Page 39 - IACC Newsletter August-September 2013 Issue 13

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Chaired Mr. R Anand, Partner, Earnst & Young, session III included panel discussion on ‘Funding the Food Processing
Sector’.
Mr. Venkatraman, Partner & Sr. Vice President, Rabo Equity Advisors, gave a broad outlook on some of the potential
areas for investments in the food and agriculture sectors. Shift in the role of women from housewife to homemaker has
changed the food industry resulting in high demand for kitchen products such as ready-to-cook and ready-to-eat foods.
Similarly snack foods, milk & diary, mango pulp and poultry are growing sectors and offer good potential for
investments. Further, demand for ready-to-cook and ready-to-eat foods is significantly growing in smaller towns and this
is another area for investments. With host of specific needs emerging in large supply chains, Mr. Venkatraman felt that it
is more promising to invest in B2B over B2C sectors.
Mr. Venkatraman noted that investing in food sector is not without challenges and convincing small and medium sized
players for private equity fund is a real task. He discussed about different funding models emerging in the farm
equipment sector and one such example included funding import of farm equipment from China and customizing it to
Indian conditions.
Mr. Kalpathi S. Suresh, Chairman & CEO, Kalpathi Investments Pvt. Ltd., briefed about the importance of innovation in
products and technology, which have now become essential criteria for funding in startup companies. The gradual shift
in unorganized sector towards organized sector is opening up a plethora of opportunities for investments in the food
processing sector.
Mr. Nirmal Vishwas, DGM & Regional Head Export Import Bank of India talked about the services offered by EXIM bank
specifically in the food processing sector. EXIM bank offers financing support at subsidized rates across various in
activities including export of products, services and machinery, joint ventures and Line of Credit (LoC). Line of Credit
operates in a unique way and Mr. Vishwas gave an example of the recently signed LoC agreement between India and
Bhutan. EXIM Bank has 8 regional offices across the globe and also offers advisory services to exporters.
Mr. K. Ramakrishnan Executive Director & Head – Investment Banking, Spark Capital, talked about the complexities in
the valuation of investments in the food processing sector.
Mr. R Anand concluded the session by stating that funding in the food processing sector has reached the critical stage.
Central Government has announced an allocation of Rs. 2,000 crore for the development of food processing industry. On
these lines if all the State Governments can come together and contribute, a huge corpus can be created. This Central-
State unison will help in developing, modernizing and branding the Indian food processing industry to the international
standards.
The Q & A session was more focused on Government subsidies and its mis-use and benefits of utilizing private funding.