Improving India
ü'Tl
country pro file
IDFC and Rabo India - unique solutions
Fact: India's food and agribusiness industry is worth about USD 58 bil-
lion. With growth rates of 12-13%, it's expected to doublé by 2005 -
reaching net worth USD 113 billion. Fact: India is the largest fruit and
vegetable producer in the world. However, each year fruits and vegeta-
bles equalling the UK's total consumption are lost or wasted. Fact: 7-8%
of Indian produce is damaged in transit - losses that amount to USD 4.5
billion perannum.
New approach
Shifting role
Improving infrastructure in India will
pave the road for F&A developments
ahead. In a unique deal, Rl gets in on
the ground-level, helping projects move
towards privatization.
4 What'sNewS
Issue 6 October 2000
The message is clear: India,
the world's potential
greatest F&A producer, needs
some work. Better processing,
greater yields, and infrastruc-
tural development are needed
to let this F&A giant take its
rightful place in the global
market. 'There are still so
many resources to be utilized,'
says Rana Kapoor, Rabo In-
dia's managing director. 'Right now, agri-
cultural exports only make up 10% of to
tal exports. This is clearly a inissed
opportunity, an area that must be
NHn
expanded. India is such a
big producer, and nowhere
near enough of that capac-
ity has been captured for
the benefit of the economy.'
Rana Kapoor
Today, most processing fa-
cilities in India remain
small-scale, and are not as
profitable as they could (or should) be.
'Processing is definitely due for some ma
jor improvements,' says Kapoor. 'For ex-
ample, our Minister of Food Processing
has recently taken up India's processing
practices with experts around the world -
visiting Europe and the FIS to discuss, de-
velop, and improve these practices. Gov-
ernment-led initiatives such as this will
certainly speed the process for change.' In-
creasing output is another area receiving
attention, with biotech research paving the
way toward more advanced and profitable
yields. 'India's total arable land is more
than China and Asia put together,' Kapoor
explains. 'But annual yields remain pro-
portionately low. Through biotech re
search, seeds can be developed that foster
higher yields.' In tune with this issue,
Rabo India recently organized India's first-
ever biotech conference, which had very
encouraging results (see sidebar).
The last, yet certainly most critical issue
on India's F&A improvement agenda is in-
frastructural improvement. Largely gov-
ernment-controlled since the sub-conti-
nent's independence in 1947, infra-
structure got its first make-over with the
'Five-year plan' of 1951, when Rs 1100
crores, or USD 240 million, was
The IDFC-RI agreement, signed 1 1 Au
gust, 2000, offers India's F&A indus
try unique solutions in developing infra
structure. Established in 1997 by the
Indian government with equity participa-
tion from foreign and multilateral
institutions in efforts to privatize infra
structure, the IDFC currently supports 42
projects totalling USD 1 billion of sup
port. The agreement leverages RI's deep
F&A expertise and IDFC's infrastructural
experience, synthesizing the complemen-
tary strengths of the institutions. The al-
liance will focus on the following strategie
«Ml INFRASTRUCIUSt
rEGlC COOPERATION AGRFI
Signing up for improvement: standing, from left - O.K. Batraj, Vice-
President Business Development, IDFC; Preeti Sinha, Rabo India; seat
ed, Nasser Munjee, Managing Director, IDFC; Rik van Slingelandt,
chairman of the Board, Rl; Rana Kapoor, Rabo India
and financial advisory mandates: estab
lishment of cold chain networks; improve
ments in quality and technology in ware-
houses; creation of dedicated ports; setting
up of commodity exchanges and auction
systems; implementing
integrated multi-modal
transportation and lo-
gistics; and facilitating
linkages to value-
added centers. Rik van
Slingelandt, chairman
of the Managing
Board, assisted Rabo
India in this momen-
tous cooperation.
'Leveraging 100 years
of RI's F&A experi
ence and IDFC's inher
ent strengths and vi-
sion will help the
creation of successful
business models in India,' he commented.
'This partnership will serve as a strong
platform for future efforts on key infra
structure projects in the food and
agribusiness.'
