The Orissa government is likely to form a special purpose vehicle (SPV) with Infrastructure Leasing & Financial Services (IL&FS), one of India's leading infrastructure development and finance companies, for the proposed mega food park project at Khurda.
The mega food park which is coming up on 250 acres of land at Khurda has the potential to attract investments to the tune of Rs 2000 crore.
“Presently, we have roped in IL&FS as a consultant to help boost investments in the food processing sector. We may team up with IL&FS later to form an SPV for the mega food park project in the state. The Centre is planning to float tenders for this project by August and the project is expected to attract many noted developers in the food processing sector”, Saurabh Garg, industries secretary, Orissa government told Business Standard.
Besides offering its expertise to help boost investments in the food processing sector, IL&FS will also offer its inputs to the state government in finalizing the food processing policy which would be notified soon, he added.
Garg admitted that the lack of adequate storage facilities was impeding the growth of the food processing sector in the state. To overcome this, he stated that the state government had a preliminary round of talks with Fresh and Healthy Enterprises Ltd, a wholly owned subsidiary of Container Corporation of India Limited for setting up cold chains in different locations of the state.
The details in this connection, however, are yet to be finalized.
It may be noted that IL&FS had carried a study on raw material availability for the food processing sector in different locations of the state. It had identified paddy, mango, tomato, coconut, cashew, ginger and brinjal as the products with a huge potential for processing but had pointed out that the major bottleneck to the growth of the sector was the inadequate cold storage facilities in the state.
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To give the much desired fillip to the food processing sector, IL&FS had suggested the Orissa government to offer a package of incentives to attract big players in the sector like ITC, Britannia Industries and Parle Agro Ltd.
Hemant Sharma, director, industries department, Orissa government said, “IL&FS has suggested us to offer a host of incentives like capital investment subsidy of at least 30 per cent, make provisions for seasonal electricity tariff for the food processing units, offer these units exemption from Value Added Tax (VAT) and provide interest subvention of five per cent. While Bihar offers a capital investment subsidy of up to 40 per cent for maize processing, there is no such scheme in Orissa.”
All the big players- ITC, Britannia Industries, Parle Agro Ltd and Indo Nissin Foods Ltd have evinced interest in investing in the food processing sector in the state.
Among these, Parle Agro's unit has been cleared by the State Level Single Window Clearance Authority while the site selection is underway for the proposed projects of Britannia Industries and Indo Nissin Foods, the noodles maker.
ITC has so far remained non-responsive after initially evincing interest to invest in the food processing sector.
LMJ International, a Kolkata-based export firm had also proposed to set up a maize processing complex in south Orissa’s Nabarangapur district at an investment of around Rs 150 crore.