• Save
Cold-chain in emerging markets
Upcoming SlideShare
Loading in...5
×
 

Cold-chain in emerging markets

on

  • 2,239 views

Presented at World Conference Cold chain - Thaifex 2013. Opportunity and Challenges in emerging markets, case study India. Cold chain development, the need and the success in hand. Market prospects ...

Presented at World Conference Cold chain - Thaifex 2013. Opportunity and Challenges in emerging markets, case study India. Cold chain development, the need and the success in hand. Market prospects for cold chain in emerging markets with focus on India.

Statistics

Views

Total Views
2,239
Views on SlideShare
2,239
Embed Views
0

Actions

Likes
0
Downloads
0
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Cold-chain in emerging markets Cold-chain in emerging markets Presentation Transcript

  • Principal AdvisorChief Advisor to
  • Globalisation  Process Integration.  Bilateral trade.  Diminishing world, singular demands.  Right-Cost Country optimisation.  Business friendly Global Banking.  Borderless consumer.
  • Growth in initial areas extends parity. Parity feeds demand; new consumption. Demand outpaces development. Lack of development creates bottlenecks. Bottlenecks raise costs. High costs restricts; feeds aspirations. Aspirations provide further scope. Enduring Scope is Unending Opportunity. View slide
  • Enduring Scope is Unending Opportunity. Chain of business  Chain of transactions.  Chain of information.  Chain of operations.  Chain of processes.  Chain of policies.  Chain of people.  Value chain. Demographics, National Priorities, Sustainability, Technology, Information, Affiliation. View slide
  • Uneven, non-holistic development of resources! Cold-chain requires integration across total activity chain! Changing priorities, impatient populace – short cuts! Fear of missing the bus – short term strategy for long term solutions!
  • Integrated infrastructure development. Reverse haulage – capacity utilisation. Market capture – barriers and tariffs. Training and Skilled deployment. Rapid demo-graphic changes. Changing global strategies. Technology adaption. Investment inertia.
  • FSMA / FSSAI / Others Trend is to move from post-facto control mode to first mile preventive mode. Impacts independent development agendas; changed deployment of resources. Benefits stakeholders from early compliance; lowered rejects, opens strategic options. More inclusion among stakeholders.
  • Prevent Controls Inspect Compliance Recall Response Partner Administer Resource Labs Skills Costs Fees Procurement Onus Distrust Sharing Business New markets New pricing
  • The largest producer of milk (133 million tonnes). Largest producer of mangoes (15 million tonnes). Largest producer of bananas (29 million tonnes). Largest exporter of beef (1.52 million tons), largest buffalo livestock (105 million). Second in fruit (80 mlllion tonnes) and vegetable production (160 million tonnes). Third-largest producer of fish (8.3 million tonnes). Third largest pharmaceutical producer, 8% of global production.
  • Human population of 1.22 billion. with a GDP of USD 1.94Trillion. Post harvest value loss ~18-40% of farm produce. ForeignTrade USD 795 billion.
  • Coastline is more than 7,500 km long. Interspersed with more than 200 ports. International cargo: 95% by volume and 75% by value is carried by sea. Ports capacity 1,247 million tonnes, doubling by 2017. Railways: 87,087 km, across 7,083 stations and operates more than 18,000 trains every day. 4.2 million km Roads : National Highways - 76,818 km, State Highways - 154,522 km, District Roads - 2,577,396 km, Rural Roads - 1,433,577 km.
  • not a single perishables gateway! only ~8000 reefer trucks. limited reefer rail options. Containerisation at 20%.
