 "Gujarat has fourth highest share in India's total cold chain storage capacity: Study")
Gujarat (5.2 per cent) was ranked fourth behind Uttar Pradesh (41 per cent), West Bengal (23 per cent) and Punjab (5.5 per cent) in total share of India's cold chain storage capacity, according to a study titled 'Opportunities in Cold Chain: Emerging Trends and Market Challenges,’ jointly conducted by ASSOCHAM and global market research and consulting company TechSci Research.
Gujarat was followed by Bihar (4.7 per cent), Andhra Pradesh (3.7 per cent), Madhya Pradesh (3.3 per cent), Maharashtra (2.2 per cent) and Karnataka (1.7 per cent), the study said.
“Uneven distribution of cold storages is one of the major challenges faced by the cold chain industry in India,” said D S Rawat, secretary general, ASSOCHAM while releasing the findings of the study.
“An uneven distribution of storage capacity, lack of logistical support, highly segregated cold storage location, need for high capital investment and others are acting as the hurdles for cold chain industry in India,” said Rawat.
“India’s cold chain industry is still evolving, unorganised and operating below capacity as most equipments in use are not technically updated,” the study highlighted
Utilisation of obsolete refrigeration system in cold stores of India is quite prevalent as most of the cold stores across India lack upgraded or technologically sound refrigeration system which has been directly impacting the profit margins of cold chain industry’s stakeholders, the combined study pointed out.
“Majority of cold stores in India are running on slow speed compressors which are based on the ammonia refrigeration system lacking the capacity control mechanism, due to which, energy efficiency is considerably low for the cold stores which are utilising them,” the study stated.
Besides, the cold stores based on old compressor technology, the study pointed out, are also losing their precious space as the installation of these compressors require the installation of large sized bunker styled evaporator coils or other diffuser units.
There is also an urgent need to establish more multi-purpose cold storages across India as about 75 per cent of the current cold storage capacity in India is suitable only for potato storage and only 23 per cent is meant for multi-purpose, the study said.
However in value terms, potato storage, according to the study, contributes only about 20 per cent in the total revenue of cold chain storage, while over 54 per cent of cold chain storage revenues come from multi-purpose storage only as the rent fetched for potatoes is quite low as compared to the other food products.
“There is a need to look for economically viable options like multi-purpose cold storages as they have high capacity utilisation as compared to that of conventional storages,” said Rawat.
Growing at a compounded annual growth rate (CAGR) of about 26 per cent, the market value of Indian temperature controlled warehouse industry is likely to cross Rs six lakh crore mark by 2017. Besides, the total cold chain storage capacity in India is likely to grow at over 13 per cent CAGR and may reach about 47 MT by 2017.While, growing at a CAGR of about seven per cent, the global cold chain market is likely to cross $147 billion mark by 2017.
Growth in sectors like organized retail, pharmaceuticals, processed food, growing shift towards horticulture together with various initiatives undertaken by the government are driving the growth of cold chain industry in India, the study said.
Presence of a large number of small players in India's cold storage market is a significant disadvantage as they lack monetary means to make investments in establishing large cold storages, the study said, adding that exorbitant property prices coupled with usage of obsolete technology has led to the lower cold storage capacity in India.
Though India accounts for about 11 per cent of global vegetable production, but the cold chain capacity in India is available for just about 9 million tons of vegetables, the study asserted. “This not only leads to huge wastage of fruits and vegetables worth about Rs 35,000 crore annually but severely impacts India’s share in the global export of fruits and vegetables, which is just about two per cent.”
Of about 85 million tons (MT) of vegetables and 45 MT of fruits being produced in India annually, the study said, only about four million tons of fruits and vegetables are transported in refrigerated vehicles in the country.
Apart from horticulture, India produces about 130 million tons of milk annually but the country currently has milk storage capacity of just about 80,000 tons. Due to lack of cold chain infrastructure, about 30 per cent of about 10 million metric tons of fish produced in India annually gets wasted. In India, about 95 per cent cold storages are managed by private companies while in countries like USA, China, Brazil, Germany, Japan and others, major portion of refrigerated storage falls under public refrigerated warehouses.
