Central Warehousing Corpn to tie up with Concor for cold chains

Central Warehousing Corporation proposes to float a joint venture and a special purpose vehicle shortly, subject to the Centre's approval.

While the joint venture will be with a bank or non-banking finance company to launch a warehousing finance company, the special purpose vehicle will be in partnerships with Container Corporation of India (Concor) under the Ministry of Railways and the National Horticulture Board under the Ministry of Agriculture to promote cold-chain infrastructure.

Additional capacity

Mr B.B. Pattanaik, Managing Director of CWC, while talking to Business Line said in 2011-12, the corporation proposes to construct an additional storage capacity of over two lakh tonnes, of which 1.5 lakh tones would be earmarked for storage of food grains by Food Corporation of India and the balance for other commodities.

A memorandum of understanding in this regard was signed recently between the corporation and the Ministry of Consumer Affairs, Food and Public Distribution, he said.

Right now, the corporation has a storage capacity of 10.5 million tonnes (mt), of which it has constructed 8.32 mt and hired or leased the balance capacity.

Funding

With increasing acceptance of warehousing receipts as negotiable documents, the Managing Director of the corporation sees opportunities in warehousing financing.

“But as per law, we cannot undertake the job on our own,” he said, adding, “we will also need expertise from outside to handle warehousing financing in the most professional manner.”

The corporation would hold 26 per cent equity stake in the joint venture, leaving the balance 74 per cent to the partner(s). The size of authorised and paid capital is yet to be decided.

In the special purpose vehicle proposed for promoting cold-chain infrastructure, the corporation and Concor would hold 37 per cent stake each, leaving the balance 26 per cent for the National Horticulture Board.

The authorised capital would be Rs 3 crore and paid-up capital Rs 2 crore, to start with. “The SPV (special purpose vehicle) will not create any cold chain on its own, but will act as a facilitator, helping others keen to venture into this field,” Mr Pattanaik added.

The memorandum, signed by Mr Pattanaik and Dr B.C. Gupta, Secretary, Food and Distribution, Government of India, targets the corporation's turnover at Rs 1,100 crore for 2011-12 and proposes to train 5,500 farmers during the year on how to minimise loss after harvest and create rain-water harvesting structures in warehouses.