Madhya Pradesh: Means Business

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Madhya Pradesh Means Business
Forest, Environment Herbal
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Overview
Overview
Madhya Pradesh (MP) State that means business

• MP is the second largest State in the Country
  stretching over 308,000 sq kms.
• The State is blessed with large mineral resources
  of coal, diamond, limestone, methane etc.
• MP is among the top 4 states of the Country for
  industrial investments.

Economic Snapshot
Madhya Pradesh is emerging as a key growth center
for the Country

• Per capita GSDP USD 369
• Manufacturing sector USD 8.5 bn
• (Registered Unregistered)

• Gross state domestic product (GSDP) USD
  23,983.63 Mn
• Average growth rate 5.5 per annum

Advantage MP
Madhya Pradesh has one of the upcoming industrial
base in India

• The State is centrally located
• Investor friendly Government policies

• Total electricity generation capacity
  6,449.25 MW
• Indias first greenfield SEZ
  Indore SEZ
• Industrial Centers 8

Power
Electricity generation capacity at present is
6,449.25 MW and estimated to rise to a surplus in
2008-09

• MP is rich in low grade coal suitable for power
  generation.
• Potential of hydro-energy generation.
• Installed power capacity (MPs share)
• Hydel Power Generation 852.7 MW
• Thermal Power Generation 2,147.5 MW

Ministry of Power (powermin.nic.in)
Source Indiastat.com (as on 23 Feb 2006)
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Enabling Infrastructure

• The State is well connected with the rest of
  India with almost 425 trains passing through the
  State on a daily basis. Of these 175 trains pass
  through the State capital Bhopal alone.

MP IS CENTRALLY LOCATED AND WELL CONNECTED WITH
ALL MAJOR CITIES IN INDIA
RAILWAY NETWORK

• 25 airstrips.
• Convenient air links from key Indian cities like
  Delhi Mumbai to Bhopal, Jabalpur, Gwalior,
  Indore and Khajuraho.
• 5 operational airports.
• Indore airport has the capability of handling
  international cargo.
• An international airport proposed in Bhopal.

GWALIOR
KHAJURAHO
AIRPORTS
INDORE
BHOPAL
JABALPUR

• The total length of roads spanning MP is 67,600
  kms.
• National highways of 5,200 kms run through the
  State.
• 18 National highways including trunk routes of
  Delhi-Mumbai, Delhi-Chennai, Delhi-Bangalore,
  Delhi- Hyderabad.
• The total length of State highways in the State
  is 9,885 kms.
• Convenient linkages to western ports i.e. Kandla
  Port, Jawahar Nehru Port Trust.

ROAD NETWORK
Source Department of Road Transport Shipping
(morth.nic.in)
Source www.destinationmadhyapradesh.com
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Madhya Pradesh A Preferred Investment Destination
31 of the State under forest cover with a
largely unexploited species of rare, valuable
medicinal- herbal plants
Over 2,000 kms of roads being developed with
Private Partnership (BOT)
Offers diverse tourists destinations catering to
various segments of tourism such as religious
(Bhojpur), eco/ adventure (Panchmari), heritage
(Sanchi, Khajuraho) tourism etc.
Indias 1st operational Greenfield SEZ at Indore
Third largest producer of cement in India
Over 100 agricultural farms with an area of over
20,000 acres is available on lease to investor
Favourable climatic conditions for cotton and
over 40,000 power-looms are driving the textile
industry
Various blocks available for power, cement, iron
and steel units
Largest producer of pulses and oilseeds in the
Country (75 of soyabean production)
Over 18,000 technical graduates and 230,000
graduates add to workforce each year
12 blocks with reserves totalling 2,585 million
tons of coal has been identified
Over 144 BCM of coal bed methane reserves
available
Availability of coal and natural gas (G.A.I.L
pipeline) along with support from Government to
make investment in Thermal Power Plants lucrative
Source www.mpsidc.org Brochure MP Means
Business
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MP The Right Place with the Right Environment
Savings in Office Space Rates (A comparison of
rates in Central Business Districts)
DESTINATION MADHYA PRADESH
Fastest mover in overall performance among the
big States in the Country.
Fastest mover in agriculture
Fastest mover in infrastructure development.
Bhopal and Indore have substantial cost
advantages, even when compared to other Tier III
and IV cities.
Savings in Land Cost
Ranks 2nd in terms of governance.
(Estimated Values for Multi-product SEZs)
Ranks 3rd in terms of law order
Cost of skilled labour is USD 2.4/day vis-a-vis
USD 3.5 USD 4.0/day in metros
The cost of land is one of the lowest in the
Country. Even central hubs such as Indore and
Bhopal fare well against other cities in terms of
low land cost.
MP is centrally located. The State is at an easy
distance from all the key consumer markets in the
Country.
Fastest mover is the State where the rate of
improvement between 2003 2006 was greater than
that between 1991 2003
Source (Reference RK Swamy)
- Distances rounded off
Source India Today (September 06 Issue)
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Industrial Policy Catalyst for the Investments

