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“Space required is limited and demand is low”
Monday, 01 July, 2019, 08 : 00 AM [IST]
Federation of Cold Storage Associations of India has been around for about two decades. At present, it has 18 state associations as its members. These are also the members of the managing committee. The federation is a common platform for members to discuss their problems faced in the storage industry.

In an e-mail interaction with Vijetha Iyer, Mahendra Swarup, president, Federation of Cold Storage Associations of India, and president, Cold Storage Association of Uttar Pradesh, shared details on initiatives by government, growth of the industry and so on. Excerpts:

What is the structure of Indian cold storage industry?
In India, most of the cold storages are for storing potatoes. They are of small capacities. In recent years, bigger size cold storages are also being constructed. During previous years, some large cold storages were constructed, but mainly of smaller size.  

Mostly cold storages are governed by small private firms. Now various other types of cold storages for storing different other products are also being constructed but mainly of smaller capacities.

How was the cold storage industry earlier? Tell us about the growth these days.
Cold storage industry has grown quite fast from the year 1980 to 2010. But now over-saturation has reached, so far storage of potato is concerned. For other products, proper demand has not emerged so far.  

Do you think Indian cold chain market is highly fragmented?
Indian cold chain market is not highly fragmented. It is established and progressing as per the natural demand. Where there is no production of potato, no cold storages are constructed there.  Similar is the case of storage of fruits and marine products. Fruit cold storages are more in Kashmir, Himachal Pradesh, Uttarakhand and so on and marine products are more in coastal areas and accordingly cold chain has developed in coastal area.    

What are the government initiatives for cold storage?
Government has helped a lot in the development of cold storage industry. Good amount of subsidy has been provided for the construction of cold storages and for modernisation also, but these days subsidy part for the construction of cold storage is very constrained and available under different conditions.    

What has been the marked difference in the industry in the past five years?

During the last five years the progress in cold storage industry is quite slow, mainly because of over-saturation for the storage of potato and lesser demand for the storage of other products.

Where are we lacking as far as cold storages are concerned?
As far as cold storage industry in India is concerned, it is not lacking in any aspect. As far as the required capacity and technology is concerned, India is at par with other countries of the world. The basic point to consider is the geographical conditions of our country. In India, round the year same product is grown in any party of the country and hence people have developed a taste of eating fresh fruits and vegetables which are available round the year. Therefore, the stored products which become costlier also remain in less demand, which reduces the requirement of cold storages. As per the requirement, new cold storages are coming up.    
Any challenges faced in the industry?
Entrepreneurs are quite capable of facing the challenges which are coming in the way of cold storage industry but the basic problem is the demand for cold storage space is much less.

What are the key growth drivers in cold chain industry?
India, we are having good road connections from the growing areas to the markets. Cold storages are established either in growing areas or in markets which are consuming areas. Logistics industry is also quite developed, hence cold chain industry has got all the growth drivers in its favour, except a large consuming market.

As per recent reports, 68% of the existing cold storage capacity is for storing potatoes. Comment.
As per our estimate, cold storage capacity for storing potato is 80% of the total capacity available and not 68%. Since there is no definite data available, we cannot argue on this point.

What is the degree of competition in the Indian cold chain market?
As for the potato cold storage capacity is concerned, we have already mentioned that it is much more than the present requirement, therefore, from the last two-three years 15 to 20% capacity is remaining unutilised. As far as the storage space required for other products market is very limited and demand is very low. Whatever new cold storages are coming, they are on the basis of local market requirement or for any particular customer.
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