INDUSTRY REPORT Animal Husbandry 2019

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INDUSTRY REPORT Animal Husbandry 2019

July, 2019

INDEX Overview of Animal Husbandry Industry in India …3

Positioning of Telangana & Andhra Pradesh …4

Why Telangana & Andhra Pradesh? …5

Demand Drivers

o Existing conducive Ecosystem …7

o Growing Cold Storage Industry …10

o Growing Food Processing Sector …12

Initiatives and Policy Support by Government …13

Why Hyderabad as a Destination for Organizing

Expos on Animal Husbandry ...16

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Overview of Animal Husbandry Industry in India

3 Sources: 1) IMARCGROUP report, 2018 2) Animal Feed Sector report by Yes Bank 3) Telangana State Portal Home

The Indian Animal Husbandry Market is worth of INR 3,500 – 4,000 Billion in FY 2018-19 It is projected to reach INR 7,000– 7,500 Billion by 2024 Exhibiting a CAGR of 11.8% during 2019-2024

Market segmentation

Poultry Cattle Aqua Others

10% 12% 8% 10% Poultry 55%

Cattle 11%

Aqua 14%

Others 20%

Segment wise break up

Region wise break up

Hyderabad + AP 80%

Others 20%

Poultry

West 48%

North 17%

South 31%

East 4%

Cattle

Estimated Market size of Animal Husbandry in Telangana & AP for FY 2018-19 is INR 1,200 – 1,400 Billion

Growing a CAGR of 12-13% over next five years Products of Animal Origin is identified one of the top exported products from

Hyderabad & AP with a total export value to INR 300 Crore Livestock Production in 2015-16 (1) Milk: 44,42,300 Tonnes (2) Meat: 2,80,000Tonnes (3) Chicken: 2,63.000 Tonnes (4) Eggs: 1,13,000 Lakh no.s (5) Fish: 2,36,800 Tonnes

South 44%

East 28%

West 20%

North 8%

Aqua

Animal Husbandry Industry in Telangana & Andhra Pradesh (refer as AP in report)

CGAR %

Positioning of Telangana & Andhra Pradesh

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Poultry has identified as a thrust area and core sector by the Government

1. Telangana, a market leader in the poultry and seed business, rank 2nd in production of Eggs amongst all states of India

2. The poultry industry contributes about INR 12,000 crore to the State GDP & provides employment to about six Lakh people

3. The State has about 2,000 layer farms, 6,000 broiler farmers and around 20 mills

For Fisheries sector, AP & Hyderabad are the leader in the country

1. The states contribution to national (44%) and global fish production (1.19%) respectively. Andhra Pradesh ranks 2nd in India in terms of fish production.

2. Targeting of 42 lakh tonnes of production by 2020 3. Seafood exports were fetching INR 40,000 crores in foreign exchange and AP’s

contribution is the highest INR 17,000 crores i

Growing Dairy sector in the state

1. In Telangana, about 105 lakh litres of milk is produced every day. The state of Andhra Pradesh ranks 6th in India in terms of milk production. o 48 % is procured by milk producers for manufacturing various products

ranging from processed milk, curd and buttermilk to butter, ghee, paneer and sweets

o Remaining 52% (55 lakh litres) milk is consumed by people

Sources: 1) AICRP website, Indian Poultry Equipment Manufacturers Association 2) Online article: The Hindu, Telangana Today, Financial Express, The Hans India 3) Telangana State Portal 4) www.vetextention.com

1. Telangana ranks 1st and Andhra Pradesh ranks 3rd in meat consumption across India. 2. Telangana produces 542,000 tonnes of meat in a year and the meat producing regions

are Medak, Mahbubnagar and Rangareddy. 3. Meat processing clusters are located at Medak, Mahbubnagar, Rangareddy and

Hyderabad. 4. Andhra Pradesh has highest sheep meat production across India

Meat sector in the state

Why Telangana & Andhra Pradesh? (1/2)

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Hyderabad is gearing up to become the largest industrial hub in Telangana and South India, as it has existing conducive ecosystem 1. 100+ organization involved in Dairy Sector

o Andhra Pradesh Dairy Development, Sri Vijaya Visakha Milk Producers, The Krishna District Milk, The Guntur District Milk, The Prakasham District Milk, The Nellore District Milk, Heritage Foods, Dodla Dairy, Tirumala Milk, Creamline Dairy, Dolphin Dairy etc.

