Rs 21,000 crore to be invested in setting up/ upgrading cold storages in the next 4-5 years

March 23, 2019

According to Crisil, in coming 4-5 years Rs. 21,000 crore will be invested in setting up or upgrading cold storages to address the problem of stockpiling of perishable commodities. There has been an imperative need to upgrade existing cold storage plant and machinery, and technology. Currently 68 per cent of the existing cold storage capacity is used for storing potato and yet farmers are not getting the right price. The situation in other commodities no better.

Crisil Research has valued that investment of Rs. 16,000-21,000 crore is being lined up in the sector between 2019 and 2023 for raising the domestic post-harvest value chain and to feed the downstream food processing industry.

Crisil Research director Hetal Gandhi stated that fresh investment was expected from, while the government typically supported the sector through subsidies. For instance, the union ministry of food processing offered subsidy at 50 per cent of the project cost with a cap of Rs. 10 crore.

To set up a multi-commodity cold storage of 10,000 tonnes capacity, investment of around Rs. 20 crore is needed with a payback period of 6-7 years.

Cold storage forms the most important post-harvest horticultural value chain for the downstream food processing industry. The current cold storage capacity in India is secured at 37-39 million tonnes (MT). According to official statistics, there are about 7,645 cold storages in the country with 68 per cent of the capacity being used for potato, while 30 per cent is multi-commodity cold storage.

Crisil also expects the cold storage industry to grow at a CAGR of 13-15% over fiscals 2019-23, mainly driven by rising demand for processed food, fresh fruits & vegetables, seafood and bio-pharmaceuticals in exports markets.

Currently, 95% of the cold storages are owned by the private sector, 3% by cooperatives and the remaining 2% by the public sector undertakings. Since, bulk of the capacity is owned by the private sector, there is greater need for the central and state governments to rise up to the occasion and support the beleaguered industry.

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