Wednesday 6 May 2015

Food processing and cold-warehousing to grow hand in hand

What is food processing : Food processing is the transformation of raw ingredients, by physical or chemical means into food, or of food into other forms. Food processing combines raw food ingredients to produce marketable food products that can be easily prepared and served by the consumer.(Source: WikiPedia).

I have been noticing this industry growing like anything , there are few facts to consider why Food processing will be going to be the major industry in India.100% FDI is permissible in food processing through automatic route except for few items)(click here)

1. India has the second largest arable land in the world.(Arable land is the  land capable of being ploughed and used to grow crops.)
2. India has the largest livestock population of the animals.
3. Strategic location for the exports.(Good connectivity to Europe, Middle East , Japan , Singapore , Thailand etc)
4. Supportive policies from Govt.(link)

Source : Apeda , Business Standard

To store these items for exports as well to share this at domestic retail marts , there is a need for the cold warehousing . To support the fundamentals of the food processing growth ITC has also acquired one of the food processing company(North East Nutrients Pvt Ltd.) recently , which can be seen here.(link)

As per the news reports this food processing sector is growing at 8.4%.(link). Punjab is major contributor when it comes to food processing industry to support this growth there is an announcement to open up 5 food processing plants in Punjab(link)

There are various companies which are coming for the IPO , recent example If we want to take is the Snowman Logistics (Cold warehousing company) , few are planning for the IPO like Prabhat dairy .(click here)

Image Source : Business Standard , WikiPedia

Note : I do not recommend any stocks to Buy or Sell .This blog is only to notify the recent happenings in the industry of which author is aware.

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