FINANCING OPPORTUNITIES IN COLD STORAGE
(COLD CHAIN) – A TECHNO-ECONOMIC ANALYSIS
HARSHAL SURANGE
ACR PROJECT CONSULTANTS PVT LTD
www.acrconsultants.net
COLD CHAIN
From
FARM
NOT
Cold Chain
Food
to
CONSUMER
NEW TO INDIA – FAIRLY WELL ESTABLISHED FOR MILK &
MILK PRODUCTS


Safe Hygienic &
Refrigeration Assisted
-
-- TO SOME EXTENT FOR FISH, MEAT AND
POULTRY PRODUCTS
- STILL AT INFANCY FOR FRUITS AND VEGETABLES
DIFFERENT COMPONENTS OF THE COLD CHAIN
1.
2.
3.
4.
5.
6.
7.
8.
CONVENTIONAL COLD STORAGE
PACKHOUSES, PRECOOLING & COLD STORAGE
C.A.STORAGE
FROZEN FOODS PLANTS
A.C / VENTILATED STORAGE
DISTRIBUTION CENTERS
SUPER MARKETS / RETAILERS
REFRIGERATED TRANSPORT
ROUTE – A -- CONVENTIONAL COLD STORAGE
FARM
I
BULK
PACKING
I
TRANSPORT
I
I
CLEANING
SORTING
GRADING
PACKING
I
TRANSPORT
I
COLDSTORAGE
I
(DRYING)
I
I
TRANSPORT
BULK C/S at
Producing Centre
POTATOES /
APPLES /
RED CHILLIES /
RAISINS

DISTRIBUTION
CENTER/
SUPER
MARKET /
RETAILER
Multipurpose C/S at
Consuming Centre
DRY
FRUITS
PULSES
FRESH F&V
SPICES
JAGGERY
BEANS
MILK
PRODUCTS
NEW PRODUCTS GETTING ADDED LIKE
TURMERIC, CARROTS etc
FROM
TO
Cold Store - 1971
TYPICAL CONVENTIONAL MULTIFLOOR STRUCTURE WITH
MANUAL LOADING
MODERN MULTIPRODUCT MULTI
FLOOR STRUCTURE WITH
MECHANISED LOADING
ROUTE – B -- PACK HOUSE WITH PRECOOLING AND COLD STORAGE
FARM
I
BULK
PACKING
I
TRANSPORT
I
I
CLEANING
(WASHING)
(DRYING)
SORTING
GRADING
PACKING
I
PRE-COOLING
I
COLDSTORAGE
I
I
REFRIGERATED
TRANSPORT

PRECOOLING IS A PROCESS OF
IMMEDIATELY AFTER HARVESTING

THE ITEMS, WHICH, USUALLY, FOLLOW THE PRECOOLING ROUTE,
ARE GRAPES, STRAW-BERRIES, POMEGRANATES
& ALSO
FLOWERS
- PRECOOLING WITHIN A SHORT TIME AFTER
HARVESTING

NUMBER OF UNITS ESTABLISHED IN MAHARASHTRA, KARNATAKA
ANDHRA, U.P, M.P ETC,. OTHER STATES ARE FOLLOWING SUIT.
GRADING & PACKING - MANUAL / MECHANISED

DISTRIBUTION
CENTER/
SUPER
MARKET /
RETAILER
ACCELERATED
COOLNG
PROCESSING FACILITIES
ROUTE - C - CONTROLLED ATMOSPHERE STORAGE
FARM
I
BULK
PACKING
I
TRANSPORT
I
I
I
I
CLEANING
SORTING
GRADING
PACKING
I
I
C.A
SORTING
I
I
REFRIGERATED
TRANSPORT
DISTRIBUTION
CENTER/
SUPER
MARKET /
RETAILER
USED TO EXTEND THE STORAGE LIFE OF
SEASONAL PERISHABLES.
 INVOLVES DELAYING THE NATURAL
RIPENING PROCESS.
 LARGELY USED IN DEVELOPED COUNTRIES
ESPECIALLY FOR APPLES AND TO SOME EXTENT
FOR PEARS AND PLUMS (APPLES CAN BE STORED
UPTO 8 MONTHS)
 CA TECHNOLOGY IS AT IT’S INFANCY IN INDIA AND
THE ESTIMATED PRESENT CAPACITY IS AROUND
50000 MT
IT HAS A GOOD POTENTIAL FOR GROWTH

2
2
2
2
2
2
2
2
2
ROUTE – D -- FROZEN FOODS
FARM
I
BULK
PACKING
I
TRANSPORT
I
CLEANING
SORTING
GRADING
PACKING
I
SHORT TERM
USAGE
I
PROCESSING
I
(PACKING)
I
FREEZING
I
BULK PACKING
I
FROZEN FOOD
STORAGE
I
I
REFRIGERATED
TRANSPORT
DISTRIBUTION
CENTER/
SUPER
MARKET /
FROZEN













