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Big players may eat up small ones

india Updated: Jul 28, 2006 01:19 IST

SMALL-SCALE units in Uttar Pradesh perceive a threat of losing substantial market share in the high-value processed food segment, comprising fruit juices and milk products, in the near future.

The growing interest of Reliance Industries Ltd (RIL), ITC Ltd and Bharti Group in the agri-business space is making many smaller players re-work their strategy on production and quality management aspects.

“The imminent threat from the large corporate players foraying into the agri-business space is not at the post-harvest stage, which involves packaging and branding of raw agricultural produce. The danger lies in large players sourcing agricultural inputs from farmers for manufacturing and packaging high value items, such as fruit juices, ice cream and milk products within the state,” Indian Industries Association (IIA) executive director D S Verma told Hindustan Times.

He said that the small-scale units in the food processing sector were being constantly alerted about not ignoring issues such as technology upgradation and quality management, as the big players’ entry would substantially diminish their profit margins in the years to come.

“The IIA has been making a pitch for a collective effort in the marketing, technological and quality management arena among small units, as large players will eventually plan to even import high value processed food items as a value addition in their supply chain to further increase marketshare in the business,” Verma said.

A large number of new entrepreneurs are keen on setting up food processing units in the State. The challenge for them could erupt from cheap and high-quality processed food products manufactured in the state. “Competition in the global marketplace is a reality none can ignore. The solution lies in increasing competitiveness through a wide set of strategies, which could make the products of smaller players equally competitive in the global market,” he added.

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