Players rush to build cold chains

Retail boom makes global giants, domestic firms, rlys vie to build refrigerated warehouses.

In an attempt to leverage the retail boom, global giants, Indian corporates, airport infrastructure companies and the railways are making a beeline for building refrigerated warehouses and perishable products cargo centres across the country. The total investment committed is already around $1.2 billion, say industry analysts.

Mukesh Ambani-controlled Reliance Logistics, Kishore Biyani's Future Group (which will use the network for its own retail business) and Kerala-based Eastern Group are some of the Indian companies working on entering the sector.

Malaysian logistics giant Haisan Resources Berhad (Haisan) also plans to enter the business. Haisan's wholly-owned subsidiary, IGLO International, has signed an agreement with the Beta Empire Group and Pace CFS for starting discussion on a possible joint venture to establish cold chain logistics operations in India.

The Beta Empire Group is one of the largest food processing companies in South-East Asia while Pace CFS is already running a container freight station (CFS) in Kochi, Kerala.

Kishore Biyani, managing director of Pantaloon Retail (India) said, "We have no plans to enter this space at this moment."

However, sources said corporate houses, including Reliance Logistics and Future Group, had firmed up plans to set up related infrastructure, including refrigerated transport vehicles, cold storage facilities and processing centres and cold containers.

"The companies are mainly targeting milk products, meat products, fruits, vegetables, packed food items, beverages and biologicals," said a source.

Sensing the potential, the private airports are also joining the party. Cochin International Airport, Mumbai International Airport, Delhi International Airport and greenfield international airport projects such as Bangalore and Hyderabad are also setting up refrigerated warehouses for perishable cargoes next to the airports.

"We are building a state-of-the-art centre for perishable cargo, which can handle 40,000 million tonnes perishable cargo per year. It will be completed by mid-2007. This will help the farmers of the state who are cultivating such products in and around the region. Cochin International

Airport can help in finding a market for them abroad as well," said S Bharath, managing director of Cochin International Airport.

Not to be left behind are the railways, which are inviting private parties to run refrigerated container trains for transporting agricultural products to every corner of the country.

"This investment will primarily supplement the retail industry," said an industry analyst. "The total wastage of agricultural produce is estimated at over Rs 50,000 crore while the wastage in fruits and vegetables is estimated at 25-30 per cent," industry analysts added.

Cold chains or refrigerated centres are essential for storage and distribution of perishable goods and temperature-sensitive pharmaceuticals and biological preparations and forms an integral part of their supply chain.