How to Start a Cold Storage Business in India

Consider India's Cold Storage Business Loan for your entrepreneurial venture. Cold storage could be the perfect fit if you're seeking an investment opportunity with long-term potential. This service involves preserving vegetables and fruits to prevent spoilage over extended periods. While the initial investment may be substantial compared to other small businesses, the returns are lucrative over time.

The cold storage industry is thriving globally, encompassing both developed and developing nations. There are two main types of cold storage: product-specific, excluding potatoes, and multi-purpose facilities. However, multi-purpose cold storage tends to yield significantly higher returns, making it a profitable choice overall.

Why is there a need for a cold storage business? 

Across the world, there's a significant amount of wastage of fresh fruits and vegetables, particularly in countries with high food crop production. These nations often experience the highest levels of food waste. Consequently, cold storage becomes essential in extending the marketing period, preserving shelf life, managing post-harvesting processes, preventing spoilage, overcoming transportation bottlenecks during peak production periods, and maintaining product quality.

Furthermore, cold storage facilities are crucial in reducing the wastage of perishable commodities, ensuring fair prices for farmers, and making farm products readily accessible to consumers in fresh condition at competitive prices.

The increasing demand for packaged and processed foods and shifting lifestyle habits are also driving the global need for cold storage businesses.

Advantages of Cold Storage

Cold storage facilities offer several benefits, including:

Minimization of vegetable and fruit wastage.

Storage capability for medicines or vaccines.

Availability of off-season farm products at reasonable prices.

Facilitation of fair prices for farmers.

Accessibility of packaged or processed foods to customers.

Financing Options for Cold Storage Business

Entrepreneurs or MSMEs can seek business loans to cover investment costs or address cash flow needs. These loans, including working capital loans, are available to fulfill the operational requirements of their business.

The Ministry of Food Processing Industries typically finances around 50% of the total cost, including machinery. Additionally, Northeastern states may be eligible for grants covering up to 75% of the expenses. Eligibility criteria are determined by the ministry or the bank overseeing the loan or subsidy approval process.

Starting a cold storage business in India requires careful planning and attention to detail. Here are the key steps to get started:

1. Develop a Comprehensive Business Plan: Begin by crafting a detailed business plan that encompasses all aspects of your cold storage venture, including product and service details, as well as employee information including full names and addresses.
2. Selecting the Right Location: Location is critical for the success of any business, especially cold storage. Ideally, your facility should be situated near producing farms or consumer centers. A multi-storage or multi-commodity cold storage facility typically requires about one acre of land with a capacity of 5000 metric tonnes. The actual area needed will depend on the volume of produce to be stored.
3. Choosing Equipment: When selecting equipment, particularly in regions with high temperatures, it's important to choose wisely to handle heavy loads and potential power cuts. Consider factors such as the age of equipment, load capacities for lights, fans, and products, heat generated by stored items, and the construction materials of the storage unit.
4. Designing the Storage Unit: An ideal cold storage unit should meet specific design and capacity requirements. For instance, a cold storage room with dimensions of 14 ft. x 10 ft. x 10 ft., humidity levels between 85-90%, and capable of storing fruits and vegetables, with a capacity of 10 Metric tons (MT). It should maintain an initial temperature of 28-35 degrees Celsius, with insulation using 60mm Poly Urethane Fibre (PUF), a refrigeration capacity of 30000 Btu/hour, and able to withstand an assumed outer temperature of 43 degrees Celsius while maintaining an internal temperature variation of (+-)2-4 degrees Celsius.

IID Membership

Membership programs for business startups offer valuable resources and support to entrepreneurs at various stages of their journey. These programs often provide access to mentorship, networking opportunities, educational workshops, and shared workspaces or office facilities. Additionally, members may benefit from discounts on services, access to funding opportunities, and exposure to potential clients or investors through community events. Joining a startup membership program can accelerate