• The Government of MP has devised an investor
  friendly industrial policy, which is aimed at
  achieving global competitiveness. The policy
  emphasizes on industrial growth in the state
  through adopting cluster approach, establishing
  specialized infrastructure and offering
  favourable incentives.
• The main thrust of this policy is
• Establishment of a Madhya Pradesh Trade and
  Investment Facilitation Corporation which would
  take decisions about rationalization of taxes,
  facilities of mega projects and other related
  matters.
• Enacting an Industrial Facilitation Act and to
  change the rules of business with a view to make
  single window system decisive and result
  oriented.
• Developing infrastructure for supporting the
  identified industrial clusters
• Reviving closed down/ sick industrial units by
  granting special packages.
• Attractive incentive schemes.

SPECIAL INCENTIVES

• Special package for Mega Projects on project
  basis by apex level investment promotion
  empowered committee headed by the Chief Minister.
• Industrial investment promotion assistance 50
  to 75 of commercial tax for 3-10 years
• Concessional registration charges and stamp duty
  exemption for Term Loans.
• Interest subsidy on term loan for 5 years _at_ 3
  to 5.
• For thrust sector industries, 25 capital subsidy
  would be provided limiting up to a maximum of USD
  56,000
• Land on 75 concessive rate for Mega Projects
  limited to USD 4.4 million.
• Entry tax exemption for 5 years.
• 5 years electricity duty exemption on captive
  power generation
• 15 capital subsidy to SSI up to USD 33,000 in
  backward areas
• Infrastructure grant up to USD 0.22 million crore
  for developing private sector industrial parks
• Partial reimbursement for Project report, ISO
  Certification, Patent and Technology Purchase cost

• CLUSTER APPROACH
• Indore Pharmaceutical, Textile, Food
  Processing, IT, Auto Components
• Bhopal Engineering, Biotechnology, Herbal, IT,
  Food Processing
• Jabalpur Garment, Mineral, Forest Herbal,
  Food Processing
• Gwalior Electronics, IT, FMCG, Engineering,
  Food Processing
• Rewa Refractories, Lime Stone, Forest Based
• Sagar Mineral Processing

SPECIALIZED INFRASTRUCTURE
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Doing Business Made Easy Through MPAKVN
In a bid to build a competitive environment
industries and their ancillaries would be
promoted in clusters based on the availability of
raw materials, skilled labour and market
potential. Under this Industrial Policy through
Madhya Pradesh Audyogik Kendra Vikas Nigam Ltd
(MPAKVNs) scheme, the State Government, has
identified industrial clusters. Many of the
industrial giants have their establishments in
these areas, however 44 of developed area is
still untapped and open for investment.
Area Developed 2,262 Hectares Allotted 800
Hectares Units established 326 Major Groups JK,
Surya Roshini, Godrej, Grasim, Cadbury, Hotline,
Crompton Greaves Special Infrastructure ICD,
Food Park
Area Developed 273 Hectares Allotted 115
Hectares Units established 121 Major Groups
Birla, Jaypee Special Infrastructure Integrated
infrastructure development centres (IIDC)
Area Developed 790 Hectares Allotted 125
Hectares Units established 52 Major Groups
Raymond, Hindustan Petroleum, PBM, Ayur Special
Infrastructure Stone Park, Food Park
Area Developed 1,330 Hectares Allotted 618
Hectares Units established 286 Major GroupsHEG,
Crompton Greaves, PG, Godrej, Lupin, IFB, Oswal,
Nahar Special Infrastructure ICD, Food Park
BHOPAL AKVN
GWALIOR AKVN
JABALPUR AKVN
REWA AKVN
Area Developed 2,492 Hectares Allotted 1431
Hectares Units established 575 Major Groups
Tata, Ranbaxy, Eicher, Bridgestone, Hindustan
Motors, Kinetic, SRF, S Kumars, Gajra, Nicholas
Piramal, Indorama, IPCA, Bhilwara Special
Infrastructure SEZ, Crystal IT Park, Food Park,
Apparel Park
Malanpur, Malanpur Phase II, Banmore, Chainpura,
Siddhgawan, Pratappura
Rewa, Waidhan
INDORE AKVN
Mandideep, Pillukhedi, Mandideep Phase II
Borgaon, Maneri, Purena
Pithampur, Kheda, Dewas, Maksi, Megh Nagar
Source MPSIDC
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Forest, Environment Herbal
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Sector Profile Forests, Environment Herbal
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MP Forest Capital of India

