The size of the country’s cold chain market is expected to jump more than two-fold to $8 billion by 2015 on the back of increased investment in the sector, according to a study conducted by Yes Bank.

“The size of the cold chain market in India is estimated at more than $3 billion and is growing at a modest CAGR of 11 per cent. The total value is expected to reach $8 billion by 2015 through increased investments, modernisation of existing facilities and establishment of new ventures via public-private-partnership,” the report said.

The emergence of organised retail and changes in FDI norms provide immense opportunities for cold chain sector, the bank said in the report released by Planning Commission Member Saumitra Chaudhuri at industry body PHDCCI’s conference.

The cold storage capacity in the country currently is about 30 million tonnes, while the annual transaction volume of perishable products is estimated at 230 million tonnes.

Addressing the conference, Chaudhuri said the cold chain market has been somehow lagging behind all the sectors and there is “lot of catching up to do”.

Without making a guess on the value of post-harvest crop losses every year due to lack of cold storage facilities, he said there is lot of wastage, which is “disturbing”.

“Despite several programmes, investment has been very weak in the cold chain sector,” Chaudhuri said, adding that except potatoes, there are hardly any facilities in other crops.

The Planning Commission member emphasised on the need of cold chain facilities to store horticulture produce, fisheries and pharmaceutical products scientifically.

Chaudhuri said the investment in cold chain investment should start now to achieve perceptible change in the 12th plan period and 13th plan period.

Yes Bank’s Country Head Food and Agri-business (Strategic Advisory and Research) noted that high real estate cost and gestation period in the business are the two major challenges in establishing cold chain infrastructure.

(This article was published on November 27, 2012)
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