FOODS
PROCESSING, (PACKING) & FREEZING
STORAGE IN FROZEN STATE
POPULAR ITEMS ARE :
GREEN PEAS,
CORN,
OKRA,
MIXED VEGETABLES,
TOMATO PUREE,
MANGO PULP,
MANGO SLICES
DICES,
PINEAPPLE SLICES ETC
FISH, MEAT, POULTRY PRODUCTS, DAIRY PRODUCTS &
COOKED FOOD
MODERN MEAT PROCESSING PLANT
ROUTE – E – STORAGE OF PRE-FROZEN FOODS
FARM
I
BULK
PACKING
I
TRANSPORT
I
I
PROCESSED
PACKED &
FROZEN
FOOD
I
REFRIGERATED
TRANSPORT
FROZEN FOOD
STORE
I
I
REFRIGERATED
TRANSPORT
DISTRIBUTION
CENTER/
SUPER
MARKET /
RETAILER
PRE-FROZEN FOODS




UNDERGO PROCESSING AND FREEZING AT THE MAIN
PROCESSING PLANTS
ITEMS LIKE ICE CREAMS, BUTTER, CHEESE, FISH, MEAT
AND POULTRY PRODUCTS
TRANSPORT THROUGH-OUT IN
REEFER VANS/
CONTAINERS TO DISTRIBUTION CENTERS / SUPER
MARKETS
NORMALLY LOCATED AT CONSUMER CENTERS AND ARE A
PART OF MULTI-PURPOSE COLD STORES
PRE-FROZEN FOODS
ROUTE – F – A.C. / VENTILATED STORAGE
FARM
I
BULK
PACKING
I
TRANSPORT
I
I
I
I
PROCESSED
AND
PACKED FOOD
I
I
I
AIR
CONDITIONED
OR
VENTILATED
STORAGE
I
I
I
TRANSPORT
DISTRIBUTION
CENTER/
SUPER
MARKET /
RETAILER
VENTILATED STORAGE
SOME PROCESSED AND PACKED ITEMS
NEED AIR CONDITIONED STORES
(Eg. CHOCOLATES,CONFECTIONERY
PRODUCTS, TOBACCO)
 CONTROLLED VENTILATED STORES ARE BEING USED
FOR ONIONS ALSO.

LATEST TECHNOLOGY(IRRADIATION)
DISTRIBUTION CENTERS
FOOD DISTRIBUTION CENTERS

RELATIVELY A NEW CONCEPT IN INDIA

CARRY OUT THE FUNCTION OF
 PROCUREMENT OF LARGE VARIETY OF FOOD AND
RELATED ITEMS
 INVENTORY MANAGEMENT
 PROCESSING AND FREEZING FOR SOME ITEMS
 LOGISTICS

THEY WOULD PLAY A VERY IMPORTANT ROLE IN THE COMING
YEARS
A TYPICAL FOOD DISTRIBUTION CENTER NORMALLY PROVIDES FOR:
(A)
DRY GOODS STORE FOR STORAGE OF NON- PERISHABLE
GOODS WITH VENTILATED AND AIR-CONDITIONED AREAS
(B)
RAW MATERIAL RECEIPT AND STORAGE BLOCK
(C)
PROCESSING, FREEZING AND PACKING ZONE
(D)
CLEANING, DRYING, GRADING, PACKING /
(E)
RIPENING ROOMS
PRECOOLING ZONE
(F)
COLD AND FROZEN FOOD STORAGE
(G)
DELIVERY DOCK
(H)
SERVICES FOR WORKMEN, UTILITY SERVICE BLOCK
ADMINISTRATION ETC.
AND
THE CENTER HAS TO HANDLE BOTH THE FRESH VEG AND NON-VEG FOODS
WHICH HAVE TO HAVE DIFFERENT PATHS FOR PROCESSING, COOLING /
FREEZING AND STORAGE.
UTILITY
SERVICE BLOCK
PROCESSING &
FREEZING
SERVICES
FOR
WORK-MEN
RAW
MATERIAL
RECEIPT &
STORAGE
BLOCK
CLEANING,
DRYING,
GRADING,
PACKING /
PRECOOLING
BLOCK
DOCK
COLD &
FROZEN
FOOD
STORAGE
BLOCK
DRY
GOODS
STORE
ADMINISTRATION
TYPICAL LAYOUT FOR FOOD HANDLING / PROCESSING /
STORAGE AND DISTRIBUTION FACILITY
TEMPERATURE REQUIREMENT VARIES WIDELY FROM
20 DEG. C TO (-) 30 DEG. C FOR VARIOUS APPLICATIONS.
CURRENT SCENARIO IN THE COLD CHAIN SECTOR
THE PERISHABLE FOOD PRODUCTION IN INDIA IS ESTIMATED
AS:
Milk
F&V
Fish
Meat
Poultry
:
:
:
:
:
115 Million MT
(No.1 in the world)
200 Million MT
(No.2 in the world)
6.4 Million MT
(No.6 in the world)
Largest cattle population in the world
One of the largest in the world
CURRENT CAPACITIES OF THE COLD STORAGE
& FOOD
PROCESSING :
Cold Storage
:
Around 6000 nos - Capacity
Food Processing
:
5 to 6 % of production.
: 26 Million MT
Zonewise distribution of Cold Storage Capacity
(base 2009)
West
7%
South
6%
Central
7%
North
50%
East
30%
OPPORTUNITIES
With the growing fruit & vegetable production there is a great
potential for development of Cold Chain in F&V sector.
Food processing recognised as a Priority sector by Govt.
 Incentives offered by the govt.
Multi-products Cold Stores – more and more products such as
carrots, turmeric are being added in this category.
Food Parks –designed for overall development of the food
handling, processing & storage facilities. Govt. promoting 30
Mega Food Parks
Terminal markets managed both by APMCs & Private players..
Pack Houses with Precooling facilities for relevant products in
different regions.
OPPORTUNITIES
 Controlled Atmosphere Stores for Apples, Pears etc.
Frozen food plants for fruits & vegetables, milk
products, fish, meat & poultry products.
Scientific Ripening for Banana & Mango.
Development of Refrigerated Transport for processed &
preserved food.
With the changing lifestyles of small nucleus families,
demand for processed & refrigerated food is increasing
National & International Food chains setting up Food
Malls/ Food courts & stores in various parts of the country
.
INDIA TO BE SOURCE BASE FOR PROCESSED FOOD?
GOVT INITIATIVES
Excise concessions, Service Tax exemption,
Govt. grants, incentives etc thru’
NHB/NHM/MoFPI/APEDA
 Latest move by Govt is FDI in cold chain /
retail sector - Food (Fresh & Precooled)
covers 62% OF Retail.
 Task force on development of cold chain
 National centre for development of cold
chain - NCCD