The study concluded that India needs to adopt green cold chain concept by promoting installation of energy efficient equipments as this would not only make a positive impact on the environment but would also help the cold chain industry’s stakeholders to increase their revenue in the long run.
Gujarat was followed by Bihar (4.7 per cent), Andhra Pradesh (3.7 per cent), Madhya Pradesh (3.3 per cent), Maharashtra (2.2 per cent) and Karnataka (1.7 per cent), the study said.
“Uneven distribution of cold storages is one of the major challenges faced by the cold chain industry in India,” said D S Rawat, secretary general, ASSOCHAM while releasing the findings of the study.
More From This Section
With about two million tons of cold chain storage capacity, Gujarat has the fourth highest share of over five per cent in India’s total cold chain storage capacity of about 35 million tons (MT) worth over Rs 10,000 crore, reveals the joint study.
“An uneven distribution of storage capacity, lack of logistical support, highly segregated cold storage location, need for high capital investment and others are acting as the hurdles for cold chain industry in India,” said Rawat.
“India’s cold chain industry is still evolving, unorganised and operating below capacity as most equipments in use are not technically updated,” the study highlighted
Utilisation of obsolete refrigeration system in cold stores of India is quite prevalent as most of the cold stores across India lack upgraded or technologically sound refrigeration system which has been directly impacting the profit margins of cold chain industry’s stakeholders, the combined study pointed out.
“Majority of cold stores in India are running on slow speed compressors which are based on the ammonia refrigeration system lacking the capacity control mechanism, due to which, energy efficiency is considerably low for the cold stores which are utilising them,” the study stated.
Besides, the cold stores based on old compressor technology, the study pointed out, are also losing their precious space as the installation of these compressors require the installation of large sized bunker styled evaporator coils or other diffuser units.
There is also an urgent need to establish more multi-purpose cold storages across India as about 75 per cent of the current cold storage capacity in India is suitable only for potato storage and only 23 per cent is meant for multi-purpose, the study said.
However in value terms, potato storage, according to the study, contributes only about 20 per cent in the total revenue of cold chain storage, while over 54 per cent of cold chain storage revenues come from multi-purpose storage only as the rent fetched for potatoes is quite low as compared to the other food products.
“There is a need to look for economically viable options like multi-purpose cold storages as they have high capacity utilisation as compared to that of conventional storages,” said Rawat.
Growing at a compounded annual growth rate (CAGR) of about 26 per cent, the market value of Indian temperature controlled warehouse industry is likely to cross Rs six lakh crore mark by 2017. Besides, the total cold chain storage capacity in India is likely to grow at over 13 per cent CAGR and may reach about 47 MT by 2017.While, growing at a CAGR of about seven per cent, the global cold chain market is likely to cross $147 billion mark by 2017.
Growth in sectors like organized retail, pharmaceuticals, processed food, growing shift towards horticulture together with various initiatives undertaken by the government are driving the growth of cold chain industry in India, the study said.
Presence of a large number of small players in India's cold storage market is a significant disadvantage as they lack monetary means to make investments in establishing large cold storages, the study said, adding that exorbitant property prices coupled with usage of obsolete technology has led to the lower cold storage capacity in India.
Though India accounts for about 11 per cent of global vegetable production, but the cold chain capacity in India is available for just about 9 million tons of vegetables, the study asserted. “This not only leads to huge wastage of fruits and vegetables worth about Rs 35,000 crore annually but severely impacts India’s share in the global export of fruits and vegetables, which is just about two per cent.”
Of about 85 million tons (MT) of vegetables and 45 MT of fruits being produced in India annually, the study said, only about four million tons of fruits and vegetables are transported in refrigerated vehicles in the country.
Apart from horticulture, India produces about 130 million tons of milk annually but the country currently has milk storage capacity of just about 80,000 tons. Due to lack of cold chain infrastructure, about 30 per cent of about 10 million metric tons of fish produced in India annually gets wasted. In India, about 95 per cent cold storages are managed by private companies while in countries like USA, China, Brazil, Germany, Japan and others, major portion of refrigerated storage falls under public refrigerated warehouses.
The study concluded that India needs to adopt green cold chain concept by promoting installation of energy efficient equipments as this would not only make a positive impact on the environment but would also help the cold chain industry’s stakeholders to increase their revenue in the long run.