1.

Demographic Profile of the Country- BRAZIL

Total Population: 198,739,269 (July 2009 est.), ranked # 5 behind the United States (307,212,123) and Indonesia (240,271,522). Age Profile: 0-14 years: 26.7%, 15-64 years: 66.8%, 65 years and over: 6.4% Median age is 28.6, Average life expectancy is 71.99 years, ranked #123 in world 49% Male & 51 % Female.

Gross

Domestic

Product

Contribution

by

Economic

Sector

67.7% Services, 25.8% Industry, 6.5% Agriculture (2009 est.) Industries: textiles, shoes, chemicals, cement, lumber, iron ore, tin, steel, aircraft, motor vehicles and parts, other machinery and equipment Languages: Portuguese (official and most widely spoken language); note less common languages include Spanish (border areas and schools), German, Italian, Japanese, English, and a large number of minor Amerindian languages Religions: Roman Catholic (nominal) 73.6%, Protestant 15.4%, Spiritualist 1.3%, Bantu/voodoo 0.3%, other 1.8%, unspecified 0.2%, none 7.4% (2000 census) Ethnic groups: white 53.7%, mulatto (mixed white and black) 38.5%, black 6.2%, other (includes Japanese, Arab, Amerindian) 0.9%, unspecified 0.7% (2000 census) School life expectancy (primary to tertiary education): 14 years Total Land and Water Area:8,514,877 sq km, ranked #5 behind the United States (9,826,675 sq km) and China(9,596,961 sq km) Location - Eastern South America, bordering the Atlantic Ocean Geographic coordinates - 10 00 S, 55 00 W Map references - South America Area - total: 8,514,877 sq km, land: 8,459,417 sq km, water: 55,460 sq km Land boundaries total: 16,885 km border countries: Argentina 1,261 km, Bolivia 3,423 km, Colombia 1,644 km,

French Guiana 730 km, Guyana 1,606 km, Paraguay 1,365 km, Peru 2,995 km, Suriname 593 km, Uruguay 1,068 km, Venezuela 2,200 km Coastline 7,491 km Maritime claims : territorial sea: 12 nm, contiguous zone: 24 nm, exclusive economic zone: 200 nm, continental shelf: 200 nm or to edge of the continental margin

Climate : mostly tropical, but temperate in south Terrain : mostly flat to rolling lowlands in north; some plains, hills, mountains, and narrow coastal belt Elevation extremes : lowest point: Atlantic Ocean 0 m, highest point: Pico da Neblina 2,994 m Natural resources : bauxite, gold, iron ore, manganese, nickel, phosphates, platinum, tin, rare earth elements, uranium, petroleum, hydropower, timber Land use : arable land: 6.93% , permanent crops: 0.89% , other: 92.18% (2005) Irrigated land 45,000 sq km (2008) Total renewable water resources: 8,233 cu km (2000) Freshwater withdrawal (domestic/industrial/agricultural) : total: 59.3 cu km/yr (20%/18%/62%), per capita: 318 cu m/yr (2000)

Natural hazards : recurring droughts in northeast; floods and occasional frost in south

Environment - current issues : deforestation in Amazon Basin destroys the habitat and endangers a multitude of plant and animal species indigenous to the area; there is a lucrative illegal wildlife trade; air and water pollution in Rio de Janeiro, Sao Paulo, and several other large cities.

Nationality noun: Brazilian(s) , adjective: Brazilian

Ethnic groups : white 53.7%, mulatto (mixed white and black) 38.5%, black 6.2%, other (includes Japanese, Arab, Amerindi

Country name : conventional long form: Federative Republic of Brazil conventional short form: Brazil , local long form: Republica Federativa do Brasil local short form: Brasil Government type :federal republic

Capital : name: Brasilia , geographic coordinates: 15 47 S, 47 55 W

time difference: UTC-3 (2 hours ahead of Washington, DC during Standard Time) ,daylight saving time: +1hr, begins third Sunday in October; ends last Sunday in February Administrative divisions : 26 states (estados, singular - estado) and 1 federal district* (distrito federal) National holiday : Independence Day, 7 September (1822) Constitution : 5 October 1988 Legal system : civil law; note - a new Brazilian civil law code was enacted in 2002 replacing the 1916 code International law organization participation : has not submitted an ICJ jurisdiction declaration; accepts ICCt jurisdiction Suffrage : voluntary between 16 and 18 years of age and over 70; compulsory over 18 and under 70 years of age; note - military conscripts do not vote Judicial branch : Supreme Federal Tribunal or STF (11 ministers are appointed for life by the president and confirmed by the Senate); Higher Tribunal of Justice; Regional Federal Tribunals (judges are appointed for life); note - though appointed "for life," judges, like all federal employees, have a mandatory retirement age of 70 Political pressure groups and leaders : Landless Workers' Movement or MST other: labor unions and federations; large farmers' associations; religious groups including evangelical Christian churches and the Catholic Church

1.2 Economy - overview

Brazils large and well-developed agricultural, mining, manufacturing, and service sectors, outweighs that of all other South American countries, and Brazil is expanding its presence in world markets.
Since 2003, Brazil has steadily improved its macroeconomic stability, building up foreign reserves, and reducing its debt profile by shifting its debt burden toward real denominated and domestically held instruments.

In 2008, Brazil became a net external creditor and two ratings agencies awarded investment grade status to its debt. After record growth in 2007 and 2008, the onset of the global financial crisis hit Brazil in September 2008. Brazil experienced two quarters of recession, as global demand for Brazil's commodity-based exports dwindled and external credit dried up. However, Brazil was one of the first emerging markets to begin a recovery. Consumer and investor confidence revived and GDP growth returned to positive in 2010, boosted by an export recovery. Brazil's strong growth and high interest rates make it an attractive destination for foreign investors. Large capital inflows over the past year have contributed to the rapid appreciation of its currency and led the government to raise taxes on some foreign investments.

Brazil has a free market and export-oriented economy and is currently the ninth largest economy in the world and the largest in Latin America. The city of So Paulo is also the financial centre of South America. The country's scientific and technological development is argued to be attractive
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to foreign direct investment, which has recently averaged S$ 20 billion per year, compared to only US$ 2 billion/year over the last decade, thus showing a remarkable growth.

TABLE TITLE: economic statistics Table no: 1

Rank Currency Fiscal year Trade organizations 6th (nominal) / 6th (PPP) Brazilian real (BRL, R$) Calendar year Unasul, WTO, Mercosul, G-20 and others

GDP

$2.517 trillion (nominal)[1] $2.309 trillion (PPP)[1]

GDP growth

3% (2011)[2]
[1]

GDP per capita $11,845 (2011) (nominal; 54th) $12,916 (2011) (PPP; 76th)[1]

GDP by sector agriculture: 5.8% industry: 26.8% services: 67.4% (2010)[3] Inflation (CPI) 6.50% (December 2011)[4] Population below poverty line Gini coefficient 49.3 (June 2009)[6] Labour force Labour force by occupation Unemployment 4.7% (December 2011)[7] Main industries aeroplanes, steel; iron ore, coal; machine 103.6 million (2010 est.) agriculture: 20%, industry: 14% and services: 66% (2003 est.) 8.5% (2011)[5]

building; armaments; textilesand apparel; petroleum; cement;chemicals; fertilizers; cons umer products, including footwear, toys, and electronics; food processing;transportation equipment, includingautomobiles, rail cars and locomotives,ships, and aircraft; electronics;telecommunications equipment,satellites, real estate, brewing, tourism Ease of Doing 126th[8] Business Rank External Exports $201.9 billion (2010 est.)[9] soybeans, footwear, coffee, autos, automotive parts, machinery Main export partners Imports China 15.3%, United States 9.6%,Argentina 9.2%, Netherlands 5.1%,Germany 4.0% (2010) $181.6 billion (2010 est.)[9] electronics Main import partners Gross external $310.8 billion (31 December 2010 est.) debt Public finances Public debt Revenues Expenses Credit rating 41.4% of GDP (2010 est.)[10] $464.4 billion $552.6 billion (2010 est.) A- (Domestic), BBB (Foreign), A- (T&C Assessment) (Standard & Poor's)[11] A+ (Wikirating) Foreign reserves
Main data source: CIA World Fact Book

Export goods transport equipment, machinery, steel, airplanes, paper, electric machinery, iron ore,

Import goods machinery, electrical and transport equipment, chemical products, oil, automotive parts, United States 15.0%, China 14.1%,Argentina 7.9%, Germany 6.9%,Japan 3.8% (2010)

US$350 billion (September 2011)[12]

Source:http://en.wikipedia.org/wiki/Economy_of_Brazil

1.3 Overview of industries trade and commerce of Brazil

Brazil has manufacturing, mining and agriculture sectors and rapidly expanding technology and services industries. It is also home to the most sophisticated and diversified science, technology and innovation system in Latin America. Having made important economic reforms over the past few years, Brazilians are now reaping the benefits of new-found stability and growth. Brazil is experiencing rising commodity exports and an overvalued currency, driving up the price of its manufactured exports. International corporations are investing billions in Brazil, effectively securing its place in regional and global supply chains. The country is also becoming a major source of outward investment. Furthermore, with 191 million people, a well-educated middle class and millions of working-class citizens, Brazils importance as a consumer market is on a steep upward swing. To take advantage of the myriad commercial opportunities that Brazil offers, Canadians will need to be aware of key commercial influences, including foreign competition, import tariffs, tax and regulatory systems, labour supply and infrastructure challenges.

