Will Make Transport, Logistics World-Class In 2 Years: Nitin Gadkari, Minister For Road Transport & Highways At World Food India 2017

Given the dominance of small and medium players in the food processing segment, cost of the machinery becomes a critical factor, along with infrastructure and logistics. In the first panel discussion at a session on the second day of World Food India, Opportunities in Infrastructure and Logistics were discussed, moderated by Pawanexh Kohli, Chief Advisor and CEO, National Centre for Cold-chain Development (NCCD).

Dharmendra Gangwar, Joint Secretary, Ministry of Food Processing Industries, said, “The common theme in these four words. Is that they are the hardware of manufacturing in the food processing industries. The industry requires massive investment in machinery, logistics, investment and equipment. The backend infrastructure and logistics are the weakest link in the supply chain with a maximum gap in the required and existing infrastructure. It is by definition the most technology-intensive sector in the country.  In India, there is a requirement of investment in the R&D of this sector.” He also added, “We imported 168 million USD of plant and machinery, there is a need for indigenous manufacturing. There is a need for policy support, credit infusion and grant support. By 2025, there is an opportunity of 34 billion dollars for plants, machinery and logistics.”

Speaking about the progress of his ministry, Nitin Gadkari, Minister for Road Transport & Highways, Shipping and Water Resources, River Development & Ganga Rejuvenation, Government of India, said, “Our government has decided to give the highest priority to the development of infrastructure. It was 2 km per day of road construction, not 28 km per day. 80% of traffic will be on road. We are constructing a ring road in Delhi, which will reduce 50% of traffic and pollution. We have signed 6 lakh crore worth of contracts in the road sector. In India, we have 18% logistic cost, while in China it is 8-10% logistic cost. We have decided to convert 111 rivers in to waterways.” Gadkari also went on to add, “We have inaugurated a river traffic control recently. Cost on rivers is less as compared to road or railways. We have 12 million ports, and all their efficiency has increased and this year we are expecting 7000 crore of profit from the port sector. We have a water problem in many states, and we are moving towards drip irrigation to improve the productivity of water. The project of river connectivity is around 30 projects costing 8 lakh crore, to create balance in water supply in different regions.” He also added, “The total irrigation we are targeting is 1 crore, 88 lakh hectares of irrigation through the river connectivity project. Now it is a golden time for investors to invest in food processing industries, there is transport, connectivity, power, water already available. You leave the transport sector to me, I will make sure that within two years it is of international standard.”

Kohl commented on the minister’s speech, “The very fact that a farmer is involved in infrastructure is music to the years because farmers know best about the on-ground framework and what exactly to deliver. If your time on the road is reduced, it is not just about saving cost, it is also reducing risk which gives a greater scope for trade.” He also added, “Infrastructure has to come to good capacity use, and the capacity use has to come at the farm-gate. We have to aggregate the produce of farmlands. It is about aggregating the produce into viable loads for movement.  Logistics forms the backbone of this sector. The key is multimodal hubs, to connect the country into a hub of food chain networks. Stakeholders have to get in to leverage the idea of multimodal hubs. Money becomes extremely crucial to the discussion, as none of this can happen without financing.”

“We are logistic providers of the food industry, which is one of our main sectors. We are looking at the supply chain, trying to connect growers, to suppliers and transporters all the way to the consumer. We are able to monitor whether the cargo is moving at the right temperature and the right humidity, with a device”, said Bernhard Stade, Head of Global Competency Center, DHL.

M. Girija Shankar, Secretary, Food Processing Industries, Government of Andhra Pradesh, said, “There is a great need for logistics for the transport of highly perishable items. The supply chain has to be seen in conjunction with the value chain. AP government we are supporting food parks, 15 food parks are coming up in AP. The infrastructure required for processing is very much available.  The cold-chain, logistics sector is a viable business opportunity. It will be helpful to the farmers in increasing revenue and reducing losses.” Eric Prieur, Cold Chain Sustainability Director, Carrier Transicold and Refrigeration Systems added that “We started operations in India 25 years ago. Three focuses, first one is a customer, the second focus is on the product, to develop the appropriate product for the Indian market, which is a challenge as each country has its own specifics, and the last one is service which we feel is extremely integral. We echo PM Modi’s sentiment that food wastage is an injustice to the poor. We are also helping farmers to make more profit out of the cold-chain. We run pilots in Punjab to show how cold-chain can help improve farmer’s revenue through connectivity to the market. “

“To preserve the quality of the milk, it is mandatory to cool it down to 4 degrees for 3 hours. My expectation and suggestion for India in this subject is to implement India’s appropriate standard for cold chain, for milk and food. The second point, give subsidies against standard certification and regulation.  Third point, have independent bodies for providing certification standards. Then promote inventive of solar energy in villages, and reduce the rate of GST on the milk-cooling sector”, said Eric Boittin, President Director General and CEO, Groupe SERAP.

Nitin Puri, President & Head- Food & Agri-Business Strategic Advisory and Research, YES Bank, said speaking on the role of finance to drive investment in logistics and infrastructure, “Somebody has to lend to this entire infrastructure. There is a strong interest among companies to engage with farmers, in the last few years, and not engage with intermediaries, to ensure quantity and quality of supply. The private sector is ready to put in infrastructure from the farm gate to the fork.” He also added, “It is important that there is some sort of policy mechanisms so that there is coordination and collaboration between agencies especially when finances are concerned.”

Anurit Kanti

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