Cold Storage as a Business Investment Option for Quicker Bigger Returns
One of the major stumbling blocks in the food and medicine supply and distribution chain is proper storage and logistic shortcomings. While most of the farm-fresh food is produced in remote locations in under-connected rural areas, large-scale consumption areas are the big metropolitan cities. It is estimated that farmers lose close to 50% of their perishable farm produce due to lack of proper cold storage and processing facilities locally. Perishable produces include milk, fruits, fish, meat and vegetables.
If only cold storages can be established, most problems associated with selling farmers’ produce can be solved. Cold storage business in India, though in its nascent stage is considered as a sound business opportunity that is yet to be escalated and exploited by entrepreneurs on a large scale.
Cold storage investment is considered to be highly profitable though it entails bigger investment. It offers enormous potential in areas such as Belgaum, Goa, North Karnataka and South Maharashtra where farming is the principal source of income for many small and medium size farm households.
What is a Cold Storage?
Cold storages are more like huge refrigerators that keep the products cool at pre-determined temperatures (some commodities require temperatures as low as minus 25 degrees centigrade) until it is moved to consumption areas for sale to consumers.
There are vast numbers of cold storage types. Some of the common types of cold storages are:
- Refrigerated containers. They are the most basic type of cold storage and ideally suited for short-term storage of small quantities of produce. Entrepreneur can offer refrigerated container storage if the quantity is small and requires to be transported to consumption areas without any transhipment.
- Walk-in cold storages. Walk-ins are bigger types of cold storages (kind of insulated rooms that offer large space for storage over longer durations. Typically, such storages will contain large number of racks for better utilisation of vertical space. If products are the same or require a particular temperature then entrepreneurs can consider this as an option for providing services.
- Combined cold rooms. Combined cold rooms are really variations of walk-in cold storages and the most prominent difference is that unlike a walk-in cold storage there are different storage zones within the facility. The advantage of a combined cold storage is that entrepreneurs can offer services that require different parameters.
- Customised cold storages. These are cold storages that offer services for a specific purpose or produce. In building customised cold storages, entrepreneurs should a specific purpose and mostly cater to in-house requirements. Fish and meat producers prefer this type of cold storage. If you plan to invest in a cold storage in India specifically for fish-processing then a customised facility is recommended.
Ultimately your choice of an appropriate cold storage will depend upon factors such as: nature of produce (liquid, solid, packaged etc.); storage temperature, storage time; volume of commodity and transportability.
Is Cold Storage Business Profitable?
Making a cold storage investment is generally considered a sound proposition and the driving factor is the realisation that there is a vast requirement for this service among producers. Realising the big potential for profit in cold storage business in India, the Government of India has set up the National Centre for Cold-chain Development under the Ministry of Agriculture. There are already 7,000+ chains operating under the aegis of the ministry and more are being planned for the future.
Typically cold storage profit margins in India when set up in an appropriate location give a decent return. Cold storage investment cost in India is generally lower than in most developed countries and cold storage investment cost can be recovered much earlier than in other parts of the world. As a rule, it pays if you can keep cold storage business cost to its minimum with a focus on serving a larger customer base of small producers.
Local Steel Building Suppliers for Cold Storages
The days of concrete buildings for cold storage is gone and in its place have come steel building manufacturers with better options and durability. Contact a local steel building supplier with your requirements; often steel building manufacturers will give you readymade solutions – it’s cheaper and cost effective too.