS coupled

Scheme (MIS) with required equipment & essential agro-inputs from the
MIS Suppliers to improve Agriculture productivity and
farmers prosperity at large
Support for Assistance for plough, tractor, power tiller, rotavator,
mechanization tarpaulin, cultivator rake, decorticator machine
in agriculture
Seed assistance Assistance in sugarcane tissue culture, wheat seeds,
integrated pest management material, fodder kits
Assistance for Assistance for use of organic fertilizers, gypsum, liquid
use of fertilizer organic fertilizer, vermicomposting unit
Support for Assistance for open and underground pipelines, electric
irrigation facility motor, submersible pump, oil engine
Assistance for Assistance for knapsack sprayer, crop protection
crop protection medicines, power operated sprayer
Assistance for Assistance for multi crop planter sowing machine, seed
planting tools drill sowing machine, land leveler, power thresher, reaper,
power weeder
Sources: Agriculture and Co-operation Department, Government of Gujarat
In view of the strategy under Comprehensive Agro Business Policy,
Government has introduced ‘Scheme for Financial Assistance with a view to
promote Food Processing Units and Food Processing infrastructure Projects’
under the Chief Minister's Mission on Food Processing.

Capital 25% of project cost subsidy for Agro and Food Processing
Investment Units, Cold Chain, Food Irradiation Processing Plants &
Assistance Pack Houses and for Creating Primary Processing
Centers/ Collection centers in Rural Areas
Assistance of 7.5% interest assistance for Agro and Food Processing
Back Ended Units and Agro and Food Processing Infrastructural
Interest Projects
Additional Back 1% additional interest subsidy for SC/ST, physically
Ended Interest challenged or women entrepreneurs and entrepreneurs
below 35 age
Assistance for Air freight Subsidy 25% to 40% and Sea-Freight Subsidy
Freight Subsidy 25% to 40% Available for MSME Units
Financial Rs. 1.00 per unit maximum for 5 years and 100%
Assistance of exemption on electricity duty for first 5 years
Electricity Bill
Scheme for Skill 50% of training cost sub to max Rs. 10,000 per person
Development and Rs. 0.5 lakhs per Food Processing Units
Quality 50% (maximum of Rs.5/- lakh) assistance of expenditure
certification incurred by institute/ entrepreneur will be granted for
mark obtaining certification mark.
OVERVIEW OF AGRICULTURE AND PROCESSED FOOD
INDUSTRY IN SOUTH AFRICA AND INDIA

Agriculture has been the primary activity of civilization throughout history, and
it remains the most important economic activity in today's world. Without
agriculture urban-industrial societies could not develop. By agriculture today
employs some 45 percent of the working population of the Earth and up to 80
percent of the population in some parts of Asia and Africa.

Agricultural development is one of the most potential sectors to end extreme

poverty, boost shared prosperity and feed a projected 9.7 billion people by
2050. Growth in the agriculture sector is two to four times more effective in
raising incomes among the poorest compared to other sectors. As per 2016
analyses found that 65% of poor working adults relied on agriculture to make
a living.

Agriculture is also determining economic growth: it accounted for one-third of

global gross-domestic product (GDP) as per in 2014. But agriculture-driven
growth and poverty reduction, as well as food security are at risk: Climate
change could cut crop yields, especially in the world’s most food-insecure
regions. Agriculture, forestry and land use change are responsible for 25% of
greenhouse gas emissions. Mitigation in the agriculture sector is part of the
solution to climate change.

The current global food system also threatens the health of people and planet:
agriculture accounts for about 70% of water use and generates unsustainable
levels of pollution and waste. Risks associated with poor diets are also the
leading cause of death worldwide. Approximately 3 billion people are either
not eating enough or eating the wrong types of food, resulting in illnesses and
a public health crisis. Hunger is a challenge for 795 million people worldwide
and in 2014, 2.1 billion people were overweight and obese, 62% of them in
developing countries. (As per World Bank Update, Apr 04, 2017
http://www.worldbank.org/en/topic/agriculture/overview)
Major products are corn (32% of industry revenue); soybeans (18%); fruits,
tree nuts, and berries (12%); and vegetables, melons, and potatoes (8%).
Other major crops include wheat, cotton, and potatoes. Of all cropland farms,
nearly 40% focus on grain, oilseed, or dry beans/peas; these farms account
for 80% of all cropland revenue as per 2017.