2. Presence of 60+ premier institutes and training centers within two states: o SMILDA6, VBRI7, QAL8, APVC9 State Animal Husbandry Training Centre, Veterinary

Biological Research, State Animal Husbandry Training Centre etc

4. 3000+ Veterinary Institute, which includes Super specialty vet. Hospitals, Poly clinics, hospitals, dispensaries, mobile veterinary clinics & rural livestock units

7. Presence of 5000 + societies involved in Sheep & Goat Sector in various pockets of the region: Mahabubnagar (794 Societies), Karimnagar (599), Warangal (497), Nalgonda (350) are the majors

6. More than 250+ recognized slaughter houses within the two states

Continue…

5. 3,500+ artificial insemination centers

Note: “1” Directorate of Poultry Research “2” Indian Council Agriculture Research “3” Institute and Indian Poultry Equipment Manufacturers Association “4” Project Directorate on Poultry “5” National Egg Coordination Committee “6” State Management Institute for Livestock Development “7” Veterinary Biological & Rech Institute “8” Quality Assessment Laboratory “9” Andhra Pradesh Vigilance Commission

Presence of organization involved in bovine breeding activities (100+) o Andhra Pradesh Livestock, Krishna Livestock Development Association, West

Godavari Area Livestock, Prakasham Livestock Development, Nellore Livestock Development, Kurnool-Cuddapah Livestock, Anantapur Livestock Development, Warangal-Khammam Livestock, Karimnagar-Adilabad Livestock etc

Why Telangana & Andhra Pradesh? (2/2)

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3. Have a good support of suppliers to this industry: o Fodder Seed Suppliers (20+)

• The Hyderabad Agricultural Cooperative Association, Andhra Pradesh State Agro , National Agricultural Cooperative, Indur District Co-operative etc.

o Supply of Veterinary Drugs & Therapeutics and euquipment (50+) • Century Pharma, Darwin Formulations, Devee Biologicals, Eastwin Laboratories,

Himalaya Meditek, Hindustan Therapeutics, Indian Genomix, Indian Immunologicals Limited, Kemotheraptik Drugs, Neospark Drugs and Chemicals etc

Existing Partners

Hyderabad is gearing up to become the largest industrial hub in Telangana and South India, as it has existing conducive ecosystem 1. Presence of 80+ large & medium organisations in Poultry sector:

o DPR1, ICAR2, IPEMA3, PDP4, NECC5, A.P. Poultry Federation, Poultry Breeders Association, All India Poultry Breeders Association,Sneha Foods Limited, Srinivas Hatcheries , Balaji Hatcheries, V S N Hatcheries, Mulpuri Group etc.

Demand Drivers (1/6)

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1. Existing conducive Ecosystem 1.1 Dairy

• Vijaya Dairy plans INR 175 Crore milk processing plant at Medchal

• It plans to augment its capacity from 4.5 lakh litres to 8 lakh litres

• NABARD would give the required loan if the proposal receives the consent of the National Dairy Development Board

• KMPC* is setting up a mega dairy plant with a capacity of processing 3 lakh litres milk a day at Nallagonda under Thimmapur mandal

• With an investment of INR 63 Crore and will benefit 75,000 farmers & will generate direct employment to 500 persons

Note: The Karimnagar Milk Producers Company* Telangana State Dairy Development Cooperative Federation** Lakh litres per day *** Ultra-High-Temperature****

• Tirumala Milk's Naidu is planning to set up a processing in Andhra Pradesh and Hyderabad

• With an initial investment of over INR 100 Crore

• TSDDCF** plans to set up a state-of-the-art milk procurement and processing facility in 100 acre in Hyderabad

• Upgrading its existing plant at by increasing its daily capacity from 5.5 to 10 LLPD*** capacity at a cost of INR 180 Crores

• It would also have a INR 30 Crore UHT**** packaging unit • And would also have a milk powder plant of 30 MT capacity at an estimated cost

of INR 40 crore

Sources: Online article: Hans India, The Hindu, The Hindu2

Demand Drivers (2/6)

