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India targets more links in Africa’s food supply chain
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Thursday, 22 July, 2010, 08 : 00 AM [IST]
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Our Bureau, Mumbai
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Trade between Africa and Asia is booming like never before, and it’s no surprise that India will again have a substantial presence on Africa’s Big Seven food and beverage expo (AB7) to be held at the Gallagher Convention Centre in Johannesburg on July 25-27, 2010.
Currently India is South Africa’s sixth-largest Asian trading partner, with total trade between the two countries reaching $4.4 billion in 2008, thanks to rise in both exports & imports of agriculture, food and technology based products.
Today, a number of African countries have become increasingly reliant on Indian demand for their products. African purchasing power is becoming relevant to Indian companies, searching for a firm foothold in emerging markets. Further, the 5 prime sectors considered engines for boosting India-Africa trade were water management, food processing, education, pharmaceuticals & health and information technology.
In recent years, besides being a major recipient of global foreign direct investment (FDI) inflows, India is also emerging as an important global investor with increasing overseas investment in target markets. Up till now India’s total approved overseas direct investment in Africa is $49701.6 million.
Indian Pavilion
Vikram Doraiswami, the Indian Consul-General, expects the number of participating companies to double at this year’s expo.
The Indian companies are eager to get a chunk of the action at AB7, the 7-in-1 trade show that covers every aspect of the food and beverage industry, and the only event of its kind on the African continent.
“Last year, the Indian exhibitors were very happy with the show and the results they achieved. Most of them returned with firm orders. And it’s not just the level of sales that have brought exhibitors back – participating companies can look forward to meeting many key industry contacts and potential trading partners. I am confident that we will enjoy an even better result this year,” Doraiswami said.
India exhibited for the first time at the AB7 Expo in 2003. The 30 companies that supported the Indian Pavilion in 2009 enjoyed considerable trade exposure. Premier Tea India, producers of various gourmet teas, reported excellent business leads at the show, which ultimately led to the appointment of their first South African distributor.
The Indian companies have returned en masse for this year’s event and will install an even larger Indian Pavilion at AB7 to showcase new products and services. Visitors can expect to find tea, coffee, spices, rice, maize and cashew nuts amongst the many other familiar favourites from this country’s producers.
“India has the same scenarios in terms of basic agriculture as South Africa and faces the same challenges, hence the extension scheme we have in India will work well here. There are many unexplored opportunities in the agri-business sector that, through AB7, we are looking to access. Further, South Africa’s fruit processing, cold chain management and warehousing as some of the sectors where India is looking for solutions, and India’s biotechnology skills and agricultural machinery as areas of competitive advantage,” Doraiswami added.
“This year many nodal agencies like the Ministry of Food Processing Industries, Cashew Board, Spies Board, Tea Board, the Export Promotion Council, and leading f&b processors like Frisco Foods, Alif Ovens, Economode Food Equipment have booked their stalls at the event,” GP Bhatia, CEO – Mehr International, AB7’s exclusive Indian agent/liaison in India, told F&B News.
At present, India’s food production capacity is ranked second in the world and producers are looking for partners in Africa to further expand India’s position as a rapidly growing global supplier.
Last year, two-way trade between India and Africa represented about 8% of India’s total world trade, worth approximately $30 billion.
According to the Associated Chamber of Commerce and Industry of India (Assocham) report, trade between India and Africa is likely to grow by 22% in the next two years, reaching $55 billion in 2012, of which almost 30% will be agri and food trade. As a result of the “Focus Africa” campaign introduced by the Indian Department of Commerce, this figure is predicted to rise to $70 billion by 2015.
“The Indian participation at AB7 2010 would help to move one step ahead and reach the fresh markets for our products,” Bhatia added.
After exhibiting in AB7 last year, HA Shah, chairman and MD of Premier Tea Products, said, “Our products will soon be on South African shelves. This is the first time we are bringing our Premier Tea Products to South Africa and we are extremely impressed with the quality of the expo.”
African trade good for business
South Africa has already entered into talks regarding partnerships with India, such as the India-SACU (South African Customs Union) trade pact. This will allow goods to move duty-free between India and five SACU countries, namely South Africa, Botswana, Namibia, Lesotho and Swaziland. The agreement is expected to be finalised this year. India has signed trade agreements with 29 countries in Africa.
But India is not the only country with renewed interest in developing an African footprint. The scramble for Africa is well underway, and the Chinese are in the lead. In 2008, two-way trade between China and Africa exceeded $106 billion.
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