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Cold Storage is the second-largest supermarket chain in Singapore behind NTUC FairPrice, owned by Dairy Farm International Holdings.
M/s GURUKRIPA COLD STORAGE, WAREHOUSING & LOGISTICS
VILLAGE-JORA, TEHSIL-JAISINGH NAGAR, DISTRICT-SHAHDOL (M.P.)
PROJECT REPORT COLD STORAGE
ON
UNDER
SCHEME FOR CAPITAL INVESTMENT SUBSIDY ON CONSTRUCTION OF COLD STORAGE (Techno-Economic Feasibility Report)
COLD STORAGE FOR FRESH HORTICULTURE PRODUCE NOT REQUIRING PRE-COOLING BEFORE STORAGE ADDOPTED NEW TECHNOLOGY (FIN COOLING COIL SYSTEM) REFERENCE TO PROJECT S.NO PARTICULARS CHAPTER
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.
PROJECT AT GLANCE INTRODUCTION MARKET POTENTIAL FINANCIAL ASSISTANCE FROM GOVT. LOCATION AND SITE SELECTION CAPACITY UTILIZATION CRITERIA OF EQUIPMENT SELECTION TECHNIACAL KNOW - HOW EFFLUENT DISPOSAL & TREATMENT MANPOWER & MANAGEMENT UTILITIES PRODUCT MIX & RECIEPT IMPLEMENTATION PROGRAMME COST OF PROJECT MEANS OF FINANCE SECURITY TO PROJECT ASSUMPTION OF PROFITABLITY ECONOMIC CONSIDERATION AND SOCIAL RESPONSIBILITY CONCLUSION CHAPTER – ONE PROJECT AT GLANCE TEN SIX
ONE TWO THREE FOUR FIVE
SEVEN EIGHT NINE
ELEVEN TWELVE THIRTEEN FOURTEEN FIFTEEN SIXTEEN SEVENTEEN EIGHTEEN NINETEE
NAME OF THE CONCERN NAME OF PROMOTER (PARTNER’S) Gupta,
: :
M/s: GURUKRIPA COLD STORAGE, WAREHOUSING & LOGISTICS 1. Shri Ravi Keshari S/o Shri Lalji
Status Office Address
Site Address Product Installed Capacity Chambers) Capacity Utilization Onwards) Cost of project
Beohari, Distt.-Shahdol (M.P.) 2. Smt. Shailesh Gupta D/o Shri Brijesh Prasad Gupta, Beohari, Distt.-Shahdol (M.P.) 3. Smt. Sangeeta Gupta D/o Shri Radha Krishna Gupta, Beohari, Distt.-Shahdol (M.P.) 4. Lalji Gupta S/o Shri Shiv Prasad Gupta, Beohari, Distt.-Shahdol (M.P.) 5. Smt. Yashoda Gupta D/o Shri Hanuman Prasad Gupta, Indore (M.P.) : Partnership Firm : M/s: Guru Kripa Cold Storage, Warehousing & Logistics. C/o M/s: Bharati Lodge, Beohari, Distt.-Shahdol (M.P.) 484774 : Village-Jora, Tehsil-Jaisingh Nagar, Distt.-Shahdol (M.P.) : Cold Storage : Cold Storage - 5390 M.T. (Four : 75% (1st Year, 2nd Year) 80% (3rd Year, 4th Year,) 85% (5th Year, 6th Year & 7th Year : Site Development Building Plant & Machinery (Rupees in Lacs) : Rs 7.00 : Rs 173.00 : Rs : Rs. : Rs 0.00 0.00
220.00 Prelim. & Preoperative Exp. Contingency & W.C. Margin TOTAL Rs.400.00 Means of Finance Rs.331.00 Subsidy @55% Own Capital 69.00 TOTAL Rs.400.00 Cash Break Even Point : 63% in Second Year Operation at 75% Capacity Utilization : Rs. : Term Loan Including Rs. 165.00 lac
(Rupees in Lacs) :
D.S.C.R. Subsidy) Important Ratios (Key Indicators) Projection 2014-15 145.53 41.50 0.00 89.40% 28.52% 33.70 23.16% 84.75 58.24% 69.00 92.59 92.59 3.57 3.57 1.58 1.58 0.34 9.80% 71.48% 0.00% 0 36.60%
:
2.10: 1 (Considering Loan without
Net Sales Operating Profit (Net) Other income PBDIT/Sales PBT/Sales PAT PAT/Net Sales Cash Accruals Cash Accruals/Sales Paid up Capital (PUC) TNW Adjusted TNW (TNW-Investment in associates) TOL/TNW TOL/Adjusted TNW C/R C/R excluding T/L instalments due in 1 year Net Sales/TTA (Times) PBT/TTA (%) Operating costs/sales(%) Bank Finance / Current Assets (%) Inv + Rec. /N.S. (DAYS) NWC / CA (%)
Projectio n Projection 2015-16 2016-17 145.53 155.23 53.01 72.63 0.00 88.76% 36.42% 42.90 29.48% 87.20 59.92% 69.00 122.63 122.63 2.31 2.31 2.15 2.15 0.36 13.04% 63.58% 0.00% 0 53.45% 0.00 88.44% 46.79% 58.60 37.75% 97.08 62.54% 69.00 163.65 163.65 1.44 1.44 2.83 2.83 0.39 18.15% 53.21% 0.00% 0 64.64%
(Rs. In lacs.) Projectio Projectio Projection n n 2017-18 2017-18 2018-19 155.23 164.93 164.93 82.24 100.16 106.29 0.00 87.74% 52.98% 66.29 42.70% 99.73 64.25% 69.00 210.05 210.05 0.90 0.90 3.52 3.52 0.39 20.60% 47.02% 0.00% 0 71.56% 0.00 87.36% 60.73% 80.63 48.89% 109.71 66.52% 69.00 266.49 266.49 0.53 0.53 4.32 4.32 0.40 24.53% 39.27% 0.00% 0 76.87% 0.00 86.57% 64.45% 85.14 51.62% 110.46 66.97% 69.00 327.49 327.49 0.29 0.29 5.15 5.15 0.39 25.18% 35.55% 0.00% 0 80.57%
CHAPTER – TWO INTRODUCTION GENERAL: The proposal is being setup to install a Cold Storage, which will be made by M/s Gurukripa Cold Storage, Warehousing and Logistics (A Partnership Firm). The Cold Storage proposed under the project will have an installed capacity of 5390Metric Tonnes (Approx. 53900 Bags). PROMOTERS: The project is proposed and promoted by Gurukripa Cold Storage, Warehousing and Logistics (A Partnership Firm). The group/family has a long track record in Agricultural Land, Dairy, Hardware, Agency of Tractor, Grains and seed business, particularly in Soyabean Seeds. They have various immovable and movable properties in and around Shahdol. Promoters’ of the firm is energetic and active persons having excellent business capabilities and decision making capacity. They all have agreed to devote their time for the businesses of the firm. The partners of firm are as under: 1. Shri Ravi Keshari S/o Shri Lalji Gupta, Beohari, Distt.-Shahdol (M.P.) 2. Smt. Shailesh Gupta D/o Shri Brijesh Prasad Gupta, Beohari, Distt.-Shahdol (M.P.) 3. Smt. Sangeeta Gupta D/o Shri Radha Krishna Gupta, Beohari, Distt.-Shahdol (M.P.) 4. Lalji Gupta S/o Shri Shiv Prasad Gupta, Beohari, Distt.-Shahdol (M.P.) 5. Smt. Yashoda Gupta D/o Shri Hanuman Prasad Gupta, Indore (M.P.)
CHAPTER – THREE MARKET POTENTIAL
India is the one of largest producers of Spices, fruits and vegetables but its share in the world marker both in fresh and processed form is less than one percent. Moreover, due to inadequacy of infrastructure and processing facilities a large percentage of horticulture produce gets perished before it reaches to consumers. Such crops fruits, vegetables etc. being much more remunerative than the cereal crops, have registered a constant increase in their production in the last few decades, It is estimated that on account of inadequate post harvest infrastructure, substantial percentage gets wasted. Several institutions have reported that depending upon various types of crops, seasons of production and market, the factor like harvesting, post harvesting, handling storage, transportation etc. causes major losses. Agriculture is the major industry of India and about 70% of Indian Population is engaged in activities connected to agriculture. The total agricultural output amounts to approx. 40% of the National Income. The country is producing in excess of 60 million tons of fruits and vegetables per annum. Most of the agricultural produce is perishable in nature and requires certain levels of temperature and humidity to hold the horticultural produce in good condition for longer periods. It is estimated that due to lack of proper facilities of transportation and storage, about 33% of produce, especially fruits and vegetables are wasted i.e. about 20 million tons or 200 lakh tons are wasted. During the peak harvesting season, excess produce gets over flooded and many -a-times, due to lack of storage facilities – let alone cold storage facilities- gets damaged and totally wasted, whereas an artificial scarcity gets developed during non-harvesting periods and prices soar and many times, we have to import these goods at exhorbitantly high prices which most of the people of India cannot afford and have to starve. The major important fruits and vegetables grown in India are: Fruits - Apples, Mangoes, Grapes, Oranges, Bananas, Papaya, Pomegranate, Litchi, etc. Vegetables - Potato, Onion, Tomato, Cabbage, Cauliflower. Peas, Okra (Ladies Finger), Garlic, Ginger, Brinjal (Egg Plant), Green Chilies etc. Other important Food items are Dry Fruits, Fruit Juices, Chemicals, Dairy Products, Ice Creams, Frozen meat, Sea foods like Shrimps, fish etc and eggs. As per secondary source the total turnover in the food market is approx. Rs. 250000 Crores of which value added food products comprises Rs. 80000 Crores. Proposal for joint ventures, foreign collaboration, industrial licenses and 100% export oriented unit envisaging an investment of more than Rs. 25000 Crores was considered since liberalization in August 1991 to till 2005. Now the Government has opened doors for private sectors for coming up with their investment in agriculture segment, whether it is industrial or retail.
According to a study by the national Council for Applied Economic Research the India Food Market in 1995 was Rs. 248000 crores. According to CII Mckinsey Report on proposed food industry, the food market at 1995 price is estimated at Rs. 225000 Crores. According to the study the frozen vegetables markets has a potential to touch Rs.3.50 Crores in value terms by 2005. But this would be possible only if the adequate cold storage facilities available in difference parts of the country. Maintenance of cold chain being essential in this sector, logistics play a very important role. The total storage capacity is around 10 Million tonnes whereas the total output is over 100 million tonnes per annum, resulting in estimated wastage of Rs.23000 Crores annually. Cold Storages are essential for extending the shelf life, period of marketing, avoiding glut, post harvest losses reducing transport bottlenecks during peak period of production and maintenance of quality of produce. It is, therefore, necessary that cold storages are to be constructed in major producing as well as consuming centres. The development of cold storages in the country has an important role in reducing the wastages of the perishable commodities and providing remunerative prices to the growers and to make available farm products to the consumers at competitive and affordable prices. Location and area: The project may be located anywhere in the country suitably either near the producing farms or consumer centers. Shahdol is a district of Madhya Pradesh located on the southeasternmost portion. The district is tribal in nature, with the living standards of the tribes being relatively simple. The boundaries include both districts and a state, with the north bounded by the district of Satna (on the northwestern side) and Sidhi (on the northeastern side). The east and south parts are bounded by the state of Chhatisgarh. To the west, it is bounded by two districts, with Dindori on the southwest side and Umaria district on the northwest. Boundaries of Shahdol District: North: Satna District and Sidhi District, Madhya Pradesh South East: Anuppur District, Madhya Pradesh West: Umaria District, Madhya Pradesh Shahdol is a medium-sized district, having a total area of 5,671 square kilometers. The 2001 census states its total population is around 908,148. Of those, 391,027 are scheduled tribes while 67,528 are scheduled castes. Shahdol district is part of the Rewa division of Madhya Pradesh and its administrative headquarters is the town of Shahdol. As is most often the case with districts, the name of the district was derived from its administrative headquarters town of Shahdol. The name itself is thought to be derived from one Shahdolwa Ahir, who hailed from the village of Sohagpor. This came about because of a declaration by Jamni Bhan, the second son of Maharaja Virbhan Singh of Bagelkhand, who also
happens to be the progenitor of the Ex-Illakadar family of Sohagpur. Jamni Bhan decided to settle in Sohagpur and proceeded to maximize facilities in the settlement. He also declared that places settled by clearing the forests will be named after the pioneer settlers, hence the settlement founded by Shahdol wa Ahir. Later on, the place became the camp site for the Maharaja of Rewa and the British forces while both were on tour. In time, more villages were added on the Shahdol settlement until it eventually became recognized as a town. When the princely states merged in 1948, the district headquarters was shifted from Umaria to Shahdol. Eventually, when Madhya Pradesh was created via the melding of several existing states on November 1, 1956, Shahdol became one of the districts of Madhya Pradesh. Shahdol district is located on the northeastern part of the Deccan Plateau, at the trijunction of the Maikal Ranges of the Satpura Mountain, Vindhya Mountain’s Kymore Range, and some of the parallel hills that extend over the Chhota Nagbur Plateau over in Bihar. The district may be divided into three physio-graphic divisions. They are the Maikal Range, the Eastern Plateau hills and the Upper Son valley. Geographically, the district is mainly a hilly region. It is also very rich in mineral resources, with the major minerals being coal, clay, ochres and marble. Bauxite is also found in large quantities. The tribals living in the area still prefer the old and traditional methods of cultivation. The sizes of the fields are very small, with the tribals mainly marginal farmers. Since the annual yields of the fields are not enough for their home use, for the non-harvesting seasons, they mostly work on daily wages. The chief crops being cultivated are paddy, kutko, maize and kodo. Shahdol is in Madhya Pradesh state with geographical coordinates of in North and in East. Explore the satellite map of Shahdol with high quality images in the page below. Also explore the aerial photographs of Map of Shahdol. The Total population of Shahdol is 4662322 with 2381522 Male and 2280800 Female. Google Map Of Shahdol
• • • • • • • • •
District Code: SH Population Of Shahdol - 1,064,989 Area (km²) - 5,671 km2 (2,190 sq mi) Division - Shahdol Parliamentary Constituency - Shahdol Assembly Constituency - Jaisingnagar and Shahdol Time Zone Of Shahdol - IST (UTC+5:30) Elevation Of Shahdol - NA Sex Ratio - 968 (2011)
Named after headquarters Shahdol, this district is industrially advanced one and a Division of MP state. The lush green forestry landscapes and minerals are its major assets. Tribal dominance makes Shahdol a tribal
area in Vindhyachal ranges whose development is remarkable. Its extensive coal mines reserves are important sources of prosperity. Shahdol district was divided on 15 August 2003 to create Anuppur district. Existing area of present day Shahdol is 5671 km2. Anuppur, Satna, Sidhi and Umaria districts border Shahdol on southeastern, northern and western borders. Its main location is on Deccan Plateau and tri-junction of Maikal Ranges. 2001 census recorded total population of undivided Shahdol district at 908,148. It had 391,027 Scheduled Tribes and 67,528 Scheduled Castes inhabitants. Shahdol has attractive places. Some are mentioned here:
• • •
Virateshwar Temple in Sohagpur Vangana is sought after tourist destination Monuments representing erstwhile Maharaja of Rewa Several picturesque forest regions
Its identity of being predominantly hilly district always keeps Shahdol into the limelight especially for the tourists. Rich mineral resources like coal, fire clay, ochers and marble are pivotal in enhancing maximum revenues for the state. This district lacks in agriculture but its industrial setups are well planned. Climate and Rain: The climate of the district is moderate. It rains from June to October in the district. The temperature remains the highest in the month of June and the Lowest in the Month of January. The maximum and minimum temperature of the district remains 46oC and -1oC respectively. Forest: Sal, Amla, Teak, Sarai and Shisham are the main trees found in this district. The flower of Mahua and Guli provide edible oil. Mahua flower is mostly used for making wine by tribal people. Shahdol District Average Rainfall: 1211.6 mm Shahdol District Average Temperature in Summer: 41.4 deg C Shahdol District Average Temperature in Winter: 26.5 deg C Major Rivers: Son River, Banas River, Chandas, Tipan, Bakan, Kunaknadi, Chuwadi Nadi Tehsils: Beohari, Jaisinghnagar, Sohagpur, Jaitpur Assembly Constituencies: Boehari, Jaisinghnagar, Jaitpur
Shahdol District Facts: There are three physiographic divisions namely the Maikal Range, Eastern Plateau Hills, Upper Son Valley. It is one of the 24 most backward districts of Madhya Pradesh that is getting grants from the
Backward Regions Grant Fund Program. Fruits, Vegetables and Spices consumption is growing at a faster rate than most other food products at 11, 12 and 9 percent respectively. This implies diversification in consumer demand in favour of fruits, vegetables, spices.
HISTORICAL DEVELOPMENT:
The Royal commission on agriculture had observed as early as in 1928 that the cold storage industry was bound to play a very important role in the India’s agriculture economy. The first cold storage was set up in Calcutta in 1928, but the growth of Industry was sluggish up to 1955. There were only 83 cold storages with the installed capacity of 42965 tonnes in 1955. It was felt that cold storages were not established scientifically and store conditions were not proper and hygienic. The sector needed large–scale improvement in terms of quantitative and qualitative aspects. It was therefore, felt necessary to regulate the industry to provide for technical specification and minimum norms for hygienic storage. The need of introducing a licensing system for cold storage was also stressed by horticulture development boars as early as 1957. The Ministry of Agriculture, government of India, thereafter promulgated the cold Storage Order, 1964 under the section 3, the essential commodity act, 1955 which came into force from January1, 1965. The principle aim of promulgating the order was: 1. To ensure hygienic and proper refrigeration conditions into a Cold Storage. 2. To regulate the growth of Cold Storage Industry in a planned manner. 3. To render the technical guidance for scientific preservation of food stuff. 4. To prevent exploitation of farmers by cold storage owners. The order was made applicable all over the country except in the state of Uttar Pradesh and West Bengal, where the State Governments have enacted their Cold Storage Acts. In 1969 and 1975, West Bengal and U.P. sought permission to enact their own acts. This was to include provision for compulsory insurance of food stuff, fixation of storage charges and requisition cold storage space etc. During 1979, Punjab and Haryana were permitted their state orders for regulating the cold storage industry in their states under Act of 1955. Back- ended subsidy @ 40% of the project cost for general and 55% in case of hilly and scheduled areas for maximum storage capacity up to 5,000 per ton under the Govt. of India / NHB Capital Investment Subsidy Scheme. Notification of Ministry of law & Justice, Govt. of India is enclosed for schedule area of our project located.
