'cool supply chain the ultimate aim'

India Missing Cool Chain

India Missing Cool Chain

The Cool Chain Industry in India, despite Governmental initiatives and intervention, is at a nascent stage. The Government has announced a slew of fiscal initiatives, including Capital gap funding and excise (VAT) exemptions on Capital goods such as Air-conditioning and Conveyor Belts, in an attempt to attract investments and modernise this Infrastructure sub-sector. For the Fiscal year ending 31st March, 2011, the Government has accorded approval for 107 Cold Storage facilities, with an aggregate capacity of half a million metric tonnes. It aims at attracting private investment to create an additional 15 million Metric Tonnes of Cold Storage facilities, in order to reduce the 40% wastage in fruit and vegetable production, brought about by lack of storage, cold-chain and transport infrastructure. The total cold-chain market in India is worth about US$ 475 million per annum.

Opportunities abound in this niche, though highly profitable market segment globally, and it is Cold chain infrastructure that allows a country like Brazil, which is at the bottom end of the world’s Mango production (1.9%) to be the 3rd largest Global exporter of the fruit (12.24%), just behind India (17.2% of Global Exports) which is the world’s largest producer, accounting for about 38.6% of the global produce. Mango exports from India were worth US$ 224 million, the lowest amongst all agricultural produce, while Coffee Beans, which require relatively less care in handling, were exported to the tune of US$ 372 million. Only about 2% of the fruits and vegetables from India, receive the special care and handling from a Cool Chain solution, while the pan-Asia average is 8%, as compared to about 85% compliance in Europe.

Interestingly enough, intra-India transport infrastructure is hardly geared up to meet the challenge. Domestic air-freight is the least utilised mode of carriage, with high surcharges on Perishable Cargo rendering the option economically unviable for most Shippers. Additionally, almost all domestic air-freight is on narrow-body Aircraft with only bulk loading options available, thereby ruling out the use of modern, temperature controlled ULD’s. The Indian Railways operate a few Refrigerated Parcel Vans (Wagons), each of which can carry about 12 Metric Tonnes of chilled goods. However, in the absence of reliable power-packs, ground plug-in points and other requisite infrastructure, the demand for this service has steadily declined. Today, almost all of the Cool-Chain freight within India, moves through Surface Transport, on Refrigerated Trucks and Vans from local produce Warehouses / Refrigerated facilities, to regional distribution Centres, with approximately 80% of these vehicles being used to transport Dairy (milk in liquid form), with approximately 6,000 trucks left to handle agricultural produce.

The Indian and U.S. Governments have jointly launched an Agriculture Knowledge Initiative (AKI) and within this initiative, the U.S. Trade & Development Agency (USTDA) has been conducting programmes to strengthen the Cool Chain infrastructure in India, in association with the Global Cold Chain Alliance (GCCA). The objective of this programme is to facilitate improved handling of products in the Cold Chain and also, create an increased understanding of the implementation and management of a Cool Chain and transportation.

Perhaps, the highest credit for the development of an efficient Cool Chain Network in India could be attributed to McDonald’s. The Company spent over six years establishing an efficient Cool Chain Network pan India and has even incorporated HAACP (Hazard Analysis and Critical Control Points) programmes along the Cool Chain Supply cycle.