Scheme & Features

Pre-Bid Meeting for Expression of Interest

Scheme formulated to accelerate growth of food processing industry in the country

Cluster Based Approach

Demand driven with focus on strong backward and forward integration

Enabling Infrastructure Creation along the supply chain

Creation of Central Processing Centre and Primary Processing CentresCommon Facilities and amenities to be assistedLeverage investments in food processing units

Stakeholder participation with private led initiative through Special Purpose Vehicle (SPV)

Assistance to creation of common enabling facilities

Typical Project Cost envisaged – Rs 120-150 crore

Land – not eligible for funding out of GOI grant

Assistance from MinistryLimited to non-land component of the project 50% of project cost limited to Rs 50 crore in general areas75% of project cost limited to Rs 50 crore in difficult & hilly areas and ITDP notified areas

Mega Food ParksMega Food ParksHolistic & cluster based approach- centralized facilities for key activities which are technology and capital intensiveSpecific focus on setting up backward linkages for establishing viable supply chains - Provision for farm proximate aggregation & minimal processing infrastructureInfrastructure needs of a viable Food park /Zone estimated to be about Rs.1200 million(US $ 30 million) including farm proximate primary processing facilitiesEmphasis on economic viability

• PPCs would be fed by 5-10 collection

centres

• PPCs on 2-5 acres of land

• Food park (50-100 acres) fed by 10-12

PPCs

CPCPPC

PPC PPC PPC

PPC

PPC

PPC

PPCPPC

PP

C

Food ParkFood ParkPPC – Primary Processing CentrePPC – Primary Processing Centre

PPCCC CC

CC CC

CC CC

CC CC

CC CC

CC CC

CCCC

CC CC

CC CC

CC CC

Extended StorageExtended StorageProcessing

To Value addProcessing

To Value add Grading Sorting

Grading Sorting

Mega Food Park Model

Field Collection Centers

Primary Processing Centers

Precooling, Grading pulping Sorting, waxing,

packing , Temporary storage,

Central Processing Center

Pulping, Aseptic packing, CA chamber, Cold StoreQC lab, Logistics center,

Processing Units etc

Mega Mega Food ParkFood Park

- CPC- CPC

Importer

Exporter

Valu

e a

dd

ed P

rodu

ct

Domestic sales

Fre

sh P

rod

ucts

PPC PPC PPC

Domestic Retail sales

Farmer Groups Self Help Groups Individual farmers

Central Processing Centre : To consist of Developed plots for food processing units, Built factory sheds for MSEs and Core processing facilities along with basic infrastructure

Core Processing Facilities At CPC : Sorting and grading, Packaging unit, Dry warehouses, Specialized storage facilities including CA Chambers, Variable humidity stores, Pre-cooling chambers, Ripening chambers etc, Cold chain infrastructure, Irradiation facilities, Steam generation & sterilization units, Food incubation-cum-development centers etc.At least 50% of the project cost (excluding land cost) shall be towards creation of above mentioned facilitiesAbove is an indicative list of facilities and SPV may select or induct any facilities based on need & viabilityAdequate Consultation with the potential food processing units to finalize the components of CPC.

Primary Processing Centres(PPCs): To serve as spoke for CPC

Core Processing Facilities At Primary Processing Centers: Sorting and grading, packaging facilities , dry warehouses, specialized cold stores including pre-cooling chambers, ripening chambers , reefer vans, mobile pre-coolers and collection vansPPCs are envisaged as key components to facilitate strong linkages for sustainable supply for adequate raw materials to ensure at least 250 days of operationPPCs are to be strategically located for an optimum coverage in zone of influence of Mega Food Park.

