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Cold-chain Market prospects in India
Cold-chain Market prospects in India
Cold-chain Market prospects in India
Cold-chain Market prospects in India
Cold-chain Market prospects in India
Cold-chain Market prospects in India
Cold-chain Market prospects in India
Cold-chain Market prospects in India
Cold-chain Market prospects in India
Cold-chain Market prospects in India
Cold-chain Market prospects in India
Cold-chain Market prospects in India
Cold-chain Market prospects in India
Cold-chain Market prospects in India
Cold-chain Market prospects in India
Cold-chain Market prospects in India
Cold-chain Market prospects in India
Cold-chain Market prospects in India
Cold-chain Market prospects in India
Cold-chain Market prospects in India
Cold-chain Market prospects in India
Cold-chain Market prospects in India
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Cold-chain Market prospects in India

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Challenges & Opportunities for cold chain development in India. Future prospects of cold chain market in India (updated 2012)

Challenges & Opportunities for cold chain development in India. Future prospects of cold chain market in India (updated 2012)

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  • 1. by Captain Pawanexh Kohli
  • 2. Procure End Transport Storage Distribution /Precool Customer • Manufacturer • Climate Controlled • Cold Storage • Refrigerated • Retail • Farms Haulage • Distribution Centre Secondary move • Consumption A cold chain is a climate-controlled supply chain, consisting of storage and Cold Chain distribution activities which maintains a product at a given ambient range. Refrigerated Transport Surface Storage Segments Uses refrigerator trucks, cars, van, rail, containers and ships for Consists of refrigerated warehouses for storage of transporting perishable products perishable products Transportation Quality Assurance Key Activities related to transportation Activities to assure Technical and Activity of produce to the market from production locations Quality parameters to asssure Shelf Life and saleability.
  • 3. • Nascent Yet increasingly Demanding, Estimated USD 9 billion in 2015. • Increasing Volumes and global exposures. Market • Domestic development, burgeoning parity. • Fragmented and disjointed. Drivers: Challenges: – Growth in Organized Retail – Human Resources Drivers & – Shift Towards Horticultural Crops – Lack of Logistical Support Challenges – Growth in Processed Food Sector – Uneven Distribution of Cold chains – Government Initiatives – Cost Structure – Growth in Bio-Pharma sector – Power Supply • Cold Chains based on Public Private Partnership (PPP) model • Rail Based Reefers, organised distribution. Trends • Backward Integration, forward economy. • Cold Chain Facilities for exports. • Minimal: Few Private and State owned players. • Surface Storage comprising of both organised and unorganised. Competition • At least 50 companies are offering refrigerated transport services in India • Captive establishments & New entrants.
  • 4.  Modern retail sector necessitates efficient supply between source and the end consumer  Due to increasing risks and investments in grain crops farmers are cultivating horticultural crops  Horticultural crops need refrigerated storage, hence demand for cold chains is likely to increase.
  • 5.  Changing consumer trends for convenience and processed foods.  Government of India’s setting up 30 mega food parks  This is to propel demand for cold storage facilities
  • 6. Industry turnovers (US$ bn) Size–output/value Projected Processing Organised 98 Segment (2007–08) growth levels players Dairy products US$ 62.67 billion 15% 37% 15% Fruits & Vegetables 2.33 million tonnes 20% 2% 48% 49 38 Meat and poultry US$ 13 million 10% 1% 5% 22 24 18 Fisheries 6.4 million tonnes 20% 12% N/A 10 Packaged foods US$ 2 billion 8% 3% 80% Beverages US$ 155 million 27% N/A 77% Source IBEF Food processing (US$98 bn), 9% of GDP, growing at 15% last 3 years. Vision 2015 (GOI) action plan to double processed foods to US$210 bn. MoFPI Envisages investment of US$21.05 bn in next 5 years. FICCI-E&Y study sees investment opportunities to shoot up by 42.5% to US$ 181 billion in 2015 and to US$ 318 billion by 2020.
  • 7. 700 Market Clinical Trials 608 600 Indian clinical trials market currently sized at US$ Million 500 468 400 360 US$ 250 mill to US$ 275 300 275 mill and expected to grow 211 200 124 161 at CAGR of 30%, at almost 95 double the global average. 100 0 Indian Pharma Industry: US$ 20 billion in 2009; the domestic retail market is expected to cross the US$ 10 billion mark in 2010 and reach an estimated US$ 12 billion to US$ 13 billion by 2012. Source: IBEF, CRIS INFAC