Information and Communication Technology (ICT) and New Media: Brazil is the largest ICT market in Latin America, after Mexico. Canadian ICT exports to Brazil were $106.1 million.

Clean Technologies: In 2009, the Brazilian environmental technologies market was estimated by analysts to be worth US$9.0 billion. Given the projected growth of the Brazilian economy for the next 5 years, and the emphasis on infrastructure, the environmental industries market is expected to grow by 10% annually.

Aerospace: Canada is recognized in Brazil as a qualified and cost-effective supplier of aerospace equipment. One of the major player in the Brazilian aerospace industry imports 70% of its content and as of 2010, is seeking more than US$ 17 billion worth of supply.

Infrastructure: Infrastructure is key to the Brazilian governments economic expansion over the coming years, with Brazil looking at investments of over US$ 262 billion. The 2014 World Cup, the 2016 Olympics, and the federal
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government infrastructure program offer a broad range of business opportunities for Canadian firms.

Life Sciences: The life sciences sector in Brazil is among the 10 largest in the world, and has averaged 4% percent growth per year since 2007.

Mining: Brazil offers great potential for mining exploration activities and an expanding market for mining equipment and services due to its rich geological formations and economic stability. Mineral production in 2009 was over US$21 billion.

Oil and Gas Equipment and Services: The current five-year US$224 billion investment plan of Brazilian oil giant Petrobras is directly related to Brazil's recent pre-salt discoveries, and represents real opportunities for Canadian industry willing to undertake investment in Brazil.

Brazil Main Industry Sectors

Brazil has abundant natural resources and its economy is relatively diversified. A major agricultural power, Brazil is the world's first producer of coffee, sugar cane and oranges, as well as one of the largest producers of soy. It also attracts many world groups in the food industry and biofuels. Brazil has the world's largest commercial livestock herd. Nevertheless, agriculture's contribution to the GDP is relatively small, accounting for only 6.6%, yet the sector represents 40% of its exports. Forests cover half of the country, with the largest ombrophilous forest in the world situated in the Amazon Basin. Brazil is the world's fourth largest exporter of timber.

Brazil is also a great industrial country. It benefits from its mineral ore wealth and is the second world exporter of iron and one of the main producers of aluminum. As an oil producer, the Brazil is aiming to become self-sufficient in the near future. The country is asserting itself more and more in the textile, aeronautics, pharmacy, automobile, steel and chemical industry sectors. Most of the large automobile manufacturers have set up their production plants in the country. The industrial sector contributes more than quarter of the GDP. The tertiary sector represents almost two-thirds of the GDP.
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1.4. Overview of different economic sectors of Brazil

Brazil's major economic sectors are all well developed. The agricultural sector of Brazil represented a larger percentage of the gross domestic product than industry until 1945. At that time, the government supported industrialization and direct investment in industry, with subsidies and trade protection for Brazilian industrial products. Industry was almost 3 times more valuable than agriculture as a percentage of gross domestic product by 1999. In the agriculture sector, Brazil is one of the world's largest producers of soybeans and coffee. International competitors watch Brazil's weather to determine the success of the soybean and coffee season, setting international prices based on Brazil's harvest. The agriculture sector represented 8.4 percent of the gross domestic product in 1999 and employed 31 percent of the workforce. The government uses import taxes to protect many Brazilian industries against international competition. These industries include textiles, shoes, chemicals, cement, lumber, iron ore, tin, steel, aircraft, motor vehicles and parts, and other machinery and equipment. The footwear industry is the most important finished good exported from Brazil. Government-owned Petrobras and Brazilian Aeronautics Enterprise are important companies headquartered in Brazil that produce oil and aircraft, respectively. The industrial sector represented 31.7 percent of the gross domestic product in 1999. Twenty-seven percent of the employed workforce was in the industrial sector. The third most important developed sector of the Brazilian economy is the services sector. It represented 59.9 percent of the gross domestic product in 1999. Tourism has increased rapidly with an estimated 4.82 million foreign tourist arrivals and receipts of US$3.68 billion from foreign tourists in 1998. This represented an increase from 2.67 million foreign tourist arrivals and receipts of US$2.47 billion in 1996. Fortytwo percent of the employed working force was in the service sector.

Along with the rapid expansion of its economy in the past decade, Brazil has expanded various sectors of its economy, such as the industrial sector, which is the second biggest in the Americas. The rapid expansion of the services industry has helped to bring down the nation's unemployment rate for the past 5 years. Brazil is the 9th largest oil producer in the world with a production of 2.57 million barrels per day. Petrobas, a semi-government owned oil company, is the 8th biggest company in the world, and is responsible for the nation's overall oil production. Brazils Industry Sector 1) Agriculture in Brazil is well diversified and the country is the largest producer of sugarcane, coffee, tropical fruits, frozen concentrated orange juice (FCOG). Its other production in soya bean, corn, cotton, cocoa, forest products and tobacco. It s contribution in GDP in 2010 is 6.1 %. 2) Brazil cattle herd is the largest in the world with 20.75 million of cattle in 2009. 3) It has most advanced industry in Latin America i.e. Automobile and parts, machinery and equipment, textile, computers, cement ,steel, petrochemicals, consumer durables and food processing. 4) It is a leading producer of hydroelectric power. Also nuclear energy contributes to 4% of Brazils electricity. 5) Service industry includes telecommunication, banking, energy and computing sector. It contributes 67.5% of the GDP of Brazil. 6) There is a huge inflow of foreign investment and has highest interest rate in the world.

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1.5 Overview of Business and Trade at international level

Table No : 2 Table title: Projected U.S.exports of processed food between 2003-2012

Table No : 3 Table title : export and import partners of Brazil Export Partners 2007 U.S. Argentina China Netherland Germany Import Partners U.S. Argentina China Germany Nigeria Japan
Source: CIA World Factbook

% of total 17.8 8.5 6.1 4.2 4.1 % of total 16.2 8.8 8.7 7.1 4.3 4.2

Source :http://www.propertyfrontiers.com/research/countryguides/americas/brazil/country-economic-overview.aspx

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1.6. Present relations of Brazil with India

India brazil relations Indias links with Brazil are since five centuries. Portugals Pedro Alvares Cabral is officially recognised as the first European to discover Brazil in 1500. Cabral was sent to India by the King of Portugal soon after the return of Vasco de Gama from his pioneering journey. Brazil became an important Portuguese colony and stop-over in the long journey to Goa. This Portuguese connection led to the exchange of several agricultural crops between India and Brazil in the colonial days. Indian cattle was also imported to Brazil. Most of the cattle in Brazil is of Indian origin. Diplomatic relations between India and Brazil were established in 1948. The Indian Embassy opened in Rio de Janeiro on May 3, 1948. It shifted to Brasilia on August 1, 1971 (Brazils capital had moved to Brasilia in 1960). Brazil and India are large continental sized countries with social diversity, democratic form of government, a multi-ethnic population, and a large population base. Both possess advanced technologies. The two countries share similar perceptions on issues of interest to developing countries and have cooperated in the multilateral fora on issues such as international trade and development, environment, reform of the UN and the UNSC expansion. There is enormous interest in Brazil in India's culture, religion, performing arts and philosophy. A number of cultural events including performances by famous Kuchipudi dance group, "Raja and Radha Reddy" were organized in the major cities of Brazil ahead of the Prime Minister Dr. Manmohan Singh's visit to Brasilia from 11-14 September, 2006. Earlier, a very successful Festival of India was organised during the visit of President K.R. Narayanan to Brazil in May 1998. There are numerous organisations teaching yoga and they invite yoga teachers from India for instructions and learning. ISKCON, Satya Sai Baba, Maharshi Mahesh Yogi, Bhakti Vedanta Foundation and other Indian spiritual gurus and organisations have their chapters in Brazil. The University of Londrina has a good specialization on
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India in its Afro-Asian studies department. Mahatma Gandhi is highly regarded in the country and the government has sought to teach his philosophy of non-violence to the police to improve its track record. A statue of Mahatma Gandhi is located in a prominent square in Rio de Janeiro. A group called the Filhos de Gandhi (Sons of Gandhi) participates regularly in the carnival in Salvador. Private Brazilian organizations occasionally invite Indian cultural troupes. In recent years, relations between Brazil and India have grown considerably and co-operation between the two countries has been extended to such diverse areas as science & technology, pharmaceuticals and space. The two-way trade in 2007 nearly doubled to US$ 3.12 billion from US$ 1.2 billion in 2004. India attaches tremendous importance to its relationship with this Latin American giant and hopes to see the areas of co-operation expand in the coming years.

