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Growth in organized retail and the food processing sector drives the cold chain market in India. Further shift towards horticultural crops by farmers to evade risk boosts the demand for cold chain. Rising demand for cold storage in pharmaceutical sector is also driving the growth in cold chain market. Changing consumption pattern is expected to create huge demand for cold storage in India.
The report begins with an introduction section, projecting the evolution of Cold Chain Market in India. It then shows the value chain of the cold chain market followed by its definition, segments and key activities. The different types of cold storage are then demonstrated. A flow of Cold Chain Logistics Services is also shown in this section.
Market overview section provides a brief snapshot of the Cold Chain Market. This section includes the market size of the cold chain market in India in terms of cold storage and cold transportation, demonstrating the forecasted growth over the period 2010 - 2015. The opportunities for the players in providing cold chain facilities are also illustrated. The section then gives an overview of the surface storage market. The cold storage distribution in the country has been mapped along with the commodity wise distribution. Subsequently, the number of cold storage and their capacity as on 31st Dec, 2009 has been listed. Current ranking of India’s food production w.r.t global scenario are displayed. The impact of cold chain on shelf life of fruits & vegetables has been shown. Developments in refrigeration systems in cold storage has been shown followed by the other recent developments. An overview of the refrigerated transport market is given demonstrating the refrigerated transport process.
Current & Future Scenario section deals with the investment opportunities and the private participation in cold chain market in India. Some major deals in cold chain market in India have been listed. Further some recent investments in the cold chain sector in India are also found.
Drivers & challenges section in the report provides a comprehensive set of factors which boosts and hinders the growth in the market. An analysis of the section brings forth the key drivers fueling growth in the market including growth in organized retail, shift towards horticultural crops, growth in processed food sector, demand from pharmaceutical sector and the changing consumption pattern. While the challenges identified comprises of lack of logistical support, uneven distribution of cold chains, cost structure and deficit in power supply.
Government initiative section emphasizes on the role of government in budget for cold chain sector. Further the government’s initiatives on terminal market, railways and port and shipping are also discussed. Then the schemes and the assistance by Ministry of Food Processing Industries, National Horticultur
2. Executive Summary
Cold chains have become extremely crucial for the improvement in the preservation process of
agricultural production in India
Market The market is expected to attain a CAGR close to xx% to reach a valuation worth INR xx bn by the
end of 20‐‐
It is going to witness strong growth in capacity creation backed by government policies
It is going to witness strong growth in capacity creation backed by government policies
Owing to the shortfalls in the existing cold chain infrastructure massive amounts of food grain,
Current & fruits and vegetables get wasted every year, thereby creating ample scope for vendors
Future Private participation is expected to raise the storage capacity of the sector by a large extent
Scenario Government has classified cold chain as ‘infrastructure’ as announced in the 2011 12 union
Government has classified cold chain as infrastructure as announced in the 2011‐12 union
budget
Drivers: Challenges:
