Bengals Frito Lays plant sources elsewhere

Kolkata | Updated: Nov 21 2005, 06:34am hrs
The state of the Indian food-processing industry reflects both its prospects and problems. To illustrate, West Bengal produced 76 lakh tonne of potatoes last year, accounting for 30% of the countrys total output. The state consumes about 30 lakh tonne, the balance is either exported to other states or processed or simply left to rot.

Bengal also accounts for 27% of Indias pineapples, 12% of bananas and 16% of the total rice production. In fruits and vegetables, it recently became the largest producer. Yet, only 2% is processed and close to 10% is wasted, thanks to poor processing facilities and market mechanisms.

While officials believe this spells an investment opportunity, the present state of affairs also ensures that investments stay confined to a trickle.

Chief minister Buddhadeb Bhattacharjee recently commented that at least 400 cold storages are needed to be set up immediately to take care of the record production of vegetables.

It is not only the lack of infrastructure that is hurting the sector, poor quality of produce that the global packed food giants find unfit for processing is another stumbling block.

Take the case of potato. In Bengal, the plant of Frito Lays, a division of Pepsico that makes the Lays brand of potato chips, sources most of its requirement from other states, despite the fact that Bengal is the second largest producer.

According to SK Pandey, director of the Central Potato Research Institute, most of the potato varieties in the country are unfit for processing. He explains that when potatoes are stored at a low temperature of 2-4 degree Celsius, glucose starts accumulating. This turns the potato black and thereby unfit for processing. The phenomenon can be prevented if the crop is stored at a slightly higher temperature, but then the potato starts to sprout, said Mr Pandey.

Clearly, developing the right variety of seeds and acceptable farming techniques are as important as building infrastructure.

The scenario, however, is changing for the better. Foreign investors have shown interest in the food processing sector in Bengal, where different projects worth Rs 400 crore are under implementation.

France has taken a keen interest, tying up with two local entrepreneurs. AFT Counsel of France has joined hands with the Pailan Group to set up a 100% export oriented unit (EOU) at a cost of Rs 150 crore, while another French company 2AIMS is partnering the Pataka Group for a Rs 250-crore venture that would produce glucose syrup for supply to beverage makers.