Pointing out that the new cell will work on advising food processing companies on how to strengthen their supply chain, Rabo India Finance Pvt Ltd managing director Hans Hannaart told The Financial Express: ``There are two major problems concerning the foods and agri business in India today: the procurement of raw materials, and the marketing and distribution. There are problems not only at the quality level but also at the quantity level.

There is a need to streamline the working relation between the farmer and the processor.'' The difficulty at the supply chain end lies largely with the procurement of raw material whose quality and quantity is affected considering the large number of middle men involved between the farmer and theprocessor. At the marketing end, the problem lies in the fact that not enough effort is made to advertise and promote the value-added products to help grow the market.

``The industry has great potential in India, but it has a long way to mature. To further accentuate the problem, there exists no proper distribution cold chain,'' said Hannaart.

Hannaart said that currently, the company is trying to build up its team and knowledge about the market, the supply chain and the procurement system. There are various segments in the food and agri business which have different key drivers. This should be in place in another two-three months. According to Hannaart the bank intends to be different from other banks in terms of dealing with clients and building long-term relationships.

``We build our relationship with the clients who are our customers, not neccessarily by selling our products and convincing them to buy them. Instead, we are regularly in touch with our customers to understand what the requirementsare. Accordingly a product is moulded which will suit the customer's needs and help him overcome difficulties,'' he said.

The product is offered to the customer only after the bank has fully understood the business and difficulties. For instance, if a loss-making customer approaches Rabo India for financial assistance, instead of just assisting by giving a loan, Rabo would first attempt to explore how the case can be turned into a profitable one. If the business needs to be turned around through further investments in related/unrelated expansions, the bank will try to find the funding solutions to this and write a business plan that can make it profitable.