Invest In Equipment For Future, Not Past: Gerard Cavalier, President, Cemafroid At World Food India 2017

Given that a large number of specialized equipment is being imported, the cost becomes high, so there is a scope for establishing an indigenous manufacturing base for equipment and machinery within the country for the food processing industry. On a panel discussion on “Opportunities in technology and equipment in the food processing industry” at World Food India 2017, Kandarp Singh, Managing Director- South Asia, Tetra Pak moderated the discussion on how technology and equipment can be transformed via investments in the food processing industry.

“Close to 100,000 crore rupees worth of food products are wasted. 75% of cold-chain is only linked to one commodity, only 25% works with multi-commodities. So there is lot of work still left to be done in this sphere. We also need to look at how we secure quality, hence Cemafroud’s work in certifications becomes integral”, said Singh. Ravichandran Purushottam, President – India Region, Danfoss Industries Pvt Ltd noted, “Three observations I have, one is what works in Europe, does not work in India. The cost of processing has a very different dynamic in India. When it comes to cold storage in India, our own experience is that the rental model has failed in India. When we first started out, we thought How do you disrupt the cost structure of processing, energy footprint of processing and take advantage of business models? We need a lot of micro-cold storages.” Purushottam also added, “Despite the 30-40% subsidy by the government it is not viable. It is important to target the cost points. Working closely with farmers we are learning what to do differently to disrupt the cost.”

“There is an increased demand for processed food with more youngsters, more women working. There is increased awareness on healthy and safe food. If we look at the game changers in next 5-6 years, there will be increased demand for food safety, there will be demand for new technologies for energy efficiency, utilizing bioactive ingredients”, said Mr Anantha Padmanabhan, MD Alfa Laval India Pvt Ltd, & Cluster President- India- Middle East- Africa, Alfa Laval. Gerard Cavalier, President, Cemafroid said, “In Cemafroid we have been working on cold-chain for more than 10 years. NCCD is the Indian Cemafroid. We have seen the evolution of the number of cold stores, 90% of capacity required for India is already built. We need to build a chain, we have elements but we need to make a continuity. It is important to maintain the machinery after it is installed.” He also added, “You should invest in the equipment of the future, not equipment of the past. Invest for the future, not for the past. When you buy a machine, you buy it for a long time, hence certification is essential. Food efficiency, reduction of food wastage and environmental footprint are essential in the cold change equipment business. Safety and efficiency are the pillars of cold-chain.”

Karl Delly, President, Food Care, Executive Officer and Senior Vice President, Sealed Air Corporation, said, “These processes require an investment. If you want to double the income of the farmer, food producer or the start of the food chain, you have to start with the value-added product.  Proper processing prior to packing, handling post packaging and investment in infrastructure and technology is key to the solution. Extending the shelf life of food and reducing waste is extremely integral”. He also added, “India has fuelled our interest to do business with its recent policy change”. “There is a lot of scope of technology improvement in this area”, said Jean-Felix Lesueur, Member- Executive Committee, Synerlink.

“Managing waste is becoming at the centre of the discussion for companies, not just for CSR or compliance. Energy footprint has to be more efficient. We have to look at investment over a life cycle and not be myopic about it“, said Singh, the session moderator, concluding the session, and opening the doors for collaboration among stakeholders for investments and opportunities in technology, equipment, infrastructure and logistics in the food processing industry. The food processing sector is one of the largest importers of plant and machinery in India and increasing manufacturing within India will reduce costs for the equipment manufacturers and increase market outreach.

The MoFPI plays a direct role in boosting demand for equipment in India by directly funding (through subsidies) the investment in post-harvest cold chain infrastructure, directly funding (through subsidies) the creation, expansion and modernisation of the food processing units in the country and directly funding (through subsidies and capacity building) the creation of farmer level organizations and investments in farm gate infrastructure. The Ministry has also launched the Pradhan Mantri Kisan Sampada Yojna (PMKSY) through which MoFPI is expected to disburse capital grants of approximately USD 882 million over the next 3 years. PMKSY, with an allocation of INR 6,000 crore (USD 882 million) by the year 2019-20, will induce an investment of INR 16,800 crores (USD 2.5 billion) in plant and machinery in this period.

Anurit Kanti

BW Reporters The author is correspondent at BW Businessworld, he has a keen interest in sustainability and environmental economics