Agri Business

‘Don't leave out large corporates from Mega Food Park scheme'

Our Bureau New Delhi | Updated on April 06, 2011

Mr Saurabh Bhat, President & Managing Director (Corporate Finance and Development Banking) at YES Bank   -  Business Line

The Centre should not shut out large corporates from the Mega Food Parks (MFP) scheme that has so far attracted very little investment, according to Mr Saurabh Bhat, President & Managing Director (Corporate Finance and Development Banking) at YES Bank.

The Centre should not shut out large corporates from the Mega Food Parks (MFP) scheme that has so far attracted very little investment, according to Mr Saurabh Bhat, President & Managing Director (Corporate Finance and Development Banking) at YES Bank.

For the 11th Plan period ending 2011-12, the Ministry of Food Processing Industries (MoFPI) had planned setting up of as many as 30 MFPs in the country. As against this, only one project – Patanjali Food & Herbal Park Ltd in Haridwar (Uttaranchal), promoted by the Yoga Guru, Baba Ramdev – is currently operational.

The only other MFP to register some progress on the ground is at Mogili near Chittoor (Andhra Pradesh), being established by Srini Food Park Pat Ltd. According to Mr Ashok Sinha, Secretary, MoFPI, the Centre has already sanctioned 15 parks. In the latest Budget, the Finance Minister, Mr Pranab Mukherjee, announced approval for 15 more MFPs for 2011-12, which will help meet the Plan target.

“All schemes take time to yield results and we feel things are beginning to move,” Mr Sinha said at The Hindu Business Line-YES Bank Food & Agribusiness Conclave that was held here earlier this week.

The MFP scheme basically involves creation of food processing units around a Central Processing Centre (CPC) over an area of 50-100 acres. The CPC – which will have centralised sorting, grading, washing, dry warehousing, controlled cold storage, testing, aseptic packing, bottling, product labelling and refrigerated transportation facilities – would be supported by primary collection and processing centres close to where crop is being grown.

Each MFP would entail investments of Rs 140-150 crore, with the MoFPI giving a one-time capital grant of up to Rs 50 crore. For each project, the implementing agency is a special purpose vehicle company, which would have a minimum of three unrelated promoters and with at least 26 per cent being held by food processor(s) in the MPF.

“The Government should make things too restrictive. Since the basic objective is to develop a strong food processing industry, there is no point insisting on multiple promoters or limiting the project size and grant element. The old SSI (small scale industry) approach may not be the right one to take,” Mr Bhat felt.

YES Bank is currently advising Mr Kishore Biyani's Future Group for setting up an MFP in Bangalore. The park, spread over 100 acres, will have units basically supplying to the Group's food retail business.

Published on April 06, 2011

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