Cold storage business | How to start? | cost and profit margin.

Why we need to store products in cold storage. It is only because preserves its freshness and extends its life. so, how do I start my own cold storage business plan in India?

Cold storage business
Cold storage business

Seafood, biopharmaceutical, vegetables, meat, and biomedical products need a cold storage.

This is the business opportunity to start your cold storage business.

At some stages in the distribution chain, we need cold storage before the product finally reached the hand of the end-user.

The cold storage facility is available for potatoes, pomegranates, grapes, vegetables like this item in India.

We have only 6300 cold storage facilities in India with a capacity of 30 million tonnes.

Approximately 75% of cold storage facilities are only suitable for storage potatoes because it is a commodity that produces 20% of the revenue from the agriculture revenue.

It’s great! But business demand is also increasing.

Cold storage facilities are not just a to keep your products. You can package and deliver the products at a certain temperature from one place to another place.

How does this cold storage facility work?

Think. What do we do to increase the shelf life of vegetables? We store it in the freezer. This is exactly what cold storage does.

You can set a temperature to a certain degree to keep your products fresh and last longer and it will help to extend its life.

For example, if you put a temperature at a certain level for fruits and vegetables it will reduce the risk of damage and will provide the last longer life to your fruits.

If you store vegetables and fruits in the world environment it will mold faster rather than this cold storage.

If you store perishable fruits at the wrong temperature then it will lead to a change in color texture and test of fruits.

Whenever you eat fruits that are stored at the wrong temperature then it will increase the risk of food poisoning.

In India, there are three types of cold storage machinery facilities: industrial cool rooms, combi refrigerators, and modular room refrigerators.

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Area requirement

The area required is the main factor in any type of business whether it is a manufacturing business or a cold storage business plan.

It is good if you own the property rather than taking on rent.

Rental property is your fixed expense. Make sure to spend less money on rent for cold storage business units.

Let’s consider you are paying 1 lac rupees per month rent for cold storage in India. It means you have to pay 12lac rupees per year.

Approximately, 43560sq.feet area is required for cold storage business units.

It means you will have to buy or rent a 1-acre property to start cold storage.

Lots of Investment needs for this project. It would be around 10 cr. Let’s take a glance.

Cold storage business investment cost

We need one-acre property to install our cold storage plant.

It is good if you’re on the property then you will have to invest your money in property development.

to make a 5000 metric ton cold storage you will have to invest 10 crore rupees in this business

Including, operational cost, plant and machinery cost, property and land development cost, electricity and water supply management, labor cost, project report, skilled developers, other utilities, marketing, import-export cost, packaging cost, the salary of the high skilled employees, and many more related to the cold storage.

  • Property and land development -5000000
  • Plant and machinery – 1.5 cr
  • Cold storage investment cost – 5000 metric ton capacity of cold storage will be worth as much as 5 cr to 6 cr.
  • Construction and civil work- approximately 85 lacs.
  • Technical – approximately 2 lacs
  • Utilities. – approximately 23 lacs

Details of the machinery and equipment used in business.

you will have to buy a detailed project report on the cold storage business from higher authorities.

It will help you to build your business strategy ke liye because this is a large-scale investment business and if you did a minor mistake then it will cost you much more.

You will have to decide first what type of cold storage you want to build?

Is it vegetable cold storage or a potato cold storage plant, lemon storage plant or is it ready to eat cold storage business plan?

because there are different types of cold storage plants and in every plant you will need different machinery and equipment.

here I mention some common equipment which is used in cold storage business plant.

Chiller and condenser

it can control the temperature between minus 60 degrees Celsius to 120.

The chiller and condenser are used in chemicals hydraulics, refrigeration, water, air, and steam cooling system.

Chilling unit

Sealing unit used in chemical, pharmaceutical industries and also in cold storage textile and rubber industry

  • Bitzer piston compressor air-cooled condensing unit.
  • Rotary screw compressor unit.
  • PU panels for a cold storage unit.
  • Copeland freezer air-cooler ,that condensing unit.
  • Air cooler for cold room.

Which products is needed to be store in cold rooms?

Here is the list of products that need to be stored in cold storage to increase their shelf life.

  • Meat
  • Apple
  • Banana
  • Milk
  • Vegetables
  • Lemon
  • Lettuce
  • Lobster
  • Poultry
  • Potatoes
  • Lemon
  • Fish
  • chocolate
  • cherries
  • Oranges
  • Mangoes

Some products are ready to eat and some products you can ripen and sale in the market.

These are all the products you can store in cold storage and can earn a good profit margin from all of them.

It is equally necessary to clean and maintain cold storage plants. The machinery, such as the humidity level, temperature, and preserved product, should be examined on a regular basis. Trays, containers, and storage bins must be serviced or cleaned on time.

How to build cold storage step by step?

You will have to determine first, that how many businesses in your area need cold storage.

And how many of them already have cold storage support to store their products.

