The cold chain system is a hot topic for various industries. It is a must to know ‘how much does it cost to build a cold storage system.’The food chain includes the storage, process, distribution, transportation, and perishable food retailing from the origin place to the customer’s hands. It means it requires a low-temperature environment assuring safety and food quality.
How much does it cost to build a cold storage system?
The cost of a cold storage system varies from INR 5000 to INR 20000/ton, as per the technology. The requirement of cold storage investment is one-time but is huge. In the long run, it will give huge returns. However, the investment as an initial investment is huge in comparison to other small businesses.
What is the cost to create a cold storage system is the main concern for startups and investors. The investment is Rs. 30 to 40 lacs to open small-scale cold storage. While a large scale can take 1000 crore rupees as an investment.
The budget decides the cold storage level you wish to start. You may consider single or multiple products for cold storage. The items worth storing are fish, meat, poultry, vegetables, dairy products, and fruits.
- The cold storage initial investment is huge. There are several factors worth considering before investing. Analyze the idea properly and perform market research.
- Seek guidance from experts such as NSSPL and invest money in the cold storage business. NSSPL is highly experienced, and you can consult them about financial assistance. Acquire knowledge from them about the government providing subsidies to businesses.
- Consider these points and learn ‘how do you make a small cold storage.’ Identify requirements and needs for the setup by arranging money, acquiring land, setting up cold storage, acquiring a license, managing water, electricity, and other essentials, paying employees’ salaries, and bearing promotion and ad expenses.
Price Affecting Factors
Building cold storage brings price first. You must understand the operating costs, the power consumption, and how long to use. Consider reasonable use of resources to decrease the building cost of your cold storage. Thus, build the cold storage.
Cold storage is of immense use in the food industry, chemical industry, pharmaceutical industry, electronic industry, hotel catering, and so on. However, people lack knowledge about cold storage, and their focus is only on the price. Cold storage construction requires money, but concentrating only on the price affects its after-sales service and manufacturing quality.
Documents required for cold storage
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Paperwork is of various types for cold storage. The documents required are:
- Cold storage license
- Papers to take on rent or buy a land
- Verification papers for bank approval and loan
- Documents for government subsidy
This blog is also worth reading for you: – Can you explain the business plan for rent storing and the estimate to build a cold storage?
Detail of Government Subsidy and Bank Loan
Subsidy plans are grants by the government of India. It is for starting cold storage business. Arranging funds and investing in the cold storage business is the first step. The Indian government aims to encourage entrepreneurs to initiate cold storage businesses by announcing subsidies. The cold storage introduction is a way of reducing the wastage of vegetables and fruits.
The advanced technology available is helpful for businesses venture. Vegetables and fruits stay fresh. Managing cash flow requires applying for bank loans and completing formalities availing a loan is possible within a short period. The food processing ministry offers from the machine and business cost total, the government subsidy. You must prove loan eligibility to avail of this loan.
What is the investment in this business?
Cold storage for a single product requires less investment. However, there is a need to spend more if you wish to store vegetables and fruits in large numbers. Set a cold storage room, but the need is a few lacs to crores. 50 lacs investments are required for mini cold storage.
The more modern technology, the more you invest and the greatest cold storage to receive. It is good to create a budget before investing in this business. Acquiring information about the storage business helps proceed further. Keep a realistic budget and ensure to make more profit. A good strategy of the business and financial analysis helps in the cold storage sector growth.
Factors to consider making a cold storage
Cold storage types– Decide the cold storage you wish to set up, single or multiple products. Take it further as per your requirements. Check the cold storage expense for vegetables before proceeding.
Cooling machine- A crucial element is a cooling machine for any cold storage business. Evaluate different cooling machine types, their power consumption, capabilities, and more before selecting.
Location- An essential factor is a location. The best is to have cold storage near farmland to transport harvesting vegetables to cold storage. It allows deciding if you need the land to rent or wish to buy.
Power backup– In India power outages are not new. Installing power backup ensures saving the vegetables from wastage. You can buy a generator or any other advanced system to provide 24 x7 cold storage power.
Temperature control technology– Innovative technology manages the temperature for different vegetables within the cold storage. The temperature control technology allows for keeping vegetables fresh in cold storage for a longer time. Contact NSSPL and know all the steps, collect data and proceed.
Daily expenses – Building and maintaining cold storage means spending daily expenses. It includes labor costs, transportation, etc. However, calculate all the expenses and prepare a budget. Move ahead with this budget.
Government subsidy – A critical element is government support. Government subsidy initiatives are available in India to build cold storage. With proper documentation and cold storage papers, you can get a 50% discount.
If you wish to create cold storage, make a plan within a budget and move ahead. Research and study the market and consider investing a significant amount.
Wrapping UP
How much does it cost to build cold storage is a common question among investors. It is best to consult NSSPL, the professional consultant. When you are new to this business, professional assistance is preferable. NSSPL are expert consultants and they will help you from land acquisition to investment, meeting daily expenses, and buying a cooling machine.
Get expert advice and complete assistance at every step from NSSPL!