• Madhya Pradesh has a forest area of 94689.38 sq.
  km which constitutes nearly 31 area of the
  state. With a share of nearly 13 of the total
  forest area of the country, MP has the largest
  forest covered area among all the States in
  India.
• The state has a diverse range of forest. The four
  key types are Tropical Moist, Tropical Dry,
  Tropical Thorn, Subtropical broadleaved Hill
  forest.
• There are three key forest formations, namely
  Teak Forest, Sal Forest and Miscellaneous
  Forests. Further, Bamboo bearing areas are widely
  distributed in the State.
• Forest based industries are key contributor to
  the States economy and provide employment to a
  large part of the population.
• In 2004-05 forests and logging contribute 2.1
  to the State GDP.
• The total growing stock (volume of timber / wood)
  in MP is 50 mn cu. m valued worth USD 55.5 bn.

Forest Map of MP
Classification of MP land Mass
MP
Forest 31
Non Forest 69
MP 9.38
Forests are valuable sources of various medicinal
herbs and aromatic plants and are sole source of
woody and non woody products such as timber,
gums and resins etc.
India 90.62
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MP Forests Snapshot

• MPs forest reserves are a rich source of Timber,
  Fuel wood and Bamboo. They are also a key source
  of minor forests products such as Tendu, Harra,
  Sal Seed and Gums.
• MP is the largest producer of Tendu leaves in the
  country which is the key raw material used for
  the production of Biddi. The average annual
  production of Tendu Leaves in the state is around
  2.5 mn standard bags.
• MP accounts for nearly 25 of all the Tendu
  Leaves produced in India

Production of Timber, Fuel wood and Bamboo
Lakh Cu M
Lakh nt
Revenue From Sale of Forest Products
US Mn
One standard bag of Tendu Leaves in Madhya
Pradesh means 1000 bundles of 50 leaves each.
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Herbal Market Scenario

• As per the estimates of the WHO, nearly 80 of
  the worlds population depends on herbal medicine
  for their primary health care requirements.
• Global trade in medicinal plants is over USD 60bn
  in 2004 with an annual growth rate of 15.
• India is rapidly emerging as a key player for
  supplying medicinal plants to the world.
• Estimated total value of products from Ayurvedic
  production in India is nearly USD 1 bn.
• Exports of Ayurvedic medicines have reached a
  value of USD 100 million a year. Of the total
  exports, about 60 is crude herbs, 30 finished
  product shipped abroad for direct sales to
  consumers, and the remaining 10 is partially
  prepared products to be finished in the foreign
  countries.
• The Ayurvedic industry in India is dominated by
  around 30 companies. Key suppliers like Dabur,
  Baidyanath, and Zandu, together contribute about
  85 of India's domestic market. Charak
  Pharmaceuticals, Vicco Laboratories, Emami Group,
  Aimil Pharmaceuticals Ltd, Viswakeerthy Ayurvedic
  Pharmacy etc are few of the well-known names in
  this sector.
• Of late, leading players in the FMCG segment like
  the Hindustan Lever Limited (HLL) are increasing
  their focus on Ayurveda.
• Contract farming of medicinal plant species which
  are in demand in the foreign market is seen as
  the key growth driver of the domestic herbal
  industry.

Global Demand of Medicinal Plant
USD 5 Tn
USD 60 bn
2050
2004
Source WHO Estimates
Break up of Ayurvedic Export Market
With demand of herbal products increasing
globally, the market presents substantial
business opportunities for herbal companies in
India.
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MP Herbal Potential

• With 11 Agro-climatic zones out of the total 16
  in the country, MP is well suited for cultivation
  of a large number of Medicinal and Aromatic
  plants (MAPs).
• The production of MAPs in the State in 2004-05
  was 20,000 tonnes and is estimated to rise to
  40,000 tonnes by the year 2009.
• MPs share in the national production of MAPs was
  6.25 in 2004-05 and is expected to rise to 8.63
  till 2009.
• 30 of the demand of Indian herbal industry is
  met by the herbal collections centers of Madhya
  Pradesh.
• MP is the natural habitat for over 50 of the
  herbs used in the pharmaceutical industry and is
  the key source of raw material to various herbal
  processing units across the country. The
  Government is keen to develop MP as the key
  processing center for herbal products.

