Food processing-Introduction

Food processing is the transformation of raw ingredients into food, or of food into other forms. Food processing typically takes clean, harvested crops or butchered animal products and uses these to produce attractive, marketable and often long shelf-life food products. Similar processes are used to produce animal feed. Food processing is any deliberate change in a food that occurs before its available for us to eat. It can be as simple as freezing or drying food to preserve nutrients and freshness, or as complex as formulating a frozen meal with the right balance of nutrients and ingredients.

A few examples of processed foods include:

Canned and frozen fruits and vegetables Packaged foods labeled natural or organic, such as cereals, fresh meat and poultry, and jarred baby foods Foods with health and nutrition claims on the label, such as may reduce risk of heart disease, low in fat or high in calcium Foods fortified with nutrients such as fiber, vitamin D and omega-3 fatty acids Foods prepared in quick-service and fine-dining restaurants, cafeterias and food courts, sports arenas, coffee shops and other locations

Food Processing Senario in Indonesia

The Indonesian food processing industry serving a population of 225 million offers significant market potential for U.S. suppliers of food and ingredients. In 2012, the product value of the Indonesian food processing industry was $41.7 billion, up 17 percent from 2011. The industry consists of businesses of all sizes. About 6,100 large and medium-size producers account for over 80 percent of output and over 20 percent of the 3.36 million employees. The remaining 20 percent of processed food is produced in homes and sold on the street in roadside outdoor small restaurants, small roadside retailer kiosks called warungs, or on the street by vendors with small carts called kaki limas. Warungs, small restaurants along the road, and kaki limas are ubiquitous in Indonesia and provide a variety of meals and popular snacks for Indonesians. In Indonesia, giving food as a gift is a tradition and remains popular and snacking is very popular. In 2012, Indonesia import $9.2 billion of agricultural, fish and forestry products with 16 percent coming from the United States. Australia is the second-largest supplier, accounting for 12 percent, followed by Thailand with 10 percent. Other suppliers do not account for more than 10 percent of imports individually. In 2012, over 40 percent of imported products by value were major inputs for food processing, such as wheat, sugar, dairy, soybeans, wheat flour, and beef. Several factors contributing to the growth of the food processing industry are the introduction of new flavors and products, aggressive promotional activities, growth of modern retail outlets, and growing health awareness particularly among consumers who were educated in the west. In 2012, package food retail sales showed increases ranging from 2 to 18 percent in volume terms from the previous year and growth is expected to continue, ranging from 0.6 to 15 percent each year until 2012.

Healthy eating is becoming more popular among educated consumers particularly exposed to western-style products when living abroad and is featured by newspapers, magazines, and television. Food manufacturers are continually developing new products catering to health awareness trends and snacking. In addition, more women in urban areas are entering the workforce and prefer the convenience of processed food products. More processors are finding adding value by fortifying their products. Currently wheat flour, dairy products, noodles, cookies, and frozen processed chicken fortified with minerals and vitamins are for sale in the market. Other products that are growing in popularity include functional packaged foods, breakfast cereals, fresh and pasteurized milk, yogurt, pasta, and frozen snacks, such as Chinese snacks shiumai, chicken and shrimp puffs, spring rolls, dumplings, and croquettes. Since the large majority of Indonesians are Muslim, most foods are produced using methods and products that meet halal requirements. Foods sold in warungs and kaki limas tend to be traditional foods with familiar flavors. U.S. soybeans and beef offal are popular ingredients for traditional dishes such as tempe, bakso and meatballs. Soy milk in small single-serving plastic bags produced using a juicer or blender is becoming a popular option for a healthy beverage in both urban and rural areas. Fresh bakery products sold in shopping areas and malls are popular as gifts and snacks for the middle and upper classes. Indonesians will also visit high-end retail food stores to buy small packages of imported snacks. Rice is a staple eaten at every meal. However, noodles from imported wheat are a popular substitute and use of wheat continues to grow. Dairy products continue to offer opportunities for U.S. milk powder to be mixed with fresh milk and as an ingredient. Indonesia currently only produces about 25 percent of milk production needs. Though Indonesian ties to Europe remain strong and this influences taste choice and manufacturing methods, Australian, U.S., and Korean, and Japanese packaged foods are common as well. In Jakarta where about one-third of the upper and middle class live,

foreigners from Asia are replacing western foreigners offering opportunities for Asian-style foods and flavors. Smaller ready to eat packages are popular because of the lower price and the variety offered is increasing. Popular products include frozen poultry, frozen seafood, sausages, sugar confectionery, instant noodles, sweet and savory snacks, dairy drinks, and soft drinks. New brands and products with local flavors are also growing. All ages and income levels enjoy extruded snacks and other snacks of all kinds because snacking is a part of the Indonesian culture. A troubling trend is the recent increase in trade protectionist measures by the Indonesian government. The upcoming elections, recent food safety scares, efforts to curb illegal imports, and the global financial crisis have prompted the FDA-equivalent National Agency of Drug and Food Control, or BPOM, and the Ministry of Trade to issue new requirements for packaged products and ingredients as well as resume implementing old decrees that were not being enforced.

Average per capita monthly expenditure by commodity group, 2012 (Rp)

Sector wise Attractiveness:

Indian Food Processing Industry by sectors

The Agri-Food Sector
Traditional wet and dry markets, basic Mom & Pop food stores, street side vendors and traditional restaurants are the dominant route to market for the vast majority of local and certain imported products such as fruits and vegetables, meat, noodles, rice and soy bean products. At the same time an estimated market of 30 million middle to high income consumers are driving the rapid expansion of modern food retail and service businesses in large metropolitan centres such as Jakarta, Surabaya, Bandung and Bali. Together with a strong tourism trade, expatriate and transit business people, the demand for imported western food products is experiencing robust growth.

Domestic agricultural production is vital to the Indonesian economy, accounting for 16% of annual GDP and is the major source of food for the majority of Indonesians. Palm oil, tea, peanuts and cocoa are net exporting industries and Indonesia has been self-sufficient in rice for the past two years. The food processing industry is heavily reliant upon imported grains (wheat), soya bean, meat (beef) and dairy. Indonesia has implemented a number of significant reforms to improve the ease of doing business and is emerging as an attractive investment and business market for Australian companies. The Australian-New Zealand-ASEAN FTA, which was signed in early 2009, is expected to eliminate 96% of tariffs of Australian exports to ASEAN nations by 2020. Quarantine protocols and regulations for agri-food products exported into Indonesia have been relatively modest, however they are becoming more stringent, for example all processed imported foods sold at the retail level, by law, must be registered with an ML number issued from Indonesias food and safety authority (BPOM), a timely and costly exercise which is irregularly regulated. Importation of beef from BSE and foot and mouth affected countries is not permitted, likewise the import of particular categories of meat offals. It is also worth noting that all food entering Indonesia should be certified halal where appropriate, as approximately 90% of the populations are of the Muslim faith.

Dairy Products:
MAJOR PLAYERS:-Nestl, Friesche Vlag, Ultrajaya, Indomilk, Nutricia, Greenfields TRENDS Market growing at 12% p.a. with good prospects as dairy products increasingly form part of the Indonesian diet. High skim milk powder (SMP) prices may moderate growth. IMPORTS Imports account for about 70% of consumption, which is forecast to increase at a higher rate than local production.