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1.7 Pestel Analysis of Brazil

Political. Brazil has been a leading player in the World Trade Organizations Doha Round negotiations and continues to seek to bring that effort to successful conclusion. President Lula has made economic growth and poverty alleviation top priorities. Export promotion is a main component in plans to generate growth and reduce what is seen as a vulnerability to international financial market fluctuations. To increase exports, the government is seeking access to foreign markets through trade negotiations and increased export promotion as well as government financing for exports. Economy Trade: Trade balance (2009)$ 25.3 billion surplus. Exports$153.0 billion. Major marketsChina 13.20%, United States 10.20%, Argentina 8.36%. Imports$127.7 billion. Major suppliersUnited States 15.69%, China 12.46%, and Argentina 8.84% Brazil is generally open to and encourages foreign investment. It is the largest recipient of foreign direct investment (FDI) in Latin America, and the United States is traditionally the number one foreign investor in Brazil. Since domestic saving is not sufficient to sustain long-term high growth rates, Brazil must continue to attract FDI. Many business groups and international organizations have highlighted the need for Brazil to improve its regulatory environment for investments and to simplify the tax code in order to attract increasing levels of FDI. Today, Brazil economy is on the rise. Blessed with abundant natural resources, Brazil has become the most powerful country in South America in economic terms and thus is leading the other countries of South America. With large and growing Agricultural, mining, manufacturing and service sectors, Brazil economy ranks highest among all the South American countries and it has also acquired a strong position in global economy.

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Brazils gold production is rated as fourth in the world. The main problem associated with this factor however, is the pollution from mercury, which is a main component in the current gold processing techniques. Mercury is used in the process of separating the gold from other surrounding rock sediments that usually come together with the mineral when it is mined. The largest gold deposits in Brazil in current times are found along the Venezuelan Brazilian border. This area is commonly referred to as the shield and covers an estimated 415,000 square kilometers of jungle and savanna grassland. With over 2,500 currently known gold occurrences within the country, Brazilian gold mining, development, and production is expected to continue increasing significantly in the foreseeable future. Brazils gold and mining sector is going through a phase of real growth. New mine projects and expansions in progress are expected to ensure that the country retains its leading position in global mineral commodity production for years to come. Brazilian gold explorers like Magellan Minerals should do very well over the next few years. Social Brazil underwent rapid urban growth; by 2005, 81% of the total population was living in urban areas. This growth aids economic development but also creates serious social, security, environmental, and political problems for major cities. Environmental Brazil is the worlds fifth largest country with a total area of 8.5 million square kilometres. It benefits from a good river system and 7.500 kilometres of coastline (1). The country has abundant reserves of natural resources such as iron, copper, nickel, manganese or tin. Despite having an estimated gold reserve of 2,000 tones the country accounts only for 2.5% of the global production and many regions are still unexplored,

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which make Brazil an attractive location for mine development and investment opportunity. However, the lack of transportation infrastructure (under-developed railway network, poor quality of the highways with development inconsistent between regions) has long been seen as a major obstacle to economic growth. The country also lacks reliable and affordable energy. Most of the countrys energy is produced from renewable sources, particularly hydroelectric power plants that provide four fifths of Brazils electricity. This dependence on hydroelectricity has resulted in severe supply shortage Recent development includes the construction of two new railways connecting central Brazil to ports in the states of Rio de Janeiro and Bahia, and the construction of Au Superport, a port and industrial complex one and a half times the size of the island of Manhattan that should be completed by 2012.

Technological Brazil is the leader in science and technology in South America as well as one of the global leaders in fields such as biofuels and deep-water oil exploration (7). The Brazilian government tries to develop and support innovation in business, for example in 2004 the Innovation Law was passed, is meant to provide incentives to increase innovative activities, facilitate scientific and technological research by private companies and encourage collaboration between public and private sector . More specifically, the mining industry has benefited from the Governments support in terms of technology and research, for example the Center for Mineral Technology (CETEM) is a federally funded research and development centre under the Ministry of Science and Technology. Sixteen universities now offer courses in geology, geochemistry and geostatic and seven offer degrees in mining engineering.

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Legal Brazil has an established Civil Law system based on codification and statutory legislation. The country ranks as one of the worlds leading jurisdictions for mining investment but because of its complex federal legal structure, the regulation in this area is bureaucratic, inconsistent and lacks certainty. The prospecting and mining of mineral resources may be carried out by Brazilian citizens or by companies duly incorporated in Brazil holding an authorization or grant by the Republic of Brazil . Mineral resources are defined and mining rights guaranteed under the Brazils Federal Constitution and Federal Mining Code. Mineral resources belong to the state and can only be extracted pursuant to a concession. According to the Mining Code, mining activities require the grant of concessions from the Departamento Nacional da Produca o Mineral (DNPM) that consists of application for prospecting permits, exploration licenses and mining licenses. A law enacted in 2010 limits foreign investors to own more than 5,000 hectares of land. Brazilian law also protects Indigenous lands estimated to be around 895,000km. For example, the Constitution covers the interface between the mining industry and indigenous rights. It provides that the National Congress must approve the exploration and mining activities and that the Indigenous community has the right to give permission and if the project is accepted, to share the results in the conditions defined by the Congress . Brazil has also implemented strict environmental regulations. The regulations of environmental aspects of mining at both federal and local level and the inconsistencies between regulations in different states can create confusion and duplication in the application procedures. At Federal level regulations are developed by the Ministry of Environment and implemented by the National Council of Environment (CONAMA) and the Brazilian Institute of Environmental and Renewable Resources (IBAMA) controls the environmental licensing process. Three levels of control have been established, first an environmental impact assessment (EIA) and environmental-impact reports (RIMA) must be completed, an environmental license is then required and finally a plan of recovery of degraded materials (PRAD) has to be submitted.
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The Brazilian tax system is also a matter of complexity. Brazil comprises numerous federal, state and municipal taxes . The law does not distinguish between domestic and foreign owned companies. Companies are generally subject to tax at a rate of 25% (15%, plus an additional tax of 10% on profits exceeding 240,000 BRL), plus social contribution tax equal to 9% of accounting income. The country has also implemented a royalties regime for the mining companies, the Compensation for exploiting mineral resources (CFEM) which varies depending upon the mineral mined. Gold extraction is subject to this CFEM tax, which is set at 1% of total revenues. The Brazilian Ministry of Mining and Energy has proposed a reform of Brazils mining regulation and proposals will be put before the Brazilian Congress in June 2011. If adopted this reform may have important implications for the mining sector.

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2.1

Introduction of the selected (food processing) Company / Industry / Sector and its role in the economy of specified country. Food is an essential part of our lives, which is why the way it is grown, processed

and transported is significant understanding and improving. The food industry comprises a multifaceted network of activities pertaining to the supply, consumption, and catering of food products and services across the world. Finished food products and partially prepared instant RTE (Ready-to-eat) food packets are also a part of the food industry. The food industry employs a massive number of skilled and unskilled workers. Components of Food Sector : The food industry is highly diverse and comprises

several important components that are : 1. Agriculture activities for growing crops, raising livestock and sea food. 2. Food processing of fresh products into canned and packed goods, including frozen foods. 3. Research and development on food technology. 4. Manufacturing fertilizers, farm machinery and hybrid seeds to facilitate agricultural production. 5. Regulation on food production and distribution to ensure quality and safety. 6. Financial services including insurance and credit to facilitate food production and distribution 7. Marketing, packaging, advertising and distribution (wholesale and retail)

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BRAZILIAN FOOD PROCESSING INDUSTRY The food processing industry is the second largest sector among manufacturing industries in Brazil. In 2009, approximately 15,000 jobs were created in the sector. The Brazilian Food Processors Association (ABIA) reported that in the same year net revenue totaled approximately 173 billion dollars, an 8 percent increase compared to the previous year. Food and beverage industries made up 85 percent and 15 percent, respectively, of this total. Regarding distribution channels, the domestic market represented 77 percent of total net revenue in 2009, totaling 132.6 billion dollars, which includes US$ 3.7 billion of imports. Retail and food service sectors accounted for 71 percent and 29 percent, respectively, of total sales in the domestic market. The biggest food service buyers are restaurants and bakeries. Table No: 4 Table title: Net Revenue of Brazilian Food processing industry

SOURCE: FOOD PROCESSING INGREDIENTS-SAO-PAULO ATO BRAZIL-12-14-2010

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Figure No : 1

According to Exame Magazine1, of the top 10 leading companies in the food processing industry, 6 are multinational: Ambev, Bunge, Cargill, Unilever, Nestl and ADM. The other four are Brazilian companies (Sadia, Brasil Foods, Copersucar and JBS). Sales by multinational totaled approximately US$45 billion while sales by Brazilian companies totaled US$ 20 billion In 2009, the gross sales of the top 20 food processing companies listed by Exame Magazine, totaled approximately US$82.3 billion and accounted for approximately 48 percent of the industry gross output of US$173 billion.

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Table No : 5

Table title: Various Food Processing companies in Brazil

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Food Processing companies of Brazil

Some brief introduction of food processing companies of Brazil like Cargil, Sadia is given below: Cargill - Its product line includes cocoa and chocolate, flour, juice, malt, oil and fats, sweeteners, toppings, sauces, etc. Cargills worldwide presence gives a head start in accessing the best raw materials for the high-fruit content beverages. Cargill offers a wide range of value-added and innovative solutions for the beverage industry. Cargill's line of concentrated bases brings major benefits for customers, since quality standardization till time saving and raw material costs reduction, eliminating process steps.