GROWTH IN COLD STORAGE: With the launching of grow more food campaign in the first five year plan, the cold storage industry attract the attention of industrialist, growers and consumers and number of cold storage rose upto 359 with an installed capacity of 0.30 million tonnes by 1960. During the third five-year plant, the Government provided incentives for setting up more cold storage. As a result, a number of cold storages were increased to 1091 with an installed capacity of 1.55 Million tonnes by 1969. The growth in the cold storage industry has been 7.8 % per annum in the terms of number and 4.75% per annum in terms of storage capacity. According to the Ministry Consumer Affairs, the total installed cold storage capacity in the country is 103.54 Lacs tonnes. Out of this, over 80 percent is used exclusively for the storage of potatoes. The acute shortage of storage space for other perishable can well be imagined. Through NABARD and other agencies, the Government proposes to help create an additional cold storage capacity of Twelve Lacs tonnes and rehabilitate the existing capacity of Eight Lacs tonnes over the next few years. The new facilities have to be location specific and product specific. One third of our horticulture produce, fruits and vegetables are wasted, mainly on account of poor cold storage and other storage facilities. The country also experiences wide fluctuations in price of horticulture produce, particularly potatoes and onions. The Government of India had, therefore, appointed a High Level Expert Committee in November 1998 for improving the cold storage capacity of the order of 12 Lacs tonnes capacity (approximately), rehabilitation/renovation of 8 Lacs tonnes capacity (approximately), which is lying unutilized in various states would be necessary. The Committee has also assessed the requirement of storage for necessary. The Committee has also assessed the requirement of storage for onion of 1.5 Lacs tonnes on farm storage in producing areas and 3 Lacs tonnes at APMC yards and terminal markets in different states. The Scheme is implemented by NABARD/NCDC/NHB. With a view to ensuring faster development of cold storage capacity and to encourage entrepreneurs to invest more in this sector, the Hon’ble Finance Minister had made the announcements while presenting the Union Budget for 1999-2000 that we have very week post harvest storage and marketing infrastructure. This causes tremendous national loss to overcome this problem a new credit linked capital subsidy scheme for construction of cold storage and godowns. This scheme which will be implemented by the Ministry of Agriculture will help create Additional cold storage capacity of 12 Lacs tonnes and will rehabilitate and modernize 8 Lacs tonnes exciting unit over the next few years. We also propose to create 4.5 Lacs tonnes of onion cold storage capacity. The Warehousing Development and Regulatory Authority (WDRA), a statutory body had introduced Negotiable Warehouse Receipt (NWR) system in cold storage warehouses for the major horticulture produce so that the farmers may avail the benefit of loan from the banks against the deposit of NWRs. This would help in achieving the objective of easy credit access to
farmers’ effective post-harvest management and integrated development of agriculture including horticulture in the country. The WDRA had notified 26 horticulture commodities for the issuance of NWRs by the registered warehouses (cold storages). The WDRA had also finalised the checklist for accreditation of warehouses (cold storage). The Authority had approved five Government organizations as accreditation agencies for the cold storage warehouses namely National Institute of Agricultural Marketing (NIAM), Directorate of Marketing and Inspection, National Cooperative Development Corporation (NCDC), National Productivity Council (NPC), The Rail India Technical and Engineering Services (RITES) Ltd. Chairman desired that States should organize workshops in consultation with WDRA for making the cold storage owners aware of benefits of WDRA notification, RIDF funding and other initiatives. Finance Minister in its budget speech for 2012-13 had earmarked Rs.5,000 crore for creating warehousing facilities (including cold storages) from the allocation under Rural Infrastructure Development Fund (RIDF) which was Rs.2000 crore during 2011 – 12. This was available to a beneficiary through the State Government, as well as through commercial bank. States should utilize this window for financing of cold chain projects. Chairman also informed about Reduction of Excise Duty on Import of Cold Storage Equipments, External Commercial Borrowings (ECB) and hundred percent Foreign Direct Investment (FDI) under automatic route in storage and warehousing including warehousing of agriculture products with refrigeration i. e. cold storages. The Associated Chamber of Commerce and Industry (Assocham), highest body of the Chambers of Commerce of India (CCI), providing a forum for dialogue between business and government said in its report “Food Processing and Agri Business” that the country is short by 10 million tonnes of cold storage capacity due to which about 30- 40% of agricultural produce goes waste every year. The report is jointly prepared by Assocham and international advisory company – KPMG. According to Assocham’s latest study report, against a requirement of over 31 million tonnes of cold storage, India has a capacity of nearly 21.7 million tonnes, leading to a loss of about 40% of the agri-produce post harvest. About the new study on cold storages S Jindal, president – Assocham, said, “Cold storage facilities now available are mostly for single commodity like potato, orange, apple, grapes, pomegranate and flowers, resulting in poor capacity utilisation. Long and fragmented supply chain in India along with inefficiencies lead to huge losses due to wastage or shrinkage of perishable commodities.” The industry body has also asked the government to build new cold chain infrastructure to increase its storage capacity. At present, the Indian cold chain market is worth $2.6 billion. This market is expected to grow to $12.4 billion by 2015. Uttar Pradesh and West Bengal have 65% of the total installed capacity of cold storage in the country. Cold chains are used primarily for fruits and vegetables, meat and marine products, floriculture, dairy products, ice creams and confectionery.
Further, the report said that entire supply chain in the country is dominated by unorganised players with several intermediaries adding to wastage from farm to consumer via retailer, processor or exporter. In a long supply chain, one level is unaware of requirements of next level, leading to disconnection between farmer and processor. Secondly, absence of any structured market hampers discovery of correct price and availability of consistent quality of produce. Absence of proper cold chains and associated logistics in India leads to wastage of fresh produce to the extent of 25-30%, annual equivalent of over 50,000 crore. About 30-40% of these losses occur in farmers' fields and in packing, the remaining in transportation and marketing. A study by Indian School of Business, Hyderabad, revealed that more fruit, vegetables, poultry and dairy products end up in trash bins than on dining tables. Growth in organized retail and the food processing sector drives the cold chain market in India. Further shift towards horticultural crops by farmers to evade risk boosts the demand for cold chain. Rising demand for cold storage in pharmaceutical sector is also driving the growth in cold chain market. Changing consumption pattern is expected to create huge demand for cold storage in India. The report begins with an introduction section, projecting the evolution of Cold Chain Market in India. It then shows the value chain of the cold chain market followed by its definition, segments and key activities. The different types of cold storage are then demonstrated. A flow of Cold Chain Logistics Services is also shown in this section. Market overview section provides a brief snapshot of the Cold Chain Market. This section includes the market size of the cold chain market in India in terms of cold storage and cold transportation, demonstrating the forecasted growth over the period 2010 - 2015. The opportunities for the players in providing cold chain facilities are also illustrated. The section then gives an overview of the surface storage market. The cold storage distribution in the country has been mapped along with the commodity wise distribution. Subsequently, the number of cold storage and their capacity as on 31st Dec, 2009 has been listed. Current ranking of India’s food production w.r.t global scenario are displayed. The impact of cold chain on shelf life of fruits & vegetables has been shown. Developments in refrigeration systems in cold storage has been shown followed by the other recent developments. An overview of the refrigerated transport market is given demonstrating the refrigerated transport process. Current & Future Scenario section deals with the investment opportunities and the private participation in cold chain market in India. Some major deals in cold chain market in India have been listed. Further some recent investments in the cold chain sector in India are also found. Drivers & challenges section in the report provides a comprehensive set of factors which boosts and hinders the growth in the market. An analysis of the section brings forth the key drivers fueling growth in the market including growth in organized retail, shift towards horticultural crops, growth in processed food sector, demand from pharmaceutical sector and the changing consumption pattern. While the challenges identified comprises of
lack of logistical support, uneven distribution of cold chains, cost structure and deficit in power supply. Government initiative section emphasizes on the role of government in budget for cold chain sector. Further the government’s initiatives on terminal market, railways and port and shipping are also discussed. Then the schemes and the assistance by Ministry of Food Processing Industries, National Horticulture Board (NHB) and Ministry of Agriculture and Cooperation, GOI are discussed. Trends section in the report emphasizes the recent trends in the cold chain sector such as the entry of foreign players, rail based reefers, cold chains facilities at airport and backward integration by retailers. The competition section profiles the major players in container logistics market in India in details within the report which enables readers to get a clear picture of the current competitive scenario. The section lists the basic details of the players such as corporate information, business highlights and key members. The section also features financial analysis of key vendors which in turn provides us with the financial health of players. The strategic recommendations section suggests the requirements for an integrated cold chain infrastructure and the requirements to meet up the current cold chain demand in the country. India is looking to build cold-storage facilities in an effort attract investment, cut food wastage and streamline the supply chain in a country that produced the second largest amount of fruits and vegetables. Fruit and vegetable wastage due to poor post-harvest management and lack of cold chain facilities have been estimated to cost up to Rs.500 billion annually the National Commission of Farmers said in its fifth and final report. Finance Minister Pranab Mukherjee announced a number of schemes to attract investment in the sector on Friday, stating that he wanted to reduce the “difference between the farm gate prices, wholesale prices and retail prices.” “External Commercial Borrowings will henceforth be available for cold storage or cold room facility, including for farm level pre-cooling, for preservation or storage of agricultural and allied produce, marine products and meat,” Mukherjee said. According to the Economic Times of India, the government also announced concessional import duty and exemption of service taxes for installation and commissioning equipment to promote mechanized handling in spot market. The regulation will also exempt customs duty on the refrigeration units needed to produce refrigerated vehicles. Cold storage facilities remain limited in India and the government’s focus on the industry should help to boost investment and expand warehousing and cold storage capabilities in the country. The increase in cold storage should help boost exports of fruits and vegetables. The total value of India’s cold chain industry is currently estimated at USD 3 billion and reportedly growing at an annual rate of 20-25 per cent. The total value for the industry is expected to reach at USD 8 billion by 2015
through increased investments, modernization of existing facilities, and establishment of new ventures via private and government partnerships. India’s cold chain industry is still evolving, not well organized and operating below capacity. Most equipment in use is outdated and single commodity based. According to government estimates, India has 5,400 cold storage facilities, with a combined capacity of 23.66 million metric tons that can store less than 11% of what is produced. Availability of Cold Storages: Cold Storage development in India from the year 2004 to 2012 is shown in table given belowMT/Year No. of Cold Installed Capacity (in lac Storage MT) (Calmative) Previous Year 2607 54.02 2004 4748 195.52 2007 5316 233.34 2009 5381 244.50* 2010 5837 269.03@ 2011 6156 286.82@ 2012# 6307 301.10
Source: * Directorate of Marketing and Inspection upto 2009 @ includes only NHB and NHM assisted cold storages during 2009-10 and 2010-11 # As on 01.09.2012
Of the 300.05 lakh MT cold storage capacity, nearly 140.00 lakh MT has been created between 2000 - 2011 on account of interventions by National Horticulture Board (NHB), National Horticulture Mission (NHM), Horticulture Mission on North East and Himalayan States (HMNEH), Agricultural and Processed Food Products Export Development and Authority (APEDA), Ministry of Food Processing Industries (MoFPI) and Department of Animal Husbandry and fisheries (DAHD). Agency wise details of Cold Storages/CA/MA Infrastructure created (2009-12)* Name of Scheme NHM NHB HMNEH NCDC MoFPI APEDA Total No. of new Cold Capacity Govt. Storages/CA/MA created (in Subsidy infrastructure lac MT) (Rs, Crore) 4,51 24.35 3,25.91 5,28 28.28 1,64.08 9 0.41 7.35 5 0.22 3.19 49 2.32 1,46.71 24 0.02 12.09 1,066 55.60 6,59.33
in
*up to 31/03/2012
Requirement scenario: National Spot Exchange (NSE) undertook a study in December, 2010. The gap in cold storage capacity in various states has been estimated as under: State Andhra Pradesh Assam Bihar Chhattisgarh Gujarat Haryana Himachal Pradesh Jammu & Kashmir Jharkhand Karnataka Kerala Maharashtra Manipur Meghalaya Mizoram Madhya Pradesh Nagaland Orissa Punjab Rajasthan Tamil Nadu Tripura UP & Uttaranchal West Bengal Total Cold Storage requirement (in lac MT) 23.24 9.19 42.41 5.43 27.48 8.04 4.87 7.37 7.96 24.04 27.71 62.73 0.80 2.39 0.74 12.13 0.70 18.35 13.18 3.91 79.06 1.63 122.28 105.66 611.30 Present Capacity (in lac MT) 9.01 0.88 11.47 3.42 12.67 3.93 0.20 0.43 1.70 4.07 0.58 5.47 0.00 0.03 0.00 8.08 0.06 2.91 13.45 3.24 2.39 0.30 101.87 56.82 242.98 Gap (in lac MT) 14.23 8.31 30.94 2.01 14.81 4.11 4.67 6.94 6.26 19.97 27.13 57.26 0.80 2.36 0.74 4.05 0.64 15.44 0.00 0.67 76.67 1.33 20.41 48.84 368.32
Source: NSE& DMI (Present Capacity in Delhi- 126158 MT, Goa -7705 MT, A & N- 210 MT. Pondicherry-85MT)
In 2010, the cold storage gap of about 370 lakh MT was worked out on the basis of peak season production and highest arrival/ harvesting of storable fruits and vegetables in a month. Against this, normally 50%capacity is required for storable surplus of the identified fruits and vegetables. Post Harvest Losses: As per reports of the Task Force on Development of Cold Chain in India, set up by the Ministry of Agriculture (August, 2008), Planning Commission
(XIth plan working Group on horticulture) and All India Coordinated Research Project on Post Harvest Losses, CIPHET, Ludhiana (April, 2010) post harvest losses continue to be in the range of 18% - 40% in several commodities. As such, a robust cold chain, transport and logistics infrastructure is required. Recent Government initiatives i. Enhanced Pattern of Assistance: Subsidy has been enhanced from 25% to 40% in General Area and from 33.33% to 55% in Hilly and scheduled area, to attract more entrepreneurs and private investment in Cold Chain Infrastructure Sector since April, 2010. ii. Rural Infrastructure Development Fund (RIDF) for warehousing : Finance Minister in his budget speech for 2012-13 has proposed to earmark Rs. 5,000 crore for creating warehousing facilities (including cold storages) from the allocation under RIDF. During 201112, there was provision of Rs. 2,000 crore under RIDF VII for the first time. NABARD has informed that as against the allocation of Rs. 2000 crore. NABARD sanctioned an amount of Rs. 2252.90 crore during 2011 - 12. Of this Rs. 1493.82 crore was sanctioned to 13 state Governments/UTs, while the remaining amount of Rs. 759.08 crore was sanctioned and disbursed to banks as refinance. Assistance from NABARD is likely to create a storage capacity of 7.30 million metric tons. Keeping in view the shortage of warehousing infrastructure (including cold storage) for agricultural commodities, GOI has increased the allocation for 2012-13 to Rs. 5000.00 crore from a level of Rs. 2000.00 crore in 2011 - 12. The interest rate regime governing RIDF has undergone a change w. e. f. 01 April, 2012. NABARD is in the process of finalizing the policy for the year 2012 - 13, in consultation with Department of Financial Services, Ministry of Finance, and Government of India. iii. Exemption on Excise and Custom Duty: Custom Duty - The projects of cold storages, cold room (including farm level pre-cooling) or industrial projects for preservation, storage or processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat have been granted project import status with concessional Basic Customs Duty (BCD) of 5%. The Truck refrigeration units and Refrigeration motor vehicle have been fully exempted from BCD. Excise Duty - The Central Excise duty has been fully exempted for installation of a cold storage cold room or refrigerated vehicle, for the preservation, storage, transport or processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat, air conditioning equipment and refrigeration panels for cold
chain infrastructure and including conveyor belts used in cold storages, mandis and warehouse. Service Tax - The Central Board of Excise and Customs have clarified that sub-clause (v) of Section 66D of the Finance Act, which specifies the Negative List of services and where the services by way of storage and warehousing of agricultural produce are covered. The expression “Agricultural Produce” has been defined in Section 65(B) (5) of the said Act. Thus storage and warehousing of agricultural produce is not liable to service tax. Moreover, serial No. 14 of the Mega Exemption 25/2012ST, dated June 06, 2012 has exempted the construction of postharvest storage infrastructure for agricultural produce, including cold storage for such purposes. External Commercial Borrowing (ECB) External Commercial Borrowing (ECB) can be raised for investments in new projects, modernization/expansion of existing production units in real sector - industrial sector including infrastructure sector for creating cold storages or cold room facility, including farm level pre-cooling, for preservation or storage of agricultural/horticultural and allied produce. Foreign Direct Investment (FDI) 100% Foreign Direct Investment (FDI) is allowed under automatic route in storage and warehousing including warehousing of agriculture products with refrigeration i. e. cold storages. National Mission on Food Processing In order to have a better outreach and to provide more flexibility to suit local needs of fruits and vegetables, it has been decided that a new centrally sponsored scheme titled “National Mission on Food Processing” would be started, in cooperation with the State Governments in 2012-13 under which cold storage for processing purposes will also be developed. This mission will be implemented by MoFPI as a centrally sponsored vii. scheme. Introduction of Horti Train Introduction of dedicated train and reefer van is also expected to bridge the gap between the producers and consumers thereby ensuring remunerative prices to the farmers.
iv.
v.
vi.