The consumption of milk and dairy products in Asia has generally been at a much lower level than in Western societies. Most Asian countries, with the exception of the Indian subcontinent, do not have a strong culture of milk and dairy product consumption. Since the 1960s, however, there has nevertheless been a very rapid growth in milk recombination plants throughout Asia, and many very large operations are in evidence today. Recombining technology underpins the import dependence of many Asian countries for milk and dairy products, and has extended from a tradition of ambient shelf stable products into fresh chilled milk and related beverages. 70% of Indonesian milk product consumption is based on imported milk powder.12 Australia and New Zealand account for 60-70% of Indonesias milk product imports. Indonesia remains one of the few dairy markets in the world that is dominated by powdered milk, which represents more than 50% of market consumption.13 This is very much a function of the archipelagic geography of the country which makes transport difficult, as well as the low per capita purchasing power of the general population, limited ownership of refrigerators and limited and unreliable cool chain operations.

Beverages:
The Indonesian beverage sector has experienced rapid change in recent years. There has been robust growth in bottled water sales. (principally in 5 gallon or 20 litre containers). Municipal water authorities have found it difficult to keep pace with demand for safe drinking water and funding for new water supply infrastructure has been insufficient for existing needs. Groundwater, especially in Jakarta, has long been a major source of supply for many households, but this is declining and in some areas salinity and contamination are of increasing concern. The carbonated beverages sector has been relatively static, due largely to the effects of the

financial crisis and higher unit cost of drinks as a result of the imposition of luxury tax (10%). The industry lobbied intensively for relief from this tax and it was removed in January 2005. The tax was also removed at the same time from fruit juices, which are experiencing high growth. Processed, ready to drink (RTD) beverages include carbonated drinks, fruit juices, tea and coffee, cordials (dilutables), drink powders, fruit-flavoured drinks and more recent entrants such as energy drinks and sports (isotonic) beverages. The table indicates sales trends over the last 3 years for the major products in the RTD category. Market Segmentation The average Indonesian spends 53% of total income on food, earns and receives money and purchases food on a daily basis which highlights the importance of segmenting this market. The target market for the Victorian agri-food sector is the 30 million middle-high income earning households plus the expatriates, and business/tourist consumers who are now highly urbanised and educated with a strong awareness and demand for imported food products.

Meat:
Indonesian meat consumption is low. The USDA projects per capita consumption of meat in Indonesia to range between 10 and 13kg through to 2010. 20 The Washingtonbased International Food Policy Research Institute (IFPRI) modelling conducted for the DFAT publication Subsistence to Supermarkets Vol III, however, suggests that while still low in world terms, consumption by 2010 could be 12-17kg per capita. The major meat groups are: poultry beef and buffalo meat, and

 goat meat. Pork is also produced in the Riau Islands for export to Singapore, but as Indonesia is Muslim country, pork consumption, especially in the populous Western part of the sarchipelago, is negligible. POULTRY Major players: PT Charoen Pokhpand, PT Japfa Comfeed, PT Sierad Trends Chicken is the cheapest source of protein and potential to increase production is sound. Processed chicken products such as nuggets have excellent market acceptance and high growth. Issues Avian flu has dampened demand but is not expected to have a catastrophic effect on the industry. Chicken meat represents an increasingly larger share of Indonesias meat consumption. Poultry production in Indonesia has now exceeded pre-crisis levels of approximately 900,000mt p.a. The 1997/98 crisis had a profound effect on the industry and effectively halved production.

Bakery Products:
Indonesian Bakery Snapshot MAJOR PRODUCTS:-Instant noodles (and some fresh noodles, biscuits, bread, pastries, cakes, pasta. MAJOR PLAYERS:-Indofood, Mayora Indah, Sari Roti, Khong Guan, Wings and many others. TRENDS

Instant noodle sales are continuing to grow well and bakery lines are also enjoying good growth as the economy improves. ISSUES Apart from instant noodles and biscuits, most bakery lines are consumed by the upper middle to high end consumer. Cereal-based products which can compete in the lower end Consumer bracket also have good prospects. Indonesias bakery sector is large and growing. The production of flour is dominated by the Bogasari Group, which operates two of the worlds largest flour mills one in Jakarta (10,000mt per day capacity) and Surabaya (5,900 mt per day capacity). Bogasari is controlled by the Indofood Group of companies, Indonesias largest food conglomerate, which is owned by the Salim Group, through First Pacific Company of Hong Kong. Indofood and its subsidiaries have sales of over US$2 billion per year. Australia is a major and traditional supplier of wheat to Indonesia, with a market share of about 60%. Bogasari controls 70% of the Indonesian flour market, with three other mills accounting for 20 percent of the market. The remaining 10 percent of the Indonesian flour market (about 300,000mt) is supplied by imported flour, with Australian flour comprising over half of these imports. As is the case in most other Asian countries, Indonesian consumers have increasing demand for a wider range of wheat-based processed foods, with convenience of preparation being a major sales factor. Wheat-based products which are experiencing sound growth include instant noodles, breads, cakes and pastries, snack foods, biscuits and pizza.

Confectionery:
Indonesian Confectionery Snapshot

MAJOR PRODUCTS:-Chocolate, gum confectionery, sugar confectionery. MAJOR PLAYERS:-Cadbury Schweppes, Nestl , Mayora Indah, Ceres, Mars, Kraft.

TRENDS:-Hypermarkets are an increasingly important outlet for branded candy products. ISSUES
Market entry is tough, with many well-established local and global producers. Licensing of key brands is preferred mode of entry, with co-production and brand development. The Indonesian confectionery industry is dominated by global brands, with a myriad of local producers catering for specialty lines or selling into particular regional markets. Indonesia is a major world producer of cocoa. Chocolate-based products are popular. Nestl and Cadbury-Schweppes are major players in the Indonesian confectionery market. The Mars group has an operation in Indonesia, also offering its well-known global brands. The market for confectionery in Indonesia increased 1998-2003, growing at an average annual rate of 2.1%. The leading company in the market in 2003 was Cadbury Schweppes. The secondlargest player was Mayora Indah, with Ceres Natural Foods (Petra Foods) in third place. The development of supermarkets and hypermarkets is also helping to increase confectionery (notably chocolate-based product) sales. Euromonitor32 has highlighted the strong correlation between the improved handling and merchandising achieved through supermarkets and increased chocolate sales. In developing country markets, like Indonesia, the improved storage conditions provided by modern stores have greatly improved the quality of confectionery at the point of sale.

Snack Foods:
Indonesian Snack Food Snapshot

MAJOR PRODUCTS:-Traditional snacks, nuts, vegetable chips, prawn crackers

MAJOR PLAYERS:-Cadbury Schweppes, Nestl, Ceres, Mayora Indah, Indofood Frito-Lay. TRENDS:-A diverse sector with many unbranded local products marketed. Market trends in
the upper segment towards healthier items, where niches will increasingly yield opportunities.