AGRICULTURE SECTOR IN SOUTH AFRICA

South Africa has a market-oriented agricultural economy that is highly

diversified and includes the production of all the major grains (except rice),
oilseeds, deciduous and subtropical fruits, sugar, citrus, wine and most
vegetables. Livestock production includes cattle, dairy, hogs, sheep, and a
well-developed poultry and egg industry. Value-added activities in the sector
include slaughtering, processing and preserving of meat; processing and
preserving of fruit and vegetables; dairy products; grain mill products;
crushing of oilseeds; prepared animal feeds; sugar refining and cocoa,
chocolate and sugar confectionery, amongst other food products.

The agricultural sector contributed around 12% to South Africa’s total export
earnings in FY2016 at a value of $9.2 billion. Citrus, wine, table grapes and
apples accounted for the largest exports by value. South Africa also exports
nuts, pears, corn, wool, sugar and mohair to name just a few products.

South Africa imported $7.0 billion in agricultural and food products in FY2016,
which was at the same level as in FY2015. The major products imported were
corn ($505 million), rice ($424 million), wheat ($367 million), chicken cuts and
offal ($268 million), palm oil ($265 million) and soybean meal ($197 million).
South Africa is usually a net exporter of corn, but due to a severe drought in
the 2015/16 season, which decreased production by almost 50%, imports of
more than three million tons of corn were needed to fulfill local demand.

In FY 2016, the United States exported $345 million of agricultural, fish and
forestry products to South Africa, up 39% from the previous fiscal year, due to
an increase in bulk commodity exports which reached $119 million. Major bulk
commodities exported by the United States to South Africa included, wheat,
corn and sorghum. Other major products imported by South Africa from the
United States included planting seeds, poultry meat, tree nuts, and distilled
spirits.

USDA’s Foreign Agricultural Service (FAS) in Pretoria prepares more than

thirty market intelligence reports for different agricultural commodities in the
Southern Africa region. As per FAS thare is highlight the opportunities and
regulatory processes for United States agricultural exports to South Africa.
The Exporter Guide for South Africa is a good starting point for United States
agricultural and food companies that view South Africa as a potential market,
As per Foreign Agricultural Service. (As per Foreign Agricultural Service,
South Africa https://www.export.gov/article?id=South-Africa-agricultural-
equipment)

 A major exporter of Agriculture product

South Africa is currently the world’s leading producer of avocados,

clementines and ostrich products. still, the country’s position as a major
exporter is being challenged by the availability of farming subsidies in the
European Union and the United States, which are South Africa’s major export
destinations.

The decline in global trade and fluctuating exchange rates have had a
negative impact on the sector of agriculture, according to the report, as has
the failure to implement fair trade policies around the world of Agriculture
products

 Major factor of Agriculture in South Africa

 A solid transport infrastructure: South Africa’s transport infrastructure is

modern and well-developed when compared to other developing countries
on the continent.
 Scarce water supply: South Africa is classified as a ‘water stressed’
country because of both climatic conditions and human settlement
patterns. The country’s low annual rainfall and high evaporation rates
result in only 8% of SA’s rainfall being converted to runoff, placing ongoing
pressure on the water supply.
 Related: Step-by-step business plan guide

 Electricity costs and supply: Rising electricity prices continue to have a

big impact on the economy as do ongoing supply disruptions in energy
intensive sectors. The report warns that these could result in lower than
expected growth in the future.
 Start-up considerations: Agriculture, unlike mining and manufacturing,
has relatively few barriers to entry. Rural communities are able to plant
for food and sell the surplus. The problem arises when it comes to
moving beyond subsistence farming. There is clearly a shift in
economic structure across the continent, as there should be. Mining
and extraction are unstable and contentious; agriculture is less so, and
has immense potential for job creation and poverty alleviation. If
leading scientists have changed their minds about what diets work and
don’t work, economists and policy makers have to do the same about
solutions to the persistent problems face by South Africa.”