– Growth in Organized Retail – Lack of Logistical Support
Drivers & – Shift towards Horticultural Crops – Uneven Distribution of Cold Chains
Challenges
Ch ll – Growth in Processed Food Sector – Cost Structure
– Demand from Pharmaceutical Sector – Deficit in Power Supply
– Changing Consumption Pattern
Entry of Foreign Players
Rail based Reefers
Rail based Reefers
Trends
d Cold Chains Facilities at Airports
Backward Integration
Major Players
Competition Player A Player B Player C
Player D Player E Player F
COLD CHAIN MARKET IN INDIA 2012.PPT 2
5. Types of Cold Storage
Cold Stores
Type 1 Type 2 Type 3 Type 4
xx xx xx. xx
Type 5 Type 6 Type 7
xx xx xx
COLD CHAIN MARKET IN INDIA 2012.PPT 5
6. Cold Chain Logistics Services
xx
xx
xx
xx
Cold Chain
Logistics
Services
xx
xx
xx
COLD CHAIN MARKET IN INDIA 2012.PPT 6
7. Cold chain market in India is going to witness strong growth
in capacity creation backed by government policies
Cold Chain Market – Overview Market Size and Growth
• Cold chain is an important infrastructure for INR bn
enhancing the preservation process of agricultural 400 z6
productivity in India X% x6
6
z5
300 x5
• Cold chain comprises of mainly 2 activities – storage z4
z3 x4
consisting of about xx% of the market share and 200 z2 x3
z1 y6
transportation comprising about xx5% x2 y5
100 x1 y4
• Cold Chain market is expected to grow at about xx% y2 y3
y1
CAGR from INR x bn in 20‐‐ to INR y bn in 20‐‐ 0
• The last two announcements made by Government 20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐
of India (GoI) in the last two union budgets will
( ) g Segment A
Segment A Segment B
Segment B
primarily boost capacity creation
Following the announcements several multinational
Market Segmentation (2011)
corporations and PE firms have invested in cold chain
services
X%
• With the actual production capacity being 10 times
higher than the present storage capacity, India
witnesses huge spoilage of about xx% agricultural Segment A
produce Segment B
Close to xx% of fruits and vegetables and 5% of food grain
accounting for approximately INR 500 bn get wasted in Y%
India on a yearly basis
COLD CHAIN MARKET IN INDIA 2012.PPT 7
8. Player’s Opportunity in Cold Storage Facility (1/2)
Huge scope to tap the cold chain market
Processed Fruits & Vegetables
in India by focusing on the improvement
% Share
in food processing as only xx% of fruits X3%
a d egetab es
and vegetables in India get processed as
d a get p ocessed as 70 X2%
compared to xx% in USA and xx% in Brazil 60
50
40
30
20
10 X1%
0
Country A Country B Country C
Fruits & Vegetables going through Cold Storage
While xx% of fruit and vegetable
production in USA go through cold % Share
Y2%
storage, only xx% of it goes through in
g , y g g 80
India
60
40
20
Y1%
0
Country A Country B
COLD CHAIN MARKET IN INDIA 2012.PPT 8
9. Government backing to boost the capacity creation for cold
storages in India Surface Storage
Surface Storage Market – Overview Cold Storages Distribution
• Surface storage accounts for majority of the cold
chain services in India
• In 20‐‐, India h d 5,386 cold storages with a capacity
d had ld h
of about xx mn MT
• Majority of the cold storage facilities are utilized for 8%
potato storage and are scattered in states of UP,
Uttaranchal, Maharashtra & West Bengal
, g 5%
30%
• Over xx% cold storages are in the private sector 2%
• Cold storage infrastructure is set to undergo major 6%
revamp with government backing
7% 5% 10%
Co
Commodity Wise Distribution
od ty se st but o
2%
9%
x6%
Commodity A 5%
x3% x4%
x5% Commodity B
C dit 3% Comprise 2 % of total
C i 2% f l
Commodity C cold storages
x1% Commodity D
x2%
Commodity E 3%
3%
Others
Note: Figures are as on 31st Dec, 2009
COLD CHAIN MARKET IN INDIA 2012.PPT 9
10. Number of Cold Storage in India – State & Product wise
(1/2)
Fruits & Meat & Milk & Milk Total
Sl. No. States Potatoes Multipurpose Others
Vegetable Fish Products No.