ISSUES:-A tough market for any new investor with a huge number of producers, large and
small. The bulk of Indonesian snack foods are traditional items, available everywhere from roadside warungs and small shops or cooked on the street. These include foods with a short shelf life such as tempe and moist snack foods such as buras, lemper and nagasari, as well as those with a medium shelf life, such as dodol (semi-solid food), and those with a longer shelf life, including snacks such as cookies and krupuk (prawn crackers). Tempe (or tempeh) is a solid fermented soya bean 'cake' which is widely consumed in Indonesia. It forms an important part of the diet of many Indonesians, and is a source of dietary protein.Packaged snack foods have made inroads and again, volume of sales have been influenced by Indonesias economic conditions. Estimates of the value of Indonesias snack market vary considerably, but it is generally considered to be in the range of US$450 million.
33

Of this total, traditional snacks account for about 60 percent of the total, while

Western snacks comprise about 20 percent. The remaining 20 percent of the market is peanuts and other nut snacks. Both large snack producers and SMEs play key roles in the snack food market. Generally, larger firms produce Western style snacks for middle and upper income consumers, while SMEs produce mainly traditional snacks for lower income consumers. Snacks produced by SMEs are often not branded and sold in bulk without packaging. However, these snacks are popular and compete very strongly against snacks produced by large-scale manufacturers.

Food Ingredients:

Increasing food quality requires an array of food ingredients some are complex formulations and others are well-known commodities such as salt. Emphasis is on food quality and regulation by Indonesias BPOM has resulted in higher disclosure levels for processed food products and this includes most additives and related ingredients. Food ingredients include the following products:
Flavours and essences Fragrances Seasonings Food colours Stabilisers Bread improvers Leavenings yeast-based products Baking powder/aerators Vitamins, amino acids, minerals Glazes Herbs and spices Cocoa butter and other cocoa-based ingredients Milk fat and related products such as butter fat and whey Gelling agents Shortening Oils Salt Sugar and derivatives Preservatives.

Food Retailing Traditional retailers still dominate retailing in Indonesia out-numbering modern retailers by over 200 to 1. The sector is very fragmented, competitive and price sensitive. But modern retailers (supermarkets, hypermarkets and convenience stores), both international and domestic, such as Carrefour, the Dairy Farm Group, Makro, Matahari plus a range of high end retailers (much smaller in size) such as Ranch Market, Sogo and Food

Hall are expanding rapidly. In general they are located in urban areas with high quality cool chain management, storage and distribution and provide considerable opportunities for Victorian agri-food companies. Accessing agri-food retail channels in Indonesia is best done via a local import/distribution company who deal directly with the retailers. Opportunities exist for beef, dairy, fresh fruit and packaged grocery goods. Food Service Indonesias food service sector is very diverse. It consists of hotels and restaurants, fast food outlets/chains, clubs, small restaurants serving local and international food and street-side open air restaurants and street vendors serving local food, at local prices. Demand for imported foods is concentrated in the five star hotels and restaurants and fast food chains located in urban areas. This sector is expanding at pace as is the percentage of consumers who dine out at least once a week Similarly to retail, gaining access to this market is best done by engaging a local import/distribution company that has a network of suitable clients. Opportunities exist for meat (beef and lamb), dairy (cheese) and specialty food products. Food Processing Indonesia has a significant food processing sector with current and growth opportunities for Victorian agri-food companies. In 2005 this sector was valued at $US24 billion and was primarily focussed on the processing of dairy (milk, yoghurt, powders), wheat (noodles and flour), beef, horticulture (potatoes, fruit, fruit juice) and flavourings/ingredients. Other than noodles which are a significant export earner, the majority of manufactured food is consumed domestically. This sector is very competitive with multinational and local companies such as Danone and Indofood, the worlds largest noodle manufacturer, in operation. Many of these processing companies will import directly given the large volumes of product, whilst smaller companies may use an intermediary to import product.

Food Processing Senario in India

Food processing sector is indispensable for overall development of an economy as it provides a vital linkage and synergy between the agriculture and industry. It helps to diversify and commercialise farming; enhance income of farmers; create markets for export of agro foods as well as generate greater employment opportunities. Through the presence of such industries, a wider range of food products could be sold and distributed to the distant locations. The term 'food processing' is mainly defined as a process of value addition to the agricultural or horticultural produce by various methods like grading, sorting and packaging. In other words, it is a technique of manufacturing and preserving food substances in an effective manner with a view to enhance their shelf life; improve quality as well as make them functionally more useful. It covers spectrum of products from sub-sectors comprising agriculture, horticulture, plantation, animal husbandry and fisheries. The Indian food processing industry is one of the largest in the world in terms of production, consumption, export and growth prospects. Earlier, food processing was largely confined to the food preservation, packaging and transportation, which mainly involved salting, curdling, drying, pickling, etc. However, over the years, with emerging new markets and technologies, the sector has widened its scope. It has started producing many new items like ready-to-eat food, beverages, processed and frozen fruit and vegetable products, marine and meat products, etc. It also include establishment of post-harvest infrastructure for processing of various food items like cold storage facilities, food parks, packaging centres, value added centres, irradiation facilities and modernised abattoir.

The liberalisation of the Indian economy and world trade as well as rising consumer prosperity has thrown up new opportunities for diversification in the food processing sector and opened up new avenues for growth. Demand for processed and convenience food is increasing constantly because of urbanisation, changing life-style and food habits of

the people. Accordingly, the Indian consumers are being offered newer high quality food products made by using the latest state-of-the-art technology. India has a strong agricultural production base with diverse agro-climatic conditions and arable land of 184 million hectares. It is one of the major food producers in the world and has abundant availability of wide variety of crops, fruits, vegetables, flowers, live-stock and seafood. As per the available information, it produces annually 90 million tonnes of milk (highest in the world); 150 million tonnes of fruits and vegetables (second largest); 485 million livestock (largest); 204 million tonnes of food grains (third largest); 6.3 million tonnes of fish (third largest); 489 million poultry and 45,200 million eggs.

Food is the largest consumption category in India

As a result, Indian food processing industry has become an attractive destination for investors the world over. The total inflow of foreign direct investment (FDI), year-wise, in food processing sector during the period 2000-01 to 2007-08 (upto November 2007) is as follows: Year 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 (upto November 2007) Grand Total Foreign Direct Investment (Rs. in Crores) 0198.13 1036.12 0176.53 0510.85 0174.08 0182.94 0441.00 0061.63 2781.28

(Source: Annual Report 2007-08, Ministry of Food Processing Industries) Though the private, public and co-operative sectors are to play their rightful role in the progress of the industry, the 'Ministry of Food Processing Industries' is the nodal agency for developing a strong and vibrant food processing sector in the country. It acts as a catalyst and facilitator for attracting domestic and foreign investments towards developing large integrated processing capacities; providing technical guidance and advice to the industry; as well as creating conducive environment for its growth. It covers the products of fruits and vegetables, dairy, milk, poultry, fishery, consumer food, grains; non-molasses based alcoholic drinks, aerated water and soft drinks.

Indian Food Processing Industry by sectors

The industry structure and ongoing transformation offers opportunities for organized players to invest and grow. As the Indian market matures and consumers become morequality and brand conscious, the organized sector is poised to grow and gain prominence.

Processed fruits and vegetables Animal Products Other processed products

2008-09 Quantity Value 385984.29 1100.57 292652.2 1031177.3 1500.93 1780.07

2009-10 Quantity Value 423924.61 1206.93 359726.28 988950.37 1800.53 1720.11

2010-11 Quantity Value 429797.92 1125.8 793467.42 1279619 2024.8 2316.4

2011-12 Quantity Value 589976.7 1462.72 629550.2 616755.9 2252.33 2032.34

Source: Agricultural and Processed Food Products Export Development Authority, India

Dairy Products:
MAJOR PLAYERS:- Amul, Britannia, and others include Vijaya, Verka and Vadilal. In the category of cheese Amul, Britannia Dabur (Le Bon) are the leading players including others like Verka, Nandini, Vijaya and Vadilal. TRENDS About 15% of the total milk output in India is estimated to be processed in the organized dairy. The industry has maintained a high growth profile, especially in the wake of the Operation Flood, colloquially also termed as White Revolution, initiated in early 1980s.