Estimated Production Potential of key Medicinal
Plants
Tonnes
Increasing Annual Production of MAPs in MP
MPs Rising Share in National Production of MAPs
MT
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Concessions and Facilities for Herbal Industry

• To facilitate the development of herbal industry,
  the Government of MP extends various concessions
  and facilities to industries.
• The key concessions offers are capital investment
  subsidy, interest subsidy, concessional land
  rates, industrial investment promotion assistance
  and entry tax exemption etc.
• Exemption from electricity duty for 5 years
• Exemption from stamp duty/registration charges
• New industries are exempted from paying entry tax
  for five years from the date of first purchase of
  raw material
• Partial reimbursement of expenditure incurred on
  quality certifications, ISO-9000, patent filing,
  BIS etc by the industries in the state.
• Units with fixed capital investment of USD 2.2
  million and above would be treated as mega
  projects. 5 to 20 acres of land would be allotted
  to such units at a concessional rate of 25 of
  the stipulated rate. Further all such mega
  projects shall be eligible for special incentive
  package on case to case basis
• An industrial investment promotion assistance
  equivalent to 50 amount of Commercial tax and
  Central Sales Tax (excluding Commercial Tax on
  the purchase of raw materials) deposited by the
  unit in the preceding year, would be given to the
  industry having fixed capital investment between
  USD 0.2 million to USD 2.2 million for 3 years in
  advanced district and for 5 year in backward
  district. The rate of assistance is 75 for
  investment above USD 2.2 million.

The Government is keen to harness the natural
riches of MP and is vigorously promoting the
development of herbal industry in the State.
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Investment Destination- Opportunities in Herbal

• MP is the key supplier of raw material to the
  herbal industry across the country. While MP has
  several success stories in the cultivation and
  collection steps of the value chain substantial
  opportunities now exist for entrepreneurs in the
  post harvest process such as manufacturing/process
  ing, quality testing as well etc.
• To promote the growth and development of herbal
  industries in the State, the Government of MP has
  announced a special incentive package for the
  herbal industry.

Special incentive Package for Herbal Industry

• Reimbursement of 50 of the total fees incurred
  on hiring technical consultancy for getting GMP
  certification. With an upper limit of USD 22,000
  per project.
• For participation in the international trade
  fairs and exhibitions, entrepreneurs of herbal
  industries will be given financial assistance of
  50 on one half of the stall charges.
• Registration fees charged by the importing
  countries for import of herbal products will be
  reimbursed up to a maximum of USD 1100 and air
  fare to a maximum of USD 1100.
• All concessions and facilities that are available
  to industrial units in the backward districts
  will also be extended to units located in the
  developed and advanced district such as Indore
  and Bhopal.
• Relevant provisions of labour laws applicable in
  Special Economic Zones will be applicable for
  existing and upcoming herbal parks as well as the
  herbal and Ayurvedic industries.
• Stamp duty waiver for Herbal and Ayurvedic
  industries in case of change in name,
  collaboration, inclusion of partners,
  reorganizations and for amendment in the lease
  deed for the next 3 years and also for entering
  into agreement with financial institutions for
  getting financial assistance.
• Small scale pharmaceutical industries will be
  given priority under store purchase rules
• Fast track clearances for setting up
  pharmaceutical and herbal industries.

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Investment Destination- Opportunities in Forests
Environment

• Being the largest producer of Tendu leaves MP is
  strategically the most suitable location in the
  Country for manufacturing/ processing of tobacco
  based products. The companies located in the
  State can save substantial costs on raw material
  and transportation by establishing processing
  units for the production of Biddi and related
  products.
• The forests in the State are a key source of high
  quality timber yielding variety of Teak and Sal
  which forms the backbone of the furniture
  industry. Companies can set up the furniture
  units in the State and leverage following key
  location advantages
• 1) Proximity to raw material
• 2) Proximity to target markets
• 3) Proximity of ports for exporting products
• Given its vast forests landscape and scenic
  vistas, eco-tourism and adventure tourism
  opportunities are abound in MP. The State has
  nine natural parks and 25 sanctuaries, which
  present an immense potential for tourism and
  hospitality industry to flourish.
• Significant opportunities exists for the
  development of handicraft industry specially for
  the production of Bamboo based goods.
  Opportunities for private participation are
  immense as there is a high demand for handicrafts
  products in the foreign countries as well as in
  the domestic market. Further, companies can
  leverage the availability of local inexpensive
  labour with high skill sets in production of
  various forests goods.

