Punjab Agri Food invests Rs 300 cr

When most of the food-processing players are coming to Punjab to set up shop, a Punjab-based service provider to the food industry, Punjab Agri Food Parks Ltd (PAFPL), has decided to spread its operations in Uttaranchal, Karnataka, Gujarat and Rajasthan.

"The reason behind this expansion is facilitating our customers based in different parts of India," said Ankush Aggarwal, managing director of PAFPL.

The investments at the new locations will be a replication of the model executed in Punjab. The company implemented a hub-and-spoke model at Fatehgarh Sahib in Punjab, where a hub was built in 25 acres and spoke centres were smaller.

"The final investment at Fatehgarh Sahib will be about Rs 100 crore and the project will be completed by next year. A total investment of about Rs 300 crore (Rs 75 crore each for four facilities) will be made in the upcoming centres. The company proposes to fund new investments through a mix of internal accrual, debt and equity. Venture capital firms are interested in funding the new projects," said Aggarwal.

The investment in Punjab was slightly higher than other set-ups because Punjab had a multi-dimensional crop structure and it accommodated the produce from Himachal Pradesh, said Aggarwal.

The company at Fatehgarh Sahib has a state-of-the-art post harvest infrastructure for fresh vegetables and fruit that includes cold chain, refrigerated vans, and a 100,000 square feet pre-fabricated structure based on clean zone 1,000 technology (an international benchmark to process food to save from contamination), the largest in India.

In this model, the company engaged about 2,500 farmers to cultivate 10,000 acres for vegetables in Punjab and parts of Uttaranchal and Himachal.

"We provide quality planting material to the farmers. Due to the strong social fabric in Punjab, the farmers prefer to buy inputs from the shops of their own choice," said Aggarwal.

According to Aggarwal, "a farmer who earns about Rs 12,000-Rs 15,000 per acre per annum for wheat and paddy, can earn up to Rs 50,000 per annum by growing the fresh vegetables as they are provided with the backward and forward integration under the modular structure."

"With the corporate giants foraying to food retail, the market for service providers is propitious. Our company is already providing back-end support to Reliance, Bharti, Big Bazar, ITC and Heritage Food. The Punjab unit has the capacity to store and process 50,000 MT per annum of fruit and vegetables," added Aggarwal.

The company is doing branding and co-branding for the export houses but is not involved in any direct exports.

The company has an understanding with the Prince Charles Foundation and trains the farmers for the organic farming.

"There is an enormous market for organic food in the west and we advise our farmers to switch over to organic farming gradually if they want to earn higher returns," said Aggarwal.