Today, India produces over 85 mn tonnes of milk annually. The total milk economy is estimated at Rs 1300 billion in terms of value. India has the highest livestock population in the world with 50% of the buffaloes and 20% of the worlds cattle population, most of which are milch cows and milch buffaloes. Indias dairy industry is considered as one of the most successful development programmes.

In the year 2006-07the total milk production in the country was over 94.6 million tonnes with a per capita availability of 229 gms per day. The industry had been recording an annual growth of 4% during the period 1993-2005, which is almost 3 times the average growth rate of the dairy industry in the world. Milk processing in India is around 35%, of which the organized dairy industry account for 13% of the milk produced, while the rest of the milk is either consumed at farm level, or sold as fresh, non-pasteurized milk through unorganized channels. Indian companies are preparing themselves to meet international standards and other non-tariff barriers. Planners are taking measures to meet the sanitary and phyto-sanitary specifications - prescribed by Office International des Epizooties (OIE) under the auspices of the World Trade Organization (WTO) -, which range from the quality assurance of processed dairy products to the health status of livestock.

Beverages:
MAJOR PLAYERS:- Kingfisher, Heywards 2000, Heywards 5000, Kalyani Black Label, Kalyani Strong, Golden Eagle, Black Knight, Pelican, London Diet, Thunderbolt, Kaiser, Pilsner, Haake Beek, Lal Toofan, Castle Beer, Hi-Five. Lead Players & Alliances United Breweries, Carlsberg Denmark, Kingfisher Properties, Skol Brew, Mohan Breweries & Dist, Mohan Meakins, Shaw Wallace, Associated Breweries, Mount Shivalik, Inertia Inds, Winsome Brew, Heminger Brau Ger, Fosters India, Lilasons

TRENDS The average per capita consumption of wine is 4.6 ml, a little less than contents of a medicinal syringe per person. Ten years ago, the market for wines did not exist. But by the next two years, it could rise to as much as 7 ml. Domestic cheap wines constitute 150,000 cases per annum, domestic wines of international standard (produced by Sula, Grover) comprise 160,000 cases, wines imported in bulk and bottled here constitute 15,000 cases and imported wines comprise 50,000 cases. Wines have grown at 22% annually. The potential for wine sales in India is considered to be very large. The super premium segment with wines retailing for Rs 550 to 650 accounts for 12,500 cases with premium wines (price Rs 300/450) being a 50,000 case market. With an annual growth of about 30% since 1997, the wine market is showing a healthy upswing. Indage commands 75% of the market, while the balance is shared by Sula Vineyards and Grover Vineyards. Chateau Indage is introducing a white wine, Rhine Pride. About 50,000 bottles of Rhine Pride are expected to be sold in one year. This is the result of a joint venture between Chateau Indage and the German partners, Peter Meters, Bernakastel. It is a two-way joint venture: bulk bottling of the Indian wine produced by Indage will be sold under the brand name Angoori in Germany and Rine Pride will be bottled and sold by Chateau in India.

Meat:
Major players: Venkateswara Group,Suguna Poultry Farms Ltd, Pioneer Poultry Group,Godrej Agrovet Ltd,Sky Lark group,Jafa com feed. Trends Since 1995, production of meat & meat products has been steadily growing at a rate of 4% p.a.. Currently, the processing level of buffalo meat is estimated at 21%, poultry 6% and marine products 8%. Only about 1% of the total meat is converted into value added products like sausages, ham, bacon, kababs, meatballs, etc. Production of meat is governed

under local by-laws as slaughtering is a state subject. Processing of meat is licensed under the Meat Food Products Order, 1973.

Bakery Products:
MAJOR Player:- Allen Splash, After Eight, Quality Street, Polo Mints, Melody, Poppins, Paan Pasand, Toffo Toffee, Rolla-a-Cola, Coffee Bite, Pascal, Trebot, Lacto King, Coconut Punch, Caramilk, Eclairs, Googly, Roe Candy, Americano are the leading confectionary brands in the Indian market. Lead Players and Alliances in Confectionary Parrys' Lief, Finland, Nutrine, Ravalgaon, Candico (India) Curt Georgi UK, Cadbury, P&G Hygiene, Warner Lambert, Nestle TRENDS The Indian bakery industry is dominated by the small-scale sector with an estimated 50,000 small and medium-size producers, along with 15 units in the organized sector. Apart from the nature of the industry, which gravitates to the markets and caters to the local tastes, the industry is widely dispersed also due to the reservation policies (relating to the small scale industries) of the government. The confectionery market of India includes sugar boiled confectionery, hard-boiled candies, toffees and other sugar-based candies. Sugar boiled confectionery had penetrated an estimated 15% of the households only further suggesting a large potential for growth. Considering the 22% penetration in the urban market, the confectionery industry could hope to be in for great times.

In India the annual per capita consumption of branded confectionery is still under 100 gms. Hard-boiled candy is reserved for the small-scale sector. There are about 5,000 units catering to the local markets. The big players have used a mix of franchise arrangements (with small units) and product formulations to get out of the reservation mode.

Biscuits and bread which are considered to be the major bakery product and they account for 82% of all bakery production. The unorganized sector accounts for about half of the total biscuit production estimated at 1.5 million tonnes. It also accounts for 85% of the total bread production and around 90% of the other bakery products estimated at 0.6 million tonnes. The last includes pastries, cakes, buns, rusks and others.

Snack Foods:
Indian snack food market has reached a value of Rs 1530 crore. It is one of the largest snack markets in the world. Potato chips are by far the largest product category within snacks, with 85% of the total market share. Snack nuts and savory snacks also add to the market. At present, popcorn has yet to break into the Indian market. Frito Lay's India, Pepsicos Snack Food Division having snack foods plants in Channa (Punjab) and Pune (Maharashtra), and going for another in (Sakrail) West Bengal with investment of Rs 75 Crores as the state of West Bengal has immense opportunities for agrobased industries. The company has carried out backward integration to source potatoes and other crops with farmers across the states.

Dabur India Ltd.

ruit juices, cooling pastes, coconut milk, tomato puree, lemon drink, chilli powder and honey.

Gitz Food Products Pvt. Ltd.

weet mix, namkeens, snack mixes, pure ghee, dairy whitner and milk powder.

Godrej Industries Ltd

edible oils, vanaspati, bakery fats, fruit drinks, fruit nectar and tomato puree.

Haldiram Marketing Pvt. Ltd MTR Foods Ltd

syrups, crushes, chips and papads ready-to-eat curries and rice, ready-to-cook gravies, frozen foods, ice cream, instant snack and dessert mixes, spices(turmeric, coriander, black pepper) and a variety of accompaniments like pickles and papads.

Mill Food Hindustan Lever Limited Britannia Industries Ltd

milk powder, baby food, cheese and other milk products. tea, instant coffee, biscuits, ice creams, salt, wheat flour, instant drinks biscuits, flavoured milk, dairy whitener, ghee, bread, cake and rusk.

Agro Tech Foods

wheat flour, edible oil, vanaspati, popcorn, French fries and green peas.

ITC Ltd.

flour, salt, ready to eat meals, biscuits, confectionaries, snacks and cooking pastes.