  • 4th largest electricity consumer, fifth largest installed capacity (246 GW) with 11.5% renewable capacity. 300 clear days, Solar radiation 4 to 7 kWh/m2; area 3.287 million sqkms. Solar reception 5000 Petawatt-hours per year. Fifth largest in wind power; 18,634MW in 2013. Among lowest ecological footprints of 0.9 gha/person. Starkly different, tightly clustered; six major climatic zones.
  • DTR: (Tmax) – (Tmin) of 20°C Shortfall of power, reliance on diesel gensets. Insulation and energy efficiency standards. Portability options min.
  • 24.0 25.0 26.0 27.0 28.0 29.0 30.0 31.0 32.0 800 850 900 950 1000 1050 1100 1150 1200 1250 %oftotal millions Urban population % Total population million 0.0 0.5 1.0 1.5 2.0 2.5 800 850 900 950 1000 1050 1100 1150 1200 1250 %Growth millions Total population million Population annual % change  Indian Economy: growing at more than 8% for last decade, population growing @ 1.5% annually for last two decades.  Continuous urbanisation of India due to expanding development.  Projections: on-going Key socio- economic changes and four fold growth in the size of middle to rich class Indian households; resulting doubling household consumptions by 2020.  Young populace, aspirations overreached and to stay stretched.
  • GDP USD 1.94 trill in 2012 from 1.25 trill in 2006 (+56% in 6 years). Spending growth: $991 billion in 2010 to $3.6 trillion by 2020 (5.8% of global consumption, doubling from 2.7%). 1,870,000 Consumer Food outlets (2012). Source: Boston Consulting & CII, IRIS, MoSPI- Govt of India. 474 593 785 1003 354 444 565 735 FY05 FY07 FY09 FY11 Domestic spend (USD from ₹)31-Jan-2012 Per Capita Disposable Income Per Capita Disposable Spending >2 x from 2005 60% 17% 10% 6% 4% 3% India Spends on Food and Grocery Others Clothing and Fashion Electronics Beauty andWelness Furniture and Fixtures Increased Demand for (Cold Chain) Quality Foods Increase in consumer class pop. Purchasing power, Rise in income Changed consumer mindset Easy consumer credit Quality & Hygiene consciousness
  • 28.6 43.0 50.9 65.6 68.5 71.5 74.9 81.0 58.5 88.6 101.2 128.4 129.1 134.1 146.6 155.0 0 20 40 60 80 100 120 140 160 180 Million MetricTons Horticulture Production Fruits Vegetables Plantation Crops Others x 2.6 x 2.8 Others: includes Spices, Loose Flowers, Nuts, Mushroom, Aromatic/medicinal and Honey . Source: Horticulture Division, Ministry of Agriculture and CrossTree Analysis Agriculture cultivated area: 150 million hectares • Area under Horticulture: 23 million hectares (15%) $260 billion to Indian GDP by Agriculture • 35% of this is from Horticulture. Within Horticulture, perishable commodities trends higher & drives growing demand for perishable handling.
  • Inflationary trend (40 years) shows Food as prime driver with perishables contributing highest. Despite producers showing robust response by increasing supply, yet inflationary pressure exists. This may indicate that demand for perishable products continues to outstrip supply. This also indicates a lack of efficient supply systems which continues to feed inflation in food items. 1971-72 to 1981-82 1982-83 to 1993-94 1995-96 to 2004-05 2005-06 to 2011-12 All Commodity 10.2 7.9 5.9 6.6 Primary Food 8.5 9.2 5.9 9.9 F & V 9.0 10.6 7.5 9.2 Milk 7.1 9.0 5.7 10.1 Eggs, Meat, Fish 11.0 9.4 6.4 11.8 10.2 7.9 5.9 6.6 8.5 9.2 5.9 9.9 5.5 6.5 7.5 8.5 9.5 10.5 11.5 Inflation% Trends - AnnualAverageWPI Inflation (from 1970 to 2012) Continual demand for food distribution and cold chain is foreseen over coming decade. Source: RBI, Office of Economic Adviser, MoCI, Govt of India