The first Horticulture Train, nonstop trail run was conducted between Bhusawal - Azadpur (New Delhi) sector in the month of January, 2012 which carried about 1100 MT of banana from Bhusawal to Azadpur market yard in 26 hours. Another round of Train run with potato was successfully conducted between Agra - Turbhe (New Bombay) sector on 12 th June, 2012. The Train reached its destination in a record time with extremely good condition of produce at APMC Turbhe, Vasi Market. Another round of trail run of full rake load of onion from Khedwadi (Niphad, Distt. Nashik) to Chitpur, Kolkatta (West Bengal) was done in June, 2012. After conducting trial run on various sectors and with different commodities, service of Horticulture Train is proposed to be formally launched on viable origin - destination (OD) pairs; i. e. is Agra - Turbhe - Tulgalabad/Azadpur - Agra. Agro and Food Processing Policy, 2012 of M. P. Government: Assistance on power consumption with subsidized rate of rate of INR 1.50 per unit for 5 years subject to a ceiling of 25% of the electric units consumed to Cold Storage, Cold Chamber, Ripening Chamber and Individual Quick Freezing Enterprise. PRODUCTS: The proposal is to setup a cold storage. Cold Storage plays an important role in storage of various commodities. It is extensively useful to store the edible items. The proposed cold storage is to be set up at VillageJora, Tehsil-Jaisingh Nagar Area in Shahdol (Madhya Pradesh), which will enjoy various concessions and facilities extended by the Government. India is an agricultural country primarily and with the advent of green revaluation an introduction of improved high yielding variety of seeds and plants, the yield per acre has increased many folds. The country is producing at present about 60 million tonne fruits and vegetables. Major production of fruits and vegetables is consumed as fresh. The major quantity of these perishable commodities is grown in the rural and backward parts of the country whereas as there consumption is cantered in the big cities and towns etc. Therefore most of these commodities are transported to these Marketing Centers. The country is losing significant of the farm produced, due to inadequacy of transport and processing facilities, resulting in loss of revenue, fertilizer etc. Potato, Seasonal Vegetables and Fruits are horticulture produce, which are significantly grown as cash crop in Shahdol, which are being marketed all over the state/country. It is necessary to have adequate storage facilities for meeting out round the year supply in the country. Potato, popularly known as the king of vegetables and a native of South America, has now become an indispensable part of Indian cuisine. It is
ranked 4th in terms of important staple food after wheat, rice and maize. Moreover, India ranks fourth in terms of area and third in terms of production of potato across the globe. China and Russia are ahead of India in terms of potato production. Potato is a temperate or cool season crop which needs a low temperature, low humidity, less windy, and bright sunny days. It does well under well-distributed rains or moist weather situations to high temperatures. Humidity and rains are not conducive to potatoes as these lead to insect pests and disease attacks. Potato is rich in carbohydrates, comprising 22-24%. Moreover, it contains 2.1% to 2.7% protein, less than 0.5% of fat and the rest is water. Being a short duration crop, it produces more quantity of dry matter, edible energy, and edible protein in lesser duration of time compared to cereals like rice and wheat. Hence, potatoes may prove to be a useful tool to achieve the nutritional security of the nation. Potato is mainly a Rabi season crop. Around 80% of potato production is done as a Rabi crop. The rest of the production mainly comes from Karnataka and the hilly areas during long summer days. The Rabi crop is sown in the month of October and harvested in March. Potato is grown as a kharif crop in Maharashtra, Himachal Pradesh, Jammu & Kashmir and Uttarakhand. Kharif potato is sown in July and becomes available in the market by the month of October. The share of kharif potato in total production of potato in the country is 12%. The major potato producing states are Uttar Pradesh, Bihar, Punjab, West Bengal, Gujarat and Assam where potato is grown as a Rabi crop. The normal crop duration is 5-6 months. The following three types of crops are raised every year: Kharif crop: July-Aug to Oct-Nov. Rabi crop: Oct-Nov to Feb-March Although potato is a seasonal crop, it is grown in most of the states based on climatic conditions and harvested at different times, thus making it available throughout the year. The arrival of the winter crop potato is the major contributor to total production. Potato harvesting in India stretches between Dec-Jan to MarchApril. The major export zones for potato in India are Uttar Pradesh, Punjab, Madhya Pradesh and West Bengal. There are seven potato producing zones in the country. The zone-wise major commercial varieties are: Zone Area Name of variety North Western Hills Hills of Himachal Kufri Jyoti Pradesh and southern Jammu & Kashmir Hills of Uttarakhand Nainital, Almora, Kufri Jyoti Dehradun, Uttarkashi, Garhwal and Chamoli districts North Eastern Hills Hills of Meghalaya, Kufri Jyoti
orth Central Plains
Plateau Region
Kufri Jyoti Kufri Lavkar Kufri Chndramukhi Generally most of the potato which arrives in the market is consumed within the state. However, in some cases, it has been noticed that a significant quantity of potato is also dispatched to other states in the country. As vegetable (table purpose): Potato is used as a major vegetable throughout the world and in the preparation of a number of recipes either by using potato alone or by combining it with other vegetables, pulses, cereals, etc.. As seed: Medium-sized tubers are used normally in the northern plains. In the northern and eastern hills, is used as seed. As processed food: It is utilized in variety of ways, such as dehydrated potato products like chips, wafers, flakes, granules, flour, starch, potato powder and potato biscuits. It is also used to prepare frozen foods like potato patties, puffs, wedges, pancake, dehydrated mashed potatoes, canned potato, etc. Usage Table purpose Seed Processed Export Loss in Post harvest, marketing and storage Percentage of total production (%) 61.47 21 0.5 0.03 handling, 17
Manipur,Tripura, Nagaland, Arunachal Pradesh and Mizoram Madhya Pradesh (Indore, Gwalior, Sarguja, Ujjain, Chindwara, Sidhi, Tikamgarh, Shajapur, Dewas districts) Western U.P. and Gujarat Maharashtra, Karnataka and parts of M.P. and Orissa
Kufri Giriraj
Kufri Badsah Kufri Jyoti Kufri Lavkar Kufri Bahar Kufri Chandramukhi Kufri Chipsona
Fruits and vegetables like oranges/mangoes/apples/grapes/vegetables and other farm produce are significantly grown as cash crop in Maharashtra, Rajasthan, Gujarat and Southern India and marketed to all over the country. Crop season is seasonal but storages are persuaded round the year, which again necessitates the adequate storage facility.
This very feature has given rise to concept of setting up of registered Cold Storage Village-Jora, Tehsil-Jisingh Nagar area in Dstt.-Shahdol. MARKET: The semi perishable agriculture products like Potato, Fruits & Vegetables are grown in particular seasons while the demand for the same is round the year. To store and preserve them is necessary demand of industry and human being. If such a facility of strong and preserving these products are available to growers within their reach, they can fetch better prices and save themselves from losses. Thus it is a matter of national interest in our country, which is basically agriculture country. TECHNICAL ASPECTS: Running a cold storage is an activity of warehousing. The only major and important difference is of maintaining inside temperature according to commodities. For this, trained and experienced supervisors and operators are readily available all over the country. Since past couple of decades this activity has grown many folds in Madhya Pradesh. *Reducing Post Harvest Management (PHM) losses with multi-chamber and multi-product facilities. *Modern Design/Technology and Energy Saving Equipments/Devices to be adopted to avoid obsolescence of machinery, etc. *Improvement in technology like shifting from Diffuser system to Gravity Cooling System/Fin-coil System, etc. STORAGE CONDITIONS OF FRUITS & VEGITABLES: S. No. 1 2 3 4 5 6 7 8 9 10 11. Name of Commodity Apple Banana Guava Grape Lime Mandarin (Orange) Mosambi Pomegranat e Pine-apple Papaya Sapota Pre-Cooling Temperature Forced aiv Forced aiv Forced aiv Forced aiv Forced aiv Forced aiv Forced aiv Relative Humidity 90-95% -1? to 0? C Holding room 1390-95%
14? C
Freezing Point -1.7? C -0.5? C -1? C -3? to 1? C -3? to -2? C -1? C -2? to -1? C -
7? to 10? C -5? to 9? C 9? to 10? C 5? to 7? C 3? to 4? C 11? C
85-90% 85-90% 85-90% 85-90% 85-95% 85-95% 85-90% 85-90% 85-90%
Forced aiv Forced aiv Forced aiv
7? to 10? C 10? to 13? C 15? to 20? C
12.
Potato (Assorted)
Fresh Frozen Fresh Frozen Mature Green Pink Fresh Frozen Fresh Fresh Frozen Fresh Frozen Fresh Frozen
3? to 4? C -23? to 18? C -0? C - 18? C 13? to 18? C 10? to 13? C 7? to 10? C 18? to 24? C 8? to 12? C -0? C -0? C -0? C -18? C -0? C 23? to 18? C
13.
Onion
14.
Tomato (Hybrid) Okra Brinjal (Round Cabbage Cauliflower
90-95% Vapor tight packing 65-70% Gas tight packing 85-90% 90-95% 90-95% 98-100% 95-98% 95-98% Vapor tight packing 95% Gas tight packing
-
-
-
15. 16. 17. 18.
-1? C -1? C -1? C -0.8? C
19.
Peas
-0.6? C
Fresh fruits and vegetables are perishable. Particularly high-breed varieties have a shorter shelf life than the organic produce. Due to green revolution, yield per acre and area under cultivation has increased. Most of fruits & vegetables are seasonal. The produce of all farmers comes to market yard simultaneously as such their prices fall. There is a need to extend their shelf life. The bio-chemical and microbial changes are slow at low temperature. So refrigerated cold storages are used to prolong the shelf life of perishable produce. New technologies: 1. Modified atmosphere technology is being adhered in ultramodern plants in developed countries. In such cases of storage carbon-dioxide and oxygen ratio is varied to slow down the respiratory changes in the stored produce. 2. Cryogenic Tunnel: - Indian Institute of Technology has done experimental work on this technology in collaboration of dept. of Science and Technology. The results are encouraging. Quality of preservation is better and energy consumption is only 10% of usual cold storages. 3. Increasing relative humidity and using ozone :- Mitsubishi electrical of Japan have developed technology, which can be used in conduction with cold storage. In this technology relative humidity is
increased to 95 % which reduces evaporation but increases risk of spoilage due to bacteria, which is controlled by ozone. 4. Cold storages: - commercial refrigerated preservation of perishable commodities is a short-term process. Costly produce like dryfruits, potatoes (seed) oranges, chemicals, processed foods like fruit juices, pulp, concentrate, dairy products, frozen meals; fish, poultry etc are being stored in cold storages. The development of cold storages including cold chain for transport has an important role to play in reducing the wastage of perishable agro-produce, and thus providing remunerative prices to growers. Technical aspects: - at present there are two popular refrigerants in the Market - Freon & Ammonia. It may be noted that in near future CFC refrigerants will be banned. Cold storage consists of many rooms. Each room should be separated by insulation and protected from moisture. Partitions should be insulated on both sides. Before keeping fruits and vegetables in the cold storage, bad ones should be removed. The sorted material should be packed in boxes. Temperature and humidity should be kept according to the product. For certain Fruits like grapes, pre-cooling is necessary.
Optimum storage conditions for fruits:S. No. 1. 2. 3 4. Item Apple Bananas Guavava Grapes Temp. 0F 32-35 55-60 47-50 30-32 Cold Storage life in weeks 7-26 2-3 3-4 4-6 Fumigation with 1-2% sulphur oxide before storage and storage life is increased to 12 weeks Lemons for storage be picked at the greenish yellow colour. Remarks Small fruits keep batter
5. 6. 7.
Lemons Mangoes Pineaple
50-55 45-50 50-55
9-13 4-6 3-4
Optimum storage conditions for vegetables
R-H-85 to 95 % except for Beet root, cabbage, Reddish, Turnips and Peas where RH should be 90 to 95 % S. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Item Beans Beet Root Brinjals Carrots Cauliflower Cabbage Onions Potatoes Radish Turnips Peas Temp. 0F 32-35 32-35 47-50 32-35 34-35 32-35 32-35 37-38 32-35 32-35 32-35 Cold Storage life in weeks 2-3 6-8 3-4 13-17 4-6 9-13 17-26 26-35 6-8 13-17 2-3 Remarks Need more ventilation Big brinjals keep better Only firm and compact heads should be stored Only firm and compact heads be stored Peas need pre-cooling and more ventilation
IMPLEMENTATION PHASE: As proposed, the firm has a land (In the ownership of firm is selected place). The techno – economic feasibility report has been prepared and the same is being submitted for financial assistance. As soon as the promoter gets the loan sanctioned, the promoter will start construction of the factory building and machineries will be installed. DEMAND POTENTIAL: The proposed project aims to set up a cold storage of approx. 5390 Metric Tonne capacity. The Unit will consist of four chambers. The main commodities for preservation in the proposed cold storage will be Fruits and Vegetables (Onions and Potatoes), Spices like Coriander, Jira etc. The commercial refrigeration of perishable is a short – term process to avoid wastage. The concentration of cold storage facilities is mainly around big cities to maintain uninterrupted supply. The commodities which can be stored in the cold storage are Spices, Milk Products and by- products, Coriander, tamarind, eggs, fruits, potatoes etc. Coriander and Chilies are commodities, which lose their colour and weight due to storage in normal godowns. Its production is seasonal but the demand is spread over the whole year. To retain the natural colour and weight, the farmers of the area prefer to keep their product in cold storage rather than in normal godown due to which the demand in proposed area has been highly increased.
Recently other important but costly material like dry fruits, chemicals, essences are also being stored at low temperature. JUSTIFICATION FOR SETTING UP COLD STORAGE : Nationwide, the storage facilities have not been able to keep pace with production. It has risen from 1.75 million tonnes in 1972-73 to 4.50 million tonnes in 1985 and around 7.50 million tonnes in 1995-96 and 8.50 million tonnes in 1998-99 and 9.00 million tonnes in 2001-2002. The progressive increased in the productivity of perishable commodities have necessitated the development of cold storage facilities around the consuming centres to prolong their shelf - life. The development of cold storage has therefore, important role to play in of avoiding the wastage of perishable commodities and should be given the same importance as given to producers of these commodities. So with such a huge quantity of potato production in area about 30% of the produce sold out in market, where remaining 20% is stored in local godowns due to non availability of cold storage and remaining 50% is stored in cold storage available at distance places like Indore. If the cold storage facility is available to farmer at nearest place to their locality, they prefer to store their produce in cold storages rather than a godown so as to get the appropriate rate for their crop by maintaining the quality of produce along with its weight. As weight loss takes place in normal godowns, which is supposed to be a measurable amount. As there is some cold storage facility available in Jaipur, warehouses are the only means of storage in the region. Looking to above facts, a cold storage is required to store the produce reducing the loss of horticulture produce. Thus the cold storage has an important role to play in and around Shahdol. There is no existing capacity in the area. With the advent of this cold storage, the farmer will be motivated to place the produce in the cold storage and sell it at appropriate time thus reaping the advantage of better price. The stockiest will be also attracted, not only from nearby areas, but also other nearby states of the country. The Site is primly located on road and is suitable. ADVANTEGES OF COLD STORAGE Lack of Adoption of Proper Harvesting and Post harvest Technology Adversely affect the quality. Post-harvest Operations involve drying, curing and primary packing which reduces problems of contamination. The problem of retention is more acute in potato; farmers do not have economic and infrastructural capacity to store the produce in a proper way. These results in quality deterioration. Storage facilities available in are not up to mark and there is no provision for checking redent infestation and other damages. Moreover, Cold storage facilities are not available.
Shahdol Quality Suffers from lack of knowledge about proper post harvest operation (drying, cleaning, grading, sorting, processing, packaging & Storage: cold storage Specially.) among farmers, which further gets complicated by lack of scientific and modern post-harvest infrastructure. MARKET AND MARKETING ARRANGEMENTS: As mentioned earlier, there is large gap between availability and requirements of cold storage space in cold storage in Shahdol due to the following reasons: 1. Increase in yield per Acre; Increase in Potatoes, Fruits and Vegetable farming area along with trading activities. 2. Costly availability of space in the areas near metropolitan cities in the country. Because of the fact that the proposed location of cold storage is upcountry and as the district is the biggest market, the traders of other states will prefer to stock the horticulture produce in Shahdol and nearby areas. If the horticulture produce is stored in Shahdol then it can be delivered at very short notice to most of the metropolitan cities, from where the export take place, so as to take the advantage of rise in the current market rates. Hence the market of Cold Storage depends upon the following factors: a) The local farmers booking the space in the cold storage before arrival of the crop. b) The traders booking the space well before the effective dispatch of goods. The success of the Cold Storage depends upon the advance booking of space in the Cold Storage as well as long term tie ups for storage by the traders. c) The third category of the business of the cold storage from traders/agriculturist themselves using the part of the cold storage facility for their own stock for trading of goods. LOCATION BENEFIT:
Infrastructure Support:
Availability of required infrastructure plays a major role in enhancing growth in different sectors and blocks. The net cultivable area forms 58.35% of the total Geographical Area. The district has Dams and rivers for proper water supply. The second major source of irrigation is from Tube wells. In 2006, rainfall crossed its normal average.
Agriculture is the predominant activity of the district with production of Potatoes, Orange, Soya bean, and Wheat etc. Such infrastructure will be a key – factor for the proposed cold storage.
Location Support:
From marketing views there are many positive factors with the project: Firstly the strategic location of the cold storage at Shahdol. We can say that the site is in Shahdol, where there are no any cold storage facilities for the farmers. The farmers and traders of the District and adjoining area keep their commodities in the cold storages at 20 kms. From Shahdol. No suitable cold storage with new technology and comply with standards in other Cold Storages in the state till date, which is favorable issue for establishing a new unit. Secondly, the location of site is situated near to road, which again effectively saves the transportation charges to be borne by the farmers to bring the horticulture produce at the cold storage. The location of the proposed cold storage will attract the prospective stockiest / customers having preference over other cold storages which are not situated nearby. Thus, considering the above facts regarding storage marketing, there will not be any problem in ensuring occupancy of the available storage space. HORTICULTURAL CROPS IN M.P.
SL. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 1982-83 1985-86 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 YEAR FRUITS AREA PROD. 56679 52175 61313 57892 58441 61022 59709 59469 60129 63941 9.04 9.69 11.59 10.64 10.71 11.23 11.23 12.38 13.09 14.31 15.79 13.38 11.43 11.13 VEGETABLES AREA 123269 131322 158909 162186 173608 180811 189081 202910 212729 237129 223840 130854 140882 144095 UNIT :- PRODUCTION IN LAKH TONNE & AREA IN HECTARE SPICES FLOWERS MEDICINAL & GRAND TOTAL AROMATIC PROD. AREA PROD. AREA PROD. AREA PROD. AREA PROD. 16.61 134158 16.80 142980 0.62 0.70 964 826 915 1270 1388 1435 1778 1261 3425 3761 1437 1418 0.0057 0.0049 0.0054 0.0076 0.0083 0.0086 0.0106 0.0080 0.02 0.02 0.009 0.009 23328 26510 27892 20225 20825 15196 18364 0 1.40 1.59 1.67 1.21 1.24 0.91 1.10 0.00 314106 326477 419724 424512 467633 479737 523364 552401 633556 637887 598807 372747 402851 337773 26.27 27.19 32.8707 32.0919 33.8424 35.7236 38.3743 45.6246 47.6436 51.908 44.05 34.42 34.40 33.23
19.52 198538 1.755 19.95 203608 1.497 21.43 234669 1.697 22.41 236634 2.076 23.27 249858 2.466 28.39 262077 3.256 29.79 331028 33.24 315331 23.78 293232 18.61 171415 19.98 195905 20.49 144706 3.08 3.14 3.22 1.50 1.88 1.60
1999-2000 57485 2000-2001 51521 2001-2002 46263 2002-2003 47554
Source: Directorate of Horticulture, M.P.
CHAPTER- FOUR FINANCIAL ASSISTANCE FROM THE GOVERNMENT INTRODUCTION A new Capital Investment Subsidy Scheme for construction of Cold storage and storages for Horticulture produce has been introduced to be implemented by NHB. The Government of India has approved the implementation of the scheme during the period “April 2010 - March 2015”. The scheme would help in minimizing post harvest losses of horticulture produce. An outline of the scheme as approved by the Government of India would be implemented by NABARD /HORTICULTURE Department through back-ended capital subsidy, which would be available up to @40% of the project cost subject to a maximum of Rs. 120.00 Lacs per project. (Additional subsidy @15% grant by government for notified schedule areas. In reference our project notification of Ministry of Law & Justice, Govt. of India for schedule area is enclosed project report). This capital investment subsidy scheme for construction of cold storage and storages for horticulture produce is introduced by the Government of India. It would help in minimizing post harvest losses being suffered by farmers, particularly small and marginal farmers. The scheme would be implemented by National Horticulture Board, Ministry of Agriculture in collaboration with NABARD/NCDC. The Scheme would be a part of the ongoing Post Harvest Management (PHM) Scheme of National horticulture Board (NHB), National Horticulture Mission (NHM) of which cold storage is one of the components.
