Modern Cold Storage

KSIDC

PROJECT PROFILE
ON

MODERN COLD STORAGE

Prepared by:

Kerala State Industrial Development Corporation

Modern Cold Storage

KSIDC

PROJECT PROFILE FOR MODERN COLD STORAGE

INTRODUCTION
Cold Storage is a special kind of room, the temperature of which is kept very low with the
help of machines and precision instruments. India is having a unique geographical position
and a wide range of soil, thus producing variety of fruits and vegetables like apples, grapes,
oranges, potatoes, chillies, ginger, etc. Marine products are also being produced in large
quantities due to large coastal areas. As per 2008-09 figures, India produces around 215
Million Tons of Fruits and Vegetables, 3 Billion Tons of Marine Products, 109 Million Tons of
Milk, 56 Billion Eggs and 38 Million Tons of Meat per annum. Kerala accounts for around
20% of the marine production from the country, though the states share in the production of
Fruits & Vegetables, Milk, Egg & Meat taken together is less than 10%. Keeping in view the
growth rate of population and demand, the production of perishable commodities is
increasing every year. The cold storage facilities are the prime infrastructural component for
such perishable commodities. Besides the role of stabilizing market prices and evenly
distributing both on demand basis and time basis, the cold storage industry renders other
advantages and benefits to both the farmers and the consumers.
Commercially apples, potatoes, oranges, etc are stored on large scale in the cold storages.
Other important costly raw materials like dry fruits, chemicals, essences and processed foods
like fruit juice/pulp, concentrate dairy products, frozen meat, fish and eggs are also stored in
cold storages to regulate marketing channels of these products.

COLD STORAGE REQUIREMENTS IN KERALA

Kerala is a consumer state as it imports most of the fruits and vegetables from the
neighbouring states. The annual growth rate in the area of food grain is negative in the state.
Since there is no cultivation of generally cold stored items like apple, potato, oranges, chilly,
tamarind etc, in the state, the growth of cold storages for horticultural items is very slow.
As on 31.12.2009, there were 193 cold storages in the State having a total storage capacity of
58105 Tons. Of these, 176 cold storages were in the private sector, 11 in the Public sector and
6 in the cooperative sector. During the same period, the total number of cold storages in the
country was 5381, having a total storage capacity of 24.45 Million Tons. Thus Kerala
accounted for only 3.5% of the cold storage units in the country, with the storage
contribution being a meager 0.24%.
Almost 95% of the cold storages in the state are for the storage of marine products and for
the captive use of exporters. There are very few cold storages for horticultural commodities

Modern Cold Storage

KSIDC

and the development of such cold storages in the state is slow. Even though there is not
much production, considering the huge arrivals of fruits and vegetables in the markets
across the state, there is a need to construct cold storages in all major cities of the state to take
care of the demand, fluctuation in price, spoilage etc.
MARKET POTENTIAL
Cold storages are essential for extending the shelf life, period of marketing, avoiding glut,
reducing transport bottlenecks during peak period of production and maintenance of quality
of produce. According to a rough estimate, 25% of fruits and vegetables worth crores of
rupees are spoiled every year for want of adequate post harvest technologies including cold
storages. It is therefore necessary that cold storages are to be constructed in major producing
as well as consuming centers. The development of cold storage industry has therefore an
important role to play in reducing the wastages of the perishable commodities and thus
providing remunerative prices to the growers.

STORAGE CONDITIONS
Living food items such as fruits and vegetables have some natural protection against the
activities of micro organism. The best method of preserving these items is to keep the
product alive and at the same time retard the natural enzyme activity which will retard the
rate of ripening or maturity. Preservation of non-living foods like meat, fish etc is more
difficult since they are susceptible to spoilage. The problem is to preserve dead tissues from
decay and putrefaction. Long term storage of meat and fish product can only be achieved by
freezing and then by storing it at temperature below -15C.
PROJECT PARAMETERS
Capacity
The storage capacity envisaged for a multi-purpose medium capacity Cold Storage plant is
5000 MT. A multi-purpose Cold Storage is used in the storage and preservation of all kinds
of vegetables, fruits, dry fruits, fruit pulp, spices, food grains, frozen items, dairy products,
jaggery, ice creams, etc. Plant operation will be on an average of 10 hours/day.
Land
An extent of around 1 acre of dry land is required for setting up a multi-purpose Modern
Cold Storage.

Modern Cold Storage

KSIDC

Location

The project is proposed to be located at Thrissur District.

