S. Viraraghavan, Director, Sales and Marketing, Cargill India shares nitty gritties in an exclusive interview to B&E
Cargill India is an active player in food, agricultural sourcing and commodities trading in India. S. Viraraghavan, Director, Sales & Marketing, Cargill India has some unique yet significant points to make about the sector’s present and future
B&E: How do you think the government should deal with a fragmented supply chain which escalates costs of food processing in India by 15-30%?
SV: The biggest challenge is to build overall supply chain infrastructure, namely, augmentation of warehousing & storage capacity (especially, cold storage), reduction of wastages due to multi-point manual handling and inadequate primary & secondary packaging of basic food grains, better transport infrastructure and seamless linkages between farm and retail.
B&E: With different policies, high excise duties and lack of coherence in doing trade between various states in India in processed food, how does Cargill India deal with the situation and how can it be improved?
SV: We’re part of food processing business at a mass level with major participation in the cooking & refined oils business. We have been able to, more or less, nullify the impact of different taxes & duties by operating at standard operating prices for consumers and to a great extent for trade as well. Situation can be further stabilized by having a common VAT structure across the country. GST would be a significant step in improving business environment here.
B&E: How does Cargill India feel government policy should be modified with regard to FDI in food processing and retailing and will it adversely affect the unorganized and small players?
SV: Creating a favourable fiscal environment to induce venture capital and mutual funds to invest in different components of supply chain, tax holidays, excise relief, fiscal incentives for cold-chain setups and a regulatory mechanism are important for driving growth. It is a misnomer that organized retail will have a negative impact on unorganized sector. They can co-exist and grow and a lot of inefficiencies will get addressed.
B&E: Processed food currently forms a very small percentage of India’s exports. How can this scenario be improved in terms of duty rates and standards?
SV: We have to improve the acceptance of process food in the society and address the myth that all processed food is unhealthy. Govt. of India is taking some positive initiatives to address fiscal incentives to the sector which is a positive development. Export of food items to developed markets needs adherence to stringent food norms and hence, requires high capital investment in machinery and process automation. Concessional duties for importing machinery will also encourage big ticket investments in the sector. The Food Safety and Standards Act is a positive step and we need alignment to global food safety standards such as CODEX to make our products acceptable in the global market.
B&E: How does Cargill India see the future for the sector in a 3-5 year timeline and what is the biggest opportunity areas within the sector?
SV: With the economy growing at an accelerated pace, there’s been a significant change in food habits. More processed and functional food will become part of the Indian diet and hence the sector will see robust growth. As a major global Food Ingredients Supplier we see a big opportunities in the sector. We have successful and popular brands like Nature Fresh and Gemini and have substantial market access. Going forward, this creates a favorable situation for us to look at the food market.
Cargill India is an active player in food, agricultural sourcing and commodities trading in India. S. Viraraghavan, Director, Sales & Marketing, Cargill India has some unique yet significant points to make about the sector’s present and future
B&E: How do you think the government should deal with a fragmented supply chain which escalates costs of food processing in India by 15-30%?
SV: The biggest challenge is to build overall supply chain infrastructure, namely, augmentation of warehousing & storage capacity (especially, cold storage), reduction of wastages due to multi-point manual handling and inadequate primary & secondary packaging of basic food grains, better transport infrastructure and seamless linkages between farm and retail.
B&E: With different policies, high excise duties and lack of coherence in doing trade between various states in India in processed food, how does Cargill India deal with the situation and how can it be improved?
SV: We’re part of food processing business at a mass level with major participation in the cooking & refined oils business. We have been able to, more or less, nullify the impact of different taxes & duties by operating at standard operating prices for consumers and to a great extent for trade as well. Situation can be further stabilized by having a common VAT structure across the country. GST would be a significant step in improving business environment here.
B&E: How does Cargill India feel government policy should be modified with regard to FDI in food processing and retailing and will it adversely affect the unorganized and small players?
SV: Creating a favourable fiscal environment to induce venture capital and mutual funds to invest in different components of supply chain, tax holidays, excise relief, fiscal incentives for cold-chain setups and a regulatory mechanism are important for driving growth. It is a misnomer that organized retail will have a negative impact on unorganized sector. They can co-exist and grow and a lot of inefficiencies will get addressed.
B&E: Processed food currently forms a very small percentage of India’s exports. How can this scenario be improved in terms of duty rates and standards?
SV: We have to improve the acceptance of process food in the society and address the myth that all processed food is unhealthy. Govt. of India is taking some positive initiatives to address fiscal incentives to the sector which is a positive development. Export of food items to developed markets needs adherence to stringent food norms and hence, requires high capital investment in machinery and process automation. Concessional duties for importing machinery will also encourage big ticket investments in the sector. The Food Safety and Standards Act is a positive step and we need alignment to global food safety standards such as CODEX to make our products acceptable in the global market.
B&E: How does Cargill India see the future for the sector in a 3-5 year timeline and what is the biggest opportunity areas within the sector?
SV: With the economy growing at an accelerated pace, there’s been a significant change in food habits. More processed and functional food will become part of the Indian diet and hence the sector will see robust growth. As a major global Food Ingredients Supplier we see a big opportunities in the sector. We have successful and popular brands like Nature Fresh and Gemini and have substantial market access. Going forward, this creates a favorable situation for us to look at the food market.
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