  • 8. Challenges Human Capital, Domain Skills Driver s Lack of Logistical Support Growth in Organized Retail Uneven Distribution of Cold Stores Shift towards horticultural crops Cost Structure (Capital), Parity Growth in Processed Food Sector Power Supply (Erratic) Government Initiatives Demand from all user sectors
  • 9. Lack of Logistical Support (Agri-produce)  Small Land holding; remains logistical challenge  Requires multiple farm gate collection centres.  Fragmented cold chain industry has not encouraged the growth of cold logistics for horticulture produce.  Minimal cooperative farming  Irregular parameters in one catchment area.  Underdeveloped domestic market for fresh perishable produce.  Standard Refrigerated Systems inefficient & poorly designed. Uneven Capacity distribution  Capacity mostly for focused on single commodities.  Financial viability due to seasonality.  No proper origin/destination pairing.
  • 10.  Capital Intensive Infrastructure.  Restrictive land use and other regulations.  High Operational costs, Low yield models.  High Insurance/risk coverage premiums.  Nascent, Limited knowledge, limited experience.  Large gap in demand supply conducive to small unorganised service providers.  Users have developed captive resources.  Federal tax and commercial regulations.  No fast-track perishables corridor.
  • 11. Government policy as a „Catalyst‟ Encourages Liberalises Foreign Encourages Rationalises Grants & Organised Marketing Investment Investments Tax Laws Subsidies Sector Norms Eased Focus on ECB route Moving VG Funding, 100% FDI in Agri/Foods increased opened, towards Grants, food sector, identified as Retail, Import duty uniform Infrastructure ECB for cold priority sector improved relaxed VAT/GST status chain. supply chain.
  • 12. Market Size and Large area spreads. 500 Growth 400 400 Increasing volumes is each INR Bn 300 sector, large service gap. 200 100 100 Rising Demand, yet misaligned 0 2008 2015 / fragmented. Market Segments 12% Case - 1: Vaccines Distribution Storage Case - 2: Seafood Distribution Transport 88% Case - 3: Agri Farm to Fork Source: USTDA, 2008 ; Supply Chains.com July 2009 ; Transport Reporter
  • 13. Cold Supply Chain (India): Poised for a Quantum Jump  Best practises for India Market.  Demand for training establishments.  Gaps in appropriate Infrastructure development.  Adoption of energy efficient technology.  Adapting to Indian backdrop – move from mass storage to direct access storage.  Partner with networked Indian logistics companies.  Manage and develop Multiple complexities in human capital development.  Anticipate ahead of a developing market. History in the making & the Opportunity to be part of it. A market develops to oblige!
  • 14.  People.  Cross cultural exposure  Local Knowledge  Leadership Mix.  Best practices in cross functions  Synergise corporate and managerial mores  Laws & Norms.  Commercial Taxation  Regulatory Compliances  Corporate Governance  Affiliation with Trade Development Bodies.  Partner Integration, Cross-enterprise processes. “You've got the fuel. You've got the technology… It's what's in between that's the challenge.”
  • 15.  Changing Perceptions  Process delays - understanding.  Control - global.  Quality - total.  Customer Attrition and Loyalty.  Market specific Branding.  India specific USPs.  Socio-ecological interactions.  Inter-cultural communications. “Shorter cycles & improved logistics equals high quality information from the supply chain.”
  • 16.  Multi-modal risk managed movement.  Single window service.  Solutions biased provider.  Cost effectual transactional process.  Pro active communication.  Transparent Supply chain.  JIT – Shortened lead time. • Extended Reach – wide network. “Globalisation increases the scope and involvedness of the supply chain manager”
  • 17.  Changing Demographics.  Modified Purchase Habits.  Traceability and flexibility.  Free Trade Agreements.  Inclusive Globalisation.  Security & IP Concerns.  New Business & Opportunities.  Affected National Priorities.  Environmental Sustainability.  Changed perceptions, fading borders.  Technology reliant business processes. “Dynamic, Innovative, Lean, Universal, Enabled, Agile, Involved – Cold Chain Solutions.”
  • 18.  Technology Provision and implementation.  Cold Logistics and Supply Chain services.  Infrastructure designers and planners.  Scalable Refrigeration technology.  Refrigerated Vehicles and delivery systems.  Alternate energy, environmental protection expertise.  Shipping and international food trade.  Innovators and solutions biased companies.  Education, Training & Cold chain experts.  Knowledge Managers and Integration specialists. A fledgling Cold chain awaiting shape – to serve a billion people.
  • 19. Capt. Pawanexh Kohli 19

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