 Common small business challenges for agriculture

still, The Small Enterprise Development Agency (Seda), titled “Analysis of the
Needs, State and Performance of Small and Medium Businesses in the
Agriculture, Manufacturing, ICT and Tourism Sectors in South Africa”, found
that there were a number of barriers to entry and challenges to operations and
growth in the agriculture sector, all of which need to be considered by anyone
wanting to start a business in this sector.

 Lack of business planning during start-up, Difficulty accessing finance

 Difficulty accessing markets or meeting industry requirements or
standards
 Lack of sector-specific expertise
  Inconsistencies in cash flow
 Lack of entrepreneurial skills and mind-set as well as business acumen
 Skills shortages, particularly with respect to technical skills and
business management skills
 Lack of innovation and creativity
 Difficulty accessing land or securing operating premises
 Red tape and cumbersome regulatory processes and procedures
 Sector-specific weaknesses

On the plus side, Seda’s study also found that there were a range of
opportunities available to expand the presence of SMEs in this sector, more
than others, where there is scope to engage in value adding processes.

The study shows that in the agriculture sector, specific market and value
chain opportunities for SMEs include:

 Agro-processing activities to produce products such as fruit juice,

essential oils, dried fruit, bio-composites, bio-fuels and medicinal
products
 Packaging, transport, distribution and logistics services for agricultural
produce
 Provision of warehousing and storage facilities and services
 Production of organic foods
 In short, these are where agricultural entrepreneurs should be focusing
their efforts in order to have the greatest chances of success.

According to FAOSTAT, South Africa is one of the world's largest producers

of: chicory roots (4th); grapefruit (4th); cereals (5th); green maize and maize
(7th); castor oil seed (9th); pears (9th); sisal (10th); fibre crops (10th). The
dairy industry consists of around 4,300 milk producers providing employment
for 60,000 farm workers and contributing to the livelihoods of around 40,000
others.
AGRICULTURE SECTOR IN INDIA

Agriculture plays a vital role in India’s economy. Over 58 per cent of the rural
households depend on agriculture as their principal means of livelihood.
Agriculture, along with fisheries and forestry, is one of the largest contributors
to the Gross Domestic Product (GDP). As per the 2nd advised estimates by
the Central Statistics Office (CSO), the share of agriculture and allied sectors
(including agriculture, livestock, forestry and fishery) is expected to be 17.3
per cent of the Gross Value Added (GVA) during 2016-17 at 2011-12 prices.

India is the largest producer, consumer and exporter of spices and spice
products. India's fruit production has in the world. grown faster than
vegetables, making it the second largest fruit producer India's horticulture
output, is estimated to be 287.3 million tonnes (MT) in 2016-17 after the first
advance estimate. It ranks third in farm and agriculture outputs. Agricultural
export constitutes 10 per cent of the country’s exports and is the fourth-largest
exported principal commodity. The agro industry in India is divided into
several sub segments such as canned, dairy, processed, frozen food to
fisheries, meat, poultry, and food grains.

The Department of Agriculture and Cooperation under the Ministry of

Agriculture is responsible for the development of the agriculture sector in
India. It manages several other bodies, such as the National Dairy
Development Board (NDDB), to develop other allied agricultural sectors also
As per sectoral report.
 Growth in Agriculture

 GDP of agriculture and allied sectors in India was recorded at US$

244.74 billion in FY16
 According to the advanced estimates of MOSPI, agriculture and allied
sector recorded a CAGR rise of 6.64 per cent during FY07-16
 Agriculture is the primary source of livelihood for about 58 per cent of
India’s population.

 Market Share of Agriculture in GDP

India's GDP is expected to grow at 7.1 per cent in FY 2016-17, led by growth
in private spending, while agriculture GDP is expected to grow above-trend at
4.1 per cent to Rs 1.11 trillion (US$ 1,640 billion).$ As per the 2nd Advance
Estimates, India's food grain production is expected to be 271.98 MT in 2016-
17. Production of pulses is estimated at 22.14 MT.

