INDIA'S COLD CHAIN INDUSTRY TO DOUBLE IN VALUE BY 2017

While India is the second largest producer of fruits and vegetables in the world, the country's integrated cold chain industry is nascent and is witnessing a wide demand-supply gap. Cold storages at production zones are archaic in nature. The lack of cool rooms and refrigerated transport is causing more than 40% losses in annual produce.     India's integrated cold chain industry - a combination of surface storage and refrigerated transport - has been growing at 18% for the last three years. The industry, currently valued at Rs 245 billion (FY 2013), is expected to reach Rs 520 billion by 2017, growing at a CAGR of 20%.     India has around 5,400 cold storage units, but can only store less than 11% of the country's total produce. While 105mn MT of perishable produce is transported across India annually, only 4mn MT is transported via reefers. To address the gap in demand and supply, the Indian government has introduced multiple initiatives - modernization of existing facilities, new ventures via private and government partnerships, etc.     The private sector accounts for 90% of cold storages in India. In 2017 too, private players will dominate the surface storage segment, which is estimated to reach 95mn MT. Cold chain service providers across the globe and in India have been researching new technologies that will not only decrease their operational costs, but will also give them a competitive advantage over their peers in the industry. One of the focus areas is currently to make reefer trucks more energy efficient to withstand the variations in the ambient temperatures at drop-off points.     ''Cold chain storages in India are still archaic in nature and are only suitable for single commodities like potatoes and apples in comparison to the global industry. But with new initiatives by the Indian government and a steep growth in the consumption of processed foods, cold chain logistics will witness huge growth in the coming years,'' says Shilpa Eguvanti, team lead (Consulting) at ValueNotes.

Source: IRIS (04-DEC-13)

Cold chain market to more than double to $ 8 billion by 2015: Yes Bank

The size of the country's cold chain market is expected to jump more than two-fold to USD 8 billion by 2015 on the back of increased investment in the sector, according to a study conducted by Yes Bank.

"The size of the cold chain market in India is estimated at more than USD 3 billion and is growing at a modest CAGR of 11 per cent. The total value is expected to reach USD 8 billion by 2015 through increased investments, modernisation of existing facilities and establishment of new ventures via public-private-partnership," the report said.

The emergence of organised retail and changes in FDI norms provide immense opportunities for cold chain sector, the bank said in the report released by Planning Commission Member Saumitra Chaudhuri at industry body PHDCCI's conference.

The cold storage capacity in the country currently is about 30 million tonnes, while the annual transaction volume of perishable products is estimated at 230 million tonnes.

Addressing the conference, Chaudhuri said the cold chain market has been somehow lagging behind all the sectors and there is "lot of catching up to do".

Without making a guess on the value of post-harvest crop losses every year due to lack of cold storage facilities, he said there is lot of wastage, which is "disturbing".

"Despite several programmes, investment has been very weak in cold chain sector," Chaudhuri said, adding that except potatoes, there are hardly any facilities in other crops.

Planning Commission member emphasised on the need of cold chain facilities to store horticulture produce, fisheries and pharmaceutical products scientifically.

Chaudhuri said the investment in cold chain investment should start now to achieve perceptible change in the 12th plan period and 13th plan period.

Yes Bank's Country Head Food and Agri-business (Strategic Advisory and Research) noted that high real estate cost and gestation period in the business are the two major challenges in establishing cold chain infrastructure.

Source: The Indian Express Tuesday Nov 27 2012

Financing of cold chains should be viable to attract private investors

Cold chain financing should be viable, bankable as well as profitable in order to attract private investors. This was stated by Dr Saumitra Chaudhuri, member, Planning Commission, in the inaugural address at the national conference on cold chain financing, organised by PHD Chamber in New Delhi.

“There is a need for institutional changes in order to facilitate cold chain financing. There is a need for amending the Agricultural Produce Marketing Committee (APMC) Act. Cold chain storage is essential not only for high-value commodities, but also for other perishable food items, such as meat, fish and green vegetables, which need to come up in a big way,” he stated.

“The model APMC Act is very rigid. There is a need to figure out a way where there is institutional space for modern businesses in cold chain financing. A substantive business model needs to be developed, along with huge value addition,” Dr Chaudhuri added.

Sanjeev Chopra, joint secretary and mission director, National Horticulture Mission, Ministry of Agriculture, delivered a special address, in which he stated that cold chain financing was needed for high-value products, such as fruit and vegetables, as these show greater demand.”

“The Indian cold chain infrastructure is helping fresh produce of other countries. The cold chain infrastructure should be devised in a way that it is helpful for Indian farmers. There is a need to identify six or seven products, identify investors, and work with the banks in order to facilitate cold chain financing in India. The cold chain system needs fiscal incentives to make it commercially viable for investors,” he added.

Suman Jyoti Khaitan, president, PHD Chamber, delivered the welcome address at the conference. He emphasised on proper financing by banks in order to promote the cold chains in the country. “Many financial models are available, which need to be promoted to finance cold chains in the country. These steps might boost the confidence and encourage private investors to invest into the cold chain business,” he added.

R S Bedi, in his presentation of the industry perspective, said, “Cold chain projects are perceived by investors to be high on capital and low on volumes. The financial viability of cold chain projects is a serious issue that needs to be addressed.”

Source: FnBnews.com, Thursday, December 12, 2013