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1.2 Meat Food Telangana to add more meat to food processing industry • Telangana State exported about 59,800 metric tonnes of buffalo meat and another

420 tonnes of sheep meat to foreign countries during the financial year 2017-18

• To increase sheep meat production, the State government took up sheep distribution scheme to distribute over 42 lakh sheep resulted in reproduction of 18 lakh lambs taking the total sheep population to 2.3 crore in the State

• Lulu Group likely to propose a meat processing unit in 100 acres

on the outskirts of Hyderabad • Lulu proposed to invest Rs 2,500 crore to construct shopping

mall, set up food processing plant, and a logistics and export processing unit for fruits and vegetables

• The new meat processing unit will be in addition to the proposed investments

• Creamline Dairy plans INR 400 crore spend Hyderabad • It recently has acquired a processing plant near Tirunelveli

near Kanyakumari at an investment of INR 40 crore • A new plant of one lakh litre per day capacity is being

readied near Visakhapatnam at a cost of INR 35 crore and will serve four coastal district

• Fish production in Telangana is likely to touch 3 lakh tonnes in FY 2018-19. Due to the push being given by Government of Telangana as promoting aquaculture in the water bodies and reservoirs • Telangana occupies 3rd place in inland water resources with 77 large, medium

and minor reservoirs, 4,647 major tanks and 20,000 medium & minor tanks vested with State Fisheries department

• A Fisheries and Aqua culture Infrastructure Development Fund (FAIDF) and an animal Husbandry Infrastructure Development Fund (AHIDF) will be started with a total corpus of INR 10,000 crore

1.3 Fisheries

Demand Drivers (3/6)

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1.3 Fisheries (Cont.…)

2.46 3.5

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2014 2018 2025

Fishery Production in Telangana (in Lakh tonne)

16.85% The increased produce was on account of the government’s scheme of supplying fish seed to fisheries cooperative societies free of cost and preservation of water in fish growing ponds

Mega Projects by the State Government

1) Kaleshwaram lift irrigation : With the project starts, the fishermen community would be its major beneficiary • Government of Telagana has started Kaleshwaram Lift Irrigation Scheme worth

INR 80,000 Crore, the costliest irrigation project so far • It envisages irrigating 18 lakh acres of land in 13 districts, stabilizing another 17

lakh acres in another seven districts

Sources: Online article: The Hindu, Telangana Today

2) The Government has prioritized to restore minor irrigation tanks & utilize 255 TMC of water allocated for irrigation sector under Godavari & Krishna River basins • Planned to restore 9,306 tanks every year (20% of total tanks)

with an eventual target of restoring all 46,531 tanks in 5 years • NABARD has sanctioned a loan assistance of INR 317.036 Crore

1.4 Poultry on a growth path in Telangana 1. Broiler farming is concentrated in and around Hyderabad and an output of around 6.6

crore kg per month is generated making it the Poultry Bowl of India 2. Presence of large integrators like Venkys, GoldChick, Sneha, Diamond, SR Hatcheries,

Kohinoor and other small and medium players here is an advantage 3. The layer bird population is about 4.25 crore out of the total 25 crore birds in the

country 4. About 1.8 crore eggs are consumed in the State per day taking the per capita

consumption in the State to 178 eggs against 69 eggs across the country 5. About 1.4 crore eggs are sent to neighboring States 6. The chicken consumption in the State is at 8.21 kg, higher than the 3.75 kg national

average

Demand Drivers (4/6)

10 Sources: Online article: Telangana Today, The Hindu Business, Telangana Today2

Recent development:

• International Finance Corporation plans to make an equity investment of INR 158 crore in Srinivasa Farms to expand its operations

• US investment banking firm Goldman Sachs acquired a 60% stake in Hyderabad-headquartered Rohini Minerals

• New export policy to boost poultry sector Provide an assurance that the processed agricultural products will not be brought under any kind of export restriction such as imposing minimum export price, export duty and ban; hence more opportunities will be open

Poultry India Expo – South Asia’s biggest, conducts in Hyderabad, has attracted 325 major companies and draw over 40,000 business visitors across 27,500sqm and 5 exhibition halls at the HITEX