India's exports of basmati rice may rise to Rs 22,000-22,500 crore (US$ 3.42-
3.49 billion), with volume to around 4.09 MT in 2017-18, backed by a rise in
average realisations. Wheat production in India is expected to touch an all-
time high of 96.6 MT during 2016-17.
Groundnut exports from India are expected to cross 700,000 tonnes during
FY 2016-17 as compared to 537,888 tonnes during FY 2015-16, owing to the
expected 70 per cent increase in the crop size due to good monsoons. India’s
groundnut exports rose to 653,240 MT during April 2016-February 2017.@
India’s export of grapes to Europe and China are expected to increase by 10
to 20 per cent this year on back of higher production on account of good
monsoon and higher demand due to competitors such as Chile shifting focus
to US market.

And Spices exports from India grew by 9 per cent in volume and 5 per cent in
value year-on-year to 660,975 tonnes and US$ 1.87 billion respectively,
during April-December 2016.

 Agriculture in India

According to the ministry of finance, wheat and pulses recorded 52.28 per
cent and 24.86 per cent during FY07-16 which is heights land consumption
out of total area.
According to the ministry of finance, land consumption out of total area wheat
and pulses recorded 27.54 per cent and 32.39 per cent Increase during FY07-
17 compare to FY07-16.

 Investments of Govt. Of India

According to the Department of Industrial Policy and Promotion (DIPP), the

Indian agricultural services and agricultural machinery sectors have
cumulatively attracted Foreign Direct Investment (FDI) equity inflow of about
US$ 2,315.33 million from April 2000 to December 2016.

 Government Initiatives

Given the importance of the agriculture sector, the Government of India, in its
Budget 2017–18, planned several steps for the sustainable development of
agriculture-

Total allocation for rural, agricultural and allied sectors for FY 2017-18 has
been increased by 24 per cent year-on-year to Rs 1,87,223 crore (US$ 28.1
billion). A dedicated micro-irrigation fund will be set up by National Bank for
Agriculture and Rural Development (NABARD) with a corpus of Rs 5,000
crore (US$ 750 million). The government plans to set up a dairy processing
fund of Rs 8,000 crore (US$ 1.2 billion) over three years with initial corpus of
Rs 2,000 crore (US$ 300 million).

The participation of women in Mahatma Gandhi National Rural Employment

Guarantee Act (MGNREGA) has increased to 55 per cent and allocation to
the scheme has been increased to a record Rs 48,000 crore (US$ 7.2 billion)
for FY2017-18.

Short-term crop loans up to Rs 300,000 (US$ 4,500) at subsidised interest

rate of 7 per cent per annum would be provided to the farmers. An additional
incentive of 3 per cent is provided to farmers for prompt repayment of loans
within due date, making an effective interest rate for them at 4 per cent.

Some of the recent major government initiatives in the sector are as follows:

 The NITI Aayog has proposed various reforms in India's agriculture sector,
including liberal contract farming, direct purchase from farmers by private
players, direct sale by farmers to consumers, and single trader license,
among other measures, in order to double rural income in the next five
years. The Ministry of Agriculture, Government of India, has been
conducting various consultations and seeking suggestions from numerous
stakeholders in the agriculture sector, in order to devise a strategy to
double the income of farmers by 2022.
 The Maharashtra State Agriculture Marketing Board (MSAMB) has
operationalised 31 farmer-to-consumer markets in the state, and plans to
open 100 more such markets in the future, which would facilitate better
financial remunerations for the farmers by allowing them to directly sell
their produce in open markets.
 The Ministry of Labour and Employment plans to amend the Minimum
Wage Act to raise the daily minimum wage of unskilled agricultural labour
in C-class towns to Rs 350 (US$ 5.2) in the central sphere, from the
current wage of Rs 160 (US$ 2.4) per day.
 The Central Government plans to open at least one Krishi Vigyan Kendra
in all districts of the country, which will provide advanced agriculture
technical assistance to the farmers near their farms itself.
 The Government of Karnataka plans to invest around Rs 1 trillion (US$
15.1 billion) for developing irrigation projects across the state to mitigate
the impact of deficient rainfall and resulting drought on agriculture in recent
years.
 The Government of India and the Government of Israel have expressed
their commitment to further strengthen bilateral relations in the field of
agriculture and allied sectors, as well as enhance cooperation at the
government-to-government and business-to-business levels between the
two countries, in a bid to further enhance the relationship.
 According to the Agriculture Ministry, 50,000 hectares of area is available
for coconut cultivation in Bihar, the Coconut Development Board plans to
equip the farmers thus making India the world leader in production,
productivity, processing for value addition and export of coconut.

