Large, refrigerated warehouses known as cold storage are frequently used to store medications, frozen meals, processed meat, fruits, and vegetables. A crucial link between agricultural goods and the final customer is provided by cold storage facilities.
In India, there are more than 7000 cold storage facilities spread out over the nation, with an aggregate capacity of 32 million metric tons. So, how to start a cold storage unit in India? We are going to go into the detailed steps of the establishment of cold storage units.
What Is The Process To Start A Cold Storage Unit And What's The Income Model For Cold Storage Units?
So, are they profitable to the owners or not? We are going to discuss whether the establishment of cold storage facilities is reliable for the customers or not.
Step 1: Choosing a location.
First of all, you need to choose a location for the cold storage unit. The owners should select a location that lies near the consumer-centric areas. It should make the businesses transport their goods to the malls or other places. It depends on you whether you choose a rural or urban location.
Step 2. Choosing The Right Types of a Cold Storage Unit
There are commonly two business models for cold storage.
- Storage Of Food And Agricultural Products: Cold storage houses year-round necessities like vegetables, dairy, meat, and other commodities. The cold storage must be situated close to the final consumers and, ideally, should have its own delivery infrastructure.
- Storage Of Off-Season Goods: Cold storage houses goods including seeds, potatoes, and chilies to meet the increased demand. The cold storage facility must be situated near the product’s origins or source. This is the case with the vast majority of cold storage facilities in India.
Before beginning cold storage, detailed research of the market, major clients, and company model is important.
Step 3: The Analysis of the Machinery, Equipment and Other Tools Needed
Two crucial parts of the cold storage gear are the machinery and the insulating panels. Chillers, an evaporative condenser, and motors make up the equipment. Polyurethane insulation panels are used to build the walls of cold storage rooms.
Several of the companies that supply cold storage equipment accept complete jobs as well as provide services for building construction, equipment installation, and insulation. The price of cold storage is affected by a variety of variables, including
- The cold storage’s size and how many rooms or chambers it has
- Two categories are generally used to classify the type of commodities stored: Storage at + temperature is recommended for produce, fruits, and seeds, and at negative temperature for frozen goods.
In comparison to plus-temperature cold storage, the price of cold storage that provides capabilities for frozen storage of goods would be higher.
Step 4. Loan Eligibility Requirements; Investment Costs For Cold Storage.
Based on the cost criteria specified in the program, the subsidy is determined. For instance, the standard cost for a single chamber refrigerated container is Rs. 8000 per tonne, and the maximum amount of the subsidy is 35% of the contract price. Costs for technical civil work and machinery are included in the project cost.
Step 5: The Investment Required for the Establishment of the Cold Storage Facilities
A conventional multi-tier walk-in cold storage chamber with a 6,000-ton potential is projected to cost $5 crore, minus the cost of the land. Usually, at least an acre of dry ground would be needed for a cold storage facility with a storage space of 5000 MT. The project cost as a whole is thought to be 10% to 12% comprised of the value of the land itself.
Step 6: Upkeep and cleanup.
You should allocate a budget for the maintenance of upkeep and cleaning of the storage facility. From maintaining compressors and large types of equipment needed to cool the storage to simple cleaning of every part of the container, you have to bear all the costs.
This blog is also worth reading for you:–What is the cost to make a cold storage of 50 metric ton?
What Is the Income Model for the Cold Storage Units?
The fruits and vegetables that the farmers raise are damaged since they are not sold and there is no cold storage. So, it’s safe to state that cold storage is particularly necessary right now.
Vegetables and fruits are more likely to decay as the threat of climate change grow every day in India. We might also remark that there is a particular demand for cold storage as a result of this global warming.
In underdeveloped nations, over 30% of the food that is consumed is perishable. Nevertheless, since losses are incurred at every stage of the post-harvest process, cold storage facilities cannot be viewed as standalone alternatives to help stop post-harvest spoilage but rather as one element that must be incorporated into a cold chain system from the stage of the harvest to the point of sale to the end customer. So, it will be highly profitable to invest in the cold storage unit.
Due to the increased demand for cold storage units, we summarize that the income would double or triple in the coming years. There are higher returns for the investment done in the cold storage facility presently.