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Aimed at making Kerala an FMCG manufacturing hub, the State Government has initiated steps to set up an FMCG cluster with the support of FICCI.
Kerala Industries Minister P.Rajeev has held discussions with Ullas Kamath, Chair, FICCI Karnataka State Council and it was agreed to take the proposal ahead as a top priority with detailed action plan, as the State looks at the project as a ‘one-of-its-kind FMCG cluster in India’.
Palakkad has been identified as the location especially with the availability of sufficient land, proximity to land and rail connectivity, besides catering to the neighbouring markets of Tamil Nadu and Karnataka. Apart from creating an estimated two lakh job opportunities, the proposed FMCG cluster looks at a 35 per cent economic growth in the region by 2027.
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FICCI, which played a key role in setting up FMCG clusters in Dharwad and Guwahati, has briefed the government about a comprehensive proposal on the opportunities and advantages for setting up the FMCG cluster in the State.
Fourth largest sector
It is pointed out that the FMCG sector is currently estimated to be the fourth largest sector in the country with household and personal care products accounting for about 50 per cent of the total sales. The future trend would be to set up the factories closer to the consumption centre to cut short the transportation cost and to take advantage of the changed scenario in the FMCG segment in the country.
The average consumer FMCG market in India is around ₹4 lakh crore and FICCI estimates the value of the Kerala market to be ₹20,000–25000 crore. Indian FMCG sector has, therefore, emerged as a fertile hotspot for domestic and foreign investments with sustainable growth in the ever growing middle class and sourcing investments from Indian and foreign companies. Semi-urban and rural consumption has recently witnessed a significant rise such that the rural FMCG market is estimated to grow exponentially.
The Centre has approved 100 per cent FDI in the cash and carry and single-brand retail segment and about 51 per cent in the multi-brand retail segment. The food and beverage segment is one of the largest contributors to the FMCG sector and accounts for almost 30 per cent of the total household spending in the country. In the post-Covid scenario, healthy alternatives and products that promote hygiene are being rolled out at an unprecedented rate by FMCG companies.
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