Wednesday, May 27, 2009

it’s the smaller players that are bearing the brunt, for not being able to relish the fruits of their efforts. angshuman paul and romsha singh write..

The Most Revolutionary Concept In Education PLANMAN CHE CENTRE FOR HIGHER EDUCATION, Supported by IIPM India’s Leading B-School

No doubt, emulating the Malaysian success story of a food-processing sector dominated by small players does make utmost sense for India, but unlike Malaysia and China, Indian SMEs miss out on keeping pace with the changing dynamics of the global market. And then there is also the lack of infrastructure and appropriate levels of FDI to complain about! Moreover, hindrances at the regulatory levels make it more difficult for an entrepreneur to function smoothly. The processing sector in India has the potential to attract investments, but to achieve that, it certainly needs to be de-regulated. The government, at present regulates it through various agencies. This needs to be done away with so that India’s food processing prowess catapults to higher levels sans fears of stagnation.

how to move my cheese...

Certainly, regulatory changes will spur the much-desired growth in the food processing sector for the Indian SMEs. Under the prevailing Essential Commodities Act, producers are prevented from transporting a range of specified products across their respective state borders. This has led to increased logistics cost as smaller players can afford only one centralised export hub. Agrees Kaul, “The prevailing laws increase the cost of production for the small scale players phenomenally, especially when many of the players can’t even afford to set up their own cold storage. So, the possibility of exporting for these players absolutely closes down.” In fact, according to Enam Research, about 30% of India’s fruits and vegetable produce do not reach the end consumers and has to be dumped due to inadequate cold chain system. “Without adequate cold storage you cannot cater to the global market and big retail clients,” avers Nishant Arora, Head Food Division, Kohinoor Foods Ltd. >


For more articles, Click on IIPM Article.
Source :
IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and
Arindam Chaudhuri (Renowned Management Guru and Economist).


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