What Are The Initial Investments To Build A Cold Storage In India And How Could One Go About Loans To Set It Up?

What is the viability of setting up a cold storage unit?

Effective and efficient tactics are necessary for cold storage solutions. The first outlays are enormous. What are the initial investments to build a cold storage in India And how could one go about loans to set it up? There is a great chance to install and profit in the cold storage business. According to a preliminary estimate based on a number of sources, India has about 7,500 cold storage facilities, but the majority of them are truly only equipped to store potatoes. Less than 1000 MT of cold storage capacity makes up about 35% of the total.

India loses over 18% of its produce each year due to a lack of post-harvest storage facilities.

The cold storage sector in India continues to be one of the most underdeveloped, in spite of several government rules and incentives. S, we are going to explain everything about starting up cold storage in India. Keep reading to learn more about it.

Breakdown of Investment For Building Cold Storage in India

You’ll need to make many upfront investments if you want to construct a cold storage facility in India. Depending on the facility’s size and location, these investments may differ, however the following is a common breakdown:

  1. Land acquisition: In order to build the cold storage facility, you need land. The amount of the property depends on how much storage you plan to construct. Usually, you should set aside a sizeable amount of your money for land purchase.
  2. Construction: The cost of building the cold storage facility itself is high. This entails building the storage structure with suitable insulation and temperature control systems.
  3. Cooling Equipment: To keep the cold storage at the proper temperatures, it is essential to invest in cooling gear and equipment. This could represent a sizeable amount of your original outlay.
  4. Licensing and Permissions: It may be required to pay fees and incur legal expenses in order to secure the essential licenses and permissions from the local government and regulatory agencies.
  5. Infrastructure And Utilities: To maintain continuous cold storage operations, you’ll also need to make investments in infrastructure including electrical supplies, drinking water sources, and backup power systems.
  6. Running Expenses: Don’t forget to include staff pay, maintenance, and security in your initial running expense budget.

This blog is also worth reading for you: – What is a loan on cold storage?

Investment Required For Building Cold Storage in India

The cost of a cold storage facility is roughly 7000 Rupees per tonne.

For the project to be financially feasible, it is widely believed and advised that the plant’s minimum capacity be around 5000 tonnes. With the exclusion of the cost of the land, this comes to 3.5 crores. Around one acre of land would be needed for this 5000-tonne arrangement.

If you plan to build one, make sure you use 30% of the capacity, or 1500 tonnes, for your own needs in order to reach break-even. The unused area may be rented out. You can get in touch with your neighbourhood federal agency and ask them to look over your request for financial assistance.

Loan Requirement For Setting Up Cold Storage Units

The government launched numerous initiatives to construct cold storage facilities.

We will go over a number of loan and subsidy programs in order to answer the question “Will the Government Assist in Building a Cold Storage?” The government is putting into effect a number of programs that will offer financial support for the construction of cool room facilities for the storage of agricultural goods around the nation, notably perishable horticultural crops.

The Mission for Integrated Development of Horticulture (MIDH), under the direction of the Department of Agricultural Cooperation and Farmers Welfare (DAC&FW), also provides financial support for the construction of cold storage facilities.

Subsidies and Loan Available For Setting Up Cold Storage Units

Indian cold storage company loans and subsidies

The start-up of a cold storage company demands a substantial cash outlay. Typically, a three to four-crore initial investment is required. Although a substantial investment is necessary, it is possible to obtain financing from a bank to fund the establishment of a cold storage company.

The Indian National Horticulture Board provides funding for cold storage networks for business owners. A dedicated cold storage facility with a capacity of 2,000 tonnes will cost roughly 2 crores to construct and take six to seven years to amortize.

How to Avail of Loans for Starting Up Cold Storage Units?

You may want to take into account the following methods to obtain loans for opening a cold storage facility:

  1. Banks And Other Financial Institutions that provide business loans should be contacted. For projects involving cold storage, many Indian banks offer specialized lending programs.
  2. Government Subsidies. In order to support agriculture and food preservation, the Indian government frequently offers subsidies and financial support for cold storage projects. For information on subsidies, contact the relevant government departments.
  3. Getting Funds From the Private Lenders. Consider private lenders that might be interested in funding your cold storage project, such as venture capitalists, angel investors, or private equity firms.

Initiatives Taken By the Indian Government for the Promotion of Cold Storage Unit Construction in India

The cold chain and storage industries in India have been strengthened and expanded through a number of government-led programs. With the aim of giving the cold-chain industry all it needs for expansion, ease of doing business, luring foreign buyers, and boosting its share of the economy, it has pursued a number of well-developed initiatives.

The Indian government has the perfect solution. The “Capital Investment Subsidy for Construction/Expansion/Modernization of Cold Storages and Storages for Horticulture Products” program (NHB) is another initiative being carried out by the National Horticultural Board.

Back-ended credit-linked incentives of 35% of the investment cost of the project in basic categories and 50% in cases including the North East, Hilly States, and Timetabled areas can be obtained under the approach for building initiatives, advancement, and the industrialization of cold storage and CA storage with a higher capital than 5000 MT and up to 10000 MT. In the North East region, units with a capacity greater than 1000 MT are also eligible for funding. The Plan’s main sources of fuel are entrepreneurs and consumer demand. In accordance with the Scheme Rules, the person seeking approval has to send an online application for In-Principle Approval (IPA) to NHB.

So, you can confidently file for building a cold storage unit in India. The Indian government has been taking multiple steps to set up units.

NSSPL Offers the Super-Quality And Highly Efficient Cold Storage Units In India.

The construction of cold storage facilities is financed in part by the Indian government. NSSPL is ready to assist you if you require more details or assistance with the project. Please get in touch with the NSSPL for more information. We also offer consultation services for clients on topics such as “What is the approximate cost of cold storage in India?” and “How much is rent, per ton and per month, for meat in cold storage in India?”.

Contact us for more information.

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