The agriculture sector in India is expected to generate better momentum in

the next few years due to increased investments in agricultural infrastructure
such as irrigation facilities, warehousing and cold storage. Factors such as
reduced transaction costs and time, improved port gate management and
better fiscal incentives would contribute to the sector’s growth. Furthermore,
the growing use of genetically modified crops will likely improve the yield for
Indian farmers. India is expected to be self-sufficient in pulses in the coming
few years due to concerted efforts of scientists to get early-maturing varieties
of pulses and the increase in minimum support price.

Exchange rate used: INR 1 = US$ 0.0155 as of April 17, 2017.

JUSTIFICATION FOR SELECTING THE INDUSTRY IN TERMS OF
BILATERAL TRADE OPPORTUNITIES WITH INDIA/GUJARAT

 Agriculture and Processed Food Industry of South Africa

South Africa has a market-oriented agricultural economy that is highly

diversified and includes the production of all the major grains (except rice),
oilseeds, deciduous and subtropical fruits, sugar, citrus, wine and most
vegetables. Livestock production includes cattle, dairy, hogs, sheep, and a
well-developed poultry and egg industry. Value-added activities in the sector
include slaughtering, processing and preserving of meat; processing and
preserving of fruit and vegetables; dairy products; grain mill products;
crushing of oilseeds; prepared animal feeds; sugar refining and cocoa,
chocolate and sugar confectionery, amongst other food products.

The agricultural sector contributed around 12% to South Africa’s total export
earnings in FY2016 at a value of $9.2 billion. Citrus, wine, table grapes and
apples accounted for the largest exports by value. South Africa also exports
nuts, pears, corn, wool, sugar and mohair to name just a few products .

South Africa imported $7.0 billion in agricultural and food products in FY2016,
which was at the same level as in FY2015. The major products imported were
corn ($505 million), rice ($424 million), wheat ($367 million), chicken cuts and
offal ($268 million), palm oil ($265 million) and soybean meal ($197 million).
South Africa is usually a net exporter of corn, but due to a severe drought in
the 2015/16 season, which decreased production by almost 50%, imports of
more than three million tons of corn were needed to fulfill local demand.

 Sub-Sector Best Prospects

 Grains
The grain industry (barley, maize, oats, sorghum and wheat) is one of the
largest agricultural industries in South Africa, contributing more than 30% to
the total gross value of agricultural production.
 Grains FY2014 FY2015 FY2016
Total Exports $556 million $330 million $290 million
Total Imports $607 million $594 million $908 million

 Wheat
South Africa is the only country in the region with significant wheat production.
However, in the past 20 years, and especially after the deregulation of the
market in 1997, there has been a decreasing trend in the area planted with
wheat despite increasing local consumption.

Wheat FY 2014 FY 2015 FY 2016

Exports $89 million $127 million $22 million
Imports $540 million $459 million $370 million

 Alcoholic Beverages
South Africa consumes more than 4.0 billion liters of alcoholic beverages per
annum and is also an important exporter of alcoholic beverages, especially
wine. However, South Africa also imports a significant amount of alcoholic
beverages, especially whiskies. Recent trends indicate that consumers are
turning to new and innovative distilled spirits, including a greater prominence
in previously disadvantaged areas.

Alcoholic
FY2014 FY 2015 FY 2016
Beverages
Total Exports $1,034 million $973 million $855 million
Total Imports $494 million $414 million $349 million
Note: All figures in US$ Million
Above Figures are from Global Trade Atlas

 Poultry
The South African poultry meat industry, with a gross value of almost R40
billion (US$3.0 billion), is the country’s largest individual agricultural industry
and is contributing almost 17% to the total gross value of agricultural
products. Broiler production makes up most of the poultry industry. However,
South Africa only produces about 1.5% of the total broiler meat in the world
and needs imports to augment local production and fulfill local demand.