Food Processing Senario in Gujarat

Gujarat is endowed with abundant natural resources in terms of fertile land, varied soil and climatic conditions, river canal network, excellent State Government support to hi-tech agriculture and its value-added products and most important the enterprising farmers. The State tops the Agriculture Growth table in the country growing at Cumulative Average Growth Rate (CAGR) of 10.7% in last decade. The State is a leading producer of high value cash crops such as groundnut, cotton, sesame, castor, psyllium husk, cumin, etc. The production of cotton in Gujarat is 98 lakh bales, which accounts for one-third of production in the country. The production of total food grains during the year 2010-11 was 101 lakh tons as against 56 lakh tons in the previous year. The major vegetables grown in the State include onion, potato, brinjal, tomato, okra, etc. The State also enjoys leading position at all India level (1st rank to 4th rank) in the productivity of major crops. The production of milk in the State has crossed 9.0 million tons during 2010-11. There are 17 cooperative dairy plants and 25 private dairy plants engaged in production of valueadded products of milk. The State ranks first in marine fish production and contributes 28% of national export in quantity and 15% in terms of value. More than 30,000 food processing units are operating in Gujarat, providing an employment to about 1 million persons. The food processing units include fruits and vegetable processing units, milk processing units, fish processing units, spice processing units, oil seed processing units snacks manufacturing units, rice and dal processing units, confectionaries, etc.

The State Government has taken number of strategic initiatives to accelerate growth in the agriculture and food processing sector. Some of the initiatives are listed below

Massive programme for creating water harvesting structures to build checkdams, khettalavadis (farm-ponds) along with renovation and restoration of village tanks, and boribands (sandbag dams) etc. under Public Private Partnership, under mission mode. This has helped to create life saving supportive irrigation for kharif crops and also uplift ground water table in the State.

The State Government has adopted integrated approach for large scale implementation of micro irrigation system by creating an exclusive company (Gujarat Green Revolution Company) to make the best use of available water resources. This has helped the farmers to get single source micro irrigation support.

Gujarat is the first state offering intelligent distribution of power supply where villages get 3-phase power supply 24 x 7 days and farmers get 3-phase uninterrupted power supply for irrigation according to pre-announced schedule under Jyotirgram Scheme.

Introduction of innovative mass extension services that make research and know-how available to the farmers just before Kharif sowing, at his doorstep under the Krushi Mahotsav programme since 2005.

Soil samples from farmers land are collected sent to soil testing laboratories for in-depth analysis of soil type, minerals, micronutrients etc. to help farmers to save on unnecessary expenditures and guide them with appropriate doses of fertilizers and nutrients needed to enhance productivity under Soil Health Card Scheme. So far 42.39 lakhs Soil Health Cards have been issued to the farmers.

Gujarat State Horticulture Mission (GSHM) is implementing a National Horticulture Mission (NHM) in the State with a view to double the horticulture production and income of the farmers by adopting end to end approach with simultaneous development of post harvest infrastructure and marketing facilities.

Agro Industrial Policy 2000 was announced for creation of World-class Supply Chain, Promotion of Agro Processing and Agri Infrastructure Projects, by providing financial assistance to improve their competitiveness in global market and increase exports of value

added Agro and Food Products.

The State Government has announced financial incentives for setting up of Mega Food Park in Gujarat to accelerate the investment for Food Processing Sector. The financial incentives shall be similar to the Government of India Mega Food Park Scheme. These initiatives taken by the State Government would make Gujarat the destination of choice for the investors and processors both domestic and global.

Companies in Gujarat-Related with Food processed Sector Company

APRICOT FOODS PVT. LTD. DALAL RATILAL & SONS GUJARAT TRADING CO.

Sector
Mgf. Of Food Products. Wafers,Namkeen, Frozen Fruits And Vegetables Ice Cream Stabilisers, Tomato Ketch Up, Chiily Sauce, Soya Sauce, Jelly Cube, Fruit Crush, Chocolate Powder, Instant Chocopaste Dried Pallets, Puffed Pallets, Extruded Snack Products Dealing In All Kinds Of Food Products Mfg., Packer And Supplier Of Custard Powder, Baking Powder, Icing Sugar, Corn Flour, Drinking, Chocolate, Choco Paste, Sharbat And Bakery Items Fruit & Vegetables(Fresh, Processed & Dry),Food Products,Snacks Frooti Mango, Frooti Green Mango, Appy,

HARI OM INDUSTRIES UNIQUE FOODS JALARAM PRODUCTS

JAYSHANKAR FOOD INDUSTRIES PARLE INTERNATIONAL LTD.

Parle Bailley Aqua KISAN FOODS PRAGATI SALES CORP. JAYSON FOODS GUJARAT GENERAL FOODCHEM PVT.LTD. Food Processed Food Product Item. Dry Fruit Gift Packs, Food Processed Ice Cream Stabilisers, Tomato Ketch Up, Chiily Sauce, Soya Sauce, Jelly Cube, Fruit Crush, Chocolate Powder, Instant Chocopaste

Imports- Exports related with Food processing Products Indonesia: imports

GLOBAL TRADE POSITION
Indonesias food trade An overview

Indonesias achievement of self-sufficiency in rice production in 1984 was a source of great pride for the country. From that time, emphasis was placed on diversification. This involved the expansion of estate crops (such as palm oil and cocoa), fisheries (for both export and domestic consumption) and chicken (to lift domestic meat consumption).Most politicians, including the President, have re-dedicated themselves to a policy of selfsufficiency in the last year or so following Indonesias resumption of imp orts of rice,

which was seen by many as a failure of the policy. Despite that concern, Indonesia retains a high level of self-sufficiency in primary foodstuffs and processed foods overall.
Indonesia: imports and exports of processed food

1994 Export 813.1 Import 375.7

1995 818.6 879.8

1996 961.9 1328.2

1997 755.7 546.4

1998 958.3 1029.1

1999 955.5 680.0

2000 1042.4 502.3

2001 1184.2 719.4

2002

The United States of America, Canada, Australia and New Zealand are the major suppliers of Indonesias big ticket food commodity imports but China is becoming increasingly significant as a supplier of fresh fruit and vegetables and other food products. For example, China now dominates the large market for garlic in Indonesia. Thailand and other South East Asian countries, as well as India and Pakistan, are also significant fresh produce suppliers. The Netherlands and Denmark are significant suppliers of milk product

Indonesia: major food import items, 2012

Item Wheat Maize Sugar Soybeans Vegetables Fruit Dairy produce Total imports (US$m) Major suppliers 60 138 155 299 95 215 246 Australia, Canada, India, United States of America, China India, Thailand, Philippines Thailand, Brazil, Australia, India USA, Argentina, Malaysia, Canada Australia, USA, New Zealand, China China, USA, New Zealand, Australia, Thailand Australia, New Zealand, Netherlands, USA

Sources: Directorate General of Customs and Excise, Indonesia, 2012, viewed 10 September 2012, <http://www.beacukai.go.id/english/>; INSTATE analysis.

Indonesia is a major importer of agricultural commodities including wheat, soybeans, dairy products and corn.

Soybeans are particularly important. Indonesia is the world's second-largest consumer of soybeans, with citizens consuming an average of 10 kilograms per capita per year, particularly in the form of tofu and tempe (AAFC, 2010). The United States (U.S.) is currently Indonesia's largest soybean supplier (2009: 40.1%), however, imports from Argentina have been growing at a rapid pace in the past few years, up from 30.7% in 2008, to 36.1% in 2009 (Global Trade Atlas, 2010).

