Modern terminal marts may boost cold storages

The Union Ministry of Agriculture's initiative to implement modern terminal markets (MTM) across the country is expected to give a boost not only to the agriculture sector but also to the domestic cold storage segment in India.

The industry players are expecting a growth of 20-25 per cent year-o-year in cold storage segment for the next three year. According to M Gopi Krishna, senior vice-president, operations, electro-mechanical and refrigeration business group, Voltas, "In the near future, we are expecting Rs 60-Rs 70 crore to be generated from these government initiatives. It is going to be a big challenge for us because we have not done something like this before." The investment by the cold storage companies to develop and run the MTM will be to the tune of Rs 54 crore.

"The union territory of Chandigarh was the first state to start the MTM project. Other states that have initiated work in this direction are Madhya Pradesh, Punjab, West Bengal and Maharashtra. There are other states that are in the preliminary stage of the project," said Kalyan Chakravarthy, country head, food and agri strategic advisory and research, YES Bank.

According to the industry players, the cold storage industry is fragmented and there are very few established players.

The domestic cold storage market in India is estimated to be around Rs 1,200-Rs 1,500 crore. "As of now the industry is largely dominated by the non-agro sector. But with agri boom, it is going to be one of the main contributors to the industry," said R Krishnan, head of cold storage business, BlueStar. According to Krishnan, in the first year 15 MTMs will be set up.

At present, the cold storage players cater to food & beverages, healthcare & pharma and dairy companies. The category has seen a growth of 36 per cent this year over the last year's 27 per cent. The industry players are also looking towards the west for strategic tie-ups. BlueStar already has a tie up with ISA, Italy, in place.

With the demand of cold storage equipment going up, Godrej Appliances, a division of Godrej & Boyce Manufacturing Company, is also ready to enter this segment. The company at present is evaluating all the possibilities including a strategic alliance with an international company.