GOVT INITIATIVES
NHB – TECHNICAL STANDARDS
- TECHNICAL SCRUTINY
NCCD - TRAINING
CHALLENGES IN THE COLD CHAIN SECTOR
1.Lack of quality Road network in most areas.
2. Rising cost of land
3.Shortage and erratic supply of power in most
areas
4.Rising energy costs - a cause for concern as
the plants are energy intensive.
5.Availability of required quantity & quality of
water in most regions.
CHALLENGES IN THE COLD CHAIN SECTOR
6. Inconsistence in quality & quantity of food production –
Dependence on weather.
7. Excessive use of pesticides.
8. High initial project costs (Break-even period almost 5 to
6years)
9. Lack of training on good agricultural practices, pre &
post harvest technology & hygiene.
10. Lack of availability of trained personnel for plant
operation.
11. Lack of awareness about maintenance, hygiene, safety
issues & energy efficiency aspects.
ECONOMICS OF COLD CHAIN
•
•
•
•
•
COLD STORAGE COSTS : AROUND 12000 ~ 15000
RUPEES PER MT FOR POSITIVE TEMP
AROUND 22000 ~ 25000 RUPEES PER MT FOR
FROZEN FOOD STORES
RETURNS : NORMALLY IN THE RANGE OF 200 ~
400 RUPEES PER MT PER MONTH FOR POSITIVE
TEMP STORES
FROM 600 ~ 1200 RUPEES PER MT PER MONTH
FOR FROZEN FOOD STORES
POWER REQUIRED VARIES SIGNIFICANTLY
DEPENDING ON VARIOUS FACTORS AND IS
DIFFICULT TO MAKE A GENERIC STATEMENT
CHALLENGES
Article which appeared in Times Of India dtd.15.12.04
(Front Page)
WHATS NEEDS TO BE DONE?

EXCISE EXEMPTION PROCEDURES RELAXED

CONCESSIONAL (AGRICULTURAL) ELECTRICAL TARIFF IN
ALL STATES.

A CENTRALISED REGISTRATION PROCESS FOR ALL COLD
CHAIN PROJECTS.

IMPROVED ROADS & TRANSPORT FACILITIES.

SPECIAL INCENTIVES FOR USE OF
“GREEN TECHNOLOGY”’.
Conclusion
CONCLUSION
Where as huge opportunities exist in the development
of Cold Chain as a whole, there are issues such as
high project costs, high energy requirements &
infrastructure aspects
.
The need for training of personnel on operational &
food safety aspects etc. has to be addressed.
There is a strong case to promote the concept of
“Green Cold Chain” to ensure ecofriendly & energy
efficient plant construction & operation.
Govt. initiatives with financial incentives & thrust on
sound technology & energy efficiency is a welcome
feature, which will hopefully, bring in a healthy
development in the Cold Chain.
THANK YOU
HARSHAL SURANGE
ACR PROJECT CONSULTANTS PVT LTD
TEL : (020) 2546 4327 / 2435 9209
www.acrconsultants.net