Wheat is also a major import, supplied primarily by Australia and Canada, and traditionally directed toward the Indonesian noodle industry. Growing demand for foreign wheat is now being driven by increased production of baked goods (AAFC, 2010; Global Trade Atlas, 2010).

The fastest growing agri-food imports are processed products. In 2009, Indonesian processed food and beverage imports totalled over US$5 million (Global Trade Atlas, 2010). These imports target both the consumer and foodservice markets.

Between 2002 and 2006, processed food imports for household consumption increased by 70%, while those for the food industry increased by over 100% (AAFC, 2010).

Indonesia: imports of consumer-oriented food products, 19992001 Product 2010 (US$m.) 9 3 22 1 3 126 8 8 56 59 17 3 2 2011 (US$m.) 19 6 63 2 10 253 12 5 135 64 30 4 1 2012 (US$m.) 20 5 41 2 1 317 14 2 140 73 29 5 2 Change in Value 20102012 (%) 122 67 86 100 -67 152 75 -75 150 24 71 67 0

Snack foods (exc. Nuts) Breakfast cereals and pancake mix Red meats, fresh/chilled/frozen Red meats, prepared/preserved Poultry meat Dairy products (excl. cheese) Cheese Eggs and products Fresh fruit Fresh vegetables Processed fruit and vegetables Fruit and vegetable juices Wine and beer

Source: United States Department of Agriculture Foreign Agricultural Service, Indonesia Exporter Guide Annual 2012, Global Agriculture Information Network Report #ID2027, Jakarta ATO, 2012 (based on United Nations Statistical Office data).

Indonesia: Exports related with Food processing Products

Indonesia is a strong international exporter of semi-processed and manufactured products; this has played an important role in driving Indonesia's economic growth (AAFC, 2010). Oil1, natural gas, electrical appliances, plywood, textiles, and rubber form the major exports (Central Intelligence Agency [CIA], 2010).

Indonesia is also a significant exporter of agricultural commodities. In particular, Indonesia is the world's largest producer of palm oil. In 2009, it surpassed Malaysia as the world's leading exporter, exporting 60% of its crude production, at a value of over US$10 million (Global Trade Atlas, 2010; PalmOilHQ, 2010).

In December 2009, growing concerns over the environmental damages of palm oil expansion in Indonesia caused major European purchasers, including Unilever, the world's top palm oil buyer, along with Nestl, to halt their purchases of palm oil from PT Smart, part of Indonesian conglomerate Sinar Mas (Reuters, 2010; The Economist, 2010). Despite this controversy, the Indonesian industry forecasts palm oil exports to continue to grow, driven primarily by strong demand from China and India (Reuters, 2010).

Exports of shrimp and prawns, cocoa beans, and coffee are also significant, with values of over US$500,000 each (Global Trade Atlas, 2010). Indonesia's top export destinations for agri-food and seafood products are its geographical neighbours: India (18.4%), China (9.7%), and Malaysia (8.2%). TheU.S. and the Netherlands are also top destinations, each accounting for 8.5% of total agri-food and seafood exports in 2009 (Global Trade Atlas, 2010).

With an overwhelmingly Muslim population, Indonesia requires that all imports of meat products (except pork) acquire Halal certification by a certifying body, recognized and

approved by the Indonesian Ulema Council (MUI). Currently, Indonesia imports beef and veal products from Australia, New Zealand, Canada, theU.S., Singapore, Malaysia and Brazil (Global Trade Atlas, 2010).
2009-10 PRODUCT FLORICULTURE
Floriculture Fruit and Vegetable Seeds

2010-11 Value
29446.36 14507.51

Qty
26814.52 8883.86

Qty
28906.79 11622.33

Value
29604.04 18491.77

2011-12 Qty Value

30926.02 15205.81 36532.15 28776.35

Total FRESH FRUITS & VEGETABLES

Fresh Onions Other Fresh Vegetables Other Fresh Fruits Fresh Grapes Walnuts Fresh Mangoes

35698.38

43953.87

40529.12

48095.81

46131.83

65308.5

1664922.39 419241.35 260675.43 131153.61 9073.38 74460.61

231942.98 73185.9 52283.32 54533.89 19789.51 20053.98

1182324.2 494754.6 254899.24 98005.12 5762.34 58863.41

177928.62 90975.88 49597.86 42830.28 16629.25 16483.6

1309924.82 729810.62 271347.82 108584.56 5841.56 63441.29

172299.8 129893.77 73586.2 60288.15 23108.4 20974.3

Total PROCESSED FRUITS AND VEGETABLES

Other Processed Fruits and Vegetables Pulses Dried and Preserved Vegetables Mango Pulp

2559526.77

451789.58

2094608.9

394445.49 2488950.6

480150

397978.17 100130.94 124613.5 186197.85

143550.63 40832.47 53207.48 74460.77

349498.25 209010.49 108486.85 170219.72

137282.6 87004.28 50173.58 81893.27

459514.68 174625.18 138464.03 150499.06

211785.85 106793.13 70018.8 62082.91

Total ANIMAL PRODUCTS

Buffalo Meat Poultry Products Natural Honey Dairy Products Sheep / Goat Meat Processed Meat Animal Casings Swine Meat

808920.46
495019.71 1016783.1 13310.77 34379.97 52868.01 716.19 2020.56 1117.96

312051.35
548060.08 37211.85 14665.42 40268.39 74720.07 958.51 3152.74 1034.9

837215.31
726287.27 516753.83 25979.21 37435.87 12298.38 1305.96 1804.72 1009.91

356353.73 923102.95
860778.59 31427.21 30086.76 54797.37 25879.45 1950.01 3323.61 939.56 985491.27 624165.64 26089.03 25639.51 11181.04 1703.12 923.56 305.97

450680
1372522.9 45781.45 32123.96 28935.68 25522.07 3000.52 2705.01 351.42

Total OTHER PROCESSED FOODS

Guargum Ground Nuts Jaggery and Confectionery

1616216.27

720071.96

1322875.1

1009182.5 1675499.1

1510943
1652386.7 1 524644.77 345939.5

218479.74 340246.31 53639.76

113330.55 142593.3 23320.18

441607.7 433753.23 615729.96

293869.89 217840.59 203584.7

707326.43 832616.93 1066428.39

Cereal Preparations Alcoholic Beverages Miscellaneous Preparations Cocoa Products

168795.5 69371.13 159937.33 5863.88

101353.72 58579.64 69800.8 9699.45

222651.36 122490.71 184524.97 9077.54

125280.29 81751.3 89233.93 12696.83

296537.33 214271.74 271831.5 16678.58

187004.37 145992.24 130064.66 17597.61

Total

1016333.65

518677.64

2029835.4

1024257.5 3405690.9

3003629

Trade Agreements

Indonesia is a member of the Association of Southeast Asian Nations (ASEAN), which calls on members to significantly reduce trade barriers within the Association, and acts as a forum for the harmonization of national legislations. The Association also participates in trade negotiations with other countries in the region.

As a member of ASEAN, Indonesia is party to free-trade agreements with Japan, South Korea, China, India, Australia and New Zealand. A more comprehensive bilateral free-trade agreement was signed between Japan and Indonesia in August 2007. Similar bilateral agreements are currently being discussed or negotiated with India, Australia, New Zealand, and Egypt.