Factory Buildings Provision For MSEs – Maximum 10% of total allottable area for setting up units

Enabling Basic InfrastructureRoads, drainage, water supply, electricity supply ETP, logistics facilities, weighbridges etc

Non –core InfrastructureAdmin buildings, training centers, canteen, workers hostel, trade/display center etc: Cost of non-core infrastructure facilities, not exceeding 10% of the project cost, would be eligible for grant purpose

Project Implementation ExpenseCost of hiring domain consultants (PMC) by SPV – limited to 2% of eligible grant amount

Supply Chain Management – Supply Chain Management – StrategyStrategy

Appropriate institutional development at grass roots level for backward linkages

Involvement of farmers/producers as stakeholders

Organizing farmers in SHGs-Cluster approachPossibility of formation of Producers’

Company involving SHGs/ farmers can be an option

Wherever possible, Centers to be owned and managed by SHGs/Entrepreneurs

Possibilities of contract farming

SPV can be constituted by stakeholders like infrastructure developers, FIs/Banks/PE Firms, Org. retailers, Food Processors & other service providers, Farmer Orgs. etc…

SPV to be a Body Corporate registered under the Companies Act

SPV should have wide dispersal of equity holding so that it enjoys benefit of collective composition

Each SPV to have

at least three entrepreneurs / business units independent of each other with no common directors at least one should be from the food processing sector with at least 26% equity in the SPV

SPVs to bring in at least 20% of the project cost, including the cost of land, as their contribution- 10% in case of Difficult, hilly & ITDP notified areas

Combined net worth of the shareholders of the SPV should not be less than Rs. 50 Cr - Food Processor should have at least 10 Cr of net worth

Government agencies may also become shareholders in SPV, holding to be less than 26% of share capital so as to ensure private sector character of the SPV

Reconstitution of SPV allowed but at least 75% of the initially approved shareholders to remain intact during implementation period of project.

Following points are to considered while constituting the SPV

Promoter with negative net worth in SPV is not allowedPromoter being a defaulter in RBI list is not allowedProposed equity should be in proportion to net worth of individual promoter

Formulation of Detailed Project Report (DPR)Procure land & ensure external infrastructure linkages

for the projects Obtain key statutory approvals/clearances including

environmental clearances etc. Achieve financial closure of project Responsible for development, ownership &

management of Mega Food ParkOperating a Trust and Retention Account (TRA) to

ensure utilization of grant in a transparent and judicious manner and maintain proper account

Execute project in a transparent, efficient & timely manner

At the time of Final Approval, the SPV must be in possession of requisite Land.

If the land is in possession with one of the promoters, then SPV should have clear title of land and it should be duly registered

Approval for change in land use for industrial/infrastructural purposes to be taken

Provision of “ sub-lease” clause to be stated clearly in case of Government land.

The area for CPC should have good accessibility to Market and Transport network

Details of the focus crops & raw material assessment to be provided

Viability of Mega Food Park cluster to be established and it should support at least 200 days of operation

Inherent risks in the continuous supply of raw materials to be identified and their mitigations to be identified.

Assist the Ministry in disseminating information about MFP Scheme & sensitizing the potential stakeholders about the MFPS

Assist the Ministry in selection of Projects Inviting Expression of Interest for projects under

the Scheme Evaluation/appraisal of techno-feasibility reports

and DPRs Appraisal of the DPRs

Assist in the evaluation of any amendments to the projects/DPRs

Assist the SPVs in financial closure

Monitor & report the progress of the Mega Food Park projects to the Ministry- Web-based MIS & Monitoring

PMC to be appointed by the SPVPMC to be selected from MFPI list of empanelled agencies

Any other consultants meeting the eligibility criteria as laid out by MFPI

PMC to assist SPV in Preparation of DPR

Implementation of project including day-to-day supervision

Preparation of BOQs and Bid Process Management in procurement of contractors/materials

Assist SPV in release of GoI grant, duly ensuring requisite documentation for release

Submission of EoI

Appraisal of EoI

In-Principle Approval

Submission of DPR

Appraisal of DPR

Final Approval of DPR

Release of GoI grant – In four phases

Appraisal by Programme Management Agency (PMA)

To be Scrutinized by Technical Committee (TC)

In-Principle Approval by Inter-Ministerial Approval Committee (AC)

Sl. No. Criteria

Max. Points

1 Viability of cluster

25Adequate volume of raw materials (should support at least 200 days of operation in a year)

A wider mix/variety of raw materials (at least 5 crops)