The projects would also cover the facilities constructed under controlled and modified atmosphere on the same parameters as have been stipulated for construction of cold storage under the scheme. The cold storage component will be excluded from the present ongoing scheme of NHB/NHM and Department of Food Processing Industries (DFPI). BUDGET 2012-13. The mantra for the upcoming fiscal year 2012-13 is “faster, sustainable and more inclusive growth”. The objective is to achieve a GDP growth of nearly 7.6% as against estimated growth rate of 6.9% in 2011-12. Investment-linked deduction of capital expenditure incurred in cold chain facility and warehouses for storage of food grains is proposed to be provided at the enhanced rate of 150% as the current rate of 100%. PROJECT COST The project cost has been calculated upon the capacity; technology used for cold storage/storages for horticulture produce and arrived at on the basis of actual /estimates of architects/invoice prices of machineries, etc. and subject to the norms of appraisal of financing banks/NABARD regarding technical feasibility/financial viability. (AS PER ANNEXURE-A) MEANS OF FINANCE The margin money is 17% of the term loan. Minimum 20% of the project cost can be raised as term loan from institutional agencies. The eligible amount of subsidy also would be allowed as term loan. We also apply for Venture Capital fund. (AS PER ANNEXURE-A) SUBSIDY Subsidy under the scheme will be provided @ 40% of the Capital Cost of project and there is maximum level of restriction of Rs. 120.00 Lacs each project. (AS PER ANNEXURE-A) Subsidy calculates on the basis of guideline of NHM/NHB of Rs. 6000/- pmt on construction of building and plant & machineries, but presently cost of construction of new cold storage is approximately Rs. 8000/-pmt. All the state in the schedule area provides additional benefit of subsidy @ 15% extra to all promoters. ADJUSTMENT OF SUBSIDY IN BORROWER’S ACCOUNT : The subsidy for the projects under the scheme is released through the Department of Horticulture for projects financed by the bank. Fifty percent of the subsidy amount is released by Department of Horticulture in advance to the participatory bank on submission of a project profile and claim form. This amount will be kept by the bank in a Subsidy
Reserve Fund Account of the concerned borrower, to be adjusted finally against loan amount of the bank on completion of the project. The remaining 50% of the subsidy amount is disbursed to the participating bank by the Department of Horticulture after inspection by a Joint Inspecting Committee comprising of officers from DOH and Bank. The subsidy admissible to the promoter under the scheme would be kept in the Subsidy Reserve Fund Account. The bank would not charge interest on this amount. In view of this, for purposes of charging interest on the loan component, the subsidy amount is excluded. CHAPTER- FIVE LOCATION AND SITE SELECTION The proposed unit is to be situated at village-Jora, Tehsil-Jaisingh Nagar, Distt.-Shahdol which is near to road. It is well connected by all transportation modes with other parts of the State as well as Country. The power and water are available easily. Skilled and Semi-skilled workers are also available at nearby places. The location Jora situated From Shahdol to 64 kms and From Beohari to 16 kms. PRELIMINARY SITE DATA: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Location District Area Available Approach Road Nearest Railway Station Plot Condition Soil Condition Main City Availability of Manpower Post office : : : : : : : : : Village-Jora Shahdol 1.971 Hectare Road Beohari Plain Black Soil Shahdol : Shahdol
Shahdol
11.
Transportation facilities
:
Bus & Train
CHAPTER- SIX CAPACITY UTILIZATION The capacity of the plant to be installed is approx. 5390 Metric Tonnes (Approx. 53900 bags per annum) by assuming norms specified. The said figure is at 100% capacity. The different capacity utilization has been estimated as under:
Year First, Second Third, Fourth Fifth, Sixth Onwards
Capacity Utilisation 75% 80% 85%
The capacity of various equipments has been decided after thorough consideration so that production can be reached with minimum wastage and maximum saving of labour material etc.
CHAPTER- SEVEN CRITERIA OF EQUIPMENT SELECTION The choice of various equipments is guided by the prime technologies to meet the specific requirements of raw materials, choice of process and simplicity of operation since technology is already proven, and reputed
suppliers are in the field from which the reliable equipments can be procured. The same suppliers will also stand a performance guarantee for the plant operation product specification assurance and fulfillment of rated capacity. Seeing the above factors, machinery in selected as per the details given in ANNEXURE-C of the project report.
CHAPTER- EIGHT TECHNICAL KNOW-HOW OF PLANT AND MACHINERY A cold storage unit incorporates a refrigeration system to maintain the desired room environment for the commodities to be stored. A refrigeration system works on two principles: (1) (2) Vapour absorption system (VAS), and Vapour compression system (VCS)
VAS, although comparatively costlier is quite economical in operation and adequately compensates the higher initial investment wherever possible such a system be selected to conservation of energy and operational cost however it has limitations when temperature equipment is below 10 degree C and many fruits and vegetables except seeds, mango etc. lower than 10 degree C for long storage. VCS is comparatively cheaper than VAS. There are three type of VCS system available depending upon the cooling arrangement in storage rooms i.e. diffuse type, bunker type, fin coil type. Diffuser type is comparatively costlier and is selected only when the storage room heights are low. The operational costs of such units are also higher. Bunker type is the cheapest and preferred when storage rooms heights normally exceeds 11.50 meters. Its operational cost is also low. Fin coil type although about 5% costlier than the bunker type is very energy efficient with low operational cost and higher space availability for storage of produce. Such system is used for units with room heights of 15.00 meter onwards. In refrigeration system, refrigerants are used to pick up heat by evaporation at a lower temperature and pressure from the storage space and give up the heat by condensation at higher temperature and pressure in condenser. Freon used to be a common refrigerant but it causes environmental degradation. Its use is going to be banned by the year 2008. Therefore ammonia is being increasingly used and preferred for horticulture and plantation produce cold storage units.
Although several types of compressor and condensers are available high speed reciprocating compressor and atmospheric condensers are preferred because of relatively lower cost energy efficiency and case in maintenance. Although the storage space provision will vary accordingly to the room height and technology being selected. Normally, a provision of 3.4 cubic metres per MT is considered for finalizing the room size with bunker type of VCS technology. For other commodities, space adjustment should be made with relation to their bulk density as compared to potato. Both the system has their own advantage. In bunker type cold storage capital investment is about 20% low which is about 15% more in the cooling coil systems further the cooling time is short in cooling coil systems, but the accumulating dust in the stored materials reduces the efficiency during the running and the main disadvantage of cooling coil system is 10% more consumption of power, but high air circulation hence the company has opted to go for FIN-COOLING COIL type system. MANUFACTURING PROCESS: Cold storage is a closed chamber with proper insulation on inner sidewalls, floor and ceiling to resist the outside heat from flowing inside. The gas is circulated coil installed inside the chamber, which carry away inside heat to make the chamber cooler. The temperature inside the chamber is maintained between 33 degree F. to 36 degree F. However, at the time of loading it is kept at 40 degree F to 41 degree F. UTILITIES AND SERVICES: In addition to plant and machinery for the process in the previous chapter of the report, for the successful operation, various utilities and services are required. Normally utilities and services, which are required, are as follows: 1. Water requirement and water supply system. 2. Power requirement and electrical equipments. 3. Workshop and maintenance equipments. 4. Fire fighting equipments. 5. Miscellaneous assets. 6. Transportation.
CHAPTER- NINE EFFLUENT DISPOSAL & TREATMENT As such there is no effluent to be disposed off. The total quantity of water required per day is approximately 1000 Litres, which is used for machinery cooling, drinking and sanitation purposes. This is not a waterbased industry. Hence, the process does not emit any effluent or gas hence no disposal activities are required for the proposed unit. CHAPTER- TEN MAN POWER AND MANAGEMENT Successful and efficient functioning of the warehouse and plant depends largely upon the organization structure, which largely relies upon proper manpower planning. The whole exercise for the cold storage with capacity of approximately 5390 Metric tonnes has been carefully studied. The total requirement of manpower and their salaries and wages are given in the ANNEXURE-G. The management of the entity is proposed to be controlled by the Proprietor and his close relatives with the assistance of other administrative and production staff. The total number of person to be employed is Seven. ADMINISTRATIVE STAFF: The administrative staff shall be responsible for the day-to-day affairs and shall report to the promoters if the entity. He will be assisted by two security guards on shift basis. PRODUCTION STAFF: The concern would be handled by a manager. He would be responsible for efficient working and would be assisted by the skilled and unskilled workers. The total salaries and wages are estimated to Rs. 6.00 Lacs per annum.
The total strength of administrative and production staff may be increased at later stage if necessary depending upon the workload and other requirement.
CHAPTER – ELEVEN UTILITIES The utilities and Services, which are essential for any industry, are power, water and fuel. A. POWER :
The total power requirement for the proposed cold storage is estimated 100 H.P. This power would be supplied by SEB through H.T. line. The Promoters will apply for the power connection to concerned department. Annual bill in first year has been estimated Rs. 8.46 Lacs as per details given in ANNEXURE-H. (As per project report 80% capacity utilization in first year, if 100% capacity utilize total cost of power consumption Rs. 10.58 lacs.) B. WATER :
Water will be supplied by tube well.
CHAPTER – TWELVE PRODUCT MIX AND PERCEPTION The product mix should be found out on the basis of profitability of the product as well as on the consumption of the products in the industries of the region, availability of the resources etc. The demand for a particular type of cold storage arises mainly from the availability of orders in hand. Little variations may be possible. The cold storage is designed to store approximately 5390 metric tonnes (approx. 53900 Bags per annum) Details of the products to be stored and Receipt thereof at 100% capacity utilisation are as under: Item Potatoes, Coriander, Peas (Chana), Chilies, Maithi, Vegetables, Fruits, Dry Fruits, etc. (Receipt is considered Rs. 300/per tonnes per annum) Quantity (in Tonnes) Receipt (Rupees in Lacs)
5390 Tonnes
194.04
Hence, the products mix and receipt in different in years workout as follows: Years Capacity Hiring Income Per Year (Rs. In Lacs) 145.53 155.23 164.93
First, Second, Third, Fourth, Fifth, Sixth Seventh onwards &
75% 80% 85%
CHAPTER –THIRTEEN IMPLEMENTATION PROGRAMME The schedule of implementation takes into account the time required for various activities, such as detailed engineering of the unit including architectural and structural civil construction work, procurement of necessary equipment and machinery, utilities and services, erection and installation of machineries. While estimating the time for implementation of the projects the time required for all these activities has been taken into consideration. The estimate also includes lead-time required for equipment, delivery and procurement of building materials. Subsequently, when the civil construction is completed and plant and machinery are fully installed, time is required for procurement of necessary raw materials and observing the project for trial run, its readiness for commercial start up has to be taken into consideration. The estimated time required for each of the major activity has been shown in the implementation chart. As it is clear total time required for the commissioning of the project workout to be nine months. The acquisition of land, development of land, preliminary and promotional work is assumed to have already been accomplished before the loan is sanctioned.
CHAPTER – FOURTEEN COST OF PROJECT The total Cost of Project has been estimated at Rs. 400.00 Lacs. The breakup to the capital cost of the project comprising of land and site development, cold room building, plant and machinery other have been detailed as given below:
S. NO. 1 2 3 4 5 6
PARTICULARS Site Development Building Plant & Machineries Misc. Fixed Assets Contingency & Working Capital Margin Preliminary and Preoperative Expenses Total
Rs. In Lacs 7.00 173.00 207.00 13.00 0.00 0.00 400.0 0
CHAPTER – FIFTEEN MEANS OF FINANCE The total cost of project arrived at Rs. 400.00 Lacs to be financed as per the following finance fix: (Rs.In Lacs) A DEBT : Term Loan 166. # (Inclusive benefits of VCA from 00 SFCA) SUBSIDY : Capital Investment Subsidy 165. (Subsidy Rs. 165.00 lacs of 00 Central Govt. @ 55% of Cost) B CAPITAL : Own Contribution 69.0 (Includes loan from Relatives ) 0 400. 00
TOTAL
DEBT EQUITY RATIO: On the basis of above, financing pattern Debt Equity Ratio works out to 1.80:1 (Subsidy included in Debt) which is satisfactory. #We are avail facility of Govt. of India, “VENETURE CAPITAL SCHEME FOR AGRIBUSINEE DEVLOPMENT” as underSmall farmer’s Agri-Business Consortium (SFCA) would provide venture capital to qualifying projects on the recommendations of the bank financing the project. This venture capital will be repayable back to SFAC after the repayment of term loan of lending bank as per original repayment schedule or earlier. Qualifying projects under Venture Capital(i) Projects should be in agriculture or allied sector basically perishable namely horticulture, floriculture, medicinal and aromatic plants, minor forest produce, apiculture and fisheries. However, poultry and dairy projects not be covered under the scheme. (ii) Projects should provide assured market to farmers/producer groups, (iii) Projects should encourage farmers to diversify into high value crops, to increase farm incomes. (iv) Projects should be accepted by banks for grant of term loan.
CHAPTER – SIXTEENTH ASSUMPTION OF PROFITABILITY The cost of project, Incomes and profitability statement for its seven years is calculation and is presented with the report. The various assumptions made for calculation of cost of production and profitability is listed below: ? MT ? Year. ? An increment of 10% in wages and salaries shall be An increment of 15% in administrative costs is considered Moratorium period will be one year from the date of The weighted average rental income is taken @ Rs. 300.00 Taxes applicable on the profits have been calculated at per The interest on Term Loan has been taken @ 12.00% per rewarded to employees. ? in calculating the profitability of the project. ? completion of the construction. ? per tonne per month. ? the present tax slabs. ? annum. Bank will not charge interest on the sum of subsidy amount. However, calculation of interest has been done on Term Loan inclusive of subsidy amount. ? Depreciation has been calculated on Written down Value Debt Service Coverage Ratio for each operating year is Method for profitability calculation. ? given in annexure. The average DSCR is worked out, which envisages that the unit should be in a position to repay installment of loan in quarterly installment. The capacity utilisation shall be 75% in First Year, Second The installed capacity of the plant would be approximately
5390
?
Pre Incorporation Expenses will be allocated to first five
years of project. OPERATING RESULTS:
A.
CASH FLOW:
Cash flow statement for the first the years has been furnished in ANNEXURE-N. The overall cash position of the unit is satisfactory and it would permit the repayment of term loan within seven years including a moratorium of initial one year. B. PROJECTED BALANCE SHEET :
Projected Balance Sheet for seven years has been furnished in ANEXURE-O. C. DEBT SERVICE COVERAGE RATIO :
DSCR (Considering non-realisation of Subsidy) for the each operative year has been given in ANNEXURE-M. The average DSCR is 2.10:1, which shows that the unit would be in a position to repay term loan in 28 quarterly installments after 4 Quarters moratorium. D. CASH BREAK EVEN POINT
The B.E.P. has been carried out based on figures of 2 nd year of operation. The details are given in ANNEXURE-P. The CASH BEP in term of installed capacity is worked out at 63% at second year of operation.
CHAPTER – SEVENTEETH ECONOMIC CONSIDERTION AND SOCIAL RESPONISIBILTY The project is being set up at Village-Jora, Tehsil-Jaisingh Nagar, Distt.Shahdol. It will provide direct employment to ten persons at the full capacity of the project. The aim of the entity is to fulfill the requirement for cold storage facility. This project will provide additional agricultural and food marketing infrastructure to cope up with the large expected marketable surpluses of agricultural and allied commodities and will provide competitive alternative infrastructure that sustain incentives for quality and enhanced productivity thereby improving farmers’ income. The functional infrastructure unit is situated in fruits/vegetable growing belt and having good network of grower. Since the proposed unit has a modern investment and there is an ample scope to enhance their profitability within stipulated course of time due to multiple commodities procurements facilities in proposed unit. The other benefits are as:
?Large
crop and material base offering a vast potential for agro processing activities,
? Rising income levels and changing consumption patterns, ? Favorable demographic profile and changing lifestyles, ? Opening of global markets, ? Availability of capital subsidy from NHM/NHB to start a
business opportunity in local areas by converting their raw materials to value added products as per the local/domestic/export demands of the consumers/market. This project as a whole will keep aim to create general awareness and provide education and training to farmers and entrepreneurs on agricultural producing and marketing including quality certification.
