A presentation prepared on the developement of Cold Chains in India and future recommendations for sustainability

1. Development of
Cold Chains in
India

2. Development of Cold
Chains in India
Prepared by:
M. Farhan Khan
Mohit Chaurasia
Sumanta Chatterjee
Vishu Vishal
S.P. JAIN INSTITUTE OF MANAGEMENT AND RESEARCH, MUMBAI

3. • What is Cold Chain Supply ?
• Current Status of Cold Chain in India
• Industries using Cold Chains in India
• Trends in Food Consumption Patterns – Growing
Scope of Cold Chains
• Challenges & Issues for Cold Chain in India
• Key Issues with Cold Chain development in India
• Government Policies and Initiatives
• FDI in Cold Chains
• Recommendation

4. A cold chain is a temperature-controlled supply
chain. An unbroken cold chain is an
uninterrupted series of storage and distribution
activities which maintain a given temperature
range. It is used to help extend and ensure
the shelf life of products such as fresh
agricultural produce, seafood, frozen
food, photographic film, chemicals
and pharmaceutical drugs.
What is Cold Chains ?
Logistics
Transportation
Inventory
Warehousing
Information
Management
Packaging
Security
Source: Global Agri System Pvt. Ltd. Report

5. What is Cold Chain?
The Cold Chain Supply Infrastructure
Supply
Procurement
• Precooling System
• Farms (Rural Markets)
• Manufacturers
Transport
• Refrigerated Trucks
• Refrigerated Railway
Wagons
• Refrigerated Cargo
Containers
Storage
• Cold Storage
• Warehouses
Transport
• Refrigerated Trucks
• Refrigerated Railway
Wagons
• Refrigerated Cargo
Containers
End Customer
• Retail, Terminal,
Markets, Factory,
Ports, Airport
LOGISTICS
TEMPERATURE
CONTROL
(REFRIGERATION)
COLD CHAIN
LOGISTICS

6. 30% of the fruits and vegetables grown in India get wasted because of lack of cold
storage facilities and energy infrastructure.
Only 8% of the produce is processed in India
Cold Chains growing at 20-25 per cent CAGR
Source: IBEF
Commodity Cold chain capacity
(Percentage)
Potato 92.82*
Multi purpose 7.63
Fruit & vegetable 1.07
Fish 0.73
Meat 0.15
Dairy & milk 0.68
Others (Pharma, Life
sciences)
0.36
Cold Chain: India
Commodity wise Capacity Utilization, 2012
Source: Global AgriSystem Pvt. Ltd. Report

7. Industries using Cold Chains
Fruits & vegetables
Ice cream sector &
confectionery
Dairy products
Meat & Fish productsFloriculture
Pharmaceutical Products

8. Cold Chain in Food Sector
Industry Temperature Standards
Banana
13 C
Chill
2 C
Frozen
-18 C
Deep Frozen
-29 C

9. Agriculture Sector
Product % World’s Production
Fruits (50 million MT) 9%
Vegetable (90 million MT) 15%
Mango 41%
Banana 23%
Cashew nut 24%
Onion 10%
Cauliflower 30%
Green Peas 36%
Diverse agro-climatic zones across the country
Blessed with round the year sunshine.
Huge potential to cultivate a vast range of agricultural products
INDIAN SCENARIO

10. Agriculture Sector
40% of the fruits and vegetables grown in India (40 mT worth $13 billion) get wasted
every year. Huge enough to feed countries like Brazil and Vietnam
Wide gaps exist in the cold chain
Infrastructure not existing for the produced capacities
Transportation (temperature controlled) is inefficient
Services of cold stores are used with archaic storage
technology
No dominant players in the market and the market is
dominated by Domestic players
Isolated stores without logistics Support

11. Pharmaceutical Industry
Cold chain management is looked more in terms of regulatory compliance rather than
its role in product quality and patient safety
The ideal pharmaceutical cold chain should be capable of:
•Dealing with changing product portfolios
•The requirements for Good Storage and Distribution Practices
•Current regulatory trends,
•Quality management and
•Temperature monitoring
Ageing Population
Downward pressure on public
healthcare costs
Growing patient demand for leading
edge medical technology

12. Floriculture Industry
Airlines do not prefer to carry cargo which is seasonal, perishable, voluminous yet not
in such large quantity
Because of the small volume of flowers they mostly have to be transported on regular
flights which have limited cargo-space
Florist trade
Nursery plants
Extraction of essential oils from flowers
Bulb and seed production
The industry has been growing at a CAGR of 25% over the past decade
The industry comprises of:

13. Dairy Industry
‘Operation flood’ has made India the world’s largest milk producing country with a
mammoth 95mT capacity
Milk Farmers
Dairy cooperatives
Distribution centres
Milk parlours or retail outlets
•Inadequate institutional and infrastructure facilities like no cold storage, non
existence of modernized processing equipments
• Inefficient supply chain
• Lack of organized marketing of milk
• Lack of scientific and profession management
• Lack of capital investment

14. Poultry, Meat and Fish Industry
India produces about 4.9 million tonne of meat annually (8th in World)
Buffalo meat is surplus in India
India exports both frozen and fresh chilled meat to more than 54 countries in the
world
The meat processing industry is still nascent
There is large scope for meat processing in poultry as well as in red meat
Ready to eat (RTE)/chicken products is growing at a rate of 10-15 per cent
The total market for non-vegetarian value-added products (for example; nuggets,
kababs, etc) is Rs 150-180 crore
Poor infrastructure and cold chain facility are the major stumbling blocks in the
path of growth
Need to improve retail infrastructure and educate retailers about these products

15. Poultry, Meat and Fish Industry
India ranks second in the world fish production with an annual fish production of
about 6.9 million metric tonnes.
Frozen shrimp contributes 66.97 per cent of India’s total marine product export
India exports both frozen and fresh chilled meat to more than 54 countries in the
world
Only five per cent of India’s seafood exports are in processed form
More than 60 per cent of India’s exports to south-east Asia are re-exported after
processing
Unorganized state of the suppliers
Inability to form a cartel similar to the oil cartel
Dependency of several poor southern countries on fish as a valuable foreign
exchange earner have relegated southern seafood exporters to price takers

16. Trends in Food Consumption Patterns
– Growing Scope of Cold Chains
Region
1964- 1966 1997- 1999 2030
World 24.2 36.4 45.3
Developing countries 10.2 25.5 36.7
Near East and North Africa 11.9 21.2 35
Sub-Saharan Africaa 9.9 9.4 13.4
Latin America and the Caribbean 31.7 53.8 76.6
East Asia 8.7 37.7 58.5
South Asia 3.9 5.3 11.7
Industrialized countries 61.5 88.2 100.1
Transition countries 42.5 46.2 60.7
Source:www.fao.org (Food and Agricultural organization of the United Nations)
Meat (kg peryear)
As a nation develops, its
dependence on cereals for dietary
energy reduces and the demand
for meats and fresh vegetables
increases
Efficient cold chains are required to ensure the value of developed supply
capacity is passed on to the consumer and vice versa for the producer
One of the key reasons for high food inflation in India is the lack of efficient
supply chains for food, of which cold chains form an integral part.

17. Challenges & Issues for Cold Chain in India
Lack of Uniform
Technology
standards
Consolidation
Capital
Investment and
Technology
Incumbency
advantages
independent of
size
Economies of
scales
Human Capital
and Domain Skills
Lack of logistical
Support
Uneven
Distribution of
cold stores

18. Key Issues with Cold Chain
development in India
Increase in Domestic
and Export demand
Benefits of growth in
demand is not
passed on
adequately to the
farmer

19. Government Policies
Encourage Investments – Agri food is identified as priority sector.
Encourage organized sector- ECB route opened, Import duty relaxed.
Liberalize Marketing Norms- Focus on increased retail, improved supply
chain.
Rationalize Tax Laws- Moving towards uniform VAT/GST.
Provide Grants and subsidies- VG funding, Grants, Infrastructure status
Ease foreign investment- 100% FDI in food sector. ECB for cold chain

20. Government Initiatives
Excised waved on F&V, meat preparations,
ice-cream, other RTE food mixes.
Automatic approval for 100% foreign
equity in processed food items
Duties reduced on imports; Zero service
tax on installations
EOI floated for 30 mega food parks
National Highway Development Program
Partnering with Indian railways to establish
cold chain infrastructure
Integrated food law(FSSA) notified and
ready for implementation.
Development of National centre for Cold
Chain Development (NCCD)
NCCD
• Training and Capacity
Building
• Research and
Development
• Building standards
through International
benchmarking
• Development of cold
chain infrastructure
and trade in
perishable

21. FDI in Cold Chains
These facts are recognized by the Indian government and 100% FDI in the cold chain has already been permitted
country needs to ensure that their production does not go waste and returns fair value to producers and
consumers
It takes a truck 6 days to travel the 2219km from Delhi to Bangalore
Lack of Investment in much needed transportation between growers, storage and customers
Absence of a single dedicated perishables gateway or fast track corridor for perishable cargoes
Consumer food retail sector is the fastest growing in the country, worth around 15 billion USD
40% of fresh produce is wasted due to lack of satisfactory handling in the supply chain
Indian cold chain business is fragmented in a big way.

22. Recommendations
Implementation of GST
Removal of perishable agricultural products from the purview of state APMC
acts.
Wide scale Implementation of Horti Trains.

23. Thank You