If you to find out that there are some cold storage in your area with the poor facility. or there are also some of the businesses that do not have any cold storage,

then you can provide cold storage to those businesses with high facility and also with the lowest price to beat your competitor.

  • Decide which type of cold storage business you want to build.
  • Buy a property or take it on lease agreement
  • take business loan from nationalized banks.
  • Create your project report on the cold storage business plan.
  • Contact the suppliers and manufacturers of cold storage equipment.
  • Decide construction plan of property development and install machinery.
  • Apply for the subsidy on the national horticulture board.
  • Higher skilled workers and employees.
  • select number of farmers or your customers where you can get your material to store in cold rooms
  • Create a plan for exporting your materials.
  • Do market research and know more about your competitors.

Subsidy and loan procedure for cold storage business plan in India.

There is a ministry of food processing industry (MOFPI) that offers financial assistance to start a cold storage business in India.

Your cold storage business should be between 5000 metric tons to 10000 metric tons capacity. Only then you can get the subsidy from the government.

Government offers subsidies to you between 50 to 70%. Remember that the subsidy limit is up to 10 crore rupees.

the main facilities that should be included in a war cold storage business are production facility transportation facility and distribution network.

you will have to set up at least two of the facilities to get the subsidy from the government.

You can apply to the national horticulture board for a subsidy. This board accepts only 30 applications per year within a determined date.

For IPA( In principle approval), it is mandatory to fill the form online in the prescribed application format on the website http://www.nhb.gov.in

Loan procedure:
Nationalized banks like State Bank of India and Central Bank of India will give you loans for this cold storage.

you can get 80% of the loan for the construction of cold storage from banks

And also 90% of the loan for the rental properties.

These banks will provide your loan for some time 11 years and 1 grace year.

Arranging cash is one of the most challenging tasks because the cold storage business requires a significant investment. Using savings to support the complete investment for a cold storage business is not a smart idea because they may be needed to meet immediate needs or in the event of a cash constraint.

Entrepreneurs interested in starting a cold storage business may seek to obtain a business financing.

License and documentation required for cold storage business

  • You will have to obtain some registration and license from your local authorities. which I mentioned below
  • Registration of firm
  • GST number registration
  • FSSAI registration
  • Trade license
  • MSME/ SSI registration
  • EPF registration
  • ESI registration
  • Trademark of your business

License criteria for your cold storage.

  • Obtaining a license and registration is mainly based on the turn over of the cold storage rather than the capacity in metric ton.
  • if your business has an annual turnover of up to 12 lakh rupees then you can get an FSSAI registration certificate.
  • if your annual turnover is better in 12 lakh rupees to 30 rupees then you get the license under state licensing registration which is required.
  • And if your business annual turnover is more than 30 crore rupees you can get the license under Central licensing authorities.

How can you start to earn money from the cold storage business in India?

Now let’s consider you have decided to start your own cold storage business in India.

Then how you can make money from this business? is it profitable or not?

for your kind information, I want to tell you one thing. this is a high profitable business idea in India or any other country

You can make money by exporting your products like vegetables, fruits, by-products of milk, meats, and many more.

This cold storage business will give you 50 lakh rupees profit margin annually as your return on investment.

You can take rent from import-export institutions, the medical industry, or from farmers when they need cold storage to store their vegetables, meat.

Important factors

  • Property that will be utilized for cold storage must be transferred to non-agricultural land.
  • Before constructing the facility, you must get a permit letter from the local government.
  • Cold storage facilities are only authorized to operate for 12 hours every day.
  • The area must have sufficient drainage as well as road access.
  • A site elevation should be present.
  • To determine load bearing strength, soil testing must be performed.
  • Pressure and vacuum testing of the refrigeration system is required as a precautionary measure.
  • A cold storage facility must have alarms, fire extinguishers, and exist.
  • Soft water must be utilised; if it is not accessible, a water softening facility must be installed.
  • Most importantly, you must obtain cold storage facility insurance.

Promote your cold storage business online.

You can promote your business on social media platforms or you can create your blog about your business.

Where you will have to provide a piece of business information and your facilities like transportation, production facilities, and capacity of your cold storage.

Create your business ads using Google AdWords planner. It will help you to generate target customers from all over India.

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Conclusion

Cold storage is a service that keeps vegetables and fruits from rotting for an extended length of time. Although the initial investment in this firm is significantly larger than in other small enterprises, it gives higher returns over a longer period of time.

Cold storage is a significant industry in both industrialised and developing countries. There are two forms of cold storage, depending on the facilities provided. Except for potatoes, one sort of cold storage is product-specific, while the other is multi-purpose. However, the returns on multi-purpose cold storage are significantly larger and more profitable overall.

Cold storage facilities are very important in reducing perishable product waste. Furthermore, it assists in providing farmers with remunerative costs and making agricultural goods easily available to customers in fresh condition at cheap and competitive prices.

Need for packaged and processed goods, as well as changing living choices, are driving the global demand for cold storage businesses.

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