CHAPTER – EIGHTEENTH CONCLUSION We feel pleasure in submitting the final project report on cold storage with annual installed capacity of approx. 5390 MT (approx. 53900 bags per annum). In this study an economic analysis has been presented for the said product. The total capital outlay for the project is Rs. 400.00 Lacs. The cash profit generation is from the first year itself. Hence, it would pay Government exchange by way of various taxes. The above report has been prepared with intention to help the entity in obtaining term loan to the extent of Rs. 300.00 Lacs (Includes Rs. 165.00 Lacs as Government Subsidy) and promoters are abreast with entire funding system of project. All the data furnished in the aforesaid project is based primarily on desk research, discussions with experienced and knowledgeable persons in the relevant line of trade and industry, also referring Government publications. In the light of all technical financial projection made in the annexure, consultant can confidently say that unit is technically feasible and financially viable and promoters would have bright future ahead of them. The propose unit to set up cold storage unit there is a vast growing demand in area market of storage facility for potatoes, tomato, vegetables, horticultural crops etc. The said firm has already started the process toward the implementation of the project the firm can hope fully implement the said project as per schedule of implementation given in the project report. Considering the availability of all infrastructure facilities, good storage potential of the cold storage unit in the area the project may be termed as technically feasible and economically viable. The financial parameters and economic indicators of the project are satisfactory and are expected to generate adequate surplus to service the equity as well as the borrowings. Backward Linkage with farmers with reference to either providing services or purchase of raw material: The promoter also itself engaged in production of fruits/vegetables as well as having good contacts with the progressive farmers of their area. The beneficiary has already its own raw materials for sorting, grading, washing & minimal processing as per the demand of market. Moreover number of other farmers willing to provide their raw materials for storage of produces. Approx. 500-1000 farmers to be benefited. Forward Linkages- Analysis of domestic and export markets, tie up made for sale of Produce and branding aspect: Due to the shortages of storage capacity in the area, the farmers have to go faraway places for
storages of potatoes. Thus there is ample of potential for more modern technology based cold storage units in that area. When growers or small-scale food processors sell directly to consumers who are geographically in proximity, they are able to readily assess demand and other market information. However, as this proximity is broken, the task of relaying market information to the producers is left to intermediaries. These intermediaries are subject to a variety of conflicting pressures including, of course self-interest, resulting in the producer receiving distorted or quite often, no worthwhile market information. While this can be a concern even in developed economies, communication technologies, being more abundant, tend to ameliorate the problem. In India, however, players at almost each stage of the chain, and most certainly the farmer, are cut off from the realities of the end-market place and end-consumer due to the absence of adequate communication infrastructure. In addition, as the number of ‘hands’ touching the produce or relaying the information increases, quality is eroded, both of the goods being transported and the information being transmitted. A firm that practices the philosophy of market orientation seeks to sense, serve and satisfy customer needs better than the competition. It is as much a philosophy as a practice. Some of the key aspects of market orientation involve systematized ongoing attention to acquiring and utilizing market intelligence, investing in product and service development that create competitive differentiation, and fostering an organizational culture that internalizes this philosophy and expresses it in all its actions. The marketing literature has identified high market and technological turbulence as ripe conditions for seeing the full benefits of market orientation on firm performance. In the case of emerging markets, domestic firms are typically protected by government regulations from the winds of change from the outside, and this can often lull domestic firms into preserving the status quo. When governments decide that economic growth is possible only by opening markets to international influences, they set up the conditions for turbulence, oftentimes unleashing a tsunami for existing businesses. Not being used to sophisticated business practices such as systematically gathering market intelligence or investing in ideas and technology for new products and processes, these businesses flail about in their efforts to become more market oriented. In developed markets, information gathering, methods of transmission, and its utilization in product and process development have been continually refined over the decades. On the other hand, in emerging markets, the historical lack of demand for such market information has severely limited the information industry and information infrastructure. Occasional entrepreneurial insight and vision coupled with limited trial and error by experimentation become substitutes for the systematic development and utilization of the “information infrastructure” that is lacking. Although the systematic “sensing” of market needs and trends, and competitive offerings yields substantial benefits in staying competitive, the widespread availability of such information to all competitors in the market levels the playing field and raises the overall quality of business practices. Firms advantaged by unique insights and new product and process
development capabilities are bestowed with a competitive edge in “serving” the market by effective differentiation. Access to technological inputs and skills to convert ideas into products are essential ingredients for successful differentiation. In emerging countries, even when entrepreneurial vision provides the insight, absence of technical know-how and skilled labor severely limit the ability to offer innovative solutions to the market. It becomes important to nurture an organizational culture that values inter-functional coordination and empowers all levels of employees to focus on the customer to understand their needs and develop innovative solutions to satisfy them. Inter-functional coordination can produce superior results in customer satisfaction as a result of developing solutions for customer needs that are holistic in approach. Leadership that actively encourages such an orientation becomes an essential prerequisite for achieving market orientation in the firm. In emerging economies rampant unemployment and consequent concerns of job security and deference to senior management may tend to restrict the free flow of ideas upwards from the front lines of customer contact that is so essential for a culture of market orientation to thrive. This calls for a leadership that is visionary in sensing the market as well as in earning the trust of employees to be open in sharing their ideas. During the course of the deliberation, the following general decisions were also taken by the Empowered Committee on the minutes of the meeting of seventeenth empowered committee (EMC) of National Horticulture Mission (NHM) held on 03.08.2012. 1. In case of infrastructure projects under NHM where ever the cost of building is not defined in the guidelines. 55% of admissible project cost will be considered as building cost for computation of subsidy. 2. States should organize workshops in consultation with WDRA for making the cold storage owners aware of benefits of WDRA notification, RIDF funding, External Commercial Borrowings (ECB) and Foreign Direct Investment (FDI) in cold chain. 3. States should initiate action on the recommendations of Dr. Saumitra Chaudhuri Committee report. States to exempt the perishables from cess, farmers should be able to sell the perishables anywhere and states should clearly notify that which commodities have been exempted from the cess. The markets with turnover of more than Rs.10.00 crore should invariably have the electronic auction system. 4. The market infrastructure component under various schemes of DAC are linked with the market reforms. States need to amend the existing APMC Act and exempt perishables from market fees. 5. States should ensure to depute Mission Director for attending the meetings of EMC and EC of NHM. In case of exigencies, prior information should be sent to this Department. All SHMs will ensure that the projects are appraised at State Level with due
diligence and subsidy is worked out which is commensurate with promoter’s share and in no case subsidy should exceed the term loan sanctioned by the lending bank. The loan amount should be higher than the subsidy amount. MINISTRY OF LAW AND JUSTICE (Legislative Department) NOTIFICATION New Delhi, the 29th February, 2003 G.S.R. 114 (E)-The following Order made by the president is published for general information :- "C.O.192" THE SCHEDULED AREAS (STATES OF CHHATTISGARH, JHARKHAND AND MADHYA PRADESH) ORDER, 2003 In exercise of the powers conferred by sub- paragraph (2) of paragraph 6 the Fifth Schedule to the Constitution of India, the President hereby rescinds the Scheduled Areas (States of Bihar, Gujarat, Madhya Pradesh and Orissa) Order, 1977 in so far as it relates to the areas now comprised in the States of Chhattisgarh, Jharkhand and Madhya Pradesh and in consultation with the Governors of the States concerned, is pleased to make the following Order, namely
1) This Order may be called the Scheduled Areas (States of Chhattisgarh, Jharkhand and Madhya Pradesh) Order, 2003. (2) It Shall come into force at once. The areas specified below are hereby redefined to be the Scheduled Areas within the States of Chhattisgarh, Jharkhand and Madhya Pradesh A.P.J. ABDUL KALAM, President. " [F.No. 19 (5)/2002-L.I.] SUBHASH C. JAIN, Secy. Madhya Pradesh • Jhabua district • Mandla district • Dindori district • Barwani district • Sardarpur, Dhar, Kukshi, Dharampuri, Gandhwani and Manawar tahsils in Dhar district • Bhagwanpura, Segaon, Bhikangaon, Jhirniya, Khargone and Meheshwar tahsils in Khargone (West Nimar) district • Khalwa Tribal Development Block of Harsud tahsil and Khaknar Tribal Development Block of Khaknar tahsil in Khandwa (East Nimar) district • Sailana and Bajna tahsils in Ratlam district • Betul tahsil (excluding Betul Development Block) and Bhainsdehi and Shahpur tahsils in Betul district • Lakhanadone, Ghansaur and Kurai tahsils in Seoni district • Baihar tahsil in Balaghat district
• • • • • •
Kesla Tribal Development Block of Itarsi tahsil in Hoshangabad district Pushparajgarh, Anuppur, Jaithari, Kotma, Jaitpur, Sohagpur and Jaisinghnagar tahsils of Shahdol district Pali Tribal Development Block in Pali tahsil of Umaria district Kusmi Tribal Devrlopment Block in kusmi tahsil of Sheopur district Karahal Tribal Development Block in Karahal tahsil of Sheopur district Tamia and Jamai tahsils, patwari circle Nos. 10 to 12 and 16 to 19 villages Siregaon Khurd and Kirwari in patwai circle No. 09 Villages Mainawari and Gaulie parasia of patwari circle No. 13 in Parasia tahsil, village Bamhani of patwari circle No. 25 in Chhindwara tahsil, Harai Tribal Development Block and patwari circle Nos. 28 to 36, 41,43,44 and 45 B in Amarwara tahsil, Bichhua tahsil and patwari circle Nos. 05, 08, 09, 10, 11 and 14 in Saunsar tahsil, Patwari circle Nos. 01 to 11 and 13 tro 26, and patwari circle No. 12 (excluding village Bhuli), village Nandpur of patwari circle No. 27 village Nilkanth and Dhawdikhapa of patwari circle No. 28 in pandurna tahsil of Chhindwara district. 3. Any reference in the preceding paragraph to a territorial division by whatever name indicated shall be construed as a reference to the territorial division of that name as existing at the commencement of this Order.
doc_232511454.doc
Cold Storage is the second-largest supermarket chain in Singapore behind NTUC FairPrice, owned by Dairy Farm International Holdings.
M/s GURUKRIPA COLD STORAGE, WAREHOUSING & LOGISTICS
VILLAGE-JORA, TEHSIL-JAISINGH NAGAR, DISTRICT-SHAHDOL (M.P.)
PROJECT REPORT COLD STORAGE
ON
UNDER
SCHEME FOR CAPITAL INVESTMENT SUBSIDY ON CONSTRUCTION OF COLD STORAGE (Techno-Economic Feasibility Report)
COLD STORAGE FOR FRESH HORTICULTURE PRODUCE NOT REQUIRING PRE-COOLING BEFORE STORAGE ADDOPTED NEW TECHNOLOGY (FIN COOLING COIL SYSTEM) REFERENCE TO PROJECT S.NO PARTICULARS CHAPTER
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.
PROJECT AT GLANCE INTRODUCTION MARKET POTENTIAL FINANCIAL ASSISTANCE FROM GOVT. LOCATION AND SITE SELECTION CAPACITY UTILIZATION CRITERIA OF EQUIPMENT SELECTION TECHNIACAL KNOW - HOW EFFLUENT DISPOSAL & TREATMENT MANPOWER & MANAGEMENT UTILITIES PRODUCT MIX & RECIEPT IMPLEMENTATION PROGRAMME COST OF PROJECT MEANS OF FINANCE SECURITY TO PROJECT ASSUMPTION OF PROFITABLITY ECONOMIC CONSIDERATION AND SOCIAL RESPONSIBILITY CONCLUSION CHAPTER – ONE PROJECT AT GLANCE TEN SIX
ONE TWO THREE FOUR FIVE
SEVEN EIGHT NINE
ELEVEN TWELVE THIRTEEN FOURTEEN FIFTEEN SIXTEEN SEVENTEEN EIGHTEEN NINETEE
NAME OF THE CONCERN NAME OF PROMOTER (PARTNER’S) Gupta,
: :
M/s: GURUKRIPA COLD STORAGE, WAREHOUSING & LOGISTICS 1. Shri Ravi Keshari S/o Shri Lalji
Status Office Address
Site Address Product Installed Capacity Chambers) Capacity Utilization Onwards) Cost of project
Beohari, Distt.-Shahdol (M.P.) 2. Smt. Shailesh Gupta D/o Shri Brijesh Prasad Gupta, Beohari, Distt.-Shahdol (M.P.) 3. Smt. Sangeeta Gupta D/o Shri Radha Krishna Gupta, Beohari, Distt.-Shahdol (M.P.) 4. Lalji Gupta S/o Shri Shiv Prasad Gupta, Beohari, Distt.-Shahdol (M.P.) 5. Smt. Yashoda Gupta D/o Shri Hanuman Prasad Gupta, Indore (M.P.) : Partnership Firm : M/s: Guru Kripa Cold Storage, Warehousing & Logistics. C/o M/s: Bharati Lodge, Beohari, Distt.-Shahdol (M.P.) 484774 : Village-Jora, Tehsil-Jaisingh Nagar, Distt.-Shahdol (M.P.) : Cold Storage : Cold Storage - 5390 M.T. (Four : 75% (1st Year, 2nd Year) 80% (3rd Year, 4th Year,) 85% (5th Year, 6th Year & 7th Year : Site Development Building Plant & Machinery (Rupees in Lacs) : Rs 7.00 : Rs 173.00 : Rs : Rs. : Rs 0.00 0.00
220.00 Prelim. & Preoperative Exp. Contingency & W.C. Margin TOTAL Rs.400.00 Means of Finance Rs.331.00 Subsidy @55% Own Capital 69.00 TOTAL Rs.400.00 Cash Break Even Point : 63% in Second Year Operation at 75% Capacity Utilization : Rs. : Term Loan Including Rs. 165.00 lac
(Rupees in Lacs) :
D.S.C.R. Subsidy) Important Ratios (Key Indicators) Projection 2014-15 145.53 41.50 0.00 89.40% 28.52% 33.70 23.16% 84.75 58.24% 69.00 92.59 92.59 3.57 3.57 1.58 1.58 0.34 9.80% 71.48% 0.00% 0 36.60%
:
2.10: 1 (Considering Loan without
Net Sales Operating Profit (Net) Other income PBDIT/Sales PBT/Sales PAT PAT/Net Sales Cash Accruals Cash Accruals/Sales Paid up Capital (PUC) TNW Adjusted TNW (TNW-Investment in associates) TOL/TNW TOL/Adjusted TNW C/R C/R excluding T/L instalments due in 1 year Net Sales/TTA (Times) PBT/TTA (%) Operating costs/sales(%) Bank Finance / Current Assets (%) Inv + Rec. /N.S. (DAYS) NWC / CA (%)
Projectio n Projection 2015-16 2016-17 145.53 155.23 53.01 72.63 0.00 88.76% 36.42% 42.90 29.48% 87.20 59.92% 69.00 122.63 122.63 2.31 2.31 2.15 2.15 0.36 13.04% 63.58% 0.00% 0 53.45% 0.00 88.44% 46.79% 58.60 37.75% 97.08 62.54% 69.00 163.65 163.65 1.44 1.44 2.83 2.83 0.39 18.15% 53.21% 0.00% 0 64.64%
(Rs. In lacs.) Projectio Projectio Projection n n 2017-18 2017-18 2018-19 155.23 164.93 164.93 82.24 100.16 106.29 0.00 87.74% 52.98% 66.29 42.70% 99.73 64.25% 69.00 210.05 210.05 0.90 0.90 3.52 3.52 0.39 20.60% 47.02% 0.00% 0 71.56% 0.00 87.36% 60.73% 80.63 48.89% 109.71 66.52% 69.00 266.49 266.49 0.53 0.53 4.32 4.32 0.40 24.53% 39.27% 0.00% 0 76.87% 0.00 86.57% 64.45% 85.14 51.62% 110.46 66.97% 69.00 327.49 327.49 0.29 0.29 5.15 5.15 0.39 25.18% 35.55% 0.00% 0 80.57%
CHAPTER – TWO INTRODUCTION GENERAL: The proposal is being setup to install a Cold Storage, which will be made by M/s Gurukripa Cold Storage, Warehousing and Logistics (A Partnership Firm). The Cold Storage proposed under the project will have an installed capacity of 5390Metric Tonnes (Approx. 53900 Bags). PROMOTERS: The project is proposed and promoted by Gurukripa Cold Storage, Warehousing and Logistics (A Partnership Firm). The group/family has a long track record in Agricultural Land, Dairy, Hardware, Agency of Tractor, Grains and seed business, particularly in Soyabean Seeds. They have various immovable and movable properties in and around Shahdol. Promoters’ of the firm is energetic and active persons having excellent business capabilities and decision making capacity. They all have agreed to devote their time for the businesses of the firm. The partners of firm are as under: 1. Shri Ravi Keshari S/o Shri Lalji Gupta, Beohari, Distt.-Shahdol (M.P.) 2. Smt. Shailesh Gupta D/o Shri Brijesh Prasad Gupta, Beohari, Distt.-Shahdol (M.P.) 3. Smt. Sangeeta Gupta D/o Shri Radha Krishna Gupta, Beohari, Distt.-Shahdol (M.P.) 4. Lalji Gupta S/o Shri Shiv Prasad Gupta, Beohari, Distt.-Shahdol (M.P.) 5. Smt. Yashoda Gupta D/o Shri Hanuman Prasad Gupta, Indore (M.P.)
CHAPTER – THREE MARKET POTENTIAL
India is the one of largest producers of Spices, fruits and vegetables but its share in the world marker both in fresh and processed form is less than one percent. Moreover, due to inadequacy of infrastructure and processing facilities a large percentage of horticulture produce gets perished before it reaches to consumers. Such crops fruits, vegetables etc. being much more remunerative than the cereal crops, have registered a constant increase in their production in the last few decades, It is estimated that on account of inadequate post harvest infrastructure, substantial percentage gets wasted. Several institutions have reported that depending upon various types of crops, seasons of production and market, the factor like harvesting, post harvesting, handling storage, transportation etc. causes major losses. Agriculture is the major industry of India and about 70% of Indian Population is engaged in activities connected to agriculture. The total agricultural output amounts to approx. 40% of the National Income. The country is producing in excess of 60 million tons of fruits and vegetables per annum. Most of the agricultural produce is perishable in nature and requires certain levels of temperature and humidity to hold the horticultural produce in good condition for longer periods. It is estimated that due to lack of proper facilities of transportation and storage, about 33% of produce, especially fruits and vegetables are wasted i.e. about 20 million tons or 200 lakh tons are wasted. During the peak harvesting season, excess produce gets over flooded and many -a-times, due to lack of storage facilities – let alone cold storage facilities- gets damaged and totally wasted, whereas an artificial scarcity gets developed during non-harvesting periods and prices soar and many times, we have to import these goods at exhorbitantly high prices which most of the people of India cannot afford and have to starve. The major important fruits and vegetables grown in India are: Fruits - Apples, Mangoes, Grapes, Oranges, Bananas, Papaya, Pomegranate, Litchi, etc. Vegetables - Potato, Onion, Tomato, Cabbage, Cauliflower. Peas, Okra (Ladies Finger), Garlic, Ginger, Brinjal (Egg Plant), Green Chilies etc. Other important Food items are Dry Fruits, Fruit Juices, Chemicals, Dairy Products, Ice Creams, Frozen meat, Sea foods like Shrimps, fish etc and eggs. As per secondary source the total turnover in the food market is approx. Rs. 250000 Crores of which value added food products comprises Rs. 80000 Crores. Proposal for joint ventures, foreign collaboration, industrial licenses and 100% export oriented unit envisaging an investment of more than Rs. 25000 Crores was considered since liberalization in August 1991 to till 2005. Now the Government has opened doors for private sectors for coming up with their investment in agriculture segment, whether it is industrial or retail.
According to a study by the national Council for Applied Economic Research the India Food Market in 1995 was Rs. 248000 crores. According to CII Mckinsey Report on proposed food industry, the food market at 1995 price is estimated at Rs. 225000 Crores. According to the study the frozen vegetables markets has a potential to touch Rs.3.50 Crores in value terms by 2005. But this would be possible only if the adequate cold storage facilities available in difference parts of the country. Maintenance of cold chain being essential in this sector, logistics play a very important role. The total storage capacity is around 10 Million tonnes whereas the total output is over 100 million tonnes per annum, resulting in estimated wastage of Rs.23000 Crores annually. Cold Storages are essential for extending the shelf life, period of marketing, avoiding glut, post harvest losses reducing transport bottlenecks during peak period of production and maintenance of quality of produce. It is, therefore, necessary that cold storages are to be constructed in major producing as well as consuming centres. The development of cold storages in the country has an important role in reducing the wastages of the perishable commodities and providing remunerative prices to the growers and to make available farm products to the consumers at competitive and affordable prices. Location and area: The project may be located anywhere in the country suitably either near the producing farms or consumer centers. Shahdol is a district of Madhya Pradesh located on the southeasternmost portion. The district is tribal in nature, with the living standards of the tribes being relatively simple. The boundaries include both districts and a state, with the north bounded by the district of Satna (on the northwestern side) and Sidhi (on the northeastern side). The east and south parts are bounded by the state of Chhatisgarh. To the west, it is bounded by two districts, with Dindori on the southwest side and Umaria district on the northwest. Boundaries of Shahdol District: North: Satna District and Sidhi District, Madhya Pradesh South East: Anuppur District, Madhya Pradesh West: Umaria District, Madhya Pradesh Shahdol is a medium-sized district, having a total area of 5,671 square kilometers. The 2001 census states its total population is around 908,148. Of those, 391,027 are scheduled tribes while 67,528 are scheduled castes. Shahdol district is part of the Rewa division of Madhya Pradesh and its administrative headquarters is the town of Shahdol. As is most often the case with districts, the name of the district was derived from its administrative headquarters town of Shahdol. The name itself is thought to be derived from one Shahdolwa Ahir, who hailed from the village of Sohagpor. This came about because of a declaration by Jamni Bhan, the second son of Maharaja Virbhan Singh of Bagelkhand, who also
happens to be the progenitor of the Ex-Illakadar family of Sohagpur. Jamni Bhan decided to settle in Sohagpur and proceeded to maximize facilities in the settlement. He also declared that places settled by clearing the forests will be named after the pioneer settlers, hence the settlement founded by Shahdol wa Ahir. Later on, the place became the camp site for the Maharaja of Rewa and the British forces while both were on tour. In time, more villages were added on the Shahdol settlement until it eventually became recognized as a town. When the princely states merged in 1948, the district headquarters was shifted from Umaria to Shahdol. Eventually, when Madhya Pradesh was created via the melding of several existing states on November 1, 1956, Shahdol became one of the districts of Madhya Pradesh. Shahdol district is located on the northeastern part of the Deccan Plateau, at the trijunction of the Maikal Ranges of the Satpura Mountain, Vindhya Mountain’s Kymore Range, and some of the parallel hills that extend over the Chhota Nagbur Plateau over in Bihar. The district may be divided into three physio-graphic divisions. They are the Maikal Range, the Eastern Plateau hills and the Upper Son valley. Geographically, the district is mainly a hilly region. It is also very rich in mineral resources, with the major minerals being coal, clay, ochres and marble. Bauxite is also found in large quantities. The tribals living in the area still prefer the old and traditional methods of cultivation. The sizes of the fields are very small, with the tribals mainly marginal farmers. Since the annual yields of the fields are not enough for their home use, for the non-harvesting seasons, they mostly work on daily wages. The chief crops being cultivated are paddy, kutko, maize and kodo. Shahdol is in Madhya Pradesh state with geographical coordinates of in North and in East. Explore the satellite map of Shahdol with high quality images in the page below. Also explore the aerial photographs of Map of Shahdol. The Total population of Shahdol is 4662322 with 2381522 Male and 2280800 Female. Google Map Of Shahdol
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District Code: SH Population Of Shahdol - 1,064,989 Area (km²) - 5,671 km2 (2,190 sq mi) Division - Shahdol Parliamentary Constituency - Shahdol Assembly Constituency - Jaisingnagar and Shahdol Time Zone Of Shahdol - IST (UTC+5:30) Elevation Of Shahdol - NA Sex Ratio - 968 (2011)
Named after headquarters Shahdol, this district is industrially advanced one and a Division of MP state. The lush green forestry landscapes and minerals are its major assets. Tribal dominance makes Shahdol a tribal
area in Vindhyachal ranges whose development is remarkable. Its extensive coal mines reserves are important sources of prosperity. Shahdol district was divided on 15 August 2003 to create Anuppur district. Existing area of present day Shahdol is 5671 km2. Anuppur, Satna, Sidhi and Umaria districts border Shahdol on southeastern, northern and western borders. Its main location is on Deccan Plateau and tri-junction of Maikal Ranges. 2001 census recorded total population of undivided Shahdol district at 908,148. It had 391,027 Scheduled Tribes and 67,528 Scheduled Castes inhabitants. Shahdol has attractive places. Some are mentioned here:
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Virateshwar Temple in Sohagpur Vangana is sought after tourist destination Monuments representing erstwhile Maharaja of Rewa Several picturesque forest regions
Its identity of being predominantly hilly district always keeps Shahdol into the limelight especially for the tourists. Rich mineral resources like coal, fire clay, ochers and marble are pivotal in enhancing maximum revenues for the state. This district lacks in agriculture but its industrial setups are well planned. Climate and Rain: The climate of the district is moderate. It rains from June to October in the district. The temperature remains the highest in the month of June and the Lowest in the Month of January. The maximum and minimum temperature of the district remains 46oC and -1oC respectively. Forest: Sal, Amla, Teak, Sarai and Shisham are the main trees found in this district. The flower of Mahua and Guli provide edible oil. Mahua flower is mostly used for making wine by tribal people. Shahdol District Average Rainfall: 1211.6 mm Shahdol District Average Temperature in Summer: 41.4 deg C Shahdol District Average Temperature in Winter: 26.5 deg C Major Rivers: Son River, Banas River, Chandas, Tipan, Bakan, Kunaknadi, Chuwadi Nadi Tehsils: Beohari, Jaisinghnagar, Sohagpur, Jaitpur Assembly Constituencies: Boehari, Jaisinghnagar, Jaitpur
Shahdol District Facts: There are three physiographic divisions namely the Maikal Range, Eastern Plateau Hills, Upper Son Valley. It is one of the 24 most backward districts of Madhya Pradesh that is getting grants from the
Backward Regions Grant Fund Program. Fruits, Vegetables and Spices consumption is growing at a faster rate than most other food products at 11, 12 and 9 percent respectively. This implies diversification in consumer demand in favour of fruits, vegetables, spices.