Madhya Pradesh is Strategically Placed for Forest
Based Products
Delhi (740 Kms)
Lucknow (680 Kms)
Jaipur (580 Kms)
Kanpur (600 Kms)
Ahmedabad (570 Kms)
Patna (910 Kms)
Kandla (933)
Kolkata, Haldia (1350 Kms)
Nagpur (350 Kms)
Mumbai, JNPT (780 Kms)
Bhubaneshwar (1200 Kms)
Pune (800 Kms)
Vishakapatnam (1310)
Hyderabad (840 Kms)
Chennai (1430 Kms)
Key Markets (Distance From Bhopal)
Bangalore (1400 Kms)
Key Ports (Distance From Bhopal)
Sanctuaries
The forests resources of MP provides immense
business opportunities for forests based product
manufacturing.
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Investment Destination- Opportunities in Forests
Environment

• Environment protection and conservation is one of
  the key concerns of the State Government. All the
  envisaged development plans in the state would
  result in heightened commercial activities which
  is likely to put severe stress on the State
  environment.
• Due to the rapid industrialization of the State,
  the effluents discharge from the companies
  specially chemicals pharmaceuticals, will be a
  key environmental concern.
• Per capita waste generation in major cities in MP
  ranges from 0.20 Kg to 0.60 kg. The urban local
  bodies spends between USD 11 to USD 33 per ton on
  solid waste for collection, transportation,
  treatment and disposal.
• 60-70 of the total amount is spent on
  collection, 20-30 on transportation and less
  than 5 on final disposal. Most of the methods
  used by the municipal corporation are
  unscientific and lack safe disposal techniques.
• The State Government is keen on implementing key
  environmental protection plants Which includes
  building up of collection stations for solid
  waste.
• Significant opportunities exists for the
  commercial waste management companies in the
  State both for solid waste management and also
  for the effluent treatment plants.

Key Investment Opportunities
To utilize the large amount of waste land in the
State, the Government of MP has drawn up plans to
convert them into plantation center. Paper pulp
producing trees would be planted in next 5-7
years over one million hectares of waste
land. The opportunities for commercial paper
production in the state is pegged at USD 1.5-2 bn.
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Way Forward

• The Government is keen to develop MP as the key
  processing center for herbal products. The
  natural advantage of the State coupled with
  government initiatives makes MP an ideal
  destination for investment.
• The success of Vindhya herbal has generated
  ample confidence among the privates players to
  invest in the business opportunities presented
  by the herbal industry.
• The key opportunities of investments are in
  contract farming, contract collection centers,
  herbal processing units, collaborative
  manufacturing and setting up high quality testing
  laboratories for testing medicinal plants and
  products.

Success Story Vindhya Herbal

• In collaboration with the international FMCG
  major Hindustan Lever Ltd , the Government of MP
  has initiated efforts to promote the herbal
  industries of the State. It has launched its
  proprietary brand Vindhya Herbal to market
  various herbal formulations that are being
  produced in the state. All products are processed
  employing current Good Manufacturing Practices.

Key Products Promoted under Vindhya Herbal Brand
Contract Farming
Collaborative Manufacturing
Setting Big Processing Units
Government 3-tier Strategy for Development of
Medical Aromatic Plants Industry
MP provides ample opportunities across the value
chain of Herbal Industry
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Way Forward

• MP has been successful in attracting several
  large companies in the forest forest based
  products segment.
• By investing in the MP an investor can join the
  club of companies such as Dabur, HLL, Baidyanath,
  Lupin, ITC etc. This truly reflects upon the
  bio-diversity of the state and the investor
  confidence.
• There are over 32 contract farming companies
  operating in the state and this figure has been
  rising substantially in the recent past.
• The increased production of certain products is
  the indicator of increased activity in the state.
  For instance, the production of lac has increased
  from 3,000 quintals in 2003 to 40,000 quintals in
  2005.
• There is also scope for teak and sal based
  furniture business in the state.
• The growth of the sector is likely to continue as
  a result of increased demand for derived products
  of forest produce.

Vijay Herbals Essential Oils Kasturi Herbal
Farm Sanwaria Herbal Farm Devika Herbal Omni
Pharmaceuticals Gewit Herbal EH
Join The Club
Key Investment Opportunities
Herbal
Forest Environment
MP is the land of opportunities for Forest
Forest Based Products
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Connecting Further
Forest Department MP
http//www.forest.mp.gov.in
Madhya Pradesh Minor Forest Produce Co-operative
Federation
www.mfpfederation.com
www.cedmapindia.com
Center for Entrepreneurship Development
Government of Madhya Pradesh
http//www.mpgovt.nic.in