Fast growing food processing in India

December 12, 2016


In India, food and beverage processing, preserving and distribution are becoming increasingly important—both to ensure the availability of food at a relatively low cost for this vast country’s growing population and to fuel a developing export sector. Because of its climate diversity, India is one of the few countries in the world capable of producing a wide variety of crops and an abundance of livestock year round. And nickel-containing stainless steel is playing a key role in India’s food processing industries through its use in equipment, components and appliances.

World’s fastest growing economy

In 2016, India was recognized as the world’s fastest growing economy. By 2020, it is estimated that household consumption in India is set to nearly double. Changing lifestyles and increasing expenditure on health and hygiene mean there is huge potential for growth in the food sector. And rapid urbanisation and a young population, together with growing disposable income have increased the demand for processed food in particular. With its increased integration in the global economy and proximity to key foreign markets, India’s food processing industry is also seeing greater export potential.

The Government of India has been instrumental in the growth and development of this sector. Through the Ministry of Food Processing Industries it is making efforts to encourage investment in the food industry, which seem to be paying off. According to the Department of Industrial Policies and Promotion, the food processing sector in India has received around US $6.82 billion of foreign direct investment between April 2000 and March 2016.

Opportunity in every segment

The Indian food processing industry accounts for almost one third of the total food market and is ranked fifth in terms of production, consumption, export and expected growth in the country. It contributes around 14% of manufacturing Gross Domestic Product (GDP) and 13% of India’s exports. Similar to other parts of the world, India categorises food processing into six major segments; fruits and vegetables, milk, meat and poultry, marine products, grain processing and consumer foods. India today is the second largest producer of fruits and vegetables in the world and this sector is expected to grow 25% by 2025. The country is the world’s largest producer of milk, the largest producer of buffalo meat, and second largest producer of goat meat, eggs and broiler meat. It is estimated that India produces 200 million tonnes of different food grains annually. Processed food has been one of the fastest growing segments in the food chain. In particular, demand is increasing for packaged food, carbonated soft drinks, alcoholic beverages and bottled drinking water.

New mega food parks

The Confederation of Indian Industry estimates that the foodprocessing sectors have the potential to attract as much asUS $33 billion of investment over the next ten years. The Ministry of Food Processing Industries is actively promoting the concept of mega food parks (MFPs). Fourteen new MFPs have been approved and six are now in operation. The Government is also promoting skills development programmes. These are designed to enable the food processing industry to step up to stringent quality and hygiene norms which protect consumer health and are preparing the industry to face global competition.

A big appetite for Types 304 and 316

In the food processing sector, stainless steel is used extensively in items including bottling plants, cooking kettles, blenders, mixers, cooling tunnels, storage tanks, bio-tech reactors, digesters, process piping, pumps, valves flanges, and conveyers. Type 304 (30400) and Type 316 (S31600) stainless steels are favoured by Indian manufacturers of food processing machinery. A recent study of the stainless steels market conducted by the Joint Plant Committee, Ministry of Steel, estimated that almost 80% of the requirement in this sector is for Type 304 grade stainless steel and the balance in Type 316. These nickel-containing austenitic stainless steels have been adopted worldwide in the food processing industry and are found to be safe, passing all the technical requirements of food grade safety and hygiene standards, due to their corrosion resistance, non-toxicity, stable and non-absorbent contact surface as well as cleanability.

Serving up long-term growth and safety

It is estimated that around 50,000 tonnes of stainless steel will be used in India’s food processing sector in 2016 alone. The long-term growth of stainless steel from this sector is anticipated to increase by around 13.4% per annum over the next decade.

The major fabricators of the food processing machinery such as Alpha Laval, Tetra Pak and L&T have been using nickel-containing austenitic stainless steels for the majority of their projects. Food processing companies are creating awareness among health conscious consumers, highlighting indicators of health and wellbeing of the ingredients and promoting the fact that hygiene is best maintained in production lines made with materials safe for food processing. Indian manufacturers of processed food are well aware that stainless steels help maintain the quality of food while processing and inspire consumer confidence. Considering the overall high growth potential, the food processing industry in India has a bright future and
nickel-containing stainless steel has an essential role to play.

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