How To Start Cold Storage Business In India?

. 7 min read
How To Start Cold Storage Business In India?

Table of Contents:

1. Introduction On How To Start Cold Storage Business?

2. Why Is Cold Storage Business Necessary?

3. How To Start Cold Storage Business: Benefits.

4. Investment Needed To Start A Cold Storage Business in India

5. Types Of Cold Storages Machinery

1. Introduction On How To Start Cold Storage Business?

If you are a potential entrepreneur and scouring for businesses that require one-time investments, then cold storage business is one of those lucrative businesses. The cold storage business mainly focuses on the preservation of perishable goods such as fruits and vegetables with the help of cooling equipment.

Although the preliminary investment in this business is huge compared to other businesses, it offers high profits over a long duration. The cold storage business is booming in both developing and developed countries. Countries like India, where agriculture and allied activities are the primary livelihood sources for most of the population, are best suited to start a cold storage business. Let's understand more briefly about How To Start Cold Storage Business?

2. Why Is Cold Storage Business Necessary?

Food wastage has become a global issue nowadays, which not only leads to problems like hunger but also leads to an increase in carbon footprint. Countries like India, where the production of food crops is high, are the ones that have a fair share in food wastage. Therefore, the demand for the cold storage business is high as it helps in increasing products’ shelf life, avoiding transportation impediments, and extending the trading period of the products. It also offers competitive prices to farmers for their hard work and increases the availability of farm crops for consumers.

3. How To Start Cold Storage Business: Benefits.

The advantages of cold storage are described below:

  • Cold storage helps in reducing the wastage of perishable products and extending their shelf life.
  • Off-season fruits and vegetables can be easily made available at reasonable prices. Getting vegetables like cauliflower and cabbage during the summers is usually impossible, but cold storage helps to increase the availability.
  • It provides lucrative prices to farmers.
  • Packaged foods become readily available.

4. Investment Needed To Start A Cold Storage Business in India

Before Googling How To Start Cold Storage Business, you need to get your funds ready. The investment is usually huge for starting a cold storage business in India because funds would be needed for various areas like land acquisition, construction of buildings, getting licences and permits, and other resources such as electricity and water.

Further, investments are required for buying machinery for cold storage. You need to identify the most updated machines that will provide the best performance. Other aspects that will demand a portion of your funds are expenditures for maintenance of working capital, paying employee salaries, electricity and other utility bills, and advertising costs.

5. Types Of Cold Storages Machinery

There are three types of cold storage machinery available in India, which are:

cold storage room
How To Start Cold Storage Business?

1- Industrial Cool Room

It is a refrigerating chamber in a warehouse-like building, where the temperature is regulated artificially. It is usually designed to store products below the normal environment temperature. Products like fruits, vegetables, seafood, meat, etc., are stored here for preservation.

2- Modular Room Refrigerator

A modular room refrigerator is a cold room built on site according to the desired dimensions and cooling requirements. These facilities are built by experts who have thorough knowledge about preservation. They are perfect for those who want to start a small cold storage business. They also reduce the land requirement.

3- Combi Refrigerator

A combi refrigeration room offers settings for various temperatures. This room is best suited to store food that requires different temperatures. These are the three types of cold storage machinery that can be used to start a cold storage business. The choice of the asset depends upon the quantity of the products you want to store and the amount of land available to set up the business. Cold storage facilities can also be categorised based on the storage requirements; for single products and for multiple products.

6. How To Start A Cold Storage Business? Complete Guide.

If a potential business owner wants to start a cold storage business and is curious about how to open a cold storage business in India, then the first thing s/he should do is make a detailed business plan. This cold storage business plan should include all information such as product information, employee details, etc. Here are some additional points to be considered while developing a cold storage business model:

1- Location

Location plays an important role in every business. In the cold storage business model, location plays a crucial role. A cold storage unit must be located near the consumers or the production sources such as farms. If one wants to start a small cold storage business, then the requirement for land decreases. If one is looking to have cold storage for multi-storage purposes, then they may need a bigger plot of land. The quantity of products that one wants to store also determines the location and area. For example, if the cold storage has a storage capacity of 5k metric tonnes, the minimum land requirement is 1 acre.

2- Equipment

Before investing in equipment for the cold storage business, you need to consider some factors, such as product load, the efficiency and age of electrical equipment, fan, lights, etc. One must also keep in mind the hot weather in summers and the possibility of power cuts.  Other than these, the essential considerations for a cold storage plant include the humidity levels, insulation materials, outer temperatures, etc.

Here are the necessary factors and their optimum levels:

  1. Humidity must be in the range of 85-90 percent
  2. The initial temperature of the cold storage must be in the range of 28-35 degrees Celsius.
  3. The insulation material must be polyurethane with a thickness of 60 mm.
  4. The storage capacity must be 10 metric tonnes.
  5. The refrigeration capacity must be 30000 Btu per hour.

The temperature must be kept in the range of  (+-)2-4 degrees Celsius.

3- Maintenance

Although the cold storage business requires a one-time investment, cleaning and regular maintenance are equally necessary. There must be regular checks on machines, the temperature levels, the humidity levels, and the products kept in the cold storage. Overall, proper cleanliness must be ensured to preserve the products more efficiently.

4- Product Promotion

For the success of your cold storage business, there must be significant promotion and advertisements. In the cold storage business, the target audience includes traders, wholesalers, retailers, and supermarkets in both urban and suburban areas. In the starting and later stages, the promotion must be done significantly. If possible, the owner can discuss strategies with various exporters and distributors.

businessman doing finances and calculating
How To Start Cold Storage Business In India?

5- Finances

The funds required for investment in cold storage are quite high. Using your entire savings to invest in the business may be risky if there is an immediate requirement for money on other fronts. Therefore, it’s better to acquire loans. Many banks can help you to get the required loan at a low interest rate, provided one is eligible to get a loan with a CIBIL score of 700 or above.

So, these are some steps along with crucial points that must be taken care of while starting a cold storage business in India.

Also Read:

1) How to Start an Organic Clothing Line Business?
2) How to Start a Cloud Kitchen? A Step-by-Step Guide
3) How to Start Up a Mini-Grocery Store in a Village?
4) How to Start a Wholesale Business?

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Q. Is any subsidy available for operating a cold storage business?

Ans. Yes, a subsidy is available in the cold storage business, provided by the National Horticulture board.

Q. How to fill the form to get a subsidy?

Ans. To fill the form, entrepreneurs looking to start a cold storage business need to apply online and fill the IPA application form. Few operational guides should be read before submitting the form.

Q. What are the off-season foods that can be stored in cold storage?

Ans. Off-season food items such as corn, cauliflower, cabbage, potatoes, chilies, and various seeds can be stored and preserved in cold storage.

Q. What products can be stored in cold storage apart from food?

Ans. Apart from food products, medical supplies that require low temperatures to be stored properly can be kept in cold storage.

Q. What is a chilling injury, and what should be done to safeguard food products from chilling injuries?

Ans. Chilling injuries are damage to plant parts that can be caused due to temperatures above the freezing point. The plant parts may change colour or wilt sometimes. A chilling injury can be prevented with steps such as intermittent warming, low-temperature preconditioning, waxing, controlling storage atmosphere, etc.