1.4 Poultry on a growth path in Telangana (cont.…)

2. Growing Cold Storage Industry

• Total estimated number of Cold Storages till FY 2016-17 is 442 (capacity of 1,78,2561 MT) in Telangana & Andhra Pradesh

• The market is growing with a CAGR of 6-8% Y-o-Y • Recently government has allocated INR 132 Crores for cold storages in the state

2 million MT warehousing and 0.2 million MT cold storage capacity

Warehousing capacity increased 5X over last 3 years & cold storage capacity to increase by 5X over next 3 years

Food Corporation of India (FCI) operates warehouses worth capacity of 8.1 million MT, while Telangana State Warehousing Corporation operates with 1 million MT of handling capacity

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Demand Drivers (5/6)

Developments in Recent Past

To facilitate farmers store their produce for longer period, the government is considering provision of 50 % subsidy on ‘solar powered cold storage’ with the help of central government assistance under MIDH (Mission for Integrated Development of Horticulture)

• Andhra Pradesh APSWC (State Warehousing Corporation) has initiated measures to have its own warehouses with a total capacity of 4 lakh MT in the current fiscal

• To initiate, Chief Minister N Chandrababu Naidu laid the foundation stone for two chilli and turmeric cold storage units at Yedlapadu in Guntur o With a projected budget of INR 46 Crores and a combined storage capacity of

13,000 MT, the units will have facilities such as power sub-station, water purification plant and resting places for the labourers

• The board has decided to construct its warehouses with a total capacity of 1.15 lakh MT with its own funds to meet the growing demand for food grain storage

• Government is planning to upgrade cold storage units in AP - majority are located in Guntur and Prakasam districts - into mini market yards in a phased manner

• Gubba Cold Storage, is planning to set up first of its kind storage space exclusively for pharma sector.

• It will invest INR 15 Crores and will have a capacity to store 4,000 multi-chamber pallet

• German company Covestro, which makes materials that go into the setting up of cold storage facilities, expects to help build 800 solar-powered, micro cold rooms in Telangana over the next two years

Sources: 1) Telangana & Andhra Pradesh Government website 2) Food processing policy and strategy: 2018 3) Online article: The Hans India 1, The Hans India 2, The Hans India 3, Telangana Times

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Demand Drivers (6/6)

3. Growing Food Processing Sector

Dedicated food processing policy to promote the segment (food & preservation units) has generate an investment commitments for more than INR 7500 Cr

Investment Trends

Leading agriresearch institutions such as ICRISAT, and 10+ training institutions for food technology

• 4 mega food parks to be operational by May 2019 • 2 major integrated cold chain projects to be completed • Dedicated perishable cargo terminal for perishable products at Hyderabad

Airport to be constructed

Sources: 1) Telangana Government website 2) Food processing policy and strategy: 2018

• Netherlands-based Royal DSM sets up animal nutrition products plant in Jadcherla Hyderabad

• The 1,20,000 sq ft unit opened is spread over three acres and will cater to southern and western India. Globally, DSM occupies 30 per cent market share in the animal nutrition and health segment

Developments in Recent Past

Initiatives and Policy Support by Government (1/3)

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The state government has undertaken number of reforms to offer an enabling and investor- friendly business climate to the investors. Some of the key Ease of Doing Business initiatives in Telangana include:

Telangana State Industrial Project Approval and Self Certification System (TS-iPASS) established as a single point for clearances of industrial set up

Single Window system, combined application form (CAF) with provision to submit multiple applications in one form, Paperless application and incentive disbursement

Predefined timelines (max 30 days for processing applications) with provision for deemed approvals in case of no response

Minimum inspection, maximum facilitation with paperless application and incentive disbursement

Telangana Government has formulated a number of policies to provide impetus to the sector. Some of the key incentives to significantly increasae raw material base across agri-food, livestock, dairy and fisheries include: 1. Telangana has been providing subsidized maize for the poultry industry. During 2018-

19, planned for 1.04 lakh MT at INR 12,000 per tonne for khariff and 2.09 lakh MT at Rs 14,000 per tonne for rabi

o The Government is providing subsidy of INR 2 per unit of power consumed by poultry industry from December 2014

2. The Telangana State Government will soon give subsidy buffaloes to over 2.17 lakh

dairy farmers at a cost of INR 800 crore o Each buffalo costs nearly Rs 80,000 and the Government will bear 50 percent

subsidy.