HISTORICAL DEVELOPMENT:
The Royal commission on agriculture had observed as early as in 1928 that the cold storage industry was bound to play a very important role in the India’s agriculture economy. The first cold storage was set up in Calcutta in 1928, but the growth of Industry was sluggish up to 1955. There were only 83 cold storages with the installed capacity of 42965 tonnes in 1955. It was felt that cold storages were not established scientifically and store conditions were not proper and hygienic. The sector needed large–scale improvement in terms of quantitative and qualitative aspects. It was therefore, felt necessary to regulate the industry to provide for technical specification and minimum norms for hygienic storage. The need of introducing a licensing system for cold storage was also stressed by horticulture development boars as early as 1957. The Ministry of Agriculture, government of India, thereafter promulgated the cold Storage Order, 1964 under the section 3, the essential commodity act, 1955 which came into force from January1, 1965. The principle aim of promulgating the order was: 1. To ensure hygienic and proper refrigeration conditions into a Cold Storage. 2. To regulate the growth of Cold Storage Industry in a planned manner. 3. To render the technical guidance for scientific preservation of food stuff. 4. To prevent exploitation of farmers by cold storage owners. The order was made applicable all over the country except in the state of Uttar Pradesh and West Bengal, where the State Governments have enacted their Cold Storage Acts. In 1969 and 1975, West Bengal and U.P. sought permission to enact their own acts. This was to include provision for compulsory insurance of food stuff, fixation of storage charges and requisition cold storage space etc. During 1979, Punjab and Haryana were permitted their state orders for regulating the cold storage industry in their states under Act of 1955. Back- ended subsidy @ 40% of the project cost for general and 55% in case of hilly and scheduled areas for maximum storage capacity up to 5,000 per ton under the Govt. of India / NHB Capital Investment Subsidy Scheme. Notification of Ministry of law & Justice, Govt. of India is enclosed for schedule area of our project located.
GROWTH IN COLD STORAGE: With the launching of grow more food campaign in the first five year plan, the cold storage industry attract the attention of industrialist, growers and consumers and number of cold storage rose upto 359 with an installed capacity of 0.30 million tonnes by 1960. During the third five-year plant, the Government provided incentives for setting up more cold storage. As a result, a number of cold storages were increased to 1091 with an installed capacity of 1.55 Million tonnes by 1969. The growth in the cold storage industry has been 7.8 % per annum in the terms of number and 4.75% per annum in terms of storage capacity. According to the Ministry Consumer Affairs, the total installed cold storage capacity in the country is 103.54 Lacs tonnes. Out of this, over 80 percent is used exclusively for the storage of potatoes. The acute shortage of storage space for other perishable can well be imagined. Through NABARD and other agencies, the Government proposes to help create an additional cold storage capacity of Twelve Lacs tonnes and rehabilitate the existing capacity of Eight Lacs tonnes over the next few years. The new facilities have to be location specific and product specific. One third of our horticulture produce, fruits and vegetables are wasted, mainly on account of poor cold storage and other storage facilities. The country also experiences wide fluctuations in price of horticulture produce, particularly potatoes and onions. The Government of India had, therefore, appointed a High Level Expert Committee in November 1998 for improving the cold storage capacity of the order of 12 Lacs tonnes capacity (approximately), rehabilitation/renovation of 8 Lacs tonnes capacity (approximately), which is lying unutilized in various states would be necessary. The Committee has also assessed the requirement of storage for necessary. The Committee has also assessed the requirement of storage for onion of 1.5 Lacs tonnes on farm storage in producing areas and 3 Lacs tonnes at APMC yards and terminal markets in different states. The Scheme is implemented by NABARD/NCDC/NHB. With a view to ensuring faster development of cold storage capacity and to encourage entrepreneurs to invest more in this sector, the Hon’ble Finance Minister had made the announcements while presenting the Union Budget for 1999-2000 that we have very week post harvest storage and marketing infrastructure. This causes tremendous national loss to overcome this problem a new credit linked capital subsidy scheme for construction of cold storage and godowns. This scheme which will be implemented by the Ministry of Agriculture will help create Additional cold storage capacity of 12 Lacs tonnes and will rehabilitate and modernize 8 Lacs tonnes exciting unit over the next few years. We also propose to create 4.5 Lacs tonnes of onion cold storage capacity. The Warehousing Development and Regulatory Authority (WDRA), a statutory body had introduced Negotiable Warehouse Receipt (NWR) system in cold storage warehouses for the major horticulture produce so that the farmers may avail the benefit of loan from the banks against the deposit of NWRs. This would help in achieving the objective of easy credit access to
farmers’ effective post-harvest management and integrated development of agriculture including horticulture in the country. The WDRA had notified 26 horticulture commodities for the issuance of NWRs by the registered warehouses (cold storages). The WDRA had also finalised the checklist for accreditation of warehouses (cold storage). The Authority had approved five Government organizations as accreditation agencies for the cold storage warehouses namely National Institute of Agricultural Marketing (NIAM), Directorate of Marketing and Inspection, National Cooperative Development Corporation (NCDC), National Productivity Council (NPC), The Rail India Technical and Engineering Services (RITES) Ltd. Chairman desired that States should organize workshops in consultation with WDRA for making the cold storage owners aware of benefits of WDRA notification, RIDF funding and other initiatives. Finance Minister in its budget speech for 2012-13 had earmarked Rs.5,000 crore for creating warehousing facilities (including cold storages) from the allocation under Rural Infrastructure Development Fund (RIDF) which was Rs.2000 crore during 2011 – 12. This was available to a beneficiary through the State Government, as well as through commercial bank. States should utilize this window for financing of cold chain projects. Chairman also informed about Reduction of Excise Duty on Import of Cold Storage Equipments, External Commercial Borrowings (ECB) and hundred percent Foreign Direct Investment (FDI) under automatic route in storage and warehousing including warehousing of agriculture products with refrigeration i. e. cold storages. The Associated Chamber of Commerce and Industry (Assocham), highest body of the Chambers of Commerce of India (CCI), providing a forum for dialogue between business and government said in its report “Food Processing and Agri Business” that the country is short by 10 million tonnes of cold storage capacity due to which about 30- 40% of agricultural produce goes waste every year. The report is jointly prepared by Assocham and international advisory company – KPMG. According to Assocham’s latest study report, against a requirement of over 31 million tonnes of cold storage, India has a capacity of nearly 21.7 million tonnes, leading to a loss of about 40% of the agri-produce post harvest. About the new study on cold storages S Jindal, president – Assocham, said, “Cold storage facilities now available are mostly for single commodity like potato, orange, apple, grapes, pomegranate and flowers, resulting in poor capacity utilisation. Long and fragmented supply chain in India along with inefficiencies lead to huge losses due to wastage or shrinkage of perishable commodities.” The industry body has also asked the government to build new cold chain infrastructure to increase its storage capacity. At present, the Indian cold chain market is worth $2.6 billion. This market is expected to grow to $12.4 billion by 2015. Uttar Pradesh and West Bengal have 65% of the total installed capacity of cold storage in the country. Cold chains are used primarily for fruits and vegetables, meat and marine products, floriculture, dairy products, ice creams and confectionery.
Further, the report said that entire supply chain in the country is dominated by unorganised players with several intermediaries adding to wastage from farm to consumer via retailer, processor or exporter. In a long supply chain, one level is unaware of requirements of next level, leading to disconnection between farmer and processor. Secondly, absence of any structured market hampers discovery of correct price and availability of consistent quality of produce. Absence of proper cold chains and associated logistics in India leads to wastage of fresh produce to the extent of 25-30%, annual equivalent of over 50,000 crore. About 30-40% of these losses occur in farmers' fields and in packing, the remaining in transportation and marketing. A study by Indian School of Business, Hyderabad, revealed that more fruit, vegetables, poultry and dairy products end up in trash bins than on dining tables. Growth in organized retail and the food processing sector drives the cold chain market in India. Further shift towards horticultural crops by farmers to evade risk boosts the demand for cold chain. Rising demand for cold storage in pharmaceutical sector is also driving the growth in cold chain market. Changing consumption pattern is expected to create huge demand for cold storage in India. The report begins with an introduction section, projecting the evolution of Cold Chain Market in India. It then shows the value chain of the cold chain market followed by its definition, segments and key activities. The different types of cold storage are then demonstrated. A flow of Cold Chain Logistics Services is also shown in this section. Market overview section provides a brief snapshot of the Cold Chain Market. This section includes the market size of the cold chain market in India in terms of cold storage and cold transportation, demonstrating the forecasted growth over the period 2010 - 2015. The opportunities for the players in providing cold chain facilities are also illustrated. The section then gives an overview of the surface storage market. The cold storage distribution in the country has been mapped along with the commodity wise distribution. Subsequently, the number of cold storage and their capacity as on 31st Dec, 2009 has been listed. Current ranking of India’s food production w.r.t global scenario are displayed. The impact of cold chain on shelf life of fruits & vegetables has been shown. Developments in refrigeration systems in cold storage has been shown followed by the other recent developments. An overview of the refrigerated transport market is given demonstrating the refrigerated transport process. Current & Future Scenario section deals with the investment opportunities and the private participation in cold chain market in India. Some major deals in cold chain market in India have been listed. Further some recent investments in the cold chain sector in India are also found. Drivers & challenges section in the report provides a comprehensive set of factors which boosts and hinders the growth in the market. An analysis of the section brings forth the key drivers fueling growth in the market including growth in organized retail, shift towards horticultural crops, growth in processed food sector, demand from pharmaceutical sector and the changing consumption pattern. While the challenges identified comprises of
lack of logistical support, uneven distribution of cold chains, cost structure and deficit in power supply. Government initiative section emphasizes on the role of government in budget for cold chain sector. Further the government’s initiatives on terminal market, railways and port and shipping are also discussed. Then the schemes and the assistance by Ministry of Food Processing Industries, National Horticulture Board (NHB) and Ministry of Agriculture and Cooperation, GOI are discussed. Trends section in the report emphasizes the recent trends in the cold chain sector such as the entry of foreign players, rail based reefers, cold chains facilities at airport and backward integration by retailers. The competition section profiles the major players in container logistics market in India in details within the report which enables readers to get a clear picture of the current competitive scenario. The section lists the basic details of the players such as corporate information, business highlights and key members. The section also features financial analysis of key vendors which in turn provides us with the financial health of players. The strategic recommendations section suggests the requirements for an integrated cold chain infrastructure and the requirements to meet up the current cold chain demand in the country. India is looking to build cold-storage facilities in an effort attract investment, cut food wastage and streamline the supply chain in a country that produced the second largest amount of fruits and vegetables. Fruit and vegetable wastage due to poor post-harvest management and lack of cold chain facilities have been estimated to cost up to Rs.500 billion annually the National Commission of Farmers said in its fifth and final report. Finance Minister Pranab Mukherjee announced a number of schemes to attract investment in the sector on Friday, stating that he wanted to reduce the “difference between the farm gate prices, wholesale prices and retail prices.” “External Commercial Borrowings will henceforth be available for cold storage or cold room facility, including for farm level pre-cooling, for preservation or storage of agricultural and allied produce, marine products and meat,” Mukherjee said. According to the Economic Times of India, the government also announced concessional import duty and exemption of service taxes for installation and commissioning equipment to promote mechanized handling in spot market. The regulation will also exempt customs duty on the refrigeration units needed to produce refrigerated vehicles. Cold storage facilities remain limited in India and the government’s focus on the industry should help to boost investment and expand warehousing and cold storage capabilities in the country. The increase in cold storage should help boost exports of fruits and vegetables. The total value of India’s cold chain industry is currently estimated at USD 3 billion and reportedly growing at an annual rate of 20-25 per cent. The total value for the industry is expected to reach at USD 8 billion by 2015
through increased investments, modernization of existing facilities, and establishment of new ventures via private and government partnerships. India’s cold chain industry is still evolving, not well organized and operating below capacity. Most equipment in use is outdated and single commodity based. According to government estimates, India has 5,400 cold storage facilities, with a combined capacity of 23.66 million metric tons that can store less than 11% of what is produced. Availability of Cold Storages: Cold Storage development in India from the year 2004 to 2012 is shown in table given belowMT/Year No. of Cold Installed Capacity (in lac Storage MT) (Calmative) Previous Year 2607 54.02 2004 4748 195.52 2007 5316 233.34 2009 5381 244.50* 2010 5837 269.03@ 2011 6156 286.82@ 2012# 6307 301.10
Source: * Directorate of Marketing and Inspection upto 2009 @ includes only NHB and NHM assisted cold storages during 2009-10 and 2010-11 # As on 01.09.2012
Of the 300.05 lakh MT cold storage capacity, nearly 140.00 lakh MT has been created between 2000 - 2011 on account of interventions by National Horticulture Board (NHB), National Horticulture Mission (NHM), Horticulture Mission on North East and Himalayan States (HMNEH), Agricultural and Processed Food Products Export Development and Authority (APEDA), Ministry of Food Processing Industries (MoFPI) and Department of Animal Husbandry and fisheries (DAHD). Agency wise details of Cold Storages/CA/MA Infrastructure created (2009-12)* Name of Scheme NHM NHB HMNEH NCDC MoFPI APEDA Total No. of new Cold Capacity Govt. Storages/CA/MA created (in Subsidy infrastructure lac MT) (Rs, Crore) 4,51 24.35 3,25.91 5,28 28.28 1,64.08 9 0.41 7.35 5 0.22 3.19 49 2.32 1,46.71 24 0.02 12.09 1,066 55.60 6,59.33
in
*up to 31/03/2012
Requirement scenario: National Spot Exchange (NSE) undertook a study in December, 2010. The gap in cold storage capacity in various states has been estimated as under: State Andhra Pradesh Assam Bihar Chhattisgarh Gujarat Haryana Himachal Pradesh Jammu & Kashmir Jharkhand Karnataka Kerala Maharashtra Manipur Meghalaya Mizoram Madhya Pradesh Nagaland Orissa Punjab Rajasthan Tamil Nadu Tripura UP & Uttaranchal West Bengal Total Cold Storage requirement (in lac MT) 23.24 9.19 42.41 5.43 27.48 8.04 4.87 7.37 7.96 24.04 27.71 62.73 0.80 2.39 0.74 12.13 0.70 18.35 13.18 3.91 79.06 1.63 122.28 105.66 611.30 Present Capacity (in lac MT) 9.01 0.88 11.47 3.42 12.67 3.93 0.20 0.43 1.70 4.07 0.58 5.47 0.00 0.03 0.00 8.08 0.06 2.91 13.45 3.24 2.39 0.30 101.87 56.82 242.98 Gap (in lac MT) 14.23 8.31 30.94 2.01 14.81 4.11 4.67 6.94 6.26 19.97 27.13 57.26 0.80 2.36 0.74 4.05 0.64 15.44 0.00 0.67 76.67 1.33 20.41 48.84 368.32
Source: NSE& DMI (Present Capacity in Delhi- 126158 MT, Goa -7705 MT, A & N- 210 MT. Pondicherry-85MT)
In 2010, the cold storage gap of about 370 lakh MT was worked out on the basis of peak season production and highest arrival/ harvesting of storable fruits and vegetables in a month. Against this, normally 50%capacity is required for storable surplus of the identified fruits and vegetables. Post Harvest Losses: As per reports of the Task Force on Development of Cold Chain in India, set up by the Ministry of Agriculture (August, 2008), Planning Commission
(XIth plan working Group on horticulture) and All India Coordinated Research Project on Post Harvest Losses, CIPHET, Ludhiana (April, 2010) post harvest losses continue to be in the range of 18% - 40% in several commodities. As such, a robust cold chain, transport and logistics infrastructure is required. Recent Government initiatives i. Enhanced Pattern of Assistance: Subsidy has been enhanced from 25% to 40% in General Area and from 33.33% to 55% in Hilly and scheduled area, to attract more entrepreneurs and private investment in Cold Chain Infrastructure Sector since April, 2010. ii. Rural Infrastructure Development Fund (RIDF) for warehousing : Finance Minister in his budget speech for 2012-13 has proposed to earmark Rs. 5,000 crore for creating warehousing facilities (including cold storages) from the allocation under RIDF. During 201112, there was provision of Rs. 2,000 crore under RIDF VII for the first time. NABARD has informed that as against the allocation of Rs. 2000 crore. NABARD sanctioned an amount of Rs. 2252.90 crore during 2011 - 12. Of this Rs. 1493.82 crore was sanctioned to 13 state Governments/UTs, while the remaining amount of Rs. 759.08 crore was sanctioned and disbursed to banks as refinance. Assistance from NABARD is likely to create a storage capacity of 7.30 million metric tons. Keeping in view the shortage of warehousing infrastructure (including cold storage) for agricultural commodities, GOI has increased the allocation for 2012-13 to Rs. 5000.00 crore from a level of Rs. 2000.00 crore in 2011 - 12. The interest rate regime governing RIDF has undergone a change w. e. f. 01 April, 2012. NABARD is in the process of finalizing the policy for the year 2012 - 13, in consultation with Department of Financial Services, Ministry of Finance, and Government of India. iii. Exemption on Excise and Custom Duty: Custom Duty - The projects of cold storages, cold room (including farm level pre-cooling) or industrial projects for preservation, storage or processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat have been granted project import status with concessional Basic Customs Duty (BCD) of 5%. The Truck refrigeration units and Refrigeration motor vehicle have been fully exempted from BCD. Excise Duty - The Central Excise duty has been fully exempted for installation of a cold storage cold room or refrigerated vehicle, for the preservation, storage, transport or processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat, air conditioning equipment and refrigeration panels for cold
chain infrastructure and including conveyor belts used in cold storages, mandis and warehouse. Service Tax - The Central Board of Excise and Customs have clarified that sub-clause (v) of Section 66D of the Finance Act, which specifies the Negative List of services and where the services by way of storage and warehousing of agricultural produce are covered. The expression “Agricultural Produce” has been defined in Section 65(B) (5) of the said Act. Thus storage and warehousing of agricultural produce is not liable to service tax. Moreover, serial No. 14 of the Mega Exemption 25/2012ST, dated June 06, 2012 has exempted the construction of postharvest storage infrastructure for agricultural produce, including cold storage for such purposes. External Commercial Borrowing (ECB) External Commercial Borrowing (ECB) can be raised for investments in new projects, modernization/expansion of existing production units in real sector - industrial sector including infrastructure sector for creating cold storages or cold room facility, including farm level pre-cooling, for preservation or storage of agricultural/horticultural and allied produce. Foreign Direct Investment (FDI) 100% Foreign Direct Investment (FDI) is allowed under automatic route in storage and warehousing including warehousing of agriculture products with refrigeration i. e. cold storages. National Mission on Food Processing In order to have a better outreach and to provide more flexibility to suit local needs of fruits and vegetables, it has been decided that a new centrally sponsored scheme titled “National Mission on Food Processing” would be started, in cooperation with the State Governments in 2012-13 under which cold storage for processing purposes will also be developed. This mission will be implemented by MoFPI as a centrally sponsored vii. scheme. Introduction of Horti Train Introduction of dedicated train and reefer van is also expected to bridge the gap between the producers and consumers thereby ensuring remunerative prices to the farmers.
