‘Indian food processing machinery makers need more subsidies’ – Director, NIFTEM-K

The National Institute of Food Technology, Entrepreneurship and Management (NIFTEM) in Kundli, Sonepat, Haryana, under the Ministry of Food Processing Industry, is an apex institute which is contributing to the rapidly growing food processing sector in the country not only through the trained manpower, but also carrying out various research and development activities. businessline caught up with Harinder Singh Oberoi, Director, NIFTEM-K, to know more about the developments in the food processing sector, prospects and challenges. Excerpts from the interview:

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What’s your assessment of the Indian food processing sector?

It is a very vibrant sector, which has created employment opportunities in the recent past and if you look at the way this sector is growing, I think there is a phenomenal opportunity for growth for the young start-ups, entrepreneurs to jump into this sector and make a fast buck. By around 2030, India will be the fifth largest consumer of the processed food products. At the moment, our consumption of processed food products is low, but is expected to raise pretty fast. Also, if you look at the value of this industry it would be $543 billion by 2025. There is an upsurge and the CAGR growth is 14.6 per cent.

Having said that what are the challenges faced by the sector?

The cold chain infrastructure that is required is not adequate and the is supply chain is largely fragmented. In addition to that, we don’t have the right processing variety of fruits and vegetables for getting the required processed products. For example, Heinz — the largest tomato processor in the world — has 57 processable tomato varieties. In India we don’t have even single variety of tomato that has similar kind of characteristics. As we make lot of products from the tomato base, the cost and energy spent on making these products is much higher compared to tomatoes which are grown in China or California. Similar is the case with citrus.

Major challenge is we don’t have indigenous machinery. Most of the machinery that we have in the country for processing of fruits or vegetables, dairy or meat or even the Ready to Eat, Rtc snacks is largely imported. So that also raises the cost of investment because any start-up or MSME looking to invest in developing a new product segment or market, finds it little difficult because of the import duties and there’s no service back up for such machinery. The need of the hour is to have more subsidies for the Indian manufacturers of food processing machinery. Also, there is a need to exhort them to make machinery in India that is quite similar or close to what we see in the machinery manufactured in Denmark, Netherlands or Germany.

The larger constraints are the lack of primary and secondary processing facility in the rural areas such as cleaning, grading, packing and pulping at the farm level. Having such facility will help the tertiary processors or end product manufacturers.

What are the factors you think that will drive the growth of this industry?

Technologies. We need to have new technologies in place. Now the Indian consumer is getting inclined to consuming processed products unlike in the past where the consumption of processed products was very less. You see many variants of processed foods coming into the markets. The novel food products is where the industry should focus on. Such products should be super products or super foods, which are low in fat, low in sugar, high in fibre and high in protein. Millets is one. Millets or millet-based products is a very good option. A combination of millets with certain leafy vegetables and some fruit amalgamations will give a complete diet. Many a times, as a research organisation we are able to develop foods with balanced proportion of nutrients in them. But when it comes to shelf life and palatability we lose on those counts. Such products should be developed without compromising on shelf life and texture, fibre and taste. Second aspect is nutraceuticals will be a big game changer. The addition of botanical extracts or nutraceutical compounds into food products will add value to it. Third area is smart proteins. Proteins from plant sources is something which is going to capture the market in a big way.

How are we gearing up to meet the demand?

There is lot of R&D happening across institutes and the industry. Collaboration between the industry and academia can make a big impact on the new product development and reduce the costs. There are lot of segments such as millets, dehydrated fruits and vegetables, probiotics and utilisation of residues such as oil cakes or tomatoes, where lot of product innovation is taking place. With the food processing sector set to grow at 14.6 per cent CAGR, institutes like NIFTEM, Kundli, where students are not only trained in basic and food sciences, but also in management, are doing their bit to the advancement of the sector. Many of the students have turned entrepreneurs and launched their own start-ups.

How do you see the interest level among venture capitalists in the food processing sector?

The venture capitalists interest is quite phenomenal. We have got funding from HDFC Bank to nurture innovation and entrepreneurship in food processing and allied sectors. We have opened up our facilities to entrepreneurs and start-ups. NIFTEM, along with venture capitalists and food processing companies, will hand hold the start-ups and entrepreneurs. If there are some 20 start-ups being incubated at NIFTEM Kundli today, you may see that figure reaching 2,000 in the next couple of years.

What needs to be done by stakeholders including the government and industry to achieve this growth?

The Government is doing its bit through different schemes. Subsidy for the indigenous manufacturing of food processing machinery will help the sector. Also there is a need for the research and development of products with low sugar, salt and fat content and high protein and fibre which can make processed foods more acceptable. We have opened up our doors to the industry – big and small to see that they get confidence in what we are doing. There are companies which have shown interests in developing new products with us. The amount of confidence that is coming through the consumer awareness will be a game-changer.

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