NEW DELHI: Politics seems to have hit Yoga guru Baba Ramdev’s herbal and food business. A disappointed Acharya Balkrishna, MD of Patanjali Ayurved Ltd, has announced shifting of its mega food park out of Uttar Pradesh. Even though there are reports of Chief Minister Yogi Adityanath speaking to Ramdev and assuring him of all the help, the controversy has snowballed. It comes a day after BJP president Amit Shah met Ramdev as part of his party’s “contact for support” campaign. What is this food park and why does it matter so much to Patanjali Ayurved? Read below to know.
The Mega Food Parks scheme was introduced in 2008 by the then UPA government to link farmers to the market through modern infrastructure and supply chains. Later, the Narendra Modi government subsumed the scheme under another central scheme, Pradhan Mantri Kisan Sampada Yojana. The government provides financial assitance to these parks. So far, the government has sanctioned 42 such parks across the country but very few have started operations. Patanjali Food & Herbal Park in Noida is one of the four food parks awaiting approval. Food parks need to be completed within 30 months from the date of the final sanction.
Akhilesh Yadav, then Uttar Pradesh chief minister, laid foundation of Patanjali Food & Herbal Park in Noida in November last year. The Central government gave an in-principle approval in January this year. The cost of the Noida project is Rs 6,000 crore which makes it the biggest ever food park. It will be constructed in 455 acres. The Yamuna Expressway Industrial Development Authority (YEIDA) had allotted 430 acres of land for industrial use and 25 acres for institutional use to Patanjali Ayurved in 2016. Patanjali planned to set up a university and research centre in the 25 acres. The company had said the park would produce goods worth Rs 25,000 crore annually at its full capacity and would create 10,000 direct jobs. The company plans to set up several food parks in Madhya Pradesh, Chhattisgarh, Assam and Telangana.
A day after BJP chief Amit Shah met Baba Ramdev, Patanjali announced it would shift its food park out of Uttar Pradesh, blaming the state government for not giving necessary approvals. Many would read in the incident differences between the two yogis, Ramdev and CM Adityanath. “The mega food park was coming up to make lives of farmers better. We had also asked for permission from the central government. There are paper work for which we requested state government. But due to their disappointing attitude, it couldn’t be done,” Acharya Balkrishna, MD, Patanjali Ayurved Ltd, said.
Patanjali was given one-month extension till end of June to get the requisite clearances to start the project. There clearances relate to land and bank loans. According to a state official, the land allotted was under the name of Patanjali Ayurveda but later the company wanted it under Patanjali Foods. YEIDA said it could not provide benefits under the central government’s food park scheme because the allotment of this land was not as per the terms and conditions of the scheme.
The UP government had given a waiver of 25 per cent on stamp duty to the company. Another state official said the government had not cancelled any land for Patanjali. The transfer of the desired land would be done after seeking the state cabinet’s approval in a week or so, he said. There are reports that CM Adityanath has spoken to Ramdev and the food park would be approved.
Why the food park matters so much to Patanjali
These are challenging times for Patanjali when the competitors are getting stronger and the company’s revenue growth is plummeting. The Noida food park would be a shot in arm for the company which aims to capture the top spot in the FMCG market. Ramdev said last year in April that Patanjali was working on a single-point agenda of capturing 25-50% market-share in the Indian consumer market from multinational firms. “In the next 3-5 years, I have set a target of Rs 20,000 crore to Rs 25,000 crore turnover for my company. We will leave the multinational companies in our dust, that is our open agenda,” he said.
But it seems the company is already huffing and puffing on its way to the Rs 20,000 crore finish line. The company has closed the year around the same level as the previous fiscal year’s revenue. Patanjali had reported revenue of Rs 10,561 crore for the year ended 31 March 2017, more than double the Rs 5,000 crore in the previous year. The growth slide from more than 100% to nearly zero means slowing down of Patanjali.
The Noida food park will help Patanjali ramp up production, create new packaged food verticals and scale up the business in categories such as atta, biscuits, edible oils, rice, ghee, pulses, spices and juices. Location of food park in a state like Uttar Pradesh will ensure quick and abundant raw material supplies. Since it is located in the NCR region, it will have easy access to airport and dry ports which will enhance distribution.