Sadia

- This Food Company was created in Concrdia, Santa Catarina, Brazil. It is

major Brazilian food producer. Sadia is one of the worlds leading producers of chilled and frozen foods. Brazils main exporter of meat-based products. Sadias brand name has been voted the most important and valuable brand among all Brazils food brands. In Portuguese the word Sadia means "healthy". In addition, Sadia has much more to offer. Their products are highly nutritious, practical, safe to eat and very tasty. Sadia is proud to have nothing less than 12 industrial plants in Brazil that together produce over 1.3 million tons of protein-based products coming from chicken, turkey, pork and beef, not to mention the pasta, margarines and desserts. The line of products comprises over 2,500 different products to choose, taste and enjoy: varied cuts of poultry and pork meat, cooked meats, cold cuts in general, sausages, hamburgers, lasagna, ravioli and other types of pasta, pre-cooked meat based meals, creamy margarines, pizzas, soups, desserts etc.

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2.2 Structure, functions and business activities of food processing industry in

Brazil
Brazilian Market for Processed Food

Average incomes in Brazil are modest, but Brazilians spend about 30 percent of their incomes on food. Brazils processed food market is an urban phenomenon. People are acquiring kitchen appliances such as microwaves, which has contributed to the growth in the use of frozen foods. The market for frozen foods until recently focused on chicken nuggets, hamburger patties, dairy products, and juices, and even then in small amounts compared with the United States. There is a growing trend to market processed foods through supermarkets. The 300 largest supermarket chains account for about 40,000 check-out counters, or half the total in the sector.
Brazils Processed Food Industry

Brazil has a well-developed food processing industry that provides consumers with a extensive range of processed foods. Over half of the food consumed in Brazil is processed. The orange juice, biscuit, chocolate, candy, and dairy product industries have experienced the most growth in the 1990s. Brazil has 43,000 food manufacturing and processing plants that provide 745,000 jobs. For many years, the food processing industry was protected from foreign competition by limited access. This situation began to change in the 1990s as deregulation of food prices by the government forced Brazilian companies to pay more attention to quality in order to compete with imports. Brazils food processing industry, which is 36 percent foreign-owned, includes many U.S. companies and European-based multinational companies such as Nestl, Parmalat, and Unilever. The estimated annual gross sales of Brazils food processing sector are $45 billion. Leading Sectors Meat products, fats and oils, dairy products, beverages, and sugar refining are the largest sectors.

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Wheat milling. The wheat milling industry in Brazil consists of 235 mills, 180 of which have daily capacities of 50 MT or less. Of the total installed capacity of 11.5 MMT, 20 of the mills produce more than 500 MT a day. Santista Alimentos and Pena Branca Agroindustrial are two of the largest milling groups in Brazil. These mills have formed alliances with producers of pasta, cookies, and crackers, and with pizza franchisersan important change in the industry. Four companies dominate the industrial baking sector. Santista Alimentos and Panco are the major bread companies in a market where per capita consumption of bread averages 7 pounds per year. In the cookie and biscuit sector, family-run businesses, such as Confianca and Campineira, were incorporated by multinationals like Nestl and Danone. Nabisco also has affiliates in Brazil. Oilseed processing. Annual crush capacity is about 30 million tons. Most production processing capacity is located in southern Brazil, although several plants were recently built in the west-central and northern States. Soybeans make up over 80 percent of Brazils total oilseed crush. Paran, Rio Grande do Sul, and So Paulo are the principal oilseed processing States. Large crushers in Brazil include Ceval Alimentos (13.2percent), Cargill Agrcola (5.7 percent), and Incobrasa (4.3 percent). Other oilseed crushers include Sadia, Sambra/Samrig, Gessy Lever, Bianchini, and Olvepar. Brazil still lacks adequate storage and transportation facilities to efficiently move production into consumption and international markets. Frozen concentrated orange juice. In So Paulo, 11 companies operating 17 factories produce frozen concentrated orange juice (FCOJ), processing about 97 percent of Brazils total capacity in a modern world-class industry. The two largest companies, Cutrale and Citrosuco, control about half of the processing capacity. Brazilian exports of FCOJ are also dependent on consumer trends in Europe and Asia, Brazils biggest markets. Cocoa beans. About 85 percent of Brazils cocoa production is concentrated in the northeastern State of Bahia. The remaining production comes from Espirto Santo, So Paulo, Paran, and Rondnia. About 50 percent of the cocoa crop is processed locally
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into intermediary products (mainly cocoa butter), and the processing industry is owned by large multinational cocoa dealers and chocolate manufacturers, such as Cargill. Sugar. Brazil is among the world leaders in sugarcane, sugar, and ethanol (fuel alcohol) production and in sugar consumption and exports. It is also among the most efficient of all the major sugar producers, and Brazils sugar export products are the most diverse. Brazil can produce either sugar or ethanol from sugarcane, and only about 40 percent of its cane production is ground for sugar. Brazil has about 370 processing facilities to produce refined sugar and/or ethanol from sugarcane. About 25 produce only sugar, 145 produce only alcohol, and 200 produce both products. So Paulo is the major producing State, accounting for 60 percent of Brazils sugar output and about two-thirds of its alcohol output. Wineries. Brazil is a moderate producer of wines and is in competition with its neighbors, Argentina and Chile. Grapes from the Rio Grande do Sul are used in white wines. Santa Catarina is also a wine district. More than 80 percent of the vineyards have less than 5 hectares and have difficulty competing with Argentina and Chile. The Aurora Cooprative (Marcus James) is responsible for nearly all of Brazils wine exports. Beef processing. Brazil has a modern meat processing industry that consists of about 55 large meatpackers.. Most beef is trucked in carcass form up to 1,000 kilometers to be consumed. Only about 20 percent of the beef is packaged in ready-to-serve portions and sold in supermarkets. Poultry processing. Brazil has a poultry industry that is about a third the size of the U.S. industry and is vigorous in the international market. Perdigao- Agroindustrial SA, Ceval Alimentos SA, Sadia Trading, and Frangosul are the largest poultry exporting companies, exporting both whole birds and pieces, mostly to Saudi Arabia and Japan. In poultry production, about 25 percent of the producers provide 90 percent of the broilers

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Dairy. The Brazilian dairy industry is dominated by two multinationals, Nestl and Parmalat, Milk production is highly seasonal and is produced mostly in Minas Gerais, So Paulo, and Paran. Brazil is a net importer of dairy products. During the off-season, it is common practice to extend fresh milk supplies by recombining fluid milk with domestic or imported nonfat dried milk. Fluid milk is marketed mostly through a network of large private national and multinational companies. Three types of milk are sold at retail, the most widely consumed being type C, with 3 percent fat content. It is sold in plastic bags and requires boiling before drinking. Types A and B account for only 10 percent of the fluid milk. Ultrahigh Temperature (UHT) milk is also consumed, due to the marketing efforts of the multinational Parmalat. corn products. Production is dominated by CPC International, a U.S. company. CPC produces grainbased cereals and dietary staples, mayonnaise, soups and bouillon, and corn oil. U.S. Investment in Brazils Processed Food Industry U.S. investment in Brazils food industry tripled from 1985 to 1995. Borden, Cargill, Coca-Cola, CPC, Kellogg, Kraft Foods, PepsiCo, Philip Morris, and RJR Nabisco have a presence in Brazil. These companies have considerable market share in certain sectors and operate across a broad spectrum of products. CPC has its largest foreign affiliate in Brazil and is the largest producer of most corn products. RJR Nabisco is the second largest producer of cookies (7 percent of sales); and the leading producer of baking powder and yeast (80 percent of sales), dessert mixes (50 percent), and fruit juices (45 percent). U.S. companies compete against such European conglomerates as Unilever, the second largest food company in Brazil with food sales of $1 billion. Unilever has operated in Brazil since 1929. Unilever is the top producer of edible fats and margarine, tomato-based products, canned vegetables, and cottonseed oil, and ranks second in specialty cheese and mayonnaise production and third in tea and soybean products.

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3.1 Comparative position of food processing industry of Brazil with India/ Gujarat
Table No : 6 Table Title: Major processed fruits and vegetables imported 2007-2008

The food processing industry in India is a sunrise sector that has gained prominence in recent years. Availability of raw materials, changing lifestyles and relaxation in policies has given a considerable push to the industrys growth. A thrust to the food processing sector implies significant development of the agriculture sector and ensures value addition to it. Processing of fruits and vegetables is a low 2%, around 35% in milk, 21% in meat and 6% in poultry products. By international comparison, these levels are significantly low - processing of agriculture produce is around 40% in China, 30% in Thailand, 70% in Brazil, 78% in the Philippines and 80% in Malaysia. India, with an arable land of 184 mn hectares is, the highest producer of milk in the world at 90 mn tonnes p.a., second largest producer of fruits & vegetables (150 mn tonnes), third largest producer of foodgrains and fish and has the largest livestock population. Considering the wide-ranging and large raw material base that the country offers, along with a consumer base of over one billion people, the industry holds tremendous opportunities for large investments.