Agreements/arrangements for raw materials

2 Proposed Investment in Core Processing Facilities 10Upto Rs 50 crores

Rs 50-100 crore

More than Rs 100 crore

Sl. No. Criteria

Max. Points

3 Possession of appropriate land 10Complete possession including title to the land recorded in revenue records Allotment letter from State Agencies

Agreement to Sale

Land identified, but not acquired

4 Number of Stakeholders in the Proposed SPV

5

3-5 More than 5 Extent of involvement of food processing industry and farmer bodies

5 Shareholding Pattern of Stakeholders in the Proposed SPV

5

Food Processor(s) having more than 26% equity

None of the promoter having more than 49% of equity holding

Sl. No. Criteria

Max.Points

6 Net worth of Promoters of the SPV

25 

Rs.50-75 crore Rs.75 – 100 crore More than Rs.100 crore

7 Employment Generation

10 

  

Direct - More than 10,000 Between 5,000-10,000 Less than 5000IndirectMore than 20,000Between 10,000-20,000Less than 10,000

Sl. No. Criteria

Max. Points

8 Leveraging of Investment in food processing units in the CPC

10

Up to Rs.100 crore

Rs.100 - 200 crore

More than Rs.200 crore

Agreements/arrangements with proposed processing units

DPR to be submitted expeditiously – Latest by six months of In-Principle Approval

DPR to containDetailed cluster mapping, raw material assessment, product mix etcBusiness Plan Technical- Master plan, section design & drawings with quotationsFinancial- Detail project cost, P&L StatementManagement Aspects of the Project

Block cost should be provided for most of the components of infrastructure

Cap against costs & area allocation for core processing and basic enabling infrastructure as per scheme guidelines are to be followed

Developed plots in CPC can only be leased to food processing units and sale of the same is not allowed

User charges for various common facilities should be arrived at based on factoring in the GoI grant and existing industry norms

Approval Process

Appraisal of DPR by PMAScrutiny by Technical Committee (TC)Final Approval by Inter-Ministerial Approval Committee (AC)

Pre-requisites for DPR Approval

Incorporation and registration of SPVExecution of share subscription agreementPossession of requisite land by SPVMeans of FinanceIn-principle sanction Letter from Bank

To be released in 4 installment1st installment of 30% of grant amount in two phases

1st phase – 10% as advance within 15 days of Final Approval

Incorporation of SPV.

 Possession of land with SPV as per DPR requirements, and its conversion into industrial use, if needed.Execution of share subscription agreement Establishment of Trust and Retention Account in a Schedule ’A’ Commercial Bank and signing of TRA agreement Appointment of a nominee from the Ministry on Board of the SPV- Tenure of the Ministry nominee will be co-terminus to operationalization of the project.  Final approval of the project by AC.Proof of equity contribution of at least 10% by SPVProof of appointment of PMCRecommendation of PMA confirming the above points

2nd phase – 20% of grant amountSubmission of Utilization Certificate for the grant released in the 1st phase of First installment Details of the contribution of the SPV towards its share of the project cost.  Sanction Letter for loan Component, in case SPV is taking term loans.  Award of contracts worth at least equivalent to 30% of the total project cost, excluding the land cost.

The release to be made within 30 days of the SPV requesting the same, upon completion of aforesaid conditions

2nd installment of 30% of grant amountafter the utilization of the 2nd phase of the first installment- Submission of Utilization Certificate (UC) of the 1st Installment. after further proportionate expenditure (equal to the GOI share released) has been incurred by the SPV on the project excluding cost of land.

The release shall be made within 30 days of the SPV requesting the same, upon completion of aforesaid conditions.

3rd installment of 30% of grant amountafter the utilization of the 2nd installment - Submission of Utilization Certificate (UC) of the 2nd Installmentafter further proportionate expenditure (equal to the GOI share released) has been incurred by the SPV on the project excluding cost of land.

The release shall be made within 30 days of the SPV requesting the same, upon completion of aforesaid conditions.

4th installment of 10% of grant amount on

Successful completion and operationalization of the projectAt least 30% capacity utilization of common facilities Submission of Utilization Certificate for 3rd installmentSeparate accounts to be kept for GoI fundsRefund with accrued interest as per GoI norms in event of SPV withdrawing from the project

Thank You

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