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v.
vi.
The first Horticulture Train, nonstop trail run was conducted between Bhusawal - Azadpur (New Delhi) sector in the month of January, 2012 which carried about 1100 MT of banana from Bhusawal to Azadpur market yard in 26 hours. Another round of Train run with potato was successfully conducted between Agra - Turbhe (New Bombay) sector on 12 th June, 2012. The Train reached its destination in a record time with extremely good condition of produce at APMC Turbhe, Vasi Market. Another round of trail run of full rake load of onion from Khedwadi (Niphad, Distt. Nashik) to Chitpur, Kolkatta (West Bengal) was done in June, 2012. After conducting trial run on various sectors and with different commodities, service of Horticulture Train is proposed to be formally launched on viable origin - destination (OD) pairs; i. e. is Agra - Turbhe - Tulgalabad/Azadpur - Agra. Agro and Food Processing Policy, 2012 of M. P. Government: Assistance on power consumption with subsidized rate of rate of INR 1.50 per unit for 5 years subject to a ceiling of 25% of the electric units consumed to Cold Storage, Cold Chamber, Ripening Chamber and Individual Quick Freezing Enterprise. PRODUCTS: The proposal is to setup a cold storage. Cold Storage plays an important role in storage of various commodities. It is extensively useful to store the edible items. The proposed cold storage is to be set up at VillageJora, Tehsil-Jaisingh Nagar Area in Shahdol (Madhya Pradesh), which will enjoy various concessions and facilities extended by the Government. India is an agricultural country primarily and with the advent of green revaluation an introduction of improved high yielding variety of seeds and plants, the yield per acre has increased many folds. The country is producing at present about 60 million tonne fruits and vegetables. Major production of fruits and vegetables is consumed as fresh. The major quantity of these perishable commodities is grown in the rural and backward parts of the country whereas as there consumption is cantered in the big cities and towns etc. Therefore most of these commodities are transported to these Marketing Centers. The country is losing significant of the farm produced, due to inadequacy of transport and processing facilities, resulting in loss of revenue, fertilizer etc. Potato, Seasonal Vegetables and Fruits are horticulture produce, which are significantly grown as cash crop in Shahdol, which are being marketed all over the state/country. It is necessary to have adequate storage facilities for meeting out round the year supply in the country. Potato, popularly known as the king of vegetables and a native of South America, has now become an indispensable part of Indian cuisine. It is
ranked 4th in terms of important staple food after wheat, rice and maize. Moreover, India ranks fourth in terms of area and third in terms of production of potato across the globe. China and Russia are ahead of India in terms of potato production. Potato is a temperate or cool season crop which needs a low temperature, low humidity, less windy, and bright sunny days. It does well under well-distributed rains or moist weather situations to high temperatures. Humidity and rains are not conducive to potatoes as these lead to insect pests and disease attacks. Potato is rich in carbohydrates, comprising 22-24%. Moreover, it contains 2.1% to 2.7% protein, less than 0.5% of fat and the rest is water. Being a short duration crop, it produces more quantity of dry matter, edible energy, and edible protein in lesser duration of time compared to cereals like rice and wheat. Hence, potatoes may prove to be a useful tool to achieve the nutritional security of the nation. Potato is mainly a Rabi season crop. Around 80% of potato production is done as a Rabi crop. The rest of the production mainly comes from Karnataka and the hilly areas during long summer days. The Rabi crop is sown in the month of October and harvested in March. Potato is grown as a kharif crop in Maharashtra, Himachal Pradesh, Jammu & Kashmir and Uttarakhand. Kharif potato is sown in July and becomes available in the market by the month of October. The share of kharif potato in total production of potato in the country is 12%. The major potato producing states are Uttar Pradesh, Bihar, Punjab, West Bengal, Gujarat and Assam where potato is grown as a Rabi crop. The normal crop duration is 5-6 months. The following three types of crops are raised every year: Kharif crop: July-Aug to Oct-Nov. Rabi crop: Oct-Nov to Feb-March Although potato is a seasonal crop, it is grown in most of the states based on climatic conditions and harvested at different times, thus making it available throughout the year. The arrival of the winter crop potato is the major contributor to total production. Potato harvesting in India stretches between Dec-Jan to MarchApril. The major export zones for potato in India are Uttar Pradesh, Punjab, Madhya Pradesh and West Bengal. There are seven potato producing zones in the country. The zone-wise major commercial varieties are: Zone Area Name of variety North Western Hills Hills of Himachal Kufri Jyoti Pradesh and southern Jammu & Kashmir Hills of Uttarakhand Nainital, Almora, Kufri Jyoti Dehradun, Uttarkashi, Garhwal and Chamoli districts North Eastern Hills Hills of Meghalaya, Kufri Jyoti
orth Central Plains
Plateau Region
Kufri Jyoti Kufri Lavkar Kufri Chndramukhi Generally most of the potato which arrives in the market is consumed within the state. However, in some cases, it has been noticed that a significant quantity of potato is also dispatched to other states in the country. As vegetable (table purpose): Potato is used as a major vegetable throughout the world and in the preparation of a number of recipes either by using potato alone or by combining it with other vegetables, pulses, cereals, etc.. As seed: Medium-sized tubers are used normally in the northern plains. In the northern and eastern hills, is used as seed. As processed food: It is utilized in variety of ways, such as dehydrated potato products like chips, wafers, flakes, granules, flour, starch, potato powder and potato biscuits. It is also used to prepare frozen foods like potato patties, puffs, wedges, pancake, dehydrated mashed potatoes, canned potato, etc. Usage Table purpose Seed Processed Export Loss in Post harvest, marketing and storage Percentage of total production (%) 61.47 21 0.5 0.03 handling, 17
Manipur,Tripura, Nagaland, Arunachal Pradesh and Mizoram Madhya Pradesh (Indore, Gwalior, Sarguja, Ujjain, Chindwara, Sidhi, Tikamgarh, Shajapur, Dewas districts) Western U.P. and Gujarat Maharashtra, Karnataka and parts of M.P. and Orissa
Kufri Giriraj
Kufri Badsah Kufri Jyoti Kufri Lavkar Kufri Bahar Kufri Chandramukhi Kufri Chipsona
Fruits and vegetables like oranges/mangoes/apples/grapes/vegetables and other farm produce are significantly grown as cash crop in Maharashtra, Rajasthan, Gujarat and Southern India and marketed to all over the country. Crop season is seasonal but storages are persuaded round the year, which again necessitates the adequate storage facility.
This very feature has given rise to concept of setting up of registered Cold Storage Village-Jora, Tehsil-Jisingh Nagar area in Dstt.-Shahdol. MARKET: The semi perishable agriculture products like Potato, Fruits & Vegetables are grown in particular seasons while the demand for the same is round the year. To store and preserve them is necessary demand of industry and human being. If such a facility of strong and preserving these products are available to growers within their reach, they can fetch better prices and save themselves from losses. Thus it is a matter of national interest in our country, which is basically agriculture country. TECHNICAL ASPECTS: Running a cold storage is an activity of warehousing. The only major and important difference is of maintaining inside temperature according to commodities. For this, trained and experienced supervisors and operators are readily available all over the country. Since past couple of decades this activity has grown many folds in Madhya Pradesh. *Reducing Post Harvest Management (PHM) losses with multi-chamber and multi-product facilities. *Modern Design/Technology and Energy Saving Equipments/Devices to be adopted to avoid obsolescence of machinery, etc. *Improvement in technology like shifting from Diffuser system to Gravity Cooling System/Fin-coil System, etc. STORAGE CONDITIONS OF FRUITS & VEGITABLES: S. No. 1 2 3 4 5 6 7 8 9 10 11. Name of Commodity Apple Banana Guava Grape Lime Mandarin (Orange) Mosambi Pomegranat e Pine-apple Papaya Sapota Pre-Cooling Temperature Forced aiv Forced aiv Forced aiv Forced aiv Forced aiv Forced aiv Forced aiv Relative Humidity 90-95% -1? to 0? C Holding room 1390-95%
14? C
Freezing Point -1.7? C -0.5? C -1? C -3? to 1? C -3? to -2? C -1? C -2? to -1? C -
7? to 10? C -5? to 9? C 9? to 10? C 5? to 7? C 3? to 4? C 11? C
85-90% 85-90% 85-90% 85-90% 85-95% 85-95% 85-90% 85-90% 85-90%
Forced aiv Forced aiv Forced aiv
7? to 10? C 10? to 13? C 15? to 20? C
12.
Potato (Assorted)
Fresh Frozen Fresh Frozen Mature Green Pink Fresh Frozen Fresh Fresh Frozen Fresh Frozen Fresh Frozen
3? to 4? C -23? to 18? C -0? C - 18? C 13? to 18? C 10? to 13? C 7? to 10? C 18? to 24? C 8? to 12? C -0? C -0? C -0? C -18? C -0? C 23? to 18? C
13.
Onion
14.
Tomato (Hybrid) Okra Brinjal (Round Cabbage Cauliflower
90-95% Vapor tight packing 65-70% Gas tight packing 85-90% 90-95% 90-95% 98-100% 95-98% 95-98% Vapor tight packing 95% Gas tight packing
-
-
-
15. 16. 17. 18.
-1? C -1? C -1? C -0.8? C
19.
Peas
-0.6? C
Fresh fruits and vegetables are perishable. Particularly high-breed varieties have a shorter shelf life than the organic produce. Due to green revolution, yield per acre and area under cultivation has increased. Most of fruits & vegetables are seasonal. The produce of all farmers comes to market yard simultaneously as such their prices fall. There is a need to extend their shelf life. The bio-chemical and microbial changes are slow at low temperature. So refrigerated cold storages are used to prolong the shelf life of perishable produce. New technologies: 1. Modified atmosphere technology is being adhered in ultramodern plants in developed countries. In such cases of storage carbon-dioxide and oxygen ratio is varied to slow down the respiratory changes in the stored produce. 2. Cryogenic Tunnel: - Indian Institute of Technology has done experimental work on this technology in collaboration of dept. of Science and Technology. The results are encouraging. Quality of preservation is better and energy consumption is only 10% of usual cold storages. 3. Increasing relative humidity and using ozone :- Mitsubishi electrical of Japan have developed technology, which can be used in conduction with cold storage. In this technology relative humidity is
increased to 95 % which reduces evaporation but increases risk of spoilage due to bacteria, which is controlled by ozone. 4. Cold storages: - commercial refrigerated preservation of perishable commodities is a short-term process. Costly produce like dryfruits, potatoes (seed) oranges, chemicals, processed foods like fruit juices, pulp, concentrate, dairy products, frozen meals; fish, poultry etc are being stored in cold storages. The development of cold storages including cold chain for transport has an important role to play in reducing the wastage of perishable agro-produce, and thus providing remunerative prices to growers. Technical aspects: - at present there are two popular refrigerants in the Market - Freon & Ammonia. It may be noted that in near future CFC refrigerants will be banned. Cold storage consists of many rooms. Each room should be separated by insulation and protected from moisture. Partitions should be insulated on both sides. Before keeping fruits and vegetables in the cold storage, bad ones should be removed. The sorted material should be packed in boxes. Temperature and humidity should be kept according to the product. For certain Fruits like grapes, pre-cooling is necessary.
Optimum storage conditions for fruits:S. No. 1. 2. 3 4. Item Apple Bananas Guavava Grapes Temp. 0F 32-35 55-60 47-50 30-32 Cold Storage life in weeks 7-26 2-3 3-4 4-6 Fumigation with 1-2% sulphur oxide before storage and storage life is increased to 12 weeks Lemons for storage be picked at the greenish yellow colour. Remarks Small fruits keep batter
5. 6. 7.
Lemons Mangoes Pineaple
50-55 45-50 50-55
9-13 4-6 3-4
Optimum storage conditions for vegetables
R-H-85 to 95 % except for Beet root, cabbage, Reddish, Turnips and Peas where RH should be 90 to 95 % S. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Item Beans Beet Root Brinjals Carrots Cauliflower Cabbage Onions Potatoes Radish Turnips Peas Temp. 0F 32-35 32-35 47-50 32-35 34-35 32-35 32-35 37-38 32-35 32-35 32-35 Cold Storage life in weeks 2-3 6-8 3-4 13-17 4-6 9-13 17-26 26-35 6-8 13-17 2-3 Remarks Need more ventilation Big brinjals keep better Only firm and compact heads should be stored Only firm and compact heads be stored Peas need pre-cooling and more ventilation
IMPLEMENTATION PHASE: As proposed, the firm has a land (In the ownership of firm is selected place). The techno – economic feasibility report has been prepared and the same is being submitted for financial assistance. As soon as the promoter gets the loan sanctioned, the promoter will start construction of the factory building and machineries will be installed. DEMAND POTENTIAL: The proposed project aims to set up a cold storage of approx. 5390 Metric Tonne capacity. The Unit will consist of four chambers. The main commodities for preservation in the proposed cold storage will be Fruits and Vegetables (Onions and Potatoes), Spices like Coriander, Jira etc. The commercial refrigeration of perishable is a short – term process to avoid wastage. The concentration of cold storage facilities is mainly around big cities to maintain uninterrupted supply. The commodities which can be stored in the cold storage are Spices, Milk Products and by- products, Coriander, tamarind, eggs, fruits, potatoes etc. Coriander and Chilies are commodities, which lose their colour and weight due to storage in normal godowns. Its production is seasonal but the demand is spread over the whole year. To retain the natural colour and weight, the farmers of the area prefer to keep their product in cold storage rather than in normal godown due to which the demand in proposed area has been highly increased.
Recently other important but costly material like dry fruits, chemicals, essences are also being stored at low temperature. JUSTIFICATION FOR SETTING UP COLD STORAGE : Nationwide, the storage facilities have not been able to keep pace with production. It has risen from 1.75 million tonnes in 1972-73 to 4.50 million tonnes in 1985 and around 7.50 million tonnes in 1995-96 and 8.50 million tonnes in 1998-99 and 9.00 million tonnes in 2001-2002. The progressive increased in the productivity of perishable commodities have necessitated the development of cold storage facilities around the consuming centres to prolong their shelf - life. The development of cold storage has therefore, important role to play in of avoiding the wastage of perishable commodities and should be given the same importance as given to producers of these commodities. So with such a huge quantity of potato production in area about 30% of the produce sold out in market, where remaining 20% is stored in local godowns due to non availability of cold storage and remaining 50% is stored in cold storage available at distance places like Indore. If the cold storage facility is available to farmer at nearest place to their locality, they prefer to store their produce in cold storages rather than a godown so as to get the appropriate rate for their crop by maintaining the quality of produce along with its weight. As weight loss takes place in normal godowns, which is supposed to be a measurable amount. As there is some cold storage facility available in Jaipur, warehouses are the only means of storage in the region. Looking to above facts, a cold storage is required to store the produce reducing the loss of horticulture produce. Thus the cold storage has an important role to play in and around Shahdol. There is no existing capacity in the area. With the advent of this cold storage, the farmer will be motivated to place the produce in the cold storage and sell it at appropriate time thus reaping the advantage of better price. The stockiest will be also attracted, not only from nearby areas, but also other nearby states of the country. The Site is primly located on road and is suitable. ADVANTEGES OF COLD STORAGE Lack of Adoption of Proper Harvesting and Post harvest Technology Adversely affect the quality. Post-harvest Operations involve drying, curing and primary packing which reduces problems of contamination. The problem of retention is more acute in potato; farmers do not have economic and infrastructural capacity to store the produce in a proper way. These results in quality deterioration. Storage facilities available in are not up to mark and there is no provision for checking redent infestation and other damages. Moreover, Cold storage facilities are not available.
Shahdol Quality Suffers from lack of knowledge about proper post harvest operation (drying, cleaning, grading, sorting, processing, packaging & Storage: cold storage Specially.) among farmers, which further gets complicated by lack of scientific and modern post-harvest infrastructure. MARKET AND MARKETING ARRANGEMENTS: As mentioned earlier, there is large gap between availability and requirements of cold storage space in cold storage in Shahdol due to the following reasons: 1. Increase in yield per Acre; Increase in Potatoes, Fruits and Vegetable farming area along with trading activities. 2. Costly availability of space in the areas near metropolitan cities in the country. Because of the fact that the proposed location of cold storage is upcountry and as the district is the biggest market, the traders of other states will prefer to stock the horticulture produce in Shahdol and nearby areas. If the horticulture produce is stored in Shahdol then it can be delivered at very short notice to most of the metropolitan cities, from where the export take place, so as to take the advantage of rise in the current market rates. Hence the market of Cold Storage depends upon the following factors: a) The local farmers booking the space in the cold storage before arrival of the crop. b) The traders booking the space well before the effective dispatch of goods. The success of the Cold Storage depends upon the advance booking of space in the Cold Storage as well as long term tie ups for storage by the traders. c) The third category of the business of the cold storage from traders/agriculturist themselves using the part of the cold storage facility for their own stock for trading of goods. LOCATION BENEFIT:
Infrastructure Support:
Availability of required infrastructure plays a major role in enhancing growth in different sectors and blocks. The net cultivable area forms 58.35% of the total Geographical Area. The district has Dams and rivers for proper water supply. The second major source of irrigation is from Tube wells. In 2006, rainfall crossed its normal average.
