India’s cold storage capacity is likely to reach 40.7 million metric tonnes by 2023, rising 8.2% from 2020, as per Colliers’ latest report ‘Opportunities in Indian Cold Chain Assets.’ Colliers forecasts the Indian cold chain sector to grow at 14% CAGR during next three years, driven by growth of online grocery, pharmaceutical sales and the ongoing Covid-19 vaccination drive in the country. Over the next three years, the cold storage segment is expected to become more organized, with increased interest from third party logistics providers and institutional funds.

The cold storage market in India is fragmented and unorganized with facilities being largely set up on an ad-hoc basis. India has about 8,200 cold storage facilities as of 2020; 75% of which are suitable only for storing single commodities, mainly potatoes (one of the major crops in India in terms of production and consumption). The surge in online grocery, processed foods, and pharmaceuticals sales has opened up ample opportunities for developers and third-party logistics players to develop multi-purpose cold chain facilities in India.

“Cold store facilities are an emerging asset class in India. Lack of organized/efficient supply chain across the country leads to wastage of agricultural produce, and the government has been keen on curbing the same. Increased focus on developing organized cold storage infrastructure would enable lowering this wastage by shelf-life improvement of the stored produce. There is a clear opportunity for organized development in this segment as the current infrastructure is primarily fragmented and undersupplied,” says Shyam Arumugam, Managing Director, Industrial & Logistics Services, Colliers India.

Currently, most facilities are located near production points. For efficient last-mile delivery, occupiers can explore smaller cold storage facilities of about 10,000 sq.ft – 50,000 sq.ft closer to distribution centers, but these are in peripheral locations of Tier I cities.

Over the last 11 years, the government has initiated policies such as profit-linked tax deduction, allowing FDI and other financial assistance to support integrated cold chain management, and encourage the private sector to develop facilities.

Untapped Investment Potential
Cold storages offer a huge opportunity for developers and institutional funds to develop multi-commodity cold storages, offering storage facilities for a range of sectors, including higher-value commodities. Cold storage facilities are very capital intensive, but can fetch gross yields of about 12%, with a break-even period of 9 years, and a higher rental premium of about 3-4 times that of traditional warehouses.

Says Siddhart Goel, Senior Director & Head, Research at Colliers India, “While the government reforms have been received positively by private players, aspects such as providing uninterrupted power, recognizing the need for cold storage for non-horticulture products, with accompanying product-specific regulations, introducing single-window clearances for government approvals, and developing infrastructure interlinkages between storage and delivery, will further enthuse the private sector and help develop an important real estate asset class that can provide good returns to developers and investors.”
Mumbai-based Elixia Tech Solutions is an ISO 9001: 2010 certified company that aims to use high-end technology for providing comprehensive software solutions for transportation, logistics, and supply chain management across industries

Read more ...

The Coastal Road Project in Mumbai by Brihanmumbai Municipal Corporation (BMC) required 3.45 km twin undersea tunnels to be constructed, starting from Priyadarshini Park and ending at Girgaum Chowpatty. BMC awarded the construction of this Coastal Road

Read more ...

Rating agency ICRA has maintained a stable outlook for the Indian Road logistics sector. Accelerated pace of business activities and lower lockdown-linked restrictions from H2 FY2022 aided faster recovery in revenues for FY2022. The growth momentum

Read more ...

A recent report of ICRA states that the Indian logistics sector is projected to record a growth of 7-9% in the current fiscal; however, the industry players' margins are likely to remain sensitive to risks like the rise in oil and commodity

Read more ...

Ashok Goyal, MD, BLR Logistiks, discusses the Indian logistics industry’s progress from a manual to an automated industry due to the increasing use of technology to drive efficiencies, reduce delays and accidents by eliminating

Read more ...

With over 35 years of experience, Tara Chand Logistic Solutions is today positioned amongst the leading infrastructure development service providers in India. Himanshu Aggarwal, Director, Tara Chand Logistic Solutions, discusses the company’s

Read more ...

Deepak Vig, COO, Barkat Cranes and Equipments, shares his views on what’s driving demand and competitiveness in the market for cranes, and gives information on his company’s capabilities in executing mega infra projects with their wide fleet

Read more ...

Kunal Gala, Director, shares his views on the growing influence of Chinese OEMs in the Indian market, and expresses the need for standardization and IoT to bring more transparency and efficiency in equipment management

Read more ...

Akshat Gala, Cheif Marketing Officer, Metro Groups, discusses the growing demand across industries for lifting heavier cargo, and the company’s aim to become a one-stop solution provider for all logistic requirements

Read more ...

Anshul Singhal, Managing Director, Welspun One Logistics Park, shares his views on the growing warehousing industry where technology is bringing greater efficiencies, and hails the Government’s Gati Shakti and the National Logistics

Read more ...

Sanket Sheth, Founder & Managing Director, ElixiaTech, is deploying technology to help reduce wastage of fuel, manpower, paper, time, and money, and in managing everything in the logistics sector - from fleet to material

Read more ...

Gaurav Bhushan, Founder, explains how EQUIP9™ - the first global start-up in the heavy equipment and material handling industry - will connect every entity in this industry by end-2023 and thereby simplify the complex construction business

Read more ...

Aditya Kale, Founder & CEO, Airattix, aims to bring together storage spaces across India and make them visible and accessible using a single portal. How are storage spaces across various industries and regions being utilized

Read more ...

Oomkar Kulkarnie, Head – Product and Technology, 1Pay, explains the concept of FASTag for making fuel and parking payments and regulating them pan India along with seamless dispute resolution features, and the 1Pay neo-banking platform

Read more ...

Hall Trucking Inc. is a Heavy Haul Trucking & Crane Service company located in Evansville, Wyoming. The company was one of the first to purchase Goldhofer’s new Highway Trailer P12 Plus in 2021. Available with one or two intermediate bogies

Read more ...

PT LV Logistics has set a new domestic record for the Indonesian heavy haul industry with the delivery of RFCC plant components to the Balikpapan refinery in East Kalimantan. The main actors included three Goldhofer PST/SL

Read more ...

After months of precision planning and engineering, Jumbo Shipping, now part of Jumbo-SAL-Alliance, has carried out the tailor-made transportation of offshore platform modules including living quarters module, helideck, and flare boom for client Kiewit Offshore Services

Read more ...

Lift and Shift India, a leading heavy-lift hauler and project logistics company, operating over 7 decades, continues its record-breaking streak in 2021, despite the Covid-19 restrictions. The company transported 3 LC Max Reactors

Read more ...

SCHEUERLE’s low-bed semi-trailers come with larger and new 285/70 R19.5 tyres that facilitate higher axle loads such as those requested by customers in Great Britain and all Scandinavian countries. The previous axle load using

Read more ...

Volvo Trucks India, a division of VE Commercial Vehicles (VECV), has launched 6 new trucks from the FM & FMX heavy-duty range. They come loaded with features to boost productivity, improve safety, and enhance driver comfort

Read more ...

×
Sign-up for Free Subscription
'India Construction Week'
Weekly e-Newsletter on Construction Industry
Get the latest news, product launches, projects announced / awarded, government policies, investments, and expert views.