Indonesia is also a member of the Asia Pacific Economic Cooperation (APEC), a consortium of both Asia-Pacific countries and other major economies, such as theU.S. and Canada. Established in 1989, APEC's goals are to foster economic growth in the Asia-Pacific region, through enhanced free trade and investment (AAFC, 2010). Regional Trade Partners Share Major import sources Major export destinations (2012) (%) (20) Asia-Pacific 56.8 Asia-Pacific Europe 12.7 Europe North America 10.0 Other countries Africa and the Middle Other Countries 9.4 East Africa and the Middle East 6.0 North America Australasia 3.4 Australasia

Share (%) 59.5 10.5 8.7 8.0 7.6 3.7

Source: Euromonitor International, 2010c

India-Exports
Given the huge potential for manufacturing of the processed food products and limitation of the domestic market in consuming these products, it is imperative that concerted efforts are made to export processed food.

India exports mostly to the proximate countries

Indias geographical situation gives it the unique advantage of connectivity to Europe, the Middle East, Japan, Singapore, Thailand, Malaysia and Korea. Globally, most of the countries import from countries that are geographically closer. For example, 45% of USA imports are from Canada and Mexico. EU imports 50% from Spain, Netherlands, France, Italy, Belgium and Germany

DETAILS OF EXPORT of PROCESSED FOOD ITEMS FOR THE LAST 5 YEARS (Value: Rs. Crores)

The expected decline in the export of processed food and marine food sector in 2001 2002 is attributed to slow down in global economy and recession in demand from USA, Japan and countries under European Union. Export of rice has suffered as one of the major buyers, Bangladesh, did not import much rice due to their own good crop. Moreover, countries like Thailand and Vietnam are emerging as major competitors.

Rules and Regulation for Food Processing Sector

Rules and Regulation in Indonesia with respect to Food Processing Sector

Tariffs

Indonesia has cut its tariffs on food and other imports sharply during the last ten years. Effective from 1 February 1998, tariffs on all food items were reduced to a maximum of 5%, with just a few exceptions. A summary of current tariff rates on food products is set out in The rates summarised in Table 5.1 are so called applied or actual tariff rates. The bound rates, which are the maximum tariffs Indonesia has committed to as part of its membership of the WTO, are significantly higher.* For most food products, the bound rate is between 27% and60%, but the bound rates are significantly higher for rice (160%), milk and cream (210%) and alcoholic drinks (over 100%). A gap between the bound and applied tariffs means that, in theory, the Indonesian Government has scope to raise applied tariffs at some point in the future.

Summary of tariff rates on food imports Tariff level 0% Items soybeans cereal flours, groats, meal and pellets vegetable fats and oils maize (corn) oil live animals (except for breeding) dairy products fruit and vegetables coffee oilseeds (other than soybean) processed meat and seafood cocoa and cocoa preparations preparations of cereals, flour, starch or milk, incl. pastry cooks products preparations of veg, fruit or nuts waters wheat flour* malt, inulin, wheat gluten animal fats and oils, prepared edible fats, animal or vegetable waxes 10% fats of bovine animals, sheep or goats linseed oil castor oil sesame oil raw sugar / refined sugar wine and spirits

5%

30/35% 90170%

Source: World Trade Organisation, Trade Policy Review Indonesia A Report by the Secretariat, WTO, 28 May 2003

Specific duties

The percentage tariff rates summarised above are called ad valorem tariffs (or duties). However, Indonesia has applied fixed or specific duties on several imported food products. In some cases, the Indonesian Government has said this is in order to avoid under-invoicing practices. While rare, specific duties are in place on rice and sugar: For rice and rice flour, the import duty rate is currently set at Rp430/kg. Specific duties on raw sugar and white sugar were set at Rp450 and Rp534/kg respectively in June 2002 and were further increased to Rp550 and Rp700/kg respectively in March 2003.

Import duty calculation and check price system

Import duties and other domestic taxes (see below) are based on the CIF value; that is, the landed cost in an Indonesian port, including freight and insurance.As a result of underdeclaration of import values by some importers, Indonesian Customs implemented a check price system in 2002 to assess duties on all food product imports. In addition they switched some ad valorem duties to specific duties (see above). This system means that Indonesian officials have the discretion to assess what they consider a realistic valuation. This can be higher than the value declared by importers.

Other taxes
An income tax is levied at 2.5% of the CIF value of imports. Value added tax (VAT or PPN) is levied on almost all goods, including imports, at a rate of 10%. VAT applies to processed food products but not to fresh foodstuffs. A luxury tax of between 10% and 75% is levied on certain productswhether imported or produced domestically. Food products subject to luxury tax are: Yoghurt, cheese and butter: 10% luxury sales tax Alcoholic beverages: 4075%. 34 As of early 2004, reforms to the tax system were under consideration.

Importer registration and income tax

There are two type of importers, producer importers and general importers. All importers are required to register with the Ministry of Finance and Customs and Ministry of Industry and Trade and obtain a Tax registration number and an importers identity number (API) from the Ministry of Trade and Industry.

As of late 2003, Indonesia had about 7 000 registered importers, although up to 20% were thought likely to lose their licenses as a result of their failure to report required company data during recent anti-smuggling checks.

Prohibited imports
Indonesia prohibits the import of the following items: endangered species of wild flora and fauna and parts thereof certain dangerous species of fish and food and beverage items not registered with the Ministry of Health.

Import licences
Import licences are required for certain food products. These include: Rice and sugar (since 2002) Bulk dairy products including powdered milk, buttermilk and uncured cheese All chilled and frozen pork products Alcoholic beverages.

Restricted import rights

In addition to the state-owned importer of alcoholic beverages mentioned above, the other state trading organisation, which traditionally played an important role in food imports, is BULOG (Badan Urusan Logistik or the National Logistics Agency). This is a 100% stateowned trading enterprise. In 1999, BULOGs rice import monopoly was eliminated, however, it continues to stabilise domestic prices through its market intervention activities.

Food regulation: overview

Indonesias system of food regulation is based on: National standards including mandatory standards for selected products Sanitary / phytosanitary inspection of primary products Registration of processed food products by a specially constituted authoritythe National Agency of Drug and Food Control (BPOM) Food labelling regulations.

 National standards
National standards, which are the responsibility of the National Standards Agency (BSN), are generally optional, but three products are the subject of mandatory standards: wheat flour, salt, and raw sugar. Wheat flour and salt are required to include specified nutritional supplements, while the standard for raw sugar is directed at preventing the sale of raw sugar for direct consumption, as distinct from further processing. When the standard is mandatory, the Indonesian National Standards (SNI) mark must be carried on labelling. Indonesia is a member of the Codex Alimentarius Commission.

Sanitary and phytosanitary regulations

BPOM, which is an arm of the Ministry of Health, must test all processed food products and is also responsible for labelling and the issue of registration numbers (MLs) for imported food products. Control of imported fresh products, including fruit and vegetables, and meat is the responsibility of the Ministry of Agriculture (Pertanian)except for marine products, which are handled by the Maritime and Fisheries Ministry.

