Cold Storage Business Plan

cold storage price per square foot

Cold Storage – A cold storage facilitates a commercial space to store perishable goods such as Fish, Vegetables, Meat, Fruits.

For them to stay fresh for a longer period in a controlled environment depending on the goods stored. It is widely used in all countries especially in countries where the average temperature could quicken the process of perishing. There are mainly 3 types of gold storage which are Short-term Storage, Long-term Storage, and Frozen Storage.

Depending on the food one wants to store in cold storage, one chooses which type of storage would be appropriate accordingly.

From a customer point of view, Cold Storages are important due to their ability to store goods in a controlled environment which one could not keep at a shop or home. From a business point of view, Cold Storages are highly profitable due to it being essential in prolonging the life expectancy of perishable goods.

Whosoever has given a thought to start a Cold Storage Business, has to have a business plan which could tackle all the issues and run the business smoothly. So, what would be a good Cold Storage Business Plan?

Cold Storage Business Plan:

India, a country that comes second when it comes to producing vegetables in the world, Cold Storage Business could boom and be highly profitable. India also comes in the top fruit producers when it comes to Mangoes, Papayas, Guavas, and Bananas, still up to 15% of fruits go to waste due to lack of Cold Storages and Modern harvesting techniques. It can become a great opportunity for entrepreneurs to set up a Cold Storage Business Plan and apply it. It could reduce the wastage of food along with making high profits.

Cold Storages Business Plan is a one-time investment business, where an initial investment could get on the higher side however when the profits start to come up, it provides long-term benefits to the investors.

Cold Storage

Cost of implementing a Cold Storage Business Plan:

Purchasing cooling machinery

Purchasing/Renting land and construction cost for the infrastructure

Getting all required license and permissions from respective authorities

Management of utilities such as Electricity, and Water

Hiring a professional and skilled workforce to run the operations smoothly

Keeping Working Capital to fulfill the requirement of daily expenditures

Other expenses like Promotional activities, Marketing or Advertising cost, and others.

These are the basic cost that an individual would require when they want to implement the Cold Storage Business Plan.

– Basic Infrastructural design and other specifications required for an ideal Cold Storage Unit:

– Dimensions of a Cold Storage Unit should be 14ft * 10ft * 10ft

– Humidity of a Cold Storage Unit has to be controlled and maintained up to a certain level. The humidity level should be maintained at around 85%-90%

– Considering the above size of the Cold Storage Unit, it should be ideal to store Fruits and Vegetables.

– Temperature to be at the initial stage is 28-35 degrees Celsius.

– The insulation is a very important aspect of a Cold Storage Unit, it should be a 60mm Poly Urethane Fiber or PFU.

– Initial cooler/refrigeration capacity has to be at 3000btu per hour.

– Temperature required to keep the Vegetables and Fruits safer and healthy for a longer period is 2-4 degrees Celsius.

These are the basic requirements that have to be fulfilled when you are implementing your Cold Storage Business Plan. These specifications would be ideal for a storage unit.

This blog is also worth reading for you:– COLD STORAGE MAKING COST

Subsidiaries and Loans for Cold Storage Business:

– Implementing a Cold Storage Business Plan could be expensive considering all the expenses involved and there are chances of many entrepreneurs or businessmen not being able to afford it.

Considering the need for Cold Storages in India, Government has launched Subsidiaries and Loans at lower interest rates to help the people who would like to invest in Cold Storage Business Plan.

– Government has also allowed FDI or Foreign Direct Investment to invest up to 100% in Cold Storage Business.

– The main purpose behind providing subsidies by the government is to enhance and support the industry of Cold Storage growing rapidly. The exemptions and benefits that the government offers are categorized according to the Cold Storage type, its usage, and other factors.

The benefits include the NHB (National Horticulture Board), NHM (National Horticulture Mission), APEDA (Agriculture and Processed Food Products Export Development Authority), MoFPI ( Ministry of Food Processing Industry ), and MIDH ( Mission for Integrated Development of Horticulture ).

The Department of Agriculture also Cooperates the growth and helps the investors with their support. The government provides around 30-50% of the infrastructure cost from the subsidiary scheme depending on the type and specifications of the Cold Storage Unit.

– Under the Income-tax Act, Section 80-IB, the government also provides 100% tax exemption for the first five years of the business and after that 25-30% of tax exemption for the next 5 years.

– All Cold Storage or Cold Chain projects are eligible for External Commercial Borrowings.

– Government of India is supporting and helping with whatsoever benefits they could provide to the investors, entrepreneurs, and businessmen to boost and grow the Cold Storage Business in India at a rapid speed due to the lack of Cold Storage Units available.

Along with the subsidiary, taking a business loan is also an option available for individuals. Some eligibility criteria are required to whosoever wants to take a loan on their Cold Storage Business Plan. The eligibility criteria are:

– The individual has to have a minimum age of 18 years and can not be over the age of 65 years.

– The person should have a CIBIL (Credit Information Bureau (India) Limited) score of 700 or above to be eligible.

– He has to be a citizen of India with no prior convictions.

– One has not to have any previous Loan Defaults with any Financial Institutions.

– Annual turnover of the business, tenure, and profitability has to be checked by the lender.

After getting the knowledge regarding various subsidies and loans available and offered by the government of India and other financial institutions, how would you implement your Cold Storage Business Plan? Here are the steps that you should follow:

Location: The location of the business becomes essential as it gets. Meanwhile, in Cold Storage Business, the location has to be somewhere where transportation of the goods should be easy and convenient for both the customer and the business.

Selection of Equipment: Equipment selection has to be done according to the Cold Storage one wants to build along with a consideration of the goods one wants to open Cold Storage for.

Maintenance: Maintaining the infrastructure and machinery plays an equal part to handle a successful Cold Storage Business. The temperature, humidity, cleanliness of the equipment has to be maintained.

Marketing and Advertising: one has to market the product according to his targeted audience. Promotional campaigns, offers, discounts, monthly or annual membership are certain ways to attract your target audience.

Management of Funds: Getting finance managed is an important aspect of a successful business, when it comes to Cold Storage Business, managing working capital to complete the payment of the workforce, electricity bill, water bill, and other expenses can get very crucial.

With the support of the Government along with subsidies and tax benefits, an accurate and well-made Cold Storage Business Plan could help you get a successful business and create a business empire of yours.

Yogesh Dahiya

Yogesh Dahiya

The Managing Director of Natural Storage Solutions Pvt Ltd is known for his expertise in setting up cold storage, chilling plants and food processing units.

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Have you come to my website for cold storage business information? If yes then you can watch video related to cold storage business by clicking here. 

YouTube Channel Video List