Andaman &
1 Nicobar Islands xx xx xx xx xx xx Xx
(UT)
2 Andhra Pradesh xx xx xx xx xx xx xx
3 Arunachal Pradesh xx xx xx xx xx xx xx
4 Assam xx xx xx xx xx xx xx
5 Bihar
Bih xx xx xx xx xx xx xx
6 Chandigarh(UT) xx xx xx xx xx xx xx
7 Chhatisgarh xx xx xx xx xx xx xx
8 Delhi xx xx xx xx xx xx xx
9 Gujarat xx xx xx xx xx xx xx
10 Goa xx xx xx xx xx xx xx
11 Haryana xx xx xx xx xx xx xx
12 Himachal Pradesh xx xx xx xx xx xx xx
13 Jammu &Kashmir xx xx xx xx xx xx xx
14 Jharkhand xx xx xx xx xx xx xx
15 Kerala xx xx xx xx xx xx xx
16 Karnataka xx xx xx xx xx xx xx
Note: Figures are as on 31st Dec, 2009
COLD CHAIN MARKET IN INDIA 2012.PPT 10
11. Current Rankings of India’s Food Production w.r.t Global
Scenario
xx MT
India, holding a large
ction (MT)
food basket for global
consumption creates
xx MT Food 2 huge demand for cold
Food Produc
chain In order to
Food 1 sustain the production
trend
xx MT
Food 3
1 2 3
Rank
xx
India s position
India’s position
xx
in perishable food
production
xx
in comparison
with world xx
COLD CHAIN MARKET IN INDIA 2012.PPT 11
12. New players are now venturing into the more profitable
refrigerated transport services Refrigerated
Transport
Refrigerated Transport Market – Overview Refrigerated Transport Process
• Refrigerated transport involves usage of refrigerated
vehicles for transportation of goods Procurement
• Key products that move through reefers include
Product A
Product B Grading/
Product C Sorting/
Product D Precooling/
g/
Packing
Product E
Product F
• In terms of volume, current reefer transportation
business is about xx mn MT and is expected to reach
p Refrigerated Transport
Refrigerated Transport
xx mn MT within xx years
• Refrigerated transport offers the largest margins in
cold chain logistics
At least xx companies are offering refrigerated transport Cold Storages
services i I di
i in India
• Key players in this segment include
Player A
Player B Domestic Supply Exports
Player C
COLD CHAIN MARKET IN INDIA 2012.PPT 12
13. Major Deals in Cold Chain Market in India (2009‐2012)
Deal size Deal
Date Target Investor/Buyer Stake
(INR mn) type
Jun 20‐‐
Jun 20 Company A
Company A Company B
Company B xx xx xx
Jun 20‐‐ Company C Company D xx xx xx
Feb 20‐‐ Company E Company F xx xx xx
Dec 20‐‐ Company G Company H xx xx xx
Dec 20‐‐ Company I Company J xx xx xx
Mar 20‐‐ Company K Company L xx xx xx
Aug 20‐‐ Company M Company N xx xx xx
Jul 20‐‐ Company O Company P xx xx xx
JV – Joint Venture; PE – Private Equity; M&A – Mergers & Acquisitions
COLD CHAIN MARKET IN INDIA 2012.PPT 13
14. Focus on Investments
• Investment of INR xx bn is expected by 20‐‐ to set up
Company X
bottling plants and cold chain infrastructure in India
bottling plants and cold chain infrastructure in India
• Planning to build cold chains at its existing plants in
xx and in xx to increase xx Company Y
p p
• Construction was planned to be completed by May y y
20‐‐
• Entered into the cold chain consultancy segment in
India in 20‐‐ with plans to deal with issues of storage,
Company Z
transportation and delivery of perishable products
COLD CHAIN MARKET IN INDIA 2012.PPT 14
15. Drivers & Challenges – Summary
Challenges
Drivers Lack of Logistical Support
Growth in Organized Retail
G th i O i d R t il
Uneven Distribution of Cold chains
Shift towards Horticultural Crops
Cost Structure
Growth in Processed Food Sector Deficit in Power Supply
Demand from Pharmaceutical Sector
Changing Consumption Pattern