Labelling
New food labelling requirements were introduced in 1999* and are the responsibility of the Food and Drug Control Body (Badan POM or BPOM). Labelling requirements are designed to ensure that the consumer can be accurately informed about the ingredients in processed food and its status as a halal or non-halal product. Post market control is maintained through sampling and testing food products. Where discrepancies occur there are powers to reprimand, order withdrawal of products from sale, or prosecute through the courts. Key points of the current labelling requirements include: All packaged food products distributed in Indonesia must be labelled exclusively in Bahasa Indonesia language, Arabic numbers and Latin letters. The use of any other language, number and letters is permitted only where there are no substitute Indonesian words or if there is a difficulty in finding Indonesian words with a similar meaning; such approval must be obtained from the Indonesian Attorney-General.

 The use of stickers was authorised temporarily (until new legislation was enacted). Specific wording regarding content is required for labels of certain food i tems including milk products, baby food, alcoholic beverages, and halal food. If the product is halal, it must be certified by an approved authority The expiration date of perishable food items must be shown (and products must be landed in Indonesia with at least 2/3 of their stated shelf life remaining). Food additives must be identified. The name and address details of the importer must be stated. There are specific requirements for labelling of products with GMO content greater than 5% and also for irradiated products. SNI marks must be shown when relevant compulsory standards exist (these apply to sugar, salt and wheat flour). Non-compliance with labelling regulations can result in a fine of up to A$400 000.

Rules and Regulation in India with respect to Food Processing Sector

The objectives of the Ministry are to:

Utilize and make value addition to agricultural produce for enhancement of income of farmers. Minimize wastage at all stages in the food processing chain by the development of infrastructure for storage, transportation and processing of agro-food produce. Induct modern technology into the sector from both domestic and external sources. Use efficiently agricultural residues and by-products of the primary agricultural produce as well as of the processed industry. Encourage R&D in food processing for product and process development and improved packaging. Provide policy support, promotional initiatives and physical facilities to promote value added exports.

Promote rationalisation of tariffs and duties relating to food processing sector. Create the critical infrastructure to fill the gaps in the supply chain from farm to consumer.

The Government has accorded the sector a high priority and has undertaken several policy measures and initiatives. It has offered a number of fiscal reliefs and incentives as well as approved a large number of joint ventures, foreign collaborations, industrial licenses and 100% export oriented units (EOU) proposals in different food processing areas. Some of the important steps in this direction are:- (i) Most of the processed food items have been exempted from the purview of licensing under the Industries (Development & Regulation) Act, 1951, except items reserved for small-scale sector and alcoholic beverages; (ii) Food processing industries are included in the list of priority sector for bank lending in order to ensure easy availability of credit to them; (iii) Automatic approval for foreign equity upto 100% is available for most of the processed food items, excepting alcohol and beer and those reserved for small scale sector (subject to certain conditions); (iv) In budget 2007-08, excise duty has been waived on all kinds of food mixes including instant mixes, Soya Bari (food supplements) and ready to eat packaged goods as well as on biscuits; (v) Customs duty on sunflower oil (crude) reduced from 65% to 50% and on sunflower oil (refined) reduced from 75% to 60%; (vi) Special additional duty of 4% has been waived in the case of refined edible oil; (vii) Custom duty on food processing machinery reduced from 7.5% to 5%; etc.

Fruit Products Order (FPO), 1955 - promulgated under section 3 of theEssential Commodities Act, 1955, it provides for regulation of sanitary and hygienic conditions in manufacture of fruit and vegetable products. It aims to ensure that hygienic and good quality products are manufactured and sold. It is implemented by the Ministry through the Directorate of Fruit and Vegetable Preservation. The Directorate has five regional offices located at Delhi, Mumbai, Kolkata, Chennai and Guwahati as well as a sub-office at Lucknow. The licensing under this Order laid down the minimum requirement for the following items, namely:- (i) sanitary and hygienic conditions of premises, surrounding and personnel; (ii) water to be used

for processing; (iii) machinery and equipment; and (iv) products specifications. To keep pace with recent developments in the technologies and to harmonize the FPO standards with PFA, Codex, EU, FDA and other international food standards, the Ministry has taken the initiative to review the existing FPO, 1955 which aims to suggest amendment in the fruit and vegetable products standards based on the scientific development and modernization of the fruits and vegetables processing industries and the rules governing them.

Meat Food Products Order (MFPO), 1973 - promulgated under section 3 of theEssential Commodities Act, 1955 , it aims to ensure supply of wholesome meat food products to the consumers. It deals with quality control of meat food products from processing to finished product by way of ante-mortem and post-mortem inspection of meat animals so as to ensure hygienic conditions of processing of meat food products. It was earlier implemented by Directorate of Marketing and Inspection (DMI), but its administration has been transferred to the Ministry. The sanitary, hygienic, packing, marking and labelling requirements are specified. To keep pace with recent developments in the manufacture of meat food products and to harmonize the MFPO standards with PFA, Codex, EU, FDA and other international food standards, the Ministry has taken the initiative to review the existing MFPO, 1973 which aims to suggest amendment in the meat products standards based on the scientific development and modernization of the meat and meat processing industries and the rules governing them.

Food Safety and Standards Act, 2006 (Integrated Food Law) - has been enacted to:I. II. Consolidate the laws relating to food Establish the Food Safety and Standards Authority of India for laying down science based standards for articles of food

III.

Regulate manufacture, storage, distribution, sale and import of food articles with a view to ensure availability of safe and wholesome food for human consumption and

IV.

Pool infrastructure, manpower and testing facilities for better standard fixation and enforcement through their proper re-deployment.

Moreover, the Ministry of Food Processing Industries has finalised the document regarding the Vision 2015 for the growth of Indian food processing industries, which is known as the 'Integrated Strategy for Promotion of Agri-business - Vision, Strategy and Action Plan for the Food Processing Sector', based on the recommendations made by the Group of Ministers (GOM) for growth of the sector.

The objective of the strategy is to increase the level of processing of perishable food from 6% to 20%, value addition from 20% to 35% and share in global food trade from 1.6% to 3% by 2015. The level of processing for fruits and vegetables is envisaged to increase from the present 2.2% to 10% and 15% in 2010 and 2015 respectively.

The thrust areas identified for strategic intervention are detailed mapping of food clusters; establishment of Mega Food Parks in identified SSI/ horticulture/ meat/ dairy/ marine sectors; strengthening backward and forward linkages and developing supply chain with cold chain mechanism; modernisation of Abattoirs; developing infrastructure for organized food retail market; rationalizing tax structure for the sector; etc.

All these efforts have given competitive edge to the food processing industry on a global platform. More and more people are consuming value-added and processed food products. The industry possess high export opportunities and its growth seeks to bring immense benefits to the economy by raising agricultural yields, enhancing productivity, creating employment and raising life-standards of a large number of people across the country, especially those in rural areas. Thus, there exists innumerable business opportunities in the diverse areas of food processing.

But, the food processing sector still remains largely untapped because of high packing costs, cultural preference of the people for fresh food, seasonalities of raw materials, lack of adequate infrastructural facilities and quality control mechanism. As a result, there is a need to diversify the sector by fully harnessing its potentialities, providing greater incentives as well as creating conducive environment for more investments and exports. Packaging Centres The Scheme aims to provide facilities for packaging, which may help in enhancement of shelf life of food products and make them internationally acceptable. Assistance at 25 per cent of the project cost in general areas and 33.33 per cent in difficult areas subject to a maximum of Rs. 20 million is provided for establishment of packaging centre. Assistance is available to all implementing agencies. So far assistance of Rs. 1450 million has been sanctioned to one packaging centre in Jammu & Kashmir.