Companies

Cold storages hope to attract investors after getting industry status

Anjali Prayag Anjana Chandramouly Bangalore | Updated on March 07, 2011


While modern retail players are unhappy over the Government's weakness on foreign direct investment, they are upbeat about the decision to include cold chains in the infrastructure sector. “Warehousing space increase will help us not only in bringing fresh foodstuff to customers, but also in reduced prices because of less wastage,” says Mr Ashutosh Chakradeo, Head, Buying, Merchandising and Supply Chain, HyperCity Retail India.

Although the food-retailing industry, estimated to be worth about Rs 9 lakh crore, has benefitted by the accelerated investments in cold-storage projects, this initiative will help boost the sector further, say analysts. This year, 24 projects with a capacity of 1.4 lakh tonnes have been sanctioned under the National Horticultural Mission. In addition, 107 cold-storage projects with a capacity of 5 lakh tonnes had been approved, according to the Finance Minister.

Mr Thomas Varghese, CEO, Aditya Birla Retail, which runs the More chain of supermarkets, says people not willing to invest in cold chains, because of lack of subsidies and easy lending facilities, will now be do so. “An industry status means lending to these companies will be on softer terms, and priority sector funds will become available.”

Banks have been lending for small facilities. Ms Shubhalakshmi Panse, Executive Director, Vijaya Bank, says banks will be willing to fund cold storage facilities. “Only the huge facilities will now come under the infrastructure sector. Lending will depend on the project and the size of the facility.”

All retailers agree that increased shelf life of products will help farmers, retailers and customers, and the creation of modern cold-chain capacity is vital for reducing wastage of horticultural products in India. This initiative of the Government will directly reflect in lower retail prices, says Mr Viney Singh, Managing Director, Max Hypermarket India Ltd. “Any benefits by way of funding and fiscal relief will help in this direction. However, the fine print of announcement needs to be understood to assess its impact.”

Published on March 07, 2011

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