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3. Sheep distribution, more than 8 mn sheep are being distributed across the state thereby doubling the sheep population and making Telangana no.1 in sheep availability across India by the next year

4. Blue revolution, revival of irrigation tanks has increased the state’s fish potential to 4 mn tonnes per annum.

o More than 270 mn fish seedlings were distributed to fishermen communities to double the state’s fish production by next year

5. Implementation of Integrated development and management of fisheries scheme with an outlay of INR 20 Cr..

Andhra Pradesh Egg Processing Plant 1. The Government of AP will offer 25% capital subsidy to the organization /

entrepreneurs on the establishment of egg processing plant subject to a maximum of INR 5 crore

2. The Government will provide Subsidy to an extent of 50% for setting up of Egg Processing Centers (EPCs) and Egg Collection Centers (ECCs) limited to Rs. 2.50 crore

3. Interest subsidy on term loan for Egg Processing Centers over and above 7 % of the bank interest for a period of 4 years limited to Rs. 1.00 crore

Chicken Processing Units 1. The Government will offer 25% subsidy to the organizations / entrepreneurs on the

for establishment of poultry meat processing units subject to a maximum of INR 5.00 Cr

2. The Government will offer 35% subsidy to the organizations / entrepreneurs for setting up of cold chain facilities exclusively for broiler poultry meat limited to INR 4.00 Cr.

3. The Government will provide Subsidy to an extent of 25% on equipment cost for technology up-gradation of existing Food Processing Units

Initiatives and Policy Support by Government (2/3)

Initiatives and Policy Support by Government (3/3)

Fisheries

1. For fish processing / filleting units including cold chain, land cost etc., subsidy of 50% with upper ceiling limit of Rs. 7 crores will be provided.

2. For shrimp processing units including cold chain maintenance, Capital subsidy of 50% inclusive of land cost with upper ceiling limit of Rs.5 crores, will be provided.

3. Interest subvention of 6% will be provided on bank loan subject to maximum of Rs.2.5 Crores for 5 year period to aqua processing units, ice plants and cold storages.

4. Financial assistance will be extended for farm mechanization like pumps and aerators with 50% subsidy.

Tamil Nadu

1. In order to usher in a radiant second white revolution with a view to improve rural economy 35 and to increase the cross bred cattle population in the State, the Government of Tamil Nadu introduced the “Free distribution of Milch Cows” Scheme with a particular focus on empowering rural women.

2. The Government of Tamil Nadu announced the implementation of ‘Scheme for Free Distribution of Goats/Sheep’ to the poorest of the 41 poor in the State in order to improve their living standards.

3. The Government of Tamil Nadu launched the “Scheme for Poultry Development”. As per the Scheme, poultry clusters comprising of Broiler/Native chicken farms have been established in the backward districts of the State. The Government provides 25% of the cost of establishment of poultry farms as front ended subsidy. As per the Scheme, at least 30% of the beneficiaries should necessarily belong to SC / ST Communities.

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Hyderabad is a well connected location for Exhibitors as well as Visitors

o Road connectivity: The density of notified national highways in Telangana is 2.90 km/100 sq.km against the national average of 2.84 km/100 sq.km

o Strong railway connectivity: The State also has an integrated railway network

with railway terminals such as - Nizamabad, Mahbubnagar, Kamma Reddy, Bodhan, Jedcherala, Gadwal and, Balanagar

o Access to world class airport facility: Rajiv Gandhi International Airport (RGIA),

Shamshabad is one of the largest 7 modern airports in India o Government of Telangana has entered MoU with Ministry of Civil Aviation and

Airports Authority of India for development of small airports at Kothagudem and Warangal

o Government of Telangana is ranked no 1 in Ease of Doing Business given by

Department of Industrial Policy & Promotion (DIPP) and World Bank o State of Telangana has unique geographical advantage. It geographically placed

in close proximity to major consumer markets such as Bangalore, Mumbai, Kolkata, Chennai etc.

Why Hyderabad as a Destination for Organizing Expos on Animal Husbandry Industry

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