India’s food industry equipment demand stable despite weak monsoon

 Neha Dewan | @TheDollarBiz Participants at the 10thFood and Technology Expo 2014 held in New Delhi last week told The Dollar Business that demand for equipment from the food and beverage sectors in India remains stable despite fears of a weak monsoon this year. The food processing industry is one of the larger industries in India and is ranked fifth in production, consumption, export and expected growth. India’s total food production is expected to double in the next 10 years, with the country’s domestic food market touching $258 billion by 2015. Currently, the food processing industry accounts for 32% of the country’s total food market.  There are concerns that a weak monsoon this year may lead to reduction in overall food production. However, equipment suppliers remain optimistic. Over 100 exhibitors, including global leaders in agro-processing, participated in the Food and Technology Expo 2014 and were mostly positive about the market demand. Manu Gaurang, Zonal Manager, Thermax told The Dollar Business, “We see a continuous demand from the food and beverage sectors for our steam boilers. The saving for them is up to four times as our boilers run on various fuels that are eco-friendly.” The capital investment could be in the range of Rs. 10-15 lakh but Gaurang adds that all costs are recovered within 2-3 years. “We see more interest from the rice industry, food processing plants, biscuit manufacturers and other similar segments.” However, Buhler, which specializes in high capacity rice milling machines, is worried that poor rainfall may hurt business in India. “Rice milling is a very important business unit for us. We have launched the new Sortex S Ultravision colour sorter for the North India market. As of now, we are not finding any negative impact of the weak monsoon on our sales of rice milling and sorting machinery. However if the shortfall in rain is high, it would have an impact on the existing rice millers in expansion or investing in new rice milling plants,” Sandeep K.C., Senior Manager – Marketing and Business Development, Buhler India told The Dollar Business.  The food processing sector is a priority for the Indian government which provides several incentives to encourage growth of the sector. In a report last year, the Confederation of Indian Industry (CII) had said that the food processing sector has a potential of attracting $33 billion of investment in the next 10 years.