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Ministry of Food Processing Industries The Ministry of Food Processing Industries, GoI, has estimated the size of the Indian food market at US$ 191 bn (Rs 8,600 bn). The processed food market is projected to be over US$ 100 bn, of which the primarily processed food market accounts for 60%, while the value-added processed food market is around 40%. Structure of the Indian Food Processing Industry Industry Sub-Segments Fruits & Vegetables The processing of fruits and vegetables is estimated to be around 2.2% of the total production in the country. The prominent processed items in this segment are fruit pulps and juices, fruit based ready-to-serve beverages, canned fruits and vegetables, jams, squashes, pickles, chutneys and dehydrated vegetables. Since 2000, the industry has seen significant growth in ready-to-serve beverages, fruit juices and pulps, dehydrated and frozen fruits and vegetable products, pickles, processed mushrooms and curried vegetables, and units engaged in these segments are export oriented. Table No: 7 Table Title: (Quantity in MT, Value in Rs Mn) Exports of Processed Fruits & Vegetables

Source: Ministry of Food Processing Industries, Annual Report 2005-06 Contract farming in wheat practiced in Madhya Pradesh by Hindustan Lever Ltd and by Pepsi Foods Ltd in Punjab for tomatoes, food grains, spices and oilseeds are some successful examples of contract farming in India, which changed the farming landscape
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and promoted the cultivation of processable variety of farm produce. Such innovative practices will power the fruits, vegetables and grain processing industry. Apart from such initiatives, fiscal incentives and tax concessions will also give impetus to the sector. The five-year 100% tax exemption announced by the Government in FY05 was one such incentive for upcoming fruits and vegetable processing units. Milk and Milk Products India has one of the highest livestock population in the world, accounting for 50% of the buffaloes and 20% of the worlds cattle population, most of which are milch cows and milch buffaloes. Indias dairy industry is considered as one of the most successful development programmes in the post-Independence era. As per data released by the Ministry of Food Processing Industries, exports of dairy products have been growing at the rate of 25% p.a. in quantity terms and 28% in value terms since 2001. Significant investment opportunities exist for the manufacturing of value-added milk products like milk powder, packaged milk, butter, ghee, cheese and ready-to-drink milk products. Meat & Poultry - Since 1995, production of meat & meat products has been steadily

growing at a rate of 4% p.a.. Currently, the processing level of buffalo meat is estimated at 21%, poultry 6% and marine products 8%. Only about 1% of the total meat is converted into value added products like sausages, ham, bacon, kababs, meat balls, etc. Production of meat is governed under local by-laws as slaughtering is a state subject. Processing of meat is licensed under the Meat Food Products Order, 1973.

Table No : 8
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Table Title: Exports of Meat and Meat Products (Quantity in MT, Value in Rs Mn)

Source: Ministry of Food Processing Industries, Annual Report 2005-06 Meat exports have been growing at close to 30% p.a. in quantity terms, largely driven by poultry, buffalo, sheep and goat meat. Exports of value added meat products are insignificant. In the domestic market, the growing number of fast food outlets in the country has had a significant impact on the meat processing industry. Marine Products Processing of marine produce into canned and frozen forms is

carried out almost entirely for the export market. Infrastructure facilities for processing of marine products include 372 freezing units with a daily processing capacity of 10,320 tonnes and 504 frozen storage facilities with a capacity of 138,229.10 tonnes. Processed fish products for export include conventional block frozen products, individual quick frozen products (IQF), minced fish products like fish sausage, cakes, cutlets, pastes, surimi, texturised products and dry fish etc. Grain Processing Primary milling of grains is the most important activity in the grain processing segment of the industry. Around 65% of rice production is milled, mostly in modern rice mills. However, the sheller-cum-huller mills operating give low recovery. Dal milling is the third largest in the grain processing industry, and has approximately 11,000 mechanised mills in the organised segment. Indian rice, especially Basmati rice, has gained international recognition, and is a premium export product. Branded grains as well as grain processing is now gaining popularity.

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Beer & Alcoholic Beverages India is the third largest market for alcoholic beverages in the world, and the domestic market is largely dominated by United Breweries, Mohan Meakins and Radico Khaitan. The demand for beer and spirits is estimated to be around 373 mn cases per year. There are 12 joint venture companies having a licensed capacity of 33,919 kilo-litres p.a. for production of grain based alcoholic beverages. Around 56 units are manufacturing beer under license from the Government of India. Consumer Foods This segment includes packaged foods, aerated soft drinks, packaged drinking water and alcoholic beverages. Packaged / Convenience Foods -Consumer food industry mainly consists of ready-toeat and ready-to-cook products, chips, salted snacks, pasta products, cocoa based products, bakery products, biscuits, soft drinks, etc. There are around 60,000 bakeries, 20,000 traditional food units and several pasta food units. The bakery industry is among the few processed food segments whose production has been increasing steadily in the country in the last couple of years Cocoa Products - There are 20 units engaged in the manufacture of cocoa products like chocolates, drinking chocolate, cocoa butter substitutes, cocoa based malted milk foods with an annual production of approximately 34,000 tonnes. Soft drinks - This segment is the 3rd largest in the packaged foods industry, after packed tea and packed biscuits. The aerated soft drinks industry in India comprises over 100 plants and provides direct and indirect employment to over 125,000 employees. It has attracted one of the highest foreign direct investments in the country. Its position is strengthened by strong forward and backward linkages with glass, plastic, refrigeration, sugar and the transportation industry. Penetration levels of aerated soft drinks in India are quite low compared to other developing and developed markets, which is indicative of the potential the segment holds for further growth.

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Table No: 9 Table Title: Exports of Consumer Foods (Quantity in MT, Value in Rs Mn)

Source: Ministry of Food Processing Industries, Annual Report 2005-06 SWOT Analysis of Indian FoodProcessing Industry Strengths

Abundant availability of raw material Priority sector status for agro-processing given by the central Government Vast network of manufacturing facilities all over the country Vast domestic market

Weaknesses

Low availability of adequate infrastructural facilities Lack of adequate quality control & testing methods as per international standards Inefficient supply chain due to a large number of intermediaries High requirement of working capital. Inadequately developed linkages between R&D labs and industry. Seasonality of raw material
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Opportunities

Large crop and material base offering a vast potential for agro processing activities Setting of SEZ/AEZ and food parks for providing added incentive to develop greenfield projects

Rising income levels and changing consumption patterns Favourable demographic profile and changing lifestyles Integration of development in contemporary technologies such as electronics, material science, bio-technology etc. offer vast scope for rapid improvement and progress

Opening of global markets

Threats

Affordability and cultural preferences of fresh food High inventory carrying cost. High taxation High packaging cost

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3.2 Present Position and Trend of business (Import/export) with India/ Gujarat during last 3 to 5 years Recent news for Gujarat in food processing Blessed with largest coastline and an environment of business, Gujarat seems to be attracting current players in India to shifting their business from respective states to Vibrant Gujarat. Honorable Gujarat Chief Minister Narendra Modi has given boost to this industry by supporting it to meet export needs. It will also employ many women who are involved in Gruh Udhyog, and provide a strong base to the economy. Food processing firm Himalya International has started commercial production at its Gujarat unit. First unit of food processing plant set up at Vadnagar in Gujarat has started commercial production. Besides, the company announced that its remaining three units would commence operation in the next four months. The Vadnagar unit will grow and process 10,000 tonnes of mushrooms, 40,000 tonnes of appetisers and fries, 50,000 KL of yogurt and cheese and 100 million cans of soups per annum. Himalaya International Ltd (HIL), a Himachal Pradesh-based frozen food manufacturer, will invest Rs.1.4 billion (Rs.140 crore) to set up an export-oriented unit in Gujarat. The state government is providing 100 acres in Mehsana district.

The Gujarat facility will produce ready-to-eat products like frozen mushroom, mozzarella sticks, cheese and appetizers and plan to export to Western markets.

The company is also planning to sign an agreement with the Gujarat Tribal Development Department for starting contract farming. Technical knowhow provided will be to farmers to cultivate Spanish onions, jalapeno and seedless eggplants,

which the company will buy back for processing frozen food and appetizers. The facility,
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which is expected to start commercial production by next year, will generate employment for nearly 2,000 people. In Gujarat, the Agro and Food processing sector has received a big boost in the state. Some of the salient features of the Agro sector in Gujarat are as:

Oil seed processing - 1200 oil extraction units 49 solvent extraction units Fruit and vegetable processing - 15 organised units, 30 small/ medium scale units

Seed spices - 40 units of ground spices 25 units of Isabgol processing Fish processing - 60-65 sea food processing units Milk processing - 13 co-operative sector dairies 26 private sector dairies Gujarat has a vast network of market centres and yards

APMCs: 1178 Main Yards: 160 Sub Yards: 235 Cold storage centres: 2 4-Special Yards: Cotton, Tobacco, Spices and Groundnut