COLD CHAIN MARKET IN INDIA 2012.PPT 15
22. Higher operating costs make setting up cold storages
difficult and unviable
Cost Structure Impact
• Finding 1
Finding 1
• Finding 2
• Finding 3
• Finding 4
Finding 4
Operating Cost per Cubic meter per year
p g p p y Share of Energy Expense of Total Cold Storage Expense
gy p g p
INR % Share
y1%
100 30
x1
80 25
20
60
x2 15
40 y2%
10
20 5
0 0
India Western Countries India Western Countries
COLD CHAIN MARKET IN INDIA 2012.PPT 22
23. Power shortage is expected to pose challenges for the
development of the thriving cold chain market
Deficit in Power Supply Impact
•Finding 1
•Finding 2
•Finding 2
Sub‐finding 1
•Finding 3
Sub‐finding 2
Sub finding 2
Future Power Demand‐Supply Scenario Demand Supply Gap ~ xx%
Peak Average Energy Demand
Base Energy (BU)
x3 Generation
y3 800
x2 45% 23% 600
y1 y2
x1 26% 46% 400
24%
41% 55% 77% 200
59% 74% 54% 76%
0
Demand Supply Demand Supply Demand Supply VI VII VIII IX X
2007 2012e 2017e
COLD CHAIN MARKET IN INDIA 2012.PPT 23
24. Trends – Summary
Backward Integration Entry of foreign players
Key
Trends
Cold Chains Facilities at Airport Rail based Reefers
COLD CHAIN MARKET IN INDIA 2012.PPT 24
25. The market is dominated by the private sector with minimal
presence of the public sector
Competition – Overview Sector Wise Split – Surface Storage
• Investment and growth opportunity for cold chain is
huge as it is still not yet developed in India y% z%
Investments have been announced by Reliance, Bharti, ITC,
Godrej, Tata, Aditya Birla Group and Future Group to offer a
ready market for third‐party cold chain logistics players
• Cold chain capacity in the organized sector was
around 60,000 tonnes in 2009
Capacity additions & investments in next 3 years with
existing players expanding capacities as well as new players
Highly capital intensive industry with an average payback x%
period of around 5 years
• Distribution offers the largest margins in cold chain
Distribution offers the largest margins in cold chain
logistics Sector A Sector C
At least 50 companies are offering refrigerated transport Sector B
services in India
• 3 types of companies operates in cold storage and
transportation sector namely, Integrated Companies, • More than 90% of the cold storage capacity in India is
Stand alone Companies and 3 PL Service Providers owned and maintained by the private sector
• Government of India encourages and supports the
• Major companies have shown interest in cold chain participation of private players to develop the highly capital
market in India, including Snowman Frozen Foods, intensive cold chain sector
Fresh and Healthy Enterprises and Apollo‐Everest
Fresh and Healthy Enterprises and Apollo Everest • Public sector is also gearing up and actively participating in
bli i l i d i l i i i i
Cool Solutions the development of cold chain solutions
COLD CHAIN MARKET IN INDIA 2012.PPT 25
26. Major Public Companies ‐ Summary
Net Profit/Loss
2,200
Size of the Bubble represents Market Capitalization in INR mn
2,000
1,800
1 800
1,600
1,400
m1
1,200
,
1,000
800
600
400
200
m3
0 m2
‐200
‐1,000 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000
Total income
Player A Player B Player C
Note: All figures are in INR mn and are based on the latest financials available
COLD CHAIN MARKET IN INDIA 2012.PPT 26
27. Public: Domestic Company – Player A (1/3)
Company Information Offices and Centres – India
Corporate Address
Tel No.
Fax No.
