Cold Chain in India - 2013


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Cold Chain in India - 2013

  1. 1. + Cold Chain in India -Marketing High Tech Products
  2. 2. + What is a Cold Chain?  A temperature controlled unbroken supply chain from farm to market is called a cold chain.  Helps to improve shelf life of perishable agricultural products and pharmaceutical drugs. Logistics Transportation Warehousing Inventory Information Management Packaging Security Logistics Refriger- ation Cold Chain
  3. 3. + Overview of Cold Storage in India  In current era, Cold storage is considered as a Sunrise Sector in India. WHY ??
  4. 4. + India : Ranking in world 1 Milk Production 2 Fruits & Vegetable Production Reason 1
  5. 5. + Reason 2: Existing Problems  Lack of Adequate Cold storage facilities  Stand alone cold storages.  Lack of Refrigerated Transport facilities  High lifecycle costs for a cold storage – Land and building facility.  Existing facilities built with aged old technology  Uneven distribution of cold storage facilities in India  Low awareness about best practices in industry
  6. 6. + Reason 3: Trends  Cold Storage industry growth at 20-25 CAGR  Influence of E-commerce  Emergence of new technologies  Emergence of Micro warehousing and Green cold storage systems.  Emergence of fully integrated solution.  Need for JIT model All this gives ample opportunities in sector with Government Support.
  7. 7. + Cold Chain : Ecosystem
  8. 8. + Cold Supply Chain Supply Chain: From Farm to Customer
  9. 9. + Cold Chain : Important Processes • Industrial Plants • DiaryProcessing • Cold Storage facilities • Cold Boxes Preservation • Reefer Trucks • Reefer Rail carsPassage • Display Cases • Stand alone coolers Retail customers
  10. 10. + Cold Supply Chain Integration  Most of the cold stores are stand alone units – 84%. Transport services are not provided with majority of the cold stores owners.
  11. 11. + Industries using Cold Storage Chain Fruits and Vegetables Dairy Products Pharmaceuticals Frozen Food Poultry/ Seafood
  12. 12. + Different Types of Cold Storage  Bulk Cold Storage  Multipurpose Cold Storage  Frozen Food Stores  Walk-in cold storages  Controlled Atmosphere Stores  Ripening Chambers
  13. 13. + Typical Industrial Refrigeration Unit Industry Standards Chill • 2 C Frozen • -18 C Deep Frozen • -29 C
  14. 14. + Market Sensing
  15. 15. + SWOT Analysis : Cold Supply Chain Strengths • Abundant availability of raw material • Vast network of manufacturing facilities all over the country • Vast Domestic market Weaknesses • Low availability of adequate infrastructural facilities • Lack of adequate Quality control • Seasonality of raw material • High requirement of working capital • Non-existent integrated service providers Opportunities • Large crop and material base offering a vast potential for agro processing • Opening of global markets • Rising income level and changing consumption patterns • Integration of technology offers vast scope of rapid improvement Threats • High inventory carrying cost • High packaging cost • High taxation SWOT
  16. 16. + Drivers & Challenges Drivers Challenges
  17. 17. + Key Players : Cold Supply Chain Cold Supply Chain Transport Units Regulators Warehouse Technology Providers Customers Constructio n & Equipment
  18. 18. + Key Players : Regulators  National Horticulture Board  National Horticulture Mission  National Center for Cold chain Development  Ministry of Food Processing  Government
  19. 19. + Key Players: Warehouse Owners  Warehouses located at city outskirts.  Higher turnaround time  Reduced inefficiency  Current owners are cost focused rather than customer focused  This leads to compromises on quality. Major factors attributers are outdated technology and lack of vertical integration.  Highly fragmented  Seasonality – Impact on capacity utilization  Lack of collaboration amongst the industry players.  Lack of assured supply of power grid Existing Status & Challenges
  20. 20. + Key Players: Technology Providers  Reefer transportation having low penetration of technologies such as  Data loggers, GPS devices, Door Sensors  Fleet Management Solutions  Capacity optimization tools  Refrigerated Warehousing  QR codes, Bar codes, RFID for cargo monitoring  Warehouse management solutions for optimizing storage  Limited adoption of multi-storage / instant cooling/Electric curtains.  Lack of innovation in Container and Insulation related technology Existing Status & Challenges
  21. 21. + Trends  Construction  On-site fabrication of Internal Mezzanines with RCC structure outside  Single Racking  Technology  No warehouse management system  Simple transport vehicles  Single rack warehouses  Construction  Integrated pre-engineering buildings with Mezzanines and outer shells.  Multi-Racking  Technology  Highly sophisticated warehouse management system  Transport vehicles with GPS /GPRS monitoring systems  Multi-storage /multi purpose stores Then Now
  22. 22. + Decision Making Units  Warehouse Owners  Operating costs  Capacity utilization  Taxation  Technology Providers  Adoption of new technologies  More R&D in cold space  Regulators  Integration of supply chain  Wastage of food  Boost economy  Develop infrastructure  Efficient supply chain system  Customers (Farmers and Retailers)  JIT delivery model  Less loss of food What each member cares about? Other members include transport industry and construction industry.
