The Uttar Pradesh food processing industry is going up high with many investors lining up to capitalize in the state. Last month, US-headquartered food and beverage firm PepsiCo started its largest greenfield plant in Kosi Kalan, Mathura, to provide for the growing demand for its Lay’s potato chips. It pledged to source 150,000 tonnes of potatoes annually from local farmers and develop a “strong connection” with more than 5,000 local farmers.
Set up in less than two years with an investment of ₹814 crores, PepsiCo’s single largest investment in the country, the plant aims at employing 1,500 people directly and indirectly. The greenfield foods plant in Kosi Kalan will be the first step in PepsiCo’s journey of enabling a full-fledged supply chain ecosystem in UP, which will involve agri collaboration, warehousing, transportation and logistics.
The present government has introduced the UP Food Processing Industrial Policy as a result of the industrial policy announced earlier in the year, aimed at converting surplus food grains, horticulture, milk and other agricultural products into value-added products, ensuring a fair price for the growers, and developing the state as a food park state.
Apart from potatoes, UP is the largest producer of mangoes, sugarcane and milk, and one of the top producers of wheat. The state can be divided into nine agro climatic zones which specialize in different types of agro commodities. It has become one of the most rapidly growing sectors in the state.
According to the UP State Industrial Development Authority, in 2020-21, the largest investment was received in the food processing sector, amounting to more than ₹940 crores and making for 32% of total investments received in the year.
The 2017 policy is assessed to have attracted investments of ₹4,983 crores which are at different stages of being approved or implemented. Out of 942 applicants, 680 projects have either been sanctioned or are under process. The spurt has resulted from multiple factors such as surplus output and a general increase in investors’ interest in UP, ensuring the backward and forward integration of the production process, and a large population base of 240 million with a growing economy ensuring multiple consumption centres.
In addition, PepsiCo, AB Mauri, a UK-based bakery ingredients maker, has been allotted 257 acres of land in Pilibhit for a greenfield yeast manufacturing unit, in which it is investing ₹1,100 crores. This is over and above the ₹400 crore investment for which it had already procured land in Chitrakoot in the backward Bundelkhand region, making for a total investment of ₹1,500 crores by the company in the state.
With sugarcane molasses a key ingredient in manufacturing yeast, the facility is expected to benefit farmers, as well as boost the bakery industry. Britannia Industries has begun construction of its ₹340 crore biscuit making facility in Barabanki, a predominantly agrarian district 30 km from the capital Lucknow, where it aims to produce 125,000 tonnes of its flagship biscuit brands, including Marie Gold and Good Day, and cater to the largest consumption market in the state. Raw materials, including wheat flour and sugar for the plant, will be sourced locally, supporting a cross-section of the farmer community in the state, the company said.
“Proximity to major consumption clusters in the state to ensure the freshness of the supplies was the key criteria behind choosing Barabanki in UP,” said Varun Berry, managing director, Britannia Industries. “The state is a large consumption market for us and this facility will help us meet the growing demand for bakery products in UP, and also create fairly large-scale employment opportunities.”
Other prominent firms that have invested in the sector include Patanjali Ayurved, which is investing more than ₹2,100 crores in the establishment of a mega food park in Gautam Buddha Nagar (Noida), where the Baba Ramdev-led company will produce food products such as biscuits and juices, expecting to generate about 20,000 jobs. Haldiram Snacks has invested ₹490 crores in a snacks and sweets manufacturing unit in Noida. ITC is investing ₹760 crores in establishing a food processing unit in Hardoi, while SLMG Beverages, a bottling partner of Coca-Cola, has established a unit in Lucknow for ₹300 crores.
BL Agro Industries and Khattar Edibles have also invested in the state. The government is learnt to be finalizing a ₹500 crore proposed facility in Bijnor being brought up by Ponty Chadha’s Wave Group along with Belgium-based processed and frozen products maker Agristo. The facility aims to produce potato flakes using locally sourced potatoes.
Cultivation and export of ‘Kala Namak’ or ‘Buddha Rice’, a variety of rice produced in some Purvanchal districts which also comes under the One District One Product (ODOP) scheme from Siddharth Nagar, has received immense boost under the present government, and is finding export destinations in Southeast Asian nations like Singapore.
The rice, believed to have been given by Gautam Buddha as ‘Prasad’ after enlightenment in Kapilvastu, is tagged with a geographical indicator (GI). The state government is finding cooperation from e-commerce platforms like Flipkart in the sale of the rice. The state is setting up a third food park in Baheri, 40 km away from Bareilly, bordering Uttarakhand. Around 247 acres have been earmarked, and the government will soon begin allotments. Hindustan Petroleum Corporation has acquired 35 acres of land here for a bottling plant.
“Food Park as a concept is to give economies of scale and provide services in a cluster mode to the industries of the food sector. We will have common effluent treatment plants, straining units, R&D centres and club all of them together and also provide space for adequate warehousing and logistics within that food park,” said Mayur Maheshwari, CEO of Uttar Pradesh State Industrial Development Authority.
Before 2017, the state had an agro-park in Karkhiyaon in Varanasi and another in Kursi Road in Barabanki near Lucknow. The state is also revising its 2017 Food Processing Industry Policy, ET has learnt, to make it more attractive for larger companies and to have more provisions to encourage the setting up of food parks. With the advent of larger companies, the scale of operations will pick up and ensure better pricing for farmers as well. It will also boost the setting up of micro, small and medium enterprises in the sector. Separately, under the PM Formalization of Micro Food Processing Enterprises Scheme, 90,000 micro food producing units will be provided assistance such as training camps, necessary hand-holding and loans over the next five years.