Agriculture is the predominant activity of the district with production of Potatoes, Orange, Soya bean, and Wheat etc. Such infrastructure will be a key – factor for the proposed cold storage.
Location Support:
From marketing views there are many positive factors with the project: Firstly the strategic location of the cold storage at Shahdol. We can say that the site is in Shahdol, where there are no any cold storage facilities for the farmers. The farmers and traders of the District and adjoining area keep their commodities in the cold storages at 20 kms. From Shahdol. No suitable cold storage with new technology and comply with standards in other Cold Storages in the state till date, which is favorable issue for establishing a new unit. Secondly, the location of site is situated near to road, which again effectively saves the transportation charges to be borne by the farmers to bring the horticulture produce at the cold storage. The location of the proposed cold storage will attract the prospective stockiest / customers having preference over other cold storages which are not situated nearby. Thus, considering the above facts regarding storage marketing, there will not be any problem in ensuring occupancy of the available storage space. HORTICULTURAL CROPS IN M.P.
SL. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 1982-83 1985-86 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 YEAR FRUITS AREA PROD. 56679 52175 61313 57892 58441 61022 59709 59469 60129 63941 9.04 9.69 11.59 10.64 10.71 11.23 11.23 12.38 13.09 14.31 15.79 13.38 11.43 11.13 VEGETABLES AREA 123269 131322 158909 162186 173608 180811 189081 202910 212729 237129 223840 130854 140882 144095 UNIT :- PRODUCTION IN LAKH TONNE & AREA IN HECTARE SPICES FLOWERS MEDICINAL & GRAND TOTAL AROMATIC PROD. AREA PROD. AREA PROD. AREA PROD. AREA PROD. 16.61 134158 16.80 142980 0.62 0.70 964 826 915 1270 1388 1435 1778 1261 3425 3761 1437 1418 0.0057 0.0049 0.0054 0.0076 0.0083 0.0086 0.0106 0.0080 0.02 0.02 0.009 0.009 23328 26510 27892 20225 20825 15196 18364 0 1.40 1.59 1.67 1.21 1.24 0.91 1.10 0.00 314106 326477 419724 424512 467633 479737 523364 552401 633556 637887 598807 372747 402851 337773 26.27 27.19 32.8707 32.0919 33.8424 35.7236 38.3743 45.6246 47.6436 51.908 44.05 34.42 34.40 33.23
19.52 198538 1.755 19.95 203608 1.497 21.43 234669 1.697 22.41 236634 2.076 23.27 249858 2.466 28.39 262077 3.256 29.79 331028 33.24 315331 23.78 293232 18.61 171415 19.98 195905 20.49 144706 3.08 3.14 3.22 1.50 1.88 1.60
1999-2000 57485 2000-2001 51521 2001-2002 46263 2002-2003 47554
Source: Directorate of Horticulture, M.P.
CHAPTER- FOUR FINANCIAL ASSISTANCE FROM THE GOVERNMENT INTRODUCTION A new Capital Investment Subsidy Scheme for construction of Cold storage and storages for Horticulture produce has been introduced to be implemented by NHB. The Government of India has approved the implementation of the scheme during the period “April 2010 - March 2015”. The scheme would help in minimizing post harvest losses of horticulture produce. An outline of the scheme as approved by the Government of India would be implemented by NABARD /HORTICULTURE Department through back-ended capital subsidy, which would be available up to @40% of the project cost subject to a maximum of Rs. 120.00 Lacs per project. (Additional subsidy @15% grant by government for notified schedule areas. In reference our project notification of Ministry of Law & Justice, Govt. of India for schedule area is enclosed project report). This capital investment subsidy scheme for construction of cold storage and storages for horticulture produce is introduced by the Government of India. It would help in minimizing post harvest losses being suffered by farmers, particularly small and marginal farmers. The scheme would be implemented by National Horticulture Board, Ministry of Agriculture in collaboration with NABARD/NCDC. The Scheme would be a part of the ongoing Post Harvest Management (PHM) Scheme of National horticulture Board (NHB), National Horticulture Mission (NHM) of which cold storage is one of the components.
The projects would also cover the facilities constructed under controlled and modified atmosphere on the same parameters as have been stipulated for construction of cold storage under the scheme. The cold storage component will be excluded from the present ongoing scheme of NHB/NHM and Department of Food Processing Industries (DFPI). BUDGET 2012-13. The mantra for the upcoming fiscal year 2012-13 is “faster, sustainable and more inclusive growth”. The objective is to achieve a GDP growth of nearly 7.6% as against estimated growth rate of 6.9% in 2011-12. Investment-linked deduction of capital expenditure incurred in cold chain facility and warehouses for storage of food grains is proposed to be provided at the enhanced rate of 150% as the current rate of 100%. PROJECT COST The project cost has been calculated upon the capacity; technology used for cold storage/storages for horticulture produce and arrived at on the basis of actual /estimates of architects/invoice prices of machineries, etc. and subject to the norms of appraisal of financing banks/NABARD regarding technical feasibility/financial viability. (AS PER ANNEXURE-A) MEANS OF FINANCE The margin money is 17% of the term loan. Minimum 20% of the project cost can be raised as term loan from institutional agencies. The eligible amount of subsidy also would be allowed as term loan. We also apply for Venture Capital fund. (AS PER ANNEXURE-A) SUBSIDY Subsidy under the scheme will be provided @ 40% of the Capital Cost of project and there is maximum level of restriction of Rs. 120.00 Lacs each project. (AS PER ANNEXURE-A) Subsidy calculates on the basis of guideline of NHM/NHB of Rs. 6000/- pmt on construction of building and plant & machineries, but presently cost of construction of new cold storage is approximately Rs. 8000/-pmt. All the state in the schedule area provides additional benefit of subsidy @ 15% extra to all promoters. ADJUSTMENT OF SUBSIDY IN BORROWER’S ACCOUNT : The subsidy for the projects under the scheme is released through the Department of Horticulture for projects financed by the bank. Fifty percent of the subsidy amount is released by Department of Horticulture in advance to the participatory bank on submission of a project profile and claim form. This amount will be kept by the bank in a Subsidy
Reserve Fund Account of the concerned borrower, to be adjusted finally against loan amount of the bank on completion of the project. The remaining 50% of the subsidy amount is disbursed to the participating bank by the Department of Horticulture after inspection by a Joint Inspecting Committee comprising of officers from DOH and Bank. The subsidy admissible to the promoter under the scheme would be kept in the Subsidy Reserve Fund Account. The bank would not charge interest on this amount. In view of this, for purposes of charging interest on the loan component, the subsidy amount is excluded. CHAPTER- FIVE LOCATION AND SITE SELECTION The proposed unit is to be situated at village-Jora, Tehsil-Jaisingh Nagar, Distt.-Shahdol which is near to road. It is well connected by all transportation modes with other parts of the State as well as Country. The power and water are available easily. Skilled and Semi-skilled workers are also available at nearby places. The location Jora situated From Shahdol to 64 kms and From Beohari to 16 kms. PRELIMINARY SITE DATA: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Location District Area Available Approach Road Nearest Railway Station Plot Condition Soil Condition Main City Availability of Manpower Post office : : : : : : : : : Village-Jora Shahdol 1.971 Hectare Road Beohari Plain Black Soil Shahdol : Shahdol
Shahdol
11.
Transportation facilities
:
Bus & Train
CHAPTER- SIX CAPACITY UTILIZATION The capacity of the plant to be installed is approx. 5390 Metric Tonnes (Approx. 53900 bags per annum) by assuming norms specified. The said figure is at 100% capacity. The different capacity utilization has been estimated as under:
Year First, Second Third, Fourth Fifth, Sixth Onwards
Capacity Utilisation 75% 80% 85%
The capacity of various equipments has been decided after thorough consideration so that production can be reached with minimum wastage and maximum saving of labour material etc.
CHAPTER- SEVEN CRITERIA OF EQUIPMENT SELECTION The choice of various equipments is guided by the prime technologies to meet the specific requirements of raw materials, choice of process and simplicity of operation since technology is already proven, and reputed
suppliers are in the field from which the reliable equipments can be procured. The same suppliers will also stand a performance guarantee for the plant operation product specification assurance and fulfillment of rated capacity. Seeing the above factors, machinery in selected as per the details given in ANNEXURE-C of the project report.
CHAPTER- EIGHT TECHNICAL KNOW-HOW OF PLANT AND MACHINERY A cold storage unit incorporates a refrigeration system to maintain the desired room environment for the commodities to be stored. A refrigeration system works on two principles: (1) (2) Vapour absorption system (VAS), and Vapour compression system (VCS)
VAS, although comparatively costlier is quite economical in operation and adequately compensates the higher initial investment wherever possible such a system be selected to conservation of energy and operational cost however it has limitations when temperature equipment is below 10 degree C and many fruits and vegetables except seeds, mango etc. lower than 10 degree C for long storage. VCS is comparatively cheaper than VAS. There are three type of VCS system available depending upon the cooling arrangement in storage rooms i.e. diffuse type, bunker type, fin coil type. Diffuser type is comparatively costlier and is selected only when the storage room heights are low. The operational costs of such units are also higher. Bunker type is the cheapest and preferred when storage rooms heights normally exceeds 11.50 meters. Its operational cost is also low. Fin coil type although about 5% costlier than the bunker type is very energy efficient with low operational cost and higher space availability for storage of produce. Such system is used for units with room heights of 15.00 meter onwards. In refrigeration system, refrigerants are used to pick up heat by evaporation at a lower temperature and pressure from the storage space and give up the heat by condensation at higher temperature and pressure in condenser. Freon used to be a common refrigerant but it causes environmental degradation. Its use is going to be banned by the year 2008. Therefore ammonia is being increasingly used and preferred for horticulture and plantation produce cold storage units.
Although several types of compressor and condensers are available high speed reciprocating compressor and atmospheric condensers are preferred because of relatively lower cost energy efficiency and case in maintenance. Although the storage space provision will vary accordingly to the room height and technology being selected. Normally, a provision of 3.4 cubic metres per MT is considered for finalizing the room size with bunker type of VCS technology. For other commodities, space adjustment should be made with relation to their bulk density as compared to potato. Both the system has their own advantage. In bunker type cold storage capital investment is about 20% low which is about 15% more in the cooling coil systems further the cooling time is short in cooling coil systems, but the accumulating dust in the stored materials reduces the efficiency during the running and the main disadvantage of cooling coil system is 10% more consumption of power, but high air circulation hence the company has opted to go for FIN-COOLING COIL type system. MANUFACTURING PROCESS: Cold storage is a closed chamber with proper insulation on inner sidewalls, floor and ceiling to resist the outside heat from flowing inside. The gas is circulated coil installed inside the chamber, which carry away inside heat to make the chamber cooler. The temperature inside the chamber is maintained between 33 degree F. to 36 degree F. However, at the time of loading it is kept at 40 degree F to 41 degree F. UTILITIES AND SERVICES: In addition to plant and machinery for the process in the previous chapter of the report, for the successful operation, various utilities and services are required. Normally utilities and services, which are required, are as follows: 1. Water requirement and water supply system. 2. Power requirement and electrical equipments. 3. Workshop and maintenance equipments. 4. Fire fighting equipments. 5. Miscellaneous assets. 6. Transportation.
CHAPTER- NINE EFFLUENT DISPOSAL & TREATMENT As such there is no effluent to be disposed off. The total quantity of water required per day is approximately 1000 Litres, which is used for machinery cooling, drinking and sanitation purposes. This is not a waterbased industry. Hence, the process does not emit any effluent or gas hence no disposal activities are required for the proposed unit. CHAPTER- TEN MAN POWER AND MANAGEMENT Successful and efficient functioning of the warehouse and plant depends largely upon the organization structure, which largely relies upon proper manpower planning. The whole exercise for the cold storage with capacity of approximately 5390 Metric tonnes has been carefully studied. The total requirement of manpower and their salaries and wages are given in the ANNEXURE-G. The management of the entity is proposed to be controlled by the Proprietor and his close relatives with the assistance of other administrative and production staff. The total number of person to be employed is Seven. ADMINISTRATIVE STAFF: The administrative staff shall be responsible for the day-to-day affairs and shall report to the promoters if the entity. He will be assisted by two security guards on shift basis. PRODUCTION STAFF: The concern would be handled by a manager. He would be responsible for efficient working and would be assisted by the skilled and unskilled workers. The total salaries and wages are estimated to Rs. 6.00 Lacs per annum.
The total strength of administrative and production staff may be increased at later stage if necessary depending upon the workload and other requirement.
CHAPTER – ELEVEN UTILITIES The utilities and Services, which are essential for any industry, are power, water and fuel. A. POWER :
The total power requirement for the proposed cold storage is estimated 100 H.P. This power would be supplied by SEB through H.T. line. The Promoters will apply for the power connection to concerned department. Annual bill in first year has been estimated Rs. 8.46 Lacs as per details given in ANNEXURE-H. (As per project report 80% capacity utilization in first year, if 100% capacity utilize total cost of power consumption Rs. 10.58 lacs.) B. WATER :
Water will be supplied by tube well.
CHAPTER – TWELVE PRODUCT MIX AND PERCEPTION The product mix should be found out on the basis of profitability of the product as well as on the consumption of the products in the industries of the region, availability of the resources etc. The demand for a particular type of cold storage arises mainly from the availability of orders in hand. Little variations may be possible. The cold storage is designed to store approximately 5390 metric tonnes (approx. 53900 Bags per annum) Details of the products to be stored and Receipt thereof at 100% capacity utilisation are as under: Item Potatoes, Coriander, Peas (Chana), Chilies, Maithi, Vegetables, Fruits, Dry Fruits, etc. (Receipt is considered Rs. 300/per tonnes per annum) Quantity (in Tonnes) Receipt (Rupees in Lacs)
5390 Tonnes
194.04
Hence, the products mix and receipt in different in years workout as follows: Years Capacity Hiring Income Per Year (Rs. In Lacs) 145.53 155.23 164.93
First, Second, Third, Fourth, Fifth, Sixth Seventh onwards &
75% 80% 85%
CHAPTER –THIRTEEN IMPLEMENTATION PROGRAMME The schedule of implementation takes into account the time required for various activities, such as detailed engineering of the unit including architectural and structural civil construction work, procurement of necessary equipment and machinery, utilities and services, erection and installation of machineries. While estimating the time for implementation of the projects the time required for all these activities has been taken into consideration. The estimate also includes lead-time required for equipment, delivery and procurement of building materials. Subsequently, when the civil construction is completed and plant and machinery are fully installed, time is required for procurement of necessary raw materials and observing the project for trial run, its readiness for commercial start up has to be taken into consideration. The estimated time required for each of the major activity has been shown in the implementation chart. As it is clear total time required for the commissioning of the project workout to be nine months. The acquisition of land, development of land, preliminary and promotional work is assumed to have already been accomplished before the loan is sanctioned.
CHAPTER – FOURTEEN COST OF PROJECT The total Cost of Project has been estimated at Rs. 400.00 Lacs. The breakup to the capital cost of the project comprising of land and site development, cold room building, plant and machinery other have been detailed as given below:
S. NO. 1 2 3 4 5 6
PARTICULARS Site Development Building Plant & Machineries Misc. Fixed Assets Contingency & Working Capital Margin Preliminary and Preoperative Expenses Total
Rs. In Lacs 7.00 173.00 207.00 13.00 0.00 0.00 400.0 0
CHAPTER – FIFTEEN MEANS OF FINANCE The total cost of project arrived at Rs. 400.00 Lacs to be financed as per the following finance fix: (Rs.In Lacs) A DEBT : Term Loan 166. # (Inclusive benefits of VCA from 00 SFCA) SUBSIDY : Capital Investment Subsidy 165. (Subsidy Rs. 165.00 lacs of 00 Central Govt. @ 55% of Cost) B CAPITAL : Own Contribution 69.0 (Includes loan from Relatives ) 0 400. 00
TOTAL
DEBT EQUITY RATIO: On the basis of above, financing pattern Debt Equity Ratio works out to 1.80:1 (Subsidy included in Debt) which is satisfactory. #We are avail facility of Govt. of India, “VENETURE CAPITAL SCHEME FOR AGRIBUSINEE DEVLOPMENT” as underSmall farmer’s Agri-Business Consortium (SFCA) would provide venture capital to qualifying projects on the recommendations of the bank financing the project. This venture capital will be repayable back to SFAC after the repayment of term loan of lending bank as per original repayment schedule or earlier. Qualifying projects under Venture Capital(i) Projects should be in agriculture or allied sector basically perishable namely horticulture, floriculture, medicinal and aromatic plants, minor forest produce, apiculture and fisheries. However, poultry and dairy projects not be covered under the scheme. (ii) Projects should provide assured market to farmers/producer groups, (iii) Projects should encourage farmers to diversify into high value crops, to increase farm incomes. (iv) Projects should be accepted by banks for grant of term loan.
CHAPTER – SIXTEENTH ASSUMPTION OF PROFITABILITY The cost of project, Incomes and profitability statement for its seven years is calculation and is presented with the report. The various assumptions made for calculation of cost of production and profitability is listed below: ? MT ? Year. ? An increment of 10% in wages and salaries shall be An increment of 15% in administrative costs is considered Moratorium period will be one year from the date of The weighted average rental income is taken @ Rs. 300.00 Taxes applicable on the profits have been calculated at per The interest on Term Loan has been taken @ 12.00% per rewarded to employees. ? in calculating the profitability of the project. ? completion of the construction. ? per tonne per month. ? the present tax slabs. ? annum. Bank will not charge interest on the sum of subsidy amount. However, calculation of interest has been done on Term Loan inclusive of subsidy amount. ? Depreciation has been calculated on Written down Value Debt Service Coverage Ratio for each operating year is Method for profitability calculation. ? given in annexure. The average DSCR is worked out, which envisages that the unit should be in a position to repay installment of loan in quarterly installment. The capacity utilisation shall be 75% in First Year, Second The installed capacity of the plant would be approximately
5390
?
Pre Incorporation Expenses will be allocated to first five
years of project. OPERATING RESULTS:
A.
CASH FLOW:
Cash flow statement for the first the years has been furnished in ANNEXURE-N. The overall cash position of the unit is satisfactory and it would permit the repayment of term loan within seven years including a moratorium of initial one year. B. PROJECTED BALANCE SHEET :
Projected Balance Sheet for seven years has been furnished in ANEXURE-O. C. DEBT SERVICE COVERAGE RATIO :
DSCR (Considering non-realisation of Subsidy) for the each operative year has been given in ANNEXURE-M. The average DSCR is 2.10:1, which shows that the unit would be in a position to repay term loan in 28 quarterly installments after 4 Quarters moratorium. D. CASH BREAK EVEN POINT
The B.E.P. has