 Agriculture and Processed Food Industry of India

The Indian food industry is poised for huge growth, increasing its contribution
to world food trade every year. In India, the food sector has emerged as a
high-growth and high-profit sector due to its immense potential for value
addition, particularly within the food processing industry.

Accounting for about 32 per cent of the country’s total food market, The
Government of India has been instrumental in the growth and development of
the food processing industry. The government through the Ministry of Food
Processing Industries (MoFPI) is making all efforts to encourage investments
in the business. It has approved proposals for joint ventures (JV), foreign
collaborations, industrial licenses, and 100 per cent export oriented units.

 Market Size

The Indian food and grocery market is the world’s sixth largest, with retail
contributing 70 per cent of the sales. The Indian food processing industry
accounts for 32 per cent of the country’s total food market, one of the largest
industries in India and is ranked fifth in terms of production, consumption,
export and expected growth. It contributes around 8.80 and 8.39 per cent of
Gross Value Added (GVA) in Manufacturing and Agriculture respectively, 13
per cent of India’s exports and six per cent of total industrial investment. The
Indian gourmet food market is currently valued at US$ 1.3 billion and is
growing at a Compound Annual Growth Rate (CAGR) of 20 per cent. India's
organic food market is expected to increase by three times by 2020#.
The online food ordering business in India is in its nascent stage, but
witnessing exponential growth. With online food delivery players like
FoodPanda, Zomato, TinyOwl and Swiggy building scale through
partnerships, the organised food business has a huge potential and a
promising future. The online food delivery industry grew at 150 per cent year-
on-year with an estimated Gross Merchandise Value (GMV) of US$ 300
million in 2016.

 Investments

According to the data provided by the Department of Industrial Policies and

Promotion (DIPP), the food processing sector in India has received around
US$ 7.54 billion worth of Foreign Direct Investment (FDI) during the period
April 2000-March 2017. The Confederation of Indian Industry (CII) estimates
that the food processing sectors have the potential to attract as much as US$
33 billion of investment over the next 10 years and also to generate
employment of nine million person-days.

Some of the major investments in this sector in the recent past are:

Global e-commerce giant, Amazon is planning to enter the Indian food

retailing sector by investing US$ 515 million in the next five years, as per
MrHarsimrat Kaur Badal, Minister of Food Processing Industries, Government
of India.

Parle Agro Pvt Ltd is launching Frooti Fizz, a succession of the original Mango
Frooti, which will be retailed across 1.2 million outlets in the country as it
targets increasing its annual revenue from Rs 2800 crore (US$ 0.42 billion) to
Rs 5000 crore (US$ 0.75 billion) by 2018.

US-based food company Cargill Inc, aims to double its branded consumer
business in India by 2020, by doubling its retail reach to about 800,000 outlets
and increase market share to become national leader in the sunflower oil
category which will help the company be among the top three leading brands
in India.

Mad Over Donuts (MoD), outlined plans of expanding its operations in India
by opening nine new MOD stores by March 2017.

Danone SA plans to focus on nutrition business in India, its fastest growing

market in South Asia, by launching 10 new products in 2017, and aiming to
double its revenue in India by 2020.

Uber Technologies Inc plans to launch UberEATS, its food delivery service to
India, with investments made across multiple cities and regions.

 Government Initiatives

Some of the major initiatives taken by the Government of India to improve the
food processing sector in India are as follows:

The Government of India aims to boost growth in the food processing sector
by leveraging reforms such as 100 per cent Foreign direct investment (FDI) in
marketing of food products and various incentives at central and state
government level along with a strong focus on supply chain infrastructure.

In Union Budget 2017-18, the Government of India has set up a dairy

processing infra fund worth Rs 8,000 crore (US$ 1.2 billion).

The Government of India has relaxed foreign direct investment (FDI) norms
for the sector, allowing up to 100 per cent FDI in food product e-commerce
through automatic route.