  • • Global Cold chain logistics spend from $5.2 billion in 2008 to $6.9 billion in 2012. • Growth in Asia outstripped all regions. • Asia & India continue to grow into a major hub for Bio-Pharma, cold chain demand from the sector continues to rise. Notes : Figures exclude clinical trials which is separate specialised logistics. Sources: Cold-Chain BioPharma Logistics Sourcebook 2011 & UN Comptrade database, Orkash and CrossTree Analysis 2.1 2.5 2.7 3.2 1.5 1.7 1.9 2.31.0 1.2 1.5 2.2 0.6 0.6 0.8 1.1 0 2 4 6 8 10 2008 2009 2012e 2015e BioPharma Logistics Spending (USD Billion) NorthAmerica Europe Asia Rest ofWorld 0 0.5 1 1.5 2 2.5 3 North America Europe Asia Rest of World Cold Logistics Growth USD Billion 2012e 2008 $0.6 to 0.8 billion (33% Growth) $1.0 to 1.5 billion (50% Growth) $1.5 to 1.9 billion (27% Growth) $2.1to 2.7billion (29% Growth) Higher-than-average growth in vaccines & specialty pharmaceuticals and heightened regulatory requirements continues to drive cold chain for pharma. 3.7 4.9 4.9 6.1 7.2 8.3 10.5 13.5 16.7 11.5 13.4 15.6 18.4 21.5 24.7 28.4 32.4 36.7 0 10 20 30 40 2007 2008 2009 2010 2011 2012F 2013F 2014F 2015F Indian Pharmaceutical USD Billion Exports Total Cold chain shipment growth by region
  • Note : Total Food Service Outlets is a sum of Standalone , Leisure and Retail outlets Source : Euromonitor, IBEF, IRIS and CrossTree Analysis  India is 5th largest retail market worldwide.  1,968,000 Consumer Food outlets by 2015. Organised Retail Market is growing despite FDI.This feeds demand for cold chain. Simultaneous growth in the food service sector accelerates need for the cold-chain. 0 20 40 60 80 100 120 140 160 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E 2015E Food Service Outlets (‘000) Standalone (LHS) Leisure (RHS) Retail (RHS) 27.8 41.4 88.6 396.1 486.4 780.5 0.0 100.0 200.0 300.0 400.0 500.0 600.0 700.0 800.0 2010 2012 2015P Size of Retail Market (USD Billion) Modern Retail Traditional Food & Grocery Furniture &… Electronic s Beauty & Wellness Clothing & Fashion Others 99% 77% 96% 88% 89% 90% Traditional Modern
  • Notes: 2009 and 2010 numbers only for NHB and NHM assisted cold storages. Numbers as of Dec 2012 Source: NHB, NHM, Directorate of Marketing and Inspection 2009, Orkash & Crosstree Analysis 0 5000 10000 15000 20000 25000 30000 35000 0 1000 2000 3000 4000 5000 6000 7000 1955 1960 1965 1970 1975 1979 1986 2004 2007 2009 2010 2011 2012# (‘000)tons Number Cold Storage Availability Number of Cold Storages Installed Capacity in '000 tons (Cumulative) In the Last Decade1955-1986 As of last recorded national level data , India has 6488 cold storage with a cumulative installed capacity of approximately 30 million MetricTons . Key Trends • More than 25% of the cold storage units (~10 mill tons) have been built post 2004. • Growth (CAGR 2004-12 ) : Numbers of Cold Storage : 3.57%, Capacity : 5.19%. Growth in Transport capacity 22% • Current short fall of 4000 reefer trucks, govt states another 30+ million tons capacity needed. The witnessed growth in the Cold Storage sector is accepted to only accelerate in the coming years 88% 12% Segments Storage Transport 2007-08 2010-11 2014-15 2.1 3.8 6.9 0.2 0.9 1.9 CC Market U$ Billion Storage Transport
  • Capacity mostly focused on single product types – a long learning curve established Minimal outreach for foods and pharma – localised operations, earlier focus was storage. Chain approach to counter Irregular parameters across regions and within days. Fragmented development did not encourage holistic cool logistics for single source service. Refrigerated systems need adaption to India specific needs in design and capacity utilisation.
  • Capacity mostly focused on single product types – a long learning curve established Minimal outreach for foods and pharma – localised operations, earlier focus was storage. Chain approach to counter Irregular parameters across regions and within days. Fragmented development did not encourage holistic cool logistics for single source service. Refrigerated systems need adaption to India specific needs in design and capacity utilisation.
