cold storage industry has not gone into a deep freeze yet, but
indications suggest that could happen soon. This, despite an
awareness about the importance of cold storages growing across all
walks of life - farmers, traders, retailers and corporates.
If our capacity
utilisation was 10 per cent a few years ago, today it is 60 per
cent, says an official from Snowman Frozen Foods, which
operates from 10 locations in India. While the four metros are
using 1,200 tonnes of capacity each, other places use a
1,120-tonne capacity. The usage is coming mainly from the dairy
sector, fruits and vegetables, poultry, marine food, ice-creams
and food retailers such as pizza chains.
We did not face much
recession till last year, but this year the industry has not been
encouraging, says a Frick India official. Citing Tamil Nadu as
an example, he says last year the state had 14 cold storage
projects. But this year there were no applications.
The Rs 40-crore turnover
Frick India has set up milk-chilling plants and cold storage
facilities and serves markets like Punjab, Uttar Pradesh,
Maharashtra, Andhra Pradesh and Himachal Pradesh. It sets up
capacity ranges from 500 tonnes to 5,000 tonnes. It is also into
big industrial projects such as power, steel and ship
air-conditioning, and it is the only company in India to use screw
compressor technology, giving it an edge over others.
Talking further on the
industry, Blue Stars J Praveen Kumar, a sales engineer says:
There are basically two kinds of customers who go for cold
storage - one set is attracted purely by the subsidy, while the
other opt for it only out of business reasons.
In times of recession,
subsidy is an important factor. It amounts to Rs 50 lakh for a
5,000-tonne capacity, coming down proportionately depending on
capacity. A 1,500-to-2,000-metric-tonne project would be viable,
says Kumar. Awareness of cold rooms as collection centres is
also growing. These are facilities where goods are kept
temporarily till shipped to cold storage.
In Tamil Nadu, considered
a growing belt, almost all districts use cold storages for dairy
purposes. These are areas like the Salem-Erode-Namakkal belt,
while Hosur, Krishnagiri, Theni and Ooty also use the same for
floriculture, fruits and vegetables.
Another segment likely
to face pressures from the market is the softy ice-cream equipment
industry. Currently it is seeing a boom, but a depression
is predicted within a few months. The reason, says Jayesh
Mamtora of Snowball Enterprises, a Pune-based softy machine
manufacturer, is: The industry got a tremendous facelift
due to MTR Foods instant ice-cream mix. Out of every ice-cream
sold for Rs 5, the vendor got a profit of Rs 2. But this has
attracted a host of equipment manufacturers into the segment
to a point where supply could shortly outweigh demand.
Mahendra Jitura of Kunal
Industries expresses a similar view. There are already more than
48 equipment manufacturers in this segment and definitely more
than four in major cities. Ice-cream sales being largely seasonal,
equipments could face a petering out syndrome soon and
equipment-makers are now seeking alternative products.