The Food Safety and Standards Authority of India (FSSAI) plans to invest
around Rs 482 crore (US$ 72.3 million) to strengthen the food testing
infrastructure in India, by upgrading 59 existing food testing laboratories and
setting up 62 new mobile testing labs across the country.
The Indian Council for Fertilizer and Nutrient Research (ICFNR) will adopt
international best practices for research in fertiliser sector, which will enable
farmers to get good quality fertilisers at affordable rates and thereby achieve
food security for the common man.

The Ministry of Food Processing Industries announced a scheme for Human

Resource Development (HRD) in the food processing sector. The HRD
scheme is being implemented through State Governments under the National
Mission on Food Processing. The scheme has the following four components:

Creation of infrastructure facilities for degree/diploma courses in food

processing sector

Entrepreneurship Development Programme (EDP)

Food Processing Training Centres (FPTC)
Training at recognised institutions at State/National level

 Brand Promotion Program Organized By Agricultural & Processed

Food Products Export Development Authority (APEDA)

APEDA in association with High Commission of India, Johannesburg, South

Africa organized “Promotion Program” of Indian food products in
Johannesburg, South Africa from 1st February, 2017 to 3rd February, 2017.

Johannesburg, South Africa has been amongst the fastest growing

economies in the World in the past decades. The country features in the list of
top five fastest growing economies in the world during last five years.

The main features of Promotion Program were as follows.

1. To increase brand visibility in the market and build value relationships with
the Agri trade, media and consumers of Indian Food Products

2. Buyer Seller Meet (BSM) with potential buyers.

3. In store promotion to be organized wherein distribution and display of
range of Indian food products will take place.

The Focus sectors covered under the program are as follows.

1. Basmati Rice and Non-Basmati Rice

2. Processed Food products
3. Confectionary and Biscuits
4. Snacks foods, Ready to Eat products
5. Jams, Pickles, Chutney etc.
6. Juices & Squashes etc.
7. Miscellaneous Preparations
8. Other Processed Fruits & Vegetables
9. Other Cereal and Cereal products
10. Alcoholic and Non Alcoholic Beverages

 Road Ahead

Going forward, the adoption of food safety and quality assurance mechanisms
such as Total Quality Management (TQM) including ISO 9000, ISO 22000,
Hazard Analysis and Critical Control Points (HACCP), Good Manufacturing
Practices (GMP) and Good Hygienic Practices (GHP) by the food processing
industry offers several benefits. It would enable adherence to stringent quality
and hygiene norms and thereby protect consumer health, prepare the industry
to face global competition, enhance product acceptance by overseas buyers
and keep the industry technologically abreast of international best practices.
Exchange Rate Used For data in“Agriculture and Processed Food Industry of
India”: INR 1 = US$ 0.0155 as of April 17, 2017.

Touted as among the richest villages in India, Madhapar, Baladia, and Kera in
Kutch draw a large chunk of bank deposits from its residents settled in Africa.
Some of the top construction, sugar, and cement companies in Africa are
owned by Gujaratis, mainly from Kutch and Saurashtra regions. This testifies
to strong business links that Africa and Gujarat have enjoyed for decades.
The African continent is a major market for pharmaceuticals, textiles,
agriculture produce, ceramics, plastics, spices, agri-equipment, and auto parts
to name a few. On the other hand, Gujarat imports pulses, sesame, and
timber in large volumes from Africa. Rough diamonds mined in Africa are cut
and polished in Surat, India's diamond city.

RICH TIES
 Gujarat's pharma exports to Africa is estimated to be Rs 8,000 crore
per annum
 Wood and articles of wood worth Rs 1,186 crore imported from Africa
to India in 2016-17 (April-Feb)
 Kutch accounts for 70% of India's wood/timber imports
 Wheat, groundnut, fruits, onions, dairy products worth Rs 1,190 crore
exported to Africa via Gujarat ports in 2016-17 (April-Feb)
 Around 30,000 people from Gujarat visit popular African tourist
destinations every year
 Arvind Limited and Cadila Pharmaceuticals have manufacturing plants
in Ethiopia
 Africa provides business opportunities in sectors such as power,
infrastructure, services, agriculture, automobiles and food processing
Source: http://timesofindia.indiatimes.com/