Indian Food Processing Industry 2013

The food processing industry in India is getting a shot in the arm with increased focus from the government and policy makers, higher involvement of scientists to help increase food processing productivity, and establishment of mega food parks across the country.

Ministry of Food Processing Industries (MoFPI) outlines the Food Processing Industry includes items pertaining to two processes:

1. Manufactured Processes: Any raw product of agriculture, animal husbandry or fisheries transformed through a process (involving employees, power, machines or money) in such a way that its original physical properties undergo a change and the transformed product is edible and has commercial value

2. Other Value-Added Processes: Significant value addition such as increased shelf life, shelled and ready for consumption etc also comes under food processing, even if it does not undergo manufacturing processes

The Food processing industry in India grew at 8.5% CAGR FY06-FY10 and was worth Rs.66,078 Cr in FY10. The organized segment formed 66% of the market and grew at 13.2% compared to the unorganized segment which grew at 1.5%. The government is actively promoting the concept of Food Parks (already 50 food parks approved with a total subsidy of USD 23 million) and Mega Food Parks (expected to setup 30 mega food parks with subsidy of USD 22,000 million). Increased involvement of scientists and policy makers is expected to help increase productivity levels enabling farmers to earn more.

Valuation of Food Processing Companies

Industry median includes Tata Coffee, Ruchi Soya Industries, Shree Renuka Sugars, Zydus Wellness, Bajaj Hindusthan, Sanwaria Agro Oils, Agro Tech Foods, Balrampur Chini Mills, Bannari Amman Sugars, Rasoya Proteins, REI Agro, Hatsun Agro Products, KGN Enterprises, Kwality Dairy, KRBL, Gokul Refoils And Solvent, Heritage Foods, Triveni Engineering & Industries, Venky's, CCL Products, Dhunseri Petrochem and Tea, Goodricke Group, Jay Shree Tea & Industries, Ponni Sugars, Dhampur Sugar Mills, AVT Natural Products, KCP Sugar & Industries Corp, Riddhi Siddhi Gluco Biols, Usher Agro, JVL Agro Industries, DFM Foods, Joonktollee Tea & Industries, KS Oils, Rossell India, Assam Company India, ADF Foods, Vadilal Industries, LT Foods, Dalmia Bharat Sugar and Industries, Ugar Sugar Works, Umang Dairies, Avanti Feeds, Rajshree Sugars & Chemicals, Parrys Sugar Industries, Himalya International, Vippy Industries, Amrit Banaspati Company, Amrit Corp., Vimal Oil & Foods, Anik Industries, Alchemist, Kohinoor Foods, Kothari Sugars and Chemicals, Uttam Sugar Mills, Simbhaoli Sugars, Rasoi amongst others

End Notes

FY: Financial Year ending March

All multiples are as on Dec 31st 2012

Conversion Rate: 1 USD = 50 INR

ttm: trailing twelve months, or last twelve months

EBITDA: Earnings Before Interest, Taxes, Depreciation & Amortization - a measure of company’s profitability

EV: Enterprise Value - a measure of company’s worth