  23. 23. + Adoption Curve Modern Technology in Cold Storage Units Industry currently stuck at Early adoptors Reasons: High Costs, Lack of Infrastructure, Investments in already existing business
  24. 24. + Modern Technology in Cold Supply chain  Use of palette cold storage facility that enables customer to select right temperature for specific product requirements.  Warehouse management systems  Use of RFID, data loggers, etc. in trucks to maintain temperature
  25. 25. + Regulators : Marketing Decision
  26. 26. + Strategic Intent of Regulators  To bridge wide gap between demand and supply side  To arrest the wastage of food post harvesting and improve efficiency in system of bringing food from farm to market.  Implementing Clear cut policy on cold chain development.  Need for Adoption of modern technology in warehousing business model of cold chain infrastructure  Enforcement of Technical Standards for Refrigerated Transportation industry.  Generate minimum critical mass of Skilled Man-power  Adoption of Vertical integration in cold supply chain Adoption of cold storages to build scale All this will boost the economy and unrest the food shortage in country.
  27. 27. + Financial Intent of Regulators  Arrest Inflation  Development of infrastructure in country  Prevent food shortage in country due to food losses  Adoption of technology will benefit all stakeholders in supply chain.  Farmers  Retailers  Consumers  Wholesale traders  Availability of food at all times irrespective of season.  Energy savings Adoption of cold storages to build scale All this will boost the economy and unrest the food shortage in country.
  28. 28. + Possible Recommendations
  29. 29. + Why Warehouse owners?  In entire cold chain supply, warehouse owners sit at center of supply chain.  If Regulators can address the issues of warehouse owners, it will help the entire industry.  This will create direct network effects in ecosystem.  Direct effects  Increased shelf life  Food inflation cost will reduce  Availability of fruits and vegetables throughout the year
  30. 30. + Adoption of Cold Storage on large scale by private players
  31. 31. + Segmentation : Cold Storage Ways of segmentation : STEP 1 Based On Processes Processing Preservation Passage Retailers • First Step is to segment based on Industry. • Based on that, one can segment based on processes in that industry.
  32. 32. + Segmentation : Cold Storage Low - Modern High – Modern Low- Outdated High- Outdated Ways of segmentation: STEP 2 High Capacity Outdated Technology Low Capacity Modern Technology
  33. 33. + Target Market  Upgradation of Technology  Deep pockets  Large Customer base  Open to vertical integration Selection Criteria of Warehouse owners
  34. 34. + Target : Cold Storage Low - Modern High – Modern Low- Outdated High- Outdated High Capacity Outdated Technology Low Capacity Modern Technology TARGET MARKET
  35. 35. + Value Proposition  Huge subsidies for setting up modern cold storage units  Emphasis on GREEN Cold Storage  Tie up with foreign governments for best practices in Industry.  Benefits in Taxation in initial years.  Expand the shelf life of storage by using modern day technology.  Establishment of flexible cold storage units. From Government to Warehouse owners For Warehouse owners, adoption of modern technology helps them to gain efficiency and boost their profits relative to their existing methodologies because of its technology effectiveness and help of subsidies for new investments from us.[Government]
  36. 36. + ACCORD Affordability Compatibility Complexity Observability Risk Divisibility For Cold Storage Warehouse owners New Ways • With Government subsidies, development of new cold storage with modern technology is affordable. • It also provides huge taxation benefits -------------------------------------------------------------------------------------------- • Operationally: Yes as they will have same customers. • Technology: No as they will be using new technology --------------------------------------------------------------------------------------------- • Manpower: needs to be trained to use new technology • Faster and Efficient -------------------------------------------------------------------------------------------- • Less operating costs More capacity utilization • Faster and efficient system Higher profits in long run • Less Wastage of food Higher shelf life --------------------------------------------------------------------------------------------- • Non-reversible with the old technology. --------------------------------------------------------------------------------------------- • Build a mini warehouse with new technology to see real benefits of efficieny. • Also gain the benefits from taxation and subsidies thereby upgrading technology at virtually no cost.
  37. 37. + Switching Value Switching Costs Switching Benefits • Manpower training • Technology investment Costs • New building construction costs • Irreversibility • Higher maintenance costs • High Efficiency in operations • Lower energy costs • Lower operational costs • Taxation Benefits • Subsidies • Vertical integration opportunity • Higher shelf life For Warehouse Owners
  38. 38. + Possible Steps for Adoption of Cold Storage  Development of food mega parks for cold storage  Grant aid for cost of plant and machinery  FDI in food retail for multinational food companies with a compulsion to invest in cold storage units.  Investment in transportation for vertical integration  Provide borrowed funds at much cheaper interest rate  Other tariff and duty concessions  Setup of Reefer Rail trucks by government to bridge gap in integration of cold chain Regulators
  39. 39. + Possible Steps for Adoption of Cold Storage  Market studies /surveys  Organizing trade fairs  Promotion of participation in international trade fairs  Assistance for R&D in sector  Financial assistance  Export promotion seminars  List of suppliers, manufacturers and other industry players provided by regulators.  Tie up with Foreign Governments for technology expertise Regulators : Marketing Efforts
  40. 40. THANK YOU