logistics exp
TRANSCRIPT
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Cold storage and cold chain-
the growth catalysts
Cold storage and cold chains are important for any developing
economy. Development of cold storage and cold chain infrastructure
across the nation is one of the important requirements along with
technology advancement and policy-led intervention for positive
growth
Cold storage & cold chains are very important part of any developing economy. AsIndia, whose economy is still primarily based on agriculture given that 70% of
population still thrives on it for their daily bread earnings, the requirement for a
efficient and integrated supply chain environment becomes very important. We are
worlds largest producer of vegetables and milk and second largest producer of
fruits, but on a downside after the harvest process due to inefficient supply chain &
lack of cold storages the country bears to whopping loss of 60 thousand crore.
The major reason for the requirement for these chains & storage is the fact that
these products are perishable in nature therefore temperature controlled storage is
imperative. Where these chains are helpful 9is that they increase the shelf life of
the product. India is also 8th largest retail market in the world. Modern retail formatrequires distributed sourcing, centralized holding and dispatch and de centralized
sales for which cold chain infrastructure is essential. Development of cold chain
infrastructure across nation is seen as one of the important requirements. Indian
government has various subsidy schemes for entrepreneurs to promote cold chain
infrastructure in the country, said N K Mohanan vice president, Rinac India Ltd.
But the companies in the Logistics industry have a lot of issues that they feels the
govt needs to work on, issues pertaining to subsidy policy, which is not adequately
aligned to serve cold storage and cold storage and cold chain industry needs and
upgradation of subsidy policies of national horticulture Board & Ministry of Food
processing Industry. Cold storage industry has been categorized at par with
infrastructure sector by Honble Union finance Minster in budget 2011-12, but
nowhere in the act the cold storage have been included u/s 81A. the industry is in
the promising stage and evolving fast. Key commodities which require cold storage
are vegetables, fruits, meat and allied products. Currently US $ 1 Billion industry,
which largely constitutes storage 95% & 5 % transport. Talking about the Northern
India, UP, Bihar and West Bengal are the prominent states showcasing the industry.
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We know that in the US 11% GDP comes from Supply Chain & logistics, which is
100% of Indias GDP. India is the second highest fruit producer in the world which is
134 million tons per year, but the shocking fact is only 10% of it get cold storage
facility. Similarly, we are highest producer of milk, but overall, we have only 25
million metric tons cold storage capacity. So we can clearly see that there is huge
opportunities of growth in cold storage-esp in areas like organized retail & Pharma.
Now if we talk about opportunities, all types of organization can be part of this
industry, including NGOs, government bodies and consultants. The requirement is
right technology and right methodology for operating and maintaining the stores.
The drawback even today is that the store owners are ill-informed about the intake,
loading and maintenance practices. A concept of store-owner-farmer can have a tie-
up to manage this business. Its of upmost importance to educate & incentivize
the farmers/growers for quantity of production, right time of harvesting and so on.
There is a huge potential for development of modern and energy efficient storage
units and development of cold chain facilities. The key drivers of cold chain are
growth in organized retail, shift towards horticultural crops, growth in processed
food sector; demand from pharmaceutical sector and changing consumption
pattern, currently food processing sector constitutes 14% of manufacturing GDP
amounting to product value of Rs. 280000 crores. It employs 130 lakhs persons and
is supposed to increase at an annual rate of 7%.
The problem faced by the industry is absence of World class integrated cold chain
across the country-isolated stores without logistics support; the cold storage mainly
works on old technology and hence, are not that effective. Apart from this, other
challenges being faced by cold storage industry in India are
Lack of logistical support
Uneven distribution of cold chains
Cost structure
Power supply