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4.1 Policies and Norms of Brazil for food processing industry- for import/ export including licencing/ permission, taxation Brazil is a member of the World Trade Organization (WTO) and therefore has made commitments to subscribe to the Sanitary and Phytosanitary (SPS) Agreement and to Codex Alimentarius (CODEX) principles. Food regulations issued at the federal level are contained in various types of legal documents and, in order to be implemented must be published in Brazils Diario Oficial (similar to the U.S. Federal Register).Brazil has three levels of government: federal, state and municipal. In the federal government, numerous agencies and several Ministries share jurisdiction for ensuring the safety of the Brazilian food supply and regulating imports of agricultural commodities and foods. However, the Ministry of Agriculture, Livestock, and Food Supply (MAPA) and the Ministry of Health (MS) - through its National Agency of Sanitary Surveillance (ANVISA) - are the primary regulators of agricultural products. MAPA oversees and enforces a large number of regulations pertaining to production, marketing, import and export of animal origin products, fresh fruit and vegetables, alcoholic beverages, juices, grains, seeds, and animal feed (including pet food). ANVISA enforces most of the regulations regarding processed food products. MAPA and ANVISAs regulations may be consulted on-line. Other Ministries and/or agencies also involved in monitoring/control of food safety include the Environment Protection Institute (IBAMA), of the Ministry of the Environment; the National Institute of Metrology, Standardization and Industrial Quality (INMETRO) of the Ministry of Development, Industry and Commerce (MDIC); the
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National Technical Commission on Biosafety (CNTBio), which is an inter-Ministerial Commission based in the Ministry of Science and Technology (MCT); and the Department of Consumer Protection and Defense (DPDC) within the Ministry of Justice. LABELING REQUIREMENT The Brazilian Consumer Protection Lei n 8078 of September 11, 1990, requires that all domestic and imported foods and beverages must provide the consumer with correct, precise, clear and easily readable information about the production Portuguese. According to the Consumer Protection Law, the Brazilian importer is held liable in case of health risk to the consumer of an imported product. The expiration date, validity, or shelf life date is very important for Brazilian consumers and should never be overlooked. ANVISA provides the general regulatory framework for labeling domestic and imported food products, MAPA or ANVISA will require additional notes, such as plant number, product registration number, etc. MAPA requires that, in addition to the registration of the foreign processing plant, the Brazilian importer must also file a request for the preregistration of the foreign labels of processed meat, dairy, and seafood products. Only those products that have their labels pre-approved by DIPOA are allowed to enter Brazil. For additional information on plant registration, U.S. exporters should contact the Office of Agricultural Affairs (OAA) in Brasilia. There are some items required to appear on product front or side labels: ITEMS GENERALLY REQUIRED ON FRONT PANEL 1) Technical name, according to MAPA or ANVISA classification,2 )Brand, 3 )Quantity ITEMS GENERALLY REQUIRED ON SIDE PANEL List of ingredients, Country of Origin,Producer contact information (complete name and address), Importer Information (corporate name, address, corporate ID), Date of production, Date of product expiration, Lot, Storage care, Instructions for use or preparation (if necessary), The expression Contains Gluten or Does Not Contain Gluten, clearly visible Nutritional information

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MAPAs Inspection Requirements for Meat, Dairy, and Seafood Products In order to export animal origin (beef, pork, powdered milk, whey, lactose, cheese, and seafood) products to Brazil, the local government requires that U.S. processed plants must be inspected by federal agencies. State level inspection is not accepted and products from these plants will not be registered in Brazil. The only U.S. federal agencies approved by the Brazilian Government to certify U.S. processing plants are: the Food Safety and Inspection Service of the U.S. Department of Agriculture (FSIS/USDA) for meat and poultry, and the Agricultural Marketing Services (AMS/USDA) or the Food and Drug Administration (FDA) for dairy. The U.S. dairy product exporter must have the processing plant included in AMSs list of U.S. Dairy Plants Surveyed and Approved by the USDA Grading Service or have the Central File Number under FDA. The same procedure applies for exports of U.S. seafood. The U.S. plant must be inspected by either the National Oceanic and Atmospheric Administration/National Marine Fisheries Services (NOAA/NMFS) or FDA before exporting to Brazil, and must be included on DIPOAs list. The request for registration of the U.S. plant with DIPOA must be made through the USDAs Foreign Agricultural Service (FAS) office in the U.S. Embassy in Brasilia. The U.S. exporter must provide the FAS office in Brasilia, the following information: 1. Full name and address of the plant(s), including telephone, fax, and contact person; 2. Plant registration number with the Food Safety Inspection Service (FSIS/USDA) for meat products (beef and pork only). Plant registration number with the Agricultural Marketing Service (AMS/USDA) or the central file number with NOAA/NMFS for seafood products. 3. Description of the product to be exported to Brazil: fresh/frozen beef, beef products, beef, pork, pork products, prepared foods, milk and milk products (cheese, whey, butter, butter oil, lactose), and seafood products (in this number from the FDA for dairy products. The central file number from FDA or plant registration

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case provide the scientific name of the fish in Latin and how the product will be shipped to Brazil The important documentation procedures to be followed by importers in the country include: In the prescribed bill of entry format, importers must furnish an import declaration, disclosing the value of imported foods. This must be accompanied by the following documents: 1. Import permit original - A permit authorised by the Plant Quarantine Officer for the import of fresh Fruits/vegetables, and processed food is mandatory. The importer has to clearly state the specified quantity intended to be imported. The Import Permit issued shall be valid for six months from the date of issue and valid for multiple port access and multiple part shipments provided the exporter, importer and country Of origin are the same for the entire consignment. For frozen/processed meat Products and frozen/processed marine products a permit is required from Animal Quarantine and MPEDA respectively. 2. Phytosanitary certificate (original) issued at the country of origin or PSC Reexport format, in case of re-exported consignment along with attested copies of PSC issued from the country of origin. 3. Customs bill of entry (duly endorsed). 4. Shipping/airway bill. 5. Invoice and Packing list. 6. Fumigation certificate (if required). 7. Certificate of Origin. 8. Bill of lading. A certification from the port health authority is needed for the clearance of imported food products at the port of entry. This certificate conforms to the standard and regulations of the PFA (Prevention of Food Adulteration Act). As most ports have very limited testing facilities, this certification is based mostly on visual inspection and records of past imports. Therefore, many importers face unnecessary delays in clearing their products. Depending on the product and
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experience of the importer, the custom clearance period may last between one day and one month. An appeal can be filed by the importer at the Customs office at the port of entry in case of a dispute or rejection of the consignment.

4.2 Policies and norms of India for import /export to Brazil including licencing / permission, taxation Food Product Order (FPO): It was promulgated under Essential Commodities act in 1955 aiming at regulating sanitary and hygienic conditions in the manufacture of fruit and vegetable products. Licensing under this order lays down the minimum requirement for Sanitary and hygienic conditions in the premises, surroundings and personnel. Water to be used for processing. Machinery and equipments. Product standards. Besides these, the maximum limit for preservatives, additives and contaminants have also been specified for various products. The regulatory functions are carried out at ministry level and also through the directorates of fruits and vegetables preservation. This has four regional offices at Delhi, Kolkata, Chennai and Mumbai under Deputy Directors. Development functions- Guiding Industries to set up fruit processing industry by new

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technology or by new innovations, improving process of to obtain maximum output from fruits and vegetables, marketing label requirements of products, suggesting for suitable products, packaging as per latest trend. Preachment Inspection of food products for export -Continues expansion of Fruits and vegetables products for export by the development of fruit pulp juices export, where the samples are drawn online, cut out for analysis. The quality certificate after conditions is also issued as per request of parties under preachment. (Quality control INSPP in 1963). Financial assistance- By visiting factories as per instruction to manufactures, grant of FPO license in case of fruits and vegetable units, food parks, bakery units, infrastructural units for food processing industry. Government Regulation and Support - Since liberalisation several policy measures have been taken with regard to regulation & control, fiscal policy, export & import, taxation, exchange & interest rate control, export promotion and incentives to high priority industries. Food-processing and agro industries have been accorded high priority with a number of important relieves and incentives. Regulation and Control 1. As per extant policy, FDI up to 100% is permitted under the automatic route in the food infrastructure (food park, cold chain/warehousing). 2. Automatic approval to FDI up to 100% equity in FPI sector excluding alcoholic beverages and a few reserved items. 3. Foreign investments are allowed in SSI reserved items under an export obligation (pickles, chutneys, bread, pastry, hard-boiled sugar candy, rapeseed oil, sesame oil, groundnut oil, sweetened cashew nut products, ground and processed spices other than spice oil and oleoresin, tapioca sago and its flour). 4. FDI up to 100% is permitted on the automatic route for distillation & brewing of alcohol subject to licensing by the appropriate authority.
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No industrial license is required for almost all of the food & agro processing industries except for some items like: beer, potable alcohol & wines, cane sugar, hydrogenated. 5. Animal fats & oils etc. and items reserved for exclusive manufacture in the smallscale sector. 6. Up to a maximum of 24% foreign equity is allowed in SSI sector.

