The Hindu Business Line : US-based pistachio major plans unit in India

Monterey, California, March 16 In a bid to increase its market share in India, Paramount Farms, the world’s largest producer of pistachios with headquarters in California, is planning to set up a pistachio processing, roasting and packaging plant in India, investing over $5 million, Mr Mark Masten, Vice President, Sales, told Business Line.

“We are very excited about the Indian market and think we can do a lot of activity in India; we’ve looked at almost 20 different locations in India in Gujarat, Rajasthan and Haryana. We think setting up a plant in the close vicinity of Delhi will be a strategic move as the primary nut market is in north India.”

But, he added, Vadodara would also be a good alternative for the plant, which would have capacity to handle 10-20 million pounds annually, as it would provide a good platform to ship out processed pistachios to the West Asian markets. Work on building the plant is expected to begin in April and “we are looking for a good sales agent”. The land required for the venture is 5-10 acres, he said, adding, “we don’t necessarily have to be in one location; we can be in multiple locations too.”

Mr Masten added that while in the past the “legacy of India has been joint ventures, I feel we don’t need a joint venture in India as I think I know how to set up a plant in India”. His confidence about the Indian market comes from a previous two-year stint in Mumbai as an executive of General Electric.

Market potential

Mr Keith Sunderlal of the SCS Group, an agribusiness consultancy that represents Paramount Farms in India, added, “Paramount will radically change how the nut business is done in India; the strategy is to gain the confidence of small retailers as well as the bigger players.” Reliance Fresh is a major buyer of Paramount’s ‘Wonderful pistachios’ in India.

At present, the Indian pistachio market is estimated around 10 million pounds, and most of it comes from Iran, with Paramount Farms having a bare 10-15 per cent market share. Mr Masten thinks this is a “ridiculously low figure”, as the Indian market has a much larger potential. “What you have now there is really a ‘peanut market’, considering the purchasing power of a growing Indian middle-class.”

Mr Dominic Engels, Vice President, Marketing, says the Indian pistachio market has the potential to grow to 50 million pounds over the next five years. His company has set apart a budget of $1 million to market their pistachios in India. “Today India consumes over 60 million pounds of California almonds, making it the second-largest export country for almonds.” Paramount produces over 70 million packages of pistachios annually.

Answering specific questions on bureaucratic or other hassles/delays in India, Mr Masten said he encountered no such problems. “Doing business anywhere in the world is not easy, and India is no different.” But what he is disappointed about is that negotiations with the Indian Government to cut the import duty on pistachios got no results in the 2008 Budget.

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