INTEGRATED COLD CHAIN FOR FRESH PRODUCE

Sanjay Sethi, VP- Food & Agri, Technopak AdvisorsCold Chain Forum: Dubai 26th & 27th October, 2008

Table of Contents

OVERVIEW

CURRENT STATUS OF COLD CHAIN IN INDIA

KEY CHALLENGES

GROWTH DRIVERS

RECENT DEVELOPMENTS

OUR SUGGESTIONS

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Cold Chain: An Overview

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A logistic system for ensuring ideal storage conditions for the perishables from the point of origin to sale

Cold Chain retains the longevity of

• Product characteristics • Active ingredients• Freshness • Nutritive value

Existing supply chain

Proper supply chain

Buying Behaviour

1. Appearance2. Taste and Flavour3. Freshness, Ripeness4. Price5. Nutrition Value6. Shelf Life

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Small breaks in the cold chain

Cold Chain: Market Size & Potential

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•Total market size of $ 2.6 bn• Cold storage - 88%• Cold transport -12%

•Storage & transportation include facilities like pre cooling, grading & sorting

•Cold chain has potential to grow to $ 12.4 bn by 2015

•Cold transportation would also witness higher growth

Cold Storage: Capacity

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• Total installed capacity of 22 million MT and additional capacity of 114 million MT is required by 2015

• Two states - Uttar Pradesh & West Bengal have 65% of total installed Capacity • Larger capacity per installed units are required (at production as well as

consumption centers)• Investment required of $ 5 billion over the next 5 years

Cold Storage Utilization

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• High fluctuation in capacity utilization due to seasonality of produce

• Potatoes occupies maximum capacity for 4-5 months of storage cycle

Reefer Transport

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Key facts:• 25000 reefer vehicle for

perishables

• Dairy reefer has 20000 vehicles, only 5000 left for rest of perishables

• Reefer Transport for:• Exports 2.5 million MT• Domestic consumption 1.5

million MT

Additional reefer vehicle requirement of 90 to 100 thousands by 2015

Airflow inside an Integral Reefer Container

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Airflow inside a refrigerated trailor

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Reefer container ship

Fresh Air Cargo

• Relaxation by Government of India for private air cargo

• Main commodities transported are fresh fruits & vegetables

• Reliance’s owned private cargo airport is coming at Jhajjar (Haryana)

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Cold Chain Utilization by Commodity Group

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Fruits & vegetables

Ice cream sector & confectionery

Dairy products

Meat & marine products

Floriculture

Market Potential of F&V

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• Market size will grow from $ 47 billions in ‘07 to $75 billions by 2015 @ 6%

• Value contribution of processed F&V would grow from 7% in ‘07 to 35% in 2015

• High level of processing will need robust Cold Chain with respect to:• Regular Supply• Storage of raw Finished Product• Maintaining the Quality• Manage the traceability

Wastage of Fresh Produce

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Total wastage of fruits & vegetables is about 25-30%

Break-up of wastage from farm to state level (%value)

F&V Sensitivity to Freezing

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Most sensitive Moderately sensitive Least sensitive

Potato Apples Beets

Tomato Oranges Carrots

Cucumber Carrots Turnips

Bananas Peas Dates

Beans Cauliflower Cabbage

Chilling Injury

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CommodityApproximate Lowest Safe Temp.

oF oC

Banana 55 12.8

Beans 55 12.8

Cucumber 45 7.2

Mangoes 50 10

Potato 38 3.3

F&V subject to chilling injury at below freezing temperatures

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Cold Chain Logistics

• Procurement and delivery systems• Pre-cooling facilities• Refrigerated vehicles• Cold stores / C A stores• Grading, sorting and packaging • Warehouses• Information systems• Traceability issues

Existing players in cold chain industry

Snowman

Carriers

Crystal

Refcon

Bulkani deep freeze

Glacio cold chain

R.K. Foodland

Trans cold chain

Sensitech

Fresh & Healthy(Concor)

Weber distribution

Apollo Everest Kool Solutions

GATI (Kausar), And Many more

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Key Challenges

Seasonal production and irregular supply

High level of wastage and improper handling of produce

Inadequate Infrastructure Post harvest, storage and marketing infrastructure Inadequate and erratic power supply Poor road infrastructure

Inadequate capital availability

High capital cost - working capital & project cost

Lack of advance technologies and producer awareness

Lack of trained and skilled human resource

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Critical Success Factors

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Solar Powered Refrigerated Warehouses

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Modern Loading Dock

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ColdSAFE Packaging Systems

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Insulated Containers

t e c h n o p a k

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Growth Drivers

Huge production and fast growth in production

Increasing demand for perishable food products

Increasing growth of food processing

Growth in organized food retail

Rising middle class population & disposable income

Changing food habits

New technologies

Government support

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Fruit & Vegetables Retail29

The fresh fruit & vegetable area offers choice...

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...in a market-style setting.

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Fruit & Vegetables Retail

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Fruit & veg are also found pre-packed, cut and washed for convenience.

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Fruit & Vegetables Retail

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Under the Foodhall banner, P 'n P has also developed pre-cut vegetables and 'soup packs'.

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Fruit & Vegetables Retail

Recent Developments

Technological innovations PDF data logger – Libero (ABB)

New players (M&A, JV’S): Apollo – Spire : Apollo Everest Cool Solutions GATI

Government Initiatives 100 % FDI is allowed Cold Chain Infrastructure Schemes(CCIS) Development of Strategic Distribution Centers (SDC) Creation of National Green Grid

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Analog & Digital Data Loggers

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National Green Grid - The Concept

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End to end solutions

Planning through mapping of different modes of transports

Will lead to the development of “National Market for Perishables”

National Green Grid36

Consumption Centers

Green Grid Zone

The Blue Print

Our Suggestions

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Co-ordinated planning & execution at both production and

consumption bases

Create adequate integrated cold chain - logistics infrastructure

Technology up gradation & maintenance

Capital infusion - private sector participation, FDI

Developing support infrastructure

Risk management by providing services and information in time

Enabling regulations

“We are out there in the real world.

We are not in a controlled chamber”

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Thank You!

sethi100@gmail.com

+91-9004389012