Fiscal policy and taxation1. .Liberal corporate tax policy is applicable for export and domestic earnings, income tax rebate allowed (100% of profits for five years and 25% of profits for the next five years) for setting up of new agro-processing industries to process and package fruits & vegetables. 2. Fruits & vegetables, and dairy machineries are completely exempt from central excise duty. Central excise duty on preparation of meat, poultry and fish, pectin, pats and yeast is also completely exempt. 3. Quantity restrictions on all food products have been removed. Peak rate of customs duty has been reduced from 30% to 25% (excluding agricultural and dairy products) and duty structure on designated items has been rationalized. 4. Customs duty on refrigerated goods transport vehicles has been reduced form 20% to 10%. 5. Excise Duty of 16% on dairy machinery has been fully waived off and excise duty on meat, poultry and fish products has been reduced from 16% to 8%. Export promotion1. Food-processing industry is one of the thrust areas identified for exports. Free Trade Zones (FTZ) and Export Processing Zones (EPZ) have been set up with all infrastructures. Also, setting up of 100% Export Oriented Units (EOU) is

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encouraged in other areas. They may import free of duty all types of goods, including capital foods. 2. Capital goods, including spares up to 20% of the CIF value of the capital goods may be imported at a concessional rate of customs duty subject to certain export obligations under the EPCG scheme. Export linked duty free imports are also allowed. 3. Units in EPZ/FTZ and 100% EOUs can retain 50% of foreign exchange receipts in foreign currency accounts. 4. 50% of the production of EPZ/FTZ and 100% EOU units is saleable in domestic tariff area. All profits from export sales are completely free from corporate taxes. Profits from such exports are also exempt from MAT. 5. .Agri export zones and food parks 6. Setting up of 60 agri zones for end-to-end development for export of specific product from geographically contiguous areas. 7. 53 food parks approved to enable small and medium food and beverage units to set up and to use capital intensive common facilities such as cold storage, warehouse, quality control labs, effluent treatment plant, etc.

Various food laws applicable to food and related products in India Prevention of Food Adulteration Act (PFA), 1954 and Rules (Ministry of Health & Family Welfare), . The Standards of Weights and Measures Act, 1976, and Standards of Weights and Measures (Packaged Commodities) Rules, 1977, Agriculture Produce (Grading & Marking) Act (Ministry of Rural Development), Essential Commodities Act, 1955 (Ministry of Food & Consumer Affairs), Fruit Products Order (FPO), 1995, Meat Food Products Order, 1973 (MFPO), Milk and Milk Products Order, 1992, The Food Safety and Standards Act, 2006

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4.3 present trade barriers for import export of processed food Major Challenges for the India and Brazil Food Processing Industry are: Consumer education on nutritional facts of processed foods Low price-elasticity for processed food products Need for distribution network and cold chain Backward-forward integration from farm to consumers Development of marketing channels Development of linkages between industry, government and institutions Taxation in line with other nations Streamlining of food laws

Lack of suitable infrastructure in terms of cold storage, warehousing, etc Lack of adequate quality control and testing infrastructure Inefficient supply chain and involvement of middlemen High inventory carrying cost High packaging cost Affordability and cultural preference of fresh food

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Constraints & Drivers of Growth for India Growing urbanization, increasing disposable income, emergence of organised food retail, changing lifestyles and food consumption patterns are the key factors driving growth for processed foods in India. These are post-liberalisation trends that have given an impetus to the sector. Consumption patterns in India have been undergoing a visible shift. Earlier, the share of cereal products was the highest, followed by milk & milk products, vegetables, edible oil and meat products. However, in recent years, the growth rates for fruits, vegetables, meat and dairy products have been higher than cereals and pulses. This shift in turn implies that there is also a need to diversify the food production base to match the changing consumption preferences. This shift in consumption follows the pattern observed in developed countries in the evolution of the global food demand. There is a shift from carbohydrate staples to animal sources and sugar. Going by this pattern, in future, there will be increasing demand for prepared meals, snack foods and convenience foods and further on the demand would shift towards functional, organic and diet foods. Highest priority has been accorded by the Government for the development of infrastructure. The Government has already taken several initiatives on this front which include developing of food parks, packaging centres, modernised abattoirs, integrated cold chain facilities, irradiation facilities and value added centres. The initiative to develop food parks was taken primarily in order to assist the small and medium enterprises which are unable to invest in capital intensive activities. So far, 22 food parks have come into operation which provide common facilities like cold storage, food testing and analysis laboratories, packaging centres, etc In terms of policy support, the ministry of food processing has taken the following initiatives:

Formulation of the National Food Processing Policy Complete de-licensing, except for alcoholic beverages Declared as priority sector for lending in 1999 100% FDI on automatic route
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Excise duty waived on fruits & vegetables processing from 2000 01 Income tax holiday for fruits & vegetables processing from 2004 05 Customs duty reduced on freezer van from 20% to 10% from 2005 06 Implementation of Fruit Products Order Implementation of Meat Food Products Order Enactment of FSS Bill 2005 Food Safety & Standards Bill, 2005 Apart from these initiatives, the Centre has requested state Governments to undertake the following reforms:

Amendment to the APMC Act, Lowering of VAT rates Declaring the industry as seasonal, Integrate the promotional structure

5.1 Potential for import export in india/ Gujarat market Potential and prospects of Indian food Industry Major Players of Indias food processing: Dabur India Ltd, Gitz food products pvt ltd., Godrej industries ltd, Haldiram Marketing Pvt Ltd, MTR foods ltd, Parle Agro pvt ltd, HUL, Britannia industries ltd, Agro Tech Foods, ITC Ltd, Nestle India Pvt Ltd,etc The form in which food is consumed has been changing according to requirement, taste, standard of living, life style, development in R&D production, processing, preservation and storage. The market potential in India is huge. The realization of this potential will require:

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1. Demand creation in urban area as well as rural area through publicity by media and news papers. 2. Establishment of retail trade network with good and hygienic storage capabilities. 3. Adoption of good package system with low cost. 4. Lowering of cost and prizes through better management induction in incidence of taxes and duties both at central and state levels on processed food on packaging material, raw material and machineries, And also reduction in cost of transportation of raw materials and other inputs. The interest rate also can be reduced. 5. The up gradation of food product quality through introduction of modernization, technological innovation, development of new products with long shelf life. 6. Harmonization of food loss awareness, quality management systems like ISO 9000, ISO 22000 and HACCP (Hazard analysis critical control point) due to mass production. 7. The observed fragmentation of the food supply chain. We need to improve on post harvest handling. Cleaning, Grading, packaging and storage. 8. Infrastructure of food industry should be improved. 9. Deficiencies exist for grading and packing besides pre cool their form site which could feed into a formalized food chain. 10. The amendments and modifications of agriculture produce; marketing commodities at food facilitate the reduction in cost as well as allow the festering of beneficial relation ship between the relevant players. 11. Government subsidy scheme, partnership bank relation should be created and implemented to develop infrastructure. Financing institutions are required to give proper push to Food Industry. 12. Institutions need to engage both fundamental and applied research and keep abreast of global demands. 13. India has very wide range of eating habits and food product. Such products and processes need to be in article form, where necessary improved up on and protective.
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14. Research and development on ethic foods shall not only address regional needs but open up a market amongst all over to India market. Food processing industry is going to be a leading Industrial sector in the world India is one of the largest producers of food crops in world. We are 2nd largest producers of fruits and vegetables, Rice and the largest producers of milk in the world. Being perishable in nature, considerable wastage of 30-40% of fruits and vegetables occurs every year due inadequate infrastructures like transportation, cold storage, refrigeration, poor storage and poor marketing facilities. The growth of potential of food processing Industry is enormous and it is expected that the demand for food production will double in next 10 years and the consumption of value added food products will grow at fast rate. This growth of food processing industry, gives immense benefit to the economy, rising Agricultural yield, meeting productivity, creating employment and raising the standards of very large number of people throughout the country especially in rural areas. Economic liberalization and consumer prosperity is opening up new opportunity for diversification of food processing sector. The food processing industry ranks 5th in size in country and employs 20 lacks workers which consist of 20% of the countrys Industrial labor force. It counts for 14% of total Industry out-put with 5.5% of GDP. The turnover of the Industry is estimated to be Rs.1, 44,000 crores (nearly). Indian brands are yet to be developed in the International markets due to poor efforts at international marketing. Post harvest management of fruits and vegetables plays a very important role in the development of Agriculture sector. Insufficient infrastructures at the level of farms and unhygienic market, with poor protection from sun and rain, theyre by causing a considerable impact on post harvest losses, particularly for the more perishable products.

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5.2 Business opportunities in future For India Potential global outsourcing hub : The Indian food processing sector has the potential to become an outsourcing hub for the world by 2012. The Ministry of Food Processing Industries is committed to the sector and has announced various incentives and schemes to support new ventures. Development of food parks The Ministry of Food Processing Industries Vision 2015 action plan includes trebling the size of the food processing industry, increasing value addition from 20 per cent to 35 per cent, and enhancing Indias share in global food trade to 3 per cent.

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The Government of India is actively promoting the concept of mega food parks and is expected to set up 30 such parks across the country to attract FDI. The Government of India has released a total assistance of US$ 23 million (INR 1,104 million) to implement the Food Parks Scheme. It has, till date, approved 50 food parks for assistance across the country. The Centre has also planned for a subsidy of US$ 22 billion (INR 1,056 million) for mega food processing parks Establishment of production bases India has abundant resources in terms of raw material for food production, including fruits, vegetables, spices, dairy products and edible oils. The presence of a skilled workforce and low labour costs are key factors to be considered while establishing production bases. The Government of India has established few notable institutes for research and training in the food segment. These include the Central Food Technology Research Institute in Mysore (Karnataka) and the National Institute of Food Technology Entrepreneurship and Management (NIFTEM) in Sonepat, Haryana.

