The cold chain industry is an emerging and fast growing business sector in India. India offers great potential for cold chain solution providers, having seen phenomenal growth in production of horticulture produce, dairy and meat products over the last decade. Increasing urbanization and growth of organized retail, food servicing and food processing sectors are boosting the growth of cold chain industry in India. Today, we are witnessing a trend shift towards establishing multipurpose cold storages and providing end-to-end services to control parameters throughout the value chain. India’s cold chain sector was estimated at INR 175-177 billion (~USD 2.9 billion) during 2013-14. The industry is expected to grow annually at 28% to 30% and is largely unorganized in nature, thereby presenting a great opportunity for companies in the sector. Around 85-90% of market share is with temperature controlled warehouses [INR 162 billion (~USD 2.7 billion); there are over 6500 stores with 30.4 million MT Capacity]. The remaining 10-15% comprises of temperature controlled vehicles [INR 13-14 billion (~USD 0.2 billion); over 8000 vehicles]. (Source: YES Bank- Dutch Embassy Collaborative Study: http://indiacoldchainshow.com/cold-chain-opportunities-in-india-yes-bank-dutch-embassy-collaborative-study/) In terms of the key players, it is a highly fragmented industry and unorganized sector accounts for an estimated 85-90% share of the total capacity. The Government recognizes the importance of development of cold chain as an essential next step in upgrading India’s food processing industry, and has been providing incentives for promoting growth. The 100% FDI and Infrastructure status to the cold chain industry show the government’s commitment towards cold chain development, thereby making this a highly lucrative sector for investments and growth. (Source – Assocham, REED Analysis). Industry statistics further indicate that
• Wholesalers and organized retailers are the key user segments of cold chain services with a share of 70-75% and 10-15% respectively.
• Currently, about 68% of the total cold storage capacity is concentrated in the states of West Bengal, Uttar Pradesh and Bihar, wherein storage of potatoes accounts for 85-90% of the capacity.
• Potatoes account for 68% of total volumes handled, followed by multipurpose storage which accounts for 30%. In value terms, multipurpose stores have the largest share of 77% while the share of potatoes was a mere 17%.
(Source: YES Bank- Dutch Embassy Collaborative Study)
Approximately 18% of fruits and vegetables get wasted in the country due to lack of cold chain infrastructure, which includes both storage and transportation facilities. With the focus now on food safety and security, cold chain facilities will play an important role in meeting the demand for food in the country. For emerging economies like India where food wastage is high, it is essential to build an end-to-end cold chain infrastructure incorporating technical competency, system design and application processes that are specific to different types of perishable products. It needs design of both static and mobile infrastructure to enable delivery of fresh food from farm to fork. Specific interventions that are required include: inducing temperature controlled gas-flow, moisture content, thermal insulation and materials, which all form an integral part of efficient cold chain design principles. Development in the food processing sector and organized retail, government initiatives, and increasing investments, will drive overall growth for the industry. However, interventions are required to bring down operating costs, to improve quality of end produce, for adoption of new technology solutions and training of manpower. Some of the potential areas of intervention include:
• Controlled atmosphere/modified atmosphere storage for extension of storage life of perishables
• New technologies for storage of processing grade potato
• Low cost solutions for pre-cooling at farm
• Modern pack houses and ripening chambers
• Innovation, cost effectiveness and service support in reefer technology
• Low cost technology for automation of operations in a cold store
• Space and energy saving solutions in cold storage
We see a great opportunity in India to provide services to creators of cold chain infrastructure (both mobile and static), in terms of consultancy, design and technology interventions. Thus it is time that companies leverage this opportunity to provide consulting assistance in structural planning, storage knowledge, automation, cold chain transport, remote tracking and refrigeration. Our company plans to provide a host of services and solutions to address issues of storage, transportation and delivery for perishable products.
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