  • Government as ‘Catalyst’ Encourages Investments Agri/Foods identified as priority sector Encourages holistic development NCCD takes shape Liberalises Marketing Norms Focus on Market links development Rationalises Tax Laws Move to uniform VAT/GST Credits Grants & Subsidies PPP, Grants, Negotiable Warehouse Receipts Liberalising FDI Inflow 100% FDI in food sector Increasing focus to create enabling infrastructure by govt. While this support was earlier focused on static cold storages, recent developments have been to include refrigerated trucks including containers. NCCD to play pivotal role to correlate industry expectations and policies.
  • Subsidies available for constructing Cold Chains by Govt. of India Capital Investment Subsidy / RIDF Scheme Integrated Cold Chain Scheme PPP-IAD NVIUC Public Entrepreneur Guarantee Scheme 40.9 593.9 1187.5 0 500 1000 1500 Xth Plan XIth Plan XIIth Plan USDBillion Outlay Amounts for Infrastructure Development (FiveYear Plans) Initiatives for Infrastructure Development • Mega Food Parks Scheme. • Integrated Cold Chain Scheme. • State level Initiatives. • National Horticulture Board. • National Horti and FPI Missions. NCCD as umbrella agency to address concerns.
  • Central Excise Duty • 100% exemption for specified equipments for storages or transport, self loading / unloading trailers / semi-trailers. Customs Duty • Full exemption from basic customs duty for manufacture of refrigerated vans/trucks; bio- polymer/bio-plastics; • Concessional duty of 5% for initial installing or expansion of a cold storage, cold room, processing, etc. ServiceTax Exemption • ‘Erection, Commissioning or Installation’ of Mechanized Handling Systems; Cold Storage and transport; • Cold-chain Service of storage and transporting agriculture produce. • TechnicalTesting; Analysis Service and ‘Technical Inspection and Certification Service’. Capital Investment • Cold Chain & FDI: 100% FDI through automatic route. • Investment linkedTax deduction : 150% of capital investment deductible. • Government subsidy on investment: 40 to 55% subsidy on storage and transport
  • Industry, PSUs, Government, Investors, Entrepreneurs, Farming Associations & Knowledge Houses - All Working Together! Executive Committee 2 5 3 4 1 TechnicalSpecification, Standards,Test Laboratory & Product CertificationCommittee. Training, HRD and R&DCommittee. Committee for Application of non-Conventional Energy Sources in ColdChain Infrastructure. NCCD Members, other Committee for Supply Chain & Logistics. 6 Liaison with other NLAs and States cold chain sectors
  • Cold Supply Chain (India): Poised for a Quantum Jump Best practises for Sub-continent conditions, market. Skill development & training establishments. Appropriate & integrated Infrastructure development. Adoption of energy efficient technology. Partner with Indian logistics companies. Adapting from mass storage to direct access storage. Manage and develop Multiple markets in region. Anticipate ahead of a developing market.
  • Innovators and solutions biased companies. Technology Provision and implementation. Cold Logistics and Supply Chain services. Specialised Infrastructure designers and planners. Expertise in alternate energy, environmental protection. Scalable, Energy efficient Refrigeration technology. RefrigeratedVehicles and last mile delivery systems. Education,Training & Cold chain management experts. Knowledge Managers and Integration specialists.
  • Food / Pharma Exports Polio EradicatedQSR Majors Eggs, Beef, Ice Cream
  • The Source and the Destination
  • Visualisation
  • www.nasa.gov Earth Gallery
  • Nodal Body for Cold-chain Development Ministry of Agriculture Contact-NCCD@gov.in