Investment in infrastructure through public-private partnerships (PPPs) It is estimated that by 2012, Indias marketable surplus will increase to 870 million tonnesper annum (MTPA), 40 per cent of which is likely to be accounted for by perishable foods, creating opportunities for the development of storage infrastructure. Considerable investment is required in rural infrastructure and components of the supply chain, which is undertaken with the involvement of all stakeholders on a PPP basis. This is likely to add value and help producers obtain better prices and income. The Central Government envisages an investment of US$ 21.89 billion (INR 1,050.72 billion) by the private sector in the food processing industry by 2015.

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Contract farming Contract farming is an agreement between the food processor (contractor), typically a large organized player, and the farmer, where the latter is contracted to plant and produce the formers crop on his land. HUL Rallis and ICICI are practicing contract farming in wheat in Madhya Pradesh. Under the system, Rallis supplies agriinput and know-how, and ICICI finances (farm credit) farmers. HUL, which requires the farm produce as raw material for its food processing division, provides the buyback arrangement for the farm output. Scandic Food India PvtLtd is planning to increase its presence to 800 cities during 201011 from a present 250 through contract farming, to revive its Silbrand. The company is now taking to contract farming to secure the supply of fresh fruits and commodities such as chilli, tomatoes etc. for its jams and ketchups.

Investment in supply chain infrastructure There is a considerable scope to use sophisticated techniques and applications in areas such as demand forecasting, data integration, fund-flow management and information sharing to improve supply chain management. In addition, the expansion of storage facilities is expected to help minimize wastage in the production of fruits and vegetables. The Indian Government has initiated a number of activities to facilitate growth of the logistics and warehousing sectors. For instance, the Government has announced investmentlinked tax incentives for setting up and operating cold chains and warehousing facilities and permitted 100 per cent FDI in foodrelated infrastructure such as food parks and cold chains.
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Processed food The food processing industry, accounting for 32 per cent of the total food market, is one of the largest industries in India, and is ranked fifth in terms of production, consumption, export and expected growth. Potato chips, confectionery, cereals and bakery, spirits, spreadable fats, processed milk, frozen and chilled meat and marine products are a few key categories in the processed food space in the Indian market. Currently, India processes more than one-third of its milk, 26 per cent of its fisheries output, one-fifth of all its buffalo meat, six per cent of poultry, and 2.2 per cent of fruit and vegetables. With the necessary investment, these figures could increase to about 40 per cent for fisheries, close to 15 per cent for poultry, 60 per cent for milk and 40 per cent for buffalo meat. Investments worth US$ 30 billion (INR 1,440 billion) are required to increase the volume of processed food products to 10 per cent of overall output by 2015. With urbanization and disposable incomes rising, the lifestyle of consumers and their eating habits have evolved, thereby increasing the demand for processed and ready-to-eat food. The Government of India has undertaken several initiatives to attract investments in this segment, such as financial assistance for the establishment and modernization of food processing units, the creation of infrastructure, support for R&D and human resource development. Several challenges will test the vibrancy of Brazils economy in the next few years, notably improving the countrys dilapidated infrastructure and addressing an overheating economy in which manufactured imports are soaring and exports lagging. Driving Forces :

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Abundant availability of raw material, Demographic trends, Rising income levels leading to large customer base, Relatively young population, Changing lifestyles, Increase in consuming class in rural areas, Export opportunity For India of Brazil: Government Leadership and Support (For Brazil) Brazil is a priority market for investment attraction, retention and expansion initiatives and a key partner for science and technology collaboration. Trade Commissioners are proactively engaged in investment prospecting efforts, specifically targeting high-growth companies in sectors of comparative advantage for India . 1. Brazil is politically stabile and has democratic rules achieved under the presidencies of Fernando Henrique Cardoso and Luiz Inacio Lula da Silva. 2. Brazil has a diversified and growing economy that plays a significant role in the global economy. Brazil is the largest economic power in Latin America and the worlds 10thlargest economy. 3. The country is open to and encourages foreign investment by implementing investor-friendly policies. The country is one of the worlds leading destinations for foreign direct investment. 4. Brazil is the fourth biggest producer of gold in the world. It has abundant reserves of natural resources and many regions are still unexplored which make the country an attractive location for mine development. 5. Brazil has an established Civil Law system and a modern mining legislation. The country is a green energy leader, renewable energy supplying nearly 45% of the countrys energy needs. 6. Expanding into Brazil will allow Newmont to reinforce its presence in South America where its competitors are already well established.

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5.3 Conclusion and suggestions Conditions for success of food processing industry: 1. A company needs to understand the government policies, international standards and policies, funding agencies which give loans to the companies. Also clarity of thought about the product developed should be there. The developmental ideas need to be put to use by the food technologists effectively ironing out the draw backs that crop up in the process of product development. There has to be effective consumer testing to make a new product successful in the market. Positive feed backs helps to successfully launch a product where as negative feedback helps correcting the drawbacks of the products.
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2. For any food processing industry to be developed, there is a need for encouragement from government. Added to that, the interest rates on loans taken should be conducive for better utilization and establishment of new industries. In India due to high tax rates on machinery, raw materials and finished products, the profits from sale of finished goods is not desirable. This too can act as a hindrance for the popularity of processed goods. Government subsidy schemes with strong financial and monetary benefits to the food industry will help in the development of this sector. This sector has been neglected for a very long time. Proper awareness regarding the various financial sources would be of great help to the enthusiastic entrepreneurs to take up food processing on a larger scale. The substances of these criteria, some international and national levels for the following projects are insisted. 3. Brazil imports most of its dairy requirement from India. So India has a wide base of dairy resources to offer and earn revenue. Brazil is a net importer of dairy products. Gujarat has a best milk offering capabilities. 4. People are acquiring kitchen appliances such as microwaves, which has contributed to the growth in the use of frozen foods. 5. Over half of the food consumed in Brazil is processed. 6. Women candidates will also be benefited by the food processing industry and they will also contribute to the economy base. There are also various Gruh Udhyog run by the female for the upliftment of rural people like papad, pickles, khakhras and other items. 7. There is boost to farmers to cultivate agricultural products, further that will be processed.

National Horticultural Board (NHB) refrigerated transport facilities.

NHB promotes infrastructure which include

grading and packing centers, pre cooling units, cold storage, auction platforms and

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The Department of Food Processing Industries is the nodal agency of the Government of India for processing foods and is responsible for developing a strong and vibrant food processing sector with emphasis on the following Stimulating demand for application processed foods Achieving maximum value addition and by products utilization. Creating increased job opportunities particularly in rural areas. Enabling farmers to reap benefits of modern technology. Creating surplus for exports. Providing policy support, promotional initiatives and physical facilities to promote value added exports.

In the era of economic liberalization where the private, public and co-operative sectors are playing their rightful role in the development of Food processing sector, the department acts as a catalyst for bring in greater investment into this sector, guiding and helping the industry in a proper direction, encouraging exports and creating a conducive environment for healthy growth of Food Processing Industry. With this overview, the main objectives of Ministry of Food Processing Industries (MOFPI) can summed up as follows: Better utilization and value addition of agricultural produce for the enhancement of income of farmers. Minimizing wastage all stages in food processing chain by development of infrastructure for storage, transportation and processing of agro-food produce.
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 Induction of modern technology into the food processing industry from both domestic and external sources. Maximum utilization of agricultural residues and byproducts of primary agriculture of the food processing Industry. To encourage the research and development in food processing for product and process development and improve packaging. To provide policy support, promotional initiatives and physical facilities to promote value added exports.

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http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Food%20Processing %20Ingredients_Sao%20Paulo%20ATO_Brazil_12-14-2010.pdf http://www.ers.usda.gov/publications/aer760/aer760d.pdf http://www.ceaee.ibmecmg.br/wp/wp10.pdf http://www.chamber.org.il/images/Files/3485/foodIndustry_brasil.pdf http://en.wikipedia.org/wiki/Sadia http://www.agentschapnl.nl/sites/default/files/bijlagen/food-processing-india.pdf http://www.india-opportunities.es/foodprocessing.php?lang=ing http://www.upfood.in/Volume1_ch4.pdf http://mofpi.nic.in/images/volume1.pdf http://www.punebds.com/pdf/traineemanual.pdf http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Food%20Processing %20Ingredients_Sao%20Paulo%20ATO_Brazil_12-14-2010.pdf http://www.ers.usda.gov/publications/aer760/aer760d.pdf http://www.ceaee.ibmecmg.br/wp/wp10.pdf http://www.chamber.org.il/images/Files/3485/foodIndustry_brasil.pdf http://en.wikipedia.org/wiki/Sadia http://www.agentschapnl.nl/sites/default/files/bijlagen/food-processing-india.pdf http://www.india-opportunities.es/foodprocessing.php?lang=ing http://www.upfood.in/Volume1_ch4.pdf http://mofpi.nic.in/images/volume1.pdf http://www.punebds.com/pdf/traineemanual.pdf http://www.cargill.com/products/index.jsp www.punebds.com/pdf/traineemanual.pdf http://www.factmonster.com/ipka/A0107357.. http://www.brazilsourcing.com/manufbase
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