ENTREPRENEURSHIP DEVELOPMENT INSTITUTE

OF INDIA

AHMEDABAD, GUJARAT

Detailed Project Report (DPR)

Batch PGDM (BE) 2015-17
On

Cold Storage

Prepared by:
Harsh Patel

1
INDEX

Particulars Page no.

Acknowledgement 3

Executive Summary 4

General 5

Market 6

Technology 8

Manufacturing 11

Infrastructure 16

Implementation 17

Key success factors & challenges 18

References 19

Annexures 20

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ACKNOWLEDGMENT

I would like to extend my heartfelt gratitude to Entrepreneurship Development Institute

of India, Ahmedabad for giving me a chance to work upon my start up idea as a whole
new subject. Without the opportunity, I would not have been richer with learning and
experience.

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EXECUTIVE SUMMARY
India is the largest producer of fruits and second largest producer of vegetables in the
world. In spite of that per capita availability of fruits and vegetables is quite low because
of post harvest losses which account for about 25% to 30% of production. Besides,
quality of a sizable quantity of produce also deteriorates by the time it reaches the
consumer. This is mainly because of perishable nature of the produce which requires a
cold chain arrangement to maintain the quality and extend the shelf-life if consumption is
not meant immediately after harvest. In the absence of a cold storage and related cold
chain facilities, the farmers are being forced to sell their produce immediately after
harvest which results in glut situations and low price realization. Sometime farmers do
not even get their harvesting and transportation costs what to talk of the cost of
production or profit. As a result, our production is not getting stabilized and the farmers
after burning fingers in one crop switch over to another crop in the subsequent year and
the vicious cycle continues. Our farmers continue to remain poor even though they take
risk of cultivating high value fruits and vegetable crops year after year. A cold storage
facility accessible to them will go a long way in removing the risk of distress sale to
ensure better returns

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GENERAL INFORMATION

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. The present production level of
fruits and vegetables is more than 100 million MT and 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. The farmers get
opportunity of producing cash crops to get remunerative prices. The consumers get the
supply of perishable commodities with lower fluctuation of prices. Commercially apples,
potatoes, oranges 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 being stored in cold
storages to regulate marketing channels of these products.

PROMOTERS BACKGROUND
Harsh Patel is a Post graduate with specialisation in Business Entrepreneurship. He is
having agriculture business in limbdi where he is doing farming of fruit crop like Banana,
Water melon, Sweet melon, Papaya etc. he has some experience in his business.

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MARKET
Market Scenario
The estimated annual production of fruits and vegetables in the country is about
130 million tonnes. This accounts for 18% of our agricultural output. Due to
diverse agro climatic conditions and better availability of package of practices,
the production is gradually rising. Although, there is a vast scope for increasing
the production, the lack of cold storage and cold chain facilities are becoming
major bottlenecks in tapping the potential. The cold storage facilities now
available are mostly for a single commodity like potato, orange, apple, grapes,
pomegranates, flowers, etc. which results in poor capacity utilization.
Present availability of cold storage capacity is only 103.5 lakh tonnes, out of
which units having about 8 lakh tonnes capacity are non-functional. Although
90% of these units are made to store only potato even then it does not meet the
requirement of the single crop, the production of which is about 300 lakh tonnes.
Out of 3443 cold storage units setup till 1988, 2012 units were for potato, 447
units were for multipurpose use, 198 units were for fruits and vegetables and the
remaining were for products like meat, fish, milk, etc. The detail of the
commodity wise distribution of cold storage capacity is given.
Commodity wise distribution of cold storage capacity.

Commodity Units Capacity (lakh tonnes)

Potato 2,012 92.82

Multipurpose 447 7.63

Fruits & Vegetables 198 1.07

Meat 23 0.09

Fish 360 0.73

Meat & Fish 30 0.15

Milk & Dairy 272 0.68

Products

Others 101 0.36

Of the above 3443 cold storage units, 2975 are in private sector, 303 are in
cooperative sector and the rest are in public sector.

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According to the information collected by the expert committee on cold storage and
storage, requirement of cold storage in the next five years may be in excess of 12 lakh
tonnes. The working group of the planning commission for IX plan had assessed new
cold storage capacity for fruits, vegetables and multi commodity as 15 lakh tonnes;
13 lakh tonnes in private sector, 1.5 lakh tonnes in cooperative sector and the rest 0.5
lakh tonnes in public sector. Thus, there remains a vast potential to be tapped.

Competition
SR. NAMES Capacity in Products
Sector
Metric Tons stored
1. JANTA ICE FACTORY & COLD 712 Private Potatoes
STORAGE.,Near Jawahar
society,Surendranagar.
2. SURENDRANAGAR DAIRY,Gujarat 61 Public Dairy
Dairy Dev Corporation ltd.,Wadhwan Road, Products
Wadhwan.
3. HARI OHM COLD STORAGE,Shekhpur. 1360 Private Multipurpos
e

TECHNOLOGY

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At present there are two popular refrigerants in the market. One is Freon and the other is
Ammonia. Ammonia and Freon compressors are being manufactured indigenously.
Ammonia refrigerant is cheaper, easily available and is of high latent heat of evaporation
but it has certain disadvantages like being highly toxic in nature. It also forms explosive
mixture when mixed with oil containing high percentage of carbon.