Website
Year of Incorporation
p
West Bengal
l
Ticker Symbol
Stock Exchange Head Office
Products and Services
Products and Services
Category Products/Services
Cold Chain Logistics Key People
Name
N Designation
D i ti
COLD CHAIN MARKET IN INDIA 2012.PPT 27
28. Public: Domestic Company – Player A (2/3)
Financial Snapshot
i i lS h Key Ratios
K i
Total Income Net Profit/Loss y‐o‐y change
Particulars 2011 2010 2009 2008
INR mn INR mn (2011‐10)
Profitability Ratios
80 71.0 66.5 8 Operating Margin 5.61 14.64% 9.03% 7.88% 16.85%
60 49.2
49 2 6 Net Margin 0.55 1.94% 1.39% 1.03% 9.07%
42.8
40 4 Profit Before Tax Margin 0.53 2.98% 2.44% 1.91% 11.13%
Return on Equity 0.13 0.78% 0.65% 0.65% 6.44%
20 2 Return on Capital Employed 1.96 4.52% 2.57% 3.12% 7.48%
0 0 Return on Working Capital 0.57 1.24% 0.67% 0.72% 8.13%
2008 2009 2010 2011 Return on Assets 0.15 0.54% 0.38% 0.40% 3.77%
Financial Summary Return on Fixed Assets 0.79 3.08% 2.28% 2.05% 17.56%
Cost Ratios
• The company earned a net profit of INR xx mn in FY 2011, as Operating costs (% of Sales) ‐5.70 85.21% 90.91% 92.12% 83.15%
compared to net profit of INR xx mn in FY 2010 Administration costs (% of
‐1.29 2.56% 3.85% 2.30% 2.19%
• The company reported total income of INR xx mn in FY 2011, Sales)
Interest costs (% of Sales)
Interest costs (% of Sales) 5.37 11.16% 5.79% 5.25% 5.31%
registering a decrease of xx% over FY 2010
registering a decrease of xx% over FY 2010
Liquidity Ratios
• The company earned an operating margin of xx% in FY 2011, an Current Ratio ‐77.19% 5.21 22.84 20.92 8.23
increase of xx percentage points over FY 2010 Cash Ratio ‐73.35% 3.47 13.00 8.85 4.96
• The company reported debt to equity ratio of xx in FY 2011, a Leverage Ratios
decrease of xx% over FY 2010 Debt to Equity Ratio ‐33.83% 0.46 0.69 0.65 0.71
Debt to Capital Ratio
D b C i lR i ‐35.04% 0.26 0.40 0.38 0.40
Key Financial Performance Indicators Interest Coverage Ratio ‐15.62% 1.33 1.57 1.50 3.17
Indicators Value (09/07/2012) Efficiency Ratios
Market Capitalization (INR mn) XX Fixed Asset Turnover ‐3.78% 1.57 1.64 1.99 1.94
Asset Turnover ‐0.18% 0.27 0.27 0.39 0.42
Total Enterprise Value (INR mn) 129.5
Current Asset Turnover 11.72% 0.51 0.46 0.66 0.79
EPS (INR)
( ) 0.29 Working Capital Turnover 32.20% 0.63 0.48 0.70 0.90
PE Ratio (Absolute)‐10th July, 2012 26.62 Capital Employed Turnover ‐13.97% 0.40 0.46 0.64 0.71
Improved Decline
COLD CHAIN MARKET IN INDIA 2012.PPT 28
29. Public: Domestic Company – Player A (3/3)
Key Business Segments Key Geographic Segments
Segment A India
100% 100%
100% Segment A is the only business 100% India is the only geographic
segment in which the company segment in which the company
has been operating for the last has been operating for the last
50% 50% 100%
five years five years
0% 0%
2011 2011
Business Highlights
Description News
Overview
Name Change
COLD CHAIN MARKET IN INDIA 2012.PPT 29
30. Major Private Companies ‐ Summary
Net Profit/Loss
60
Size of the Bubble represents Total Assets in
50
INR mn
40 t2
30
20
10
0 t3
t4
‐10
‐20
‐30
t1
‐40
50
‐50
‐60 Total income
0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600 2,800 3,000 3,200
Player D
Player D Player E
Player E Player F
Player F Player G
Player G
Note: All figures are in INR mn and are based on the latest financials available
COLD CHAIN MARKET IN INDIA 2012.PPT 30
31. Private: Domestic Company ‐ Player B (1/3)
Company Information Offices and Centres – India
Corporate Address
Tel No.
Fax No.
Website
Year of Incorporation
Mumbai Head Office
Products and Services
Products and Services
Category Products/Services
Key People
Air Freight and Logistics
g g
Name
N Designation
D i ti
COLD CHAIN MARKET IN INDIA 2012.PPT 31
32. Private: Domestic Company ‐ Player B (2/3)
Financial Snapshot
i i lS h Key Ratios
K i
y‐o‐y change
Total Income Net Profit/Loss Particulars
(2011‐10)
2011 2010 2009 2008
INR mn INR mn
2938.5 Profitability Ratios
3000 10
Operating Margin 91.41 180.87% 89.46% 87.23% 88.08%
2500 0 Net Margin 0.65 ‐1.28% ‐1.93% 0.13% ‐2.16%
1936.7 2033.7
Profit Before Tax Margin ‐0.39 0.11% 0.50% 0.48% ‐3.99%
2000
‐10 Return on Equity 0.25 ‐5.69% ‐5.94% 0.97% ‐12.23%
1500 1129.5 Return on Capital Employed 248.97 443.85% 194.88% ‐436.01% ‐149.64%
‐20 Return on Working Capital 1.24 ‐5.80% ‐7.04% ‐1.35% 7.00%
1000
Return on Assets 0.68 ‐1.97% ‐2.65% 0.38% ‐12.23%
500 ‐30
30
Return on Fixed Assets 1.42 ‐3.12% ‐4.54% 0.33% ‐5.21%
0 ‐40 Cost Ratios
2008 2009 2010 2011 Operating costs (% of Sales) ‐89.61 ‐82.09% 7.52% 12.61% 11.71%
Administration costs (% of
0.91 8.43% 7.52% 9.08% 7.46%
Sales)
Financial Summary Interest costs (% of Sales)
Interest costs (% of Sales) ‐0.42 1.78%
% 2.21%
% 1.26%
% 0.14%
%
• The company incurred a net loss of INR xx mn in FY 2011, as Liquidity Ratios
Current Ratio ‐5.41% 1.91 2.02 0.82 0.60
compared to net loss of INR xx mn in FY 2010
Cash Ratio ‐48.80% 0.11 0.21 0.01 0.02
• The company reported total income of INR xx mn in FY 2011, Leverage Ratios
registering an increase of xx% over FY 2010 Debt to Equity Ratio 52.28% 1.89 1.24 1.48 0.00
Debt to Capital Ratio
b i l i 18.09% 0.65 0.55 0.60 0.00
• The company earned an operating margin of xx% in FY 2011, Interest Coverage Ratio 143.76% 102.23 41.94 69.43 640.18
an increase of xx percentage points over FY 2010 Efficiency Ratios
• The company reported debt to equity ratio of xxin FY 2011, an Fixed Asset Turnover 6.65% 2.43 2.28 2.64 2.40
increase of xx% over FY 2010 Asset Turnover 15.06% 1.53 1.33 3.07 5.63
Current Asset Turnover 20.56% 2.15 1.78 2.31 2.19
Working Capital Turnover 27.71% 4.51 3.53 ‐10.79 ‐3.23
Capital Employed Turnover 48.37% 4.42 2.98 7.73 5.63
Improved Decline
COLD CHAIN MARKET IN INDIA 2012.PPT 32
34. Strategic Recommendation (1/2)
An integrated cold chain infrastructure covering major production areas, processing
units and distribution centers should include the following:
xx xx
With integrated cold chains and supply chain management,
an amount of INR xx bn can be saved every year
by cutting xx% wastage of perishable horticulture produce,
besides generating further export revenue of over INR xx bn
COLD CHAIN MARKET IN INDIA 2012.PPT 34
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COLD CHAIN MARKET IN INDIA 2012.PPT 35