Raw Material & Utilities
The Raw materials for the Cold Storage Plant are Water and chemicals like Ammonia, Salt,
etc. Approximate water requirement is around 1 MLD.
Plant & Machinery
The machinery/ equipments required for a Cold Storage Plant is as follows:
Sl. No.
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Particulars
Super freeze refrigeration compressor
100 HP screen protected Induction Motor
Hand operated oil immersed starter
Ammonia Oil Separator
Atmospheric Type Ammonia Condenser
Ammonia Air Cooling units
Valves & fittings for Condenser
Ammonia Receiver
Valves & fittings for Receiver
Instrument with Dry & Wet Thermometers
5HP Monoblock centrifugal pump
Ammonia valves & fittings
Insulated cold storage door & fittings
Slide rail for compressor
Ammonia interconnecting pipe
Water pipelines & fittings
Material Handling equipments (Forklifts, High lifts,
Stackers, Towing tractor, etc)

Qty.
1 No.
1 No.
1 No.
1 No.
12 Nos.
16 Nos.
1 lot
1 No.
1 lot
6 Nos.
2 Nos.
1 lot
4 Nos.
2 Nos.
1 lot
1 lot
2 each

The total cost of machinery and equipments for a 5000 MT modern Cold Storage would be
around Rs.150 Lakhs. Technology support and details of machinery manufacturers are
available from institutions like NABARD. The total volume of the storage chamber would be
12,000 m3 with dimensions of 40m x 30m x 10m.
Manpower
The total manpower requirement for a 5000 MT Cold Storage Plant would be around 25
numbers. This includes managerial staff, skilled and unskilled labourers.

Cost of the Project

Modern Cold Storage

KSIDC

The total project cost for setting up a 5000MT Modern Cold Storage would be in the range of
Rs.350-400 Lakhs, including cost of 1 acre land. The project implementation period would be
12 months.
Project Components
Land (1 acre) & Land Devpt
Building & Civil works (12,000 cu.m Storage chamber)
Plant & Machinery
Utilities
Technical Know how
Misc. Fixed Assets
Preliminary & Pre-operative expenses
Contingencies
Margin money
Total Project Cost

Cost
(Rs. Lakhs)
50.00
85.00
148.00
23.00
2.00
20.00
17.00
13.00
22.00
380.00

Means of Finance

The proposed means of Finance for the Project is given below:

Equity
Promoters contribution
Subsidy
Unsecured Loan
Term Loan
KSIDC/KFC/Banks/FIs
Total Project Cost

100.00
50.00
40.00
190.00
380.00

The Debt-Equity ratio is 1:1.

Sales Turnover
The Revenue at optimum utilisation (70% from the 3rd year onwards) would be around Rs.
307 Lakhs. The capacity utilisation for the first and second years of operation is assumed to
be 50% & 60% respectively.
FINANCIAL INDICATORS

The Profit after Tax is Rs.82 Lakhs.

The Break Even Point (BEP) for the project is 31%.
The Debt Equity Ratio (DER) for the project is 1:1

Modern Cold Storage

KSIDC

Average Debt Service Coverage Ratio (DSCR) is 3.08

The average Internal Rate of Return (IRR) for the project is 23.11%.

CONCLUSION
The total available cold storage space in the State, at present, comes to only around 58000
MT. Considering the exponentially increasing demand for food, especially taking into
account the acute food insecurity that exists in the State, it is expected that the total demand
for cold storage space in the State within the next 10 years would be at least 300000 MT.
Hence there is a tremendous potential for world-class modern Cold Storages in the State,
also taking into account the stringent quality control measures adopted by western countries
especially for marine products.
The Cold Storages in the State can also be linked through a cold chain and the procurement
and distribution could be done through refrigerated trucks. The retail sales may be done
through air-conditioned super bazaars, to avoid spoilage, as the post storage life of most of
the fruits and vegetables is low. Thus there is also ample scope for necessary forward and
backward linkages from Cold Storages to Cold Chains within the State, so as to meet the
food demands and export requirements of the coming decades.
..

For further details please contact Kerala State Industrial Development Corporation Ltd.
Disclaimer:

The findings contained in this Project Profile are based on the initial information collated through primary and secondary
research, which is indicative in nature. Reference herein to any specific commercial product, process, service by trade name,
trademark, manufacturer, or otherwise, does not constitute or imply its endorsement, recommendation, or favoring by
KSIDC or any entities thereof.