Rooms of different temperature must be separated by insulation and should be protected

from moisture. Whenever possible, one coating of foam glass with vapour proof material
should be used against the outside wall.

While fixing the insulation, the points to be kept in mind are:

1. The surface to be insulated should be completely moisture-proof and be

reasonably even, free of lump or hole plaster on the walls. The ceiling must be
cured before surface is insulated.

2. Precaution may be taken to ensure that the moisture from outside cannot penetrate
through the wall, ceiling or floor.
3. The partition wall between two chambers should be insulated both sides.

Fruits and vegetables which are to be kept in cold storage are sorted out and the bad ones
removed. The sorted material is packed preferably in wooden/ plastic carton boxes and
then kept in cold storage chambers. The temperature and humidity is to be maintained
depending upon the commodity kept in the store. The requirements for successful storage
of important fruits and vegetables are shown in Table I and II.

TABLE-I

Name of Fruit Storage Cold Storage Remarks

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 Temp F life (in weeks)
1. Apple 32-35 7-26 Small fruits keep better than large ones
2. Apricot 30-32 2-4
3. Berry Fruits 30-32 2-3
4. Bananas 55-60 2-3
5. Cherries 30-32 2-3
6. Guavas 47-50 3-4
Fumigation with 1-2% sulphur dioxide before
7. Grapes 30-32 4-6 storage
reduces decay and storage life can be increased to
812 weeks.
Lemon for storage should be picked at the
8. Lemon 50-55 9-13 greenish
yellow colour.
9. Lime 50-55 4-5
10. Mangoes 45-50 4-6
Mandarin oranges can be kept satisfactorily at
11. Mandarin Oranges 40-42 9-13 lower
(Nagpur) Coorg temperature if to be stored for less than 4 weeks.
(Assam)
12. Oranges (Tight 36-39 13-17 Tight skinned oranges can also be kept at lower
skinned) temperature if to be stored for less than 8 weeks.
Malta (Punjab) 36-39 13-17
Sathgudi (Chennai) 39-42 13-17
Mussambi
(Mumbai) 42-45 13-17
13. Pears 30-32 2-4
14. Peaches 30-32 2-4
If fruit is to be stored for jam making, the storage
15. Plums 30-32 2-4 life
can be extended by another two weeks.
16. Pineapple 50-55 3-4
17. Quinces 30-35 9-17

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TABLE II
Optimum storage conditions for vegetables R.H. 85-90% except Beet root, Cabbage,
Raddish, Turnips and Peas where R.H. is 90-95%

Name of Vegetable Storage Cold Storage Remarks

Temp (OF) Life (in Weeks)

1. Beans 32-35 2-3 Beans are liable to be sweet in storage. Need more

ventilation, should be in crates and not in bags.

2. Beet Root 32-35 6-8

3. Brinjals 47-50 3-4 Big brinjals keep better than small ones

4. Carrots 32-35 13-17

5. Cauliflower 34-35 4-6 Only firm and compact heads should be stored as loose

heads shrivel badly.

6. Cabbage 32-35 9-13 Only firm and compact heads should be stored.

7. Onions 32-35 17-26

8. Potatoes 37-38 26-35 In cold storage potatoes become sweet due to

accumulation of sugars. This could be avoided by

keeping potatoes at ordinary room temperature for

1-2 weeks before they are processed.

9. Raddish 32-35 6-8

10. Turnips 32-35 13-17

11. Tomatoes Ripe 40-45 1-1 Tomatoes should not be stored in temperature

Mature (Greenish 55-60 3-4 lower than 40O F because they show tendency to

Yellow) break down. Green but matured tomatoes can be

ripened satisfactorily with the development of

attractive red colour by storing at 60-70OF

12. Peas 32-35 2-3 Green peas loose part of their sugar content unless

they are promptly cooled to 32O F. They also need

More ventilation.

MANUFACTURING

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List of plant & Machinery

Sl Description Rs. lakhs

1 Refrigeration equipment for cooling 250 20.000
tons of fruits and 250 tons of vegetables
stored in 5500 square feet each and to
provide a temperature of 2 to 8 degrees
centigrade
2 Ducting and wall panelling 10.00
3 Stand by equipment 5.000
4 Cost of pallets and stacking trays 2.000
5 Fork lift vehicle 10.000
Total machinery and equipment 47.000

List of machinery suppliers for cold storage

1. Blue Star Limited, Commercial Equipment Division, 13, Community Centre, New
Friends Colony, New Delhi. 110065. ; Tel: 011 - 6834262; Fax: 011 - 6841845
2. Carrier Refrigeration Private Limited, C-7, Golden Enclave, Airport Road, Bangalore.
560017.; Tel: 080 - 5272688; Fax: 080 - 5262788
3. Freezeking Industries Private Limited, 7/17, Industrial Area, Kirti Nagar, New Delhi.
110015.; Tel: 011 - 5930681; Fax: 011 - 5447509
4. Frick India Limited, 7 / 15, Kirti Nagar Industrial Area, New Delhi. 110015; Tel: 011
- 5463706; Fax: 011 - 5275695
5. Voltas India Limited, Air Conditioning and Refrigeration Division, 19, J.N.Heredia
Marg, Ballard Estate, Mumbai. 400001.; Tel: 022 - 2618131; Fax: 022 - 2615220

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Installed Capacity

The material to be kept under cold storage is received from the farms. It is stacked and cooled to a
temperature of 8 degrees centigrade. The plant will be in continuous operation for three shifts a day
with each shift of 8 hours duration. The storage capacity of the unit is 500 tones.

The time period required for achieving full capacity utilization is one year.

Raw Material Suppliers

Locally available.

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Manufacturing process

13
Manpower

Sl Description No of Total
Persons salary /
month
(Rs. lakhs)

14
 1 Refrigeration Engineer 1 0.150

2 Refrigeration mechanics 3 0.300

3 Plant mechanics 3 0.300

4 Skilled workers 3 0.180

5 Unskilled workers 30 0.900

6 Administrative staff 2 0.200

7 Security staff 4 0.160

8 Total 36 2.190

Statutory compliances

Pollution Control
There are no harmful effluents in the process. However, NOC may be taken from the concerned
State Pollution Control Board.

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Energy Conservation
Proper insulation should be given to avoid loss of heat/temperature.

Quality Control and Standards

The Directorates of Agricultural Marketing and Inspection in State Governments and Govt., of
India are regulating cold storage industry under Cold Storage Order, 1980, promulgated under
Essential Commodities Act, 1955 all over India except in the States of UP, West Bengal, Punjab
and Haryana and provisionally in Bihar. State Governments are regulating the industry in their
respective States under their respective Acts/Orders. The Ministry of Agriculture has now
repealed the Cold Storage Order and advised the State Governments also to repeal it totally. With
the repeal of this Order, the cold storage industry will now be able to enter the market free from
all kinds of administrative interference.

INFRASTRUCTURE

Sl Description Sq. feet

1 Cold store for fruits and vegetables 8000

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 2 Administrative office 500

3 Machinery spares store 200

4 Refrigeration room 2000

5 Toilet space 200

6 Miscellaneous space 100

7 Total 11000

Land 1.0 acres Rs. 2.0 lakhs.

Storage area is 11000 square feet as detailed below.

Construction cost Rs. 900 per square foot Total value of civil works
Rs. 99.00 lakhs.

Total cost of land and civil works is Rs. 101.00 lakhs.

Location: limbdi,Surendranagar

Utilities per month

Sl Description Rs. lakhs

1 Power 111500 kwh @ Rs. 5.50 per unit 6.133

2 Water 0.100

3 Refrigeration gas 1.000

4 Total utilities 7.233

IMPLEMENTATION
The approximate time required for various activities is given below. However, it may vary from
place to place depending upon the local circumstances and on the enthusiasm of the
entrepreneurs:

legal formalities 15 days

17
Availability of Finance 3 months
Machinery procurement, 2 months
Trial Run 1 month

KEY SUCCESS FACTORS &

CHALLENGES
SWOT Analysis
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19
 REFERENCES

https://www.google.co.in/search?
q=swot+analysis+of+cold+storage&espv=2&biw=1024&bih=662&source=lnms&tbm=isch&sa
=X&ved=0ahUKEwiT_fGW6djRAhUKp48KHW6ECogQ_AUIBigB

http://krishna.nic.in/PDFfiles/MSME/Food/Cold%20Storage[1].pdf

http://agriexchange.apeda.gov.in/Ready
%20Reckoner/Cold_Storage/WesternRegion/GUJARAT.aspx

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 ANNEXURES
Cost of project
Sl Description Rs. lakhs

1 Land 2.000

2 Civil works 99.000

3 Plant machinery 47.000

4 Cost of power connection 1.500

5 Cost of electrification 2.000

6 Erection and commissioning 3.500

7 Cost of machinery spares 2.000

8 Cost of office equipment 1.000

9 Company formation expenses 0.100

10 Gestation period expenses 1.000

11 Sales tax registration expenses 0.100

12 Initial advertisement and publicity 5.000

13 Contingencies 1.000

14 Working capital margin money 2.000

Total 167.200

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Means of finance

Sl Description Rs. lakhs

1 Total Project Cost 167.200

2 Equity 55.733

3 Debt 111.467

4 Working capital margin money 2.000

Implementation schedule
The approximate time required for various activities is given below. However, it may vary from
place to place depending upon the local circumstances and on the enthusiasm of the
entrepreneurs:

legal formalities 15 days

Availability of Finance 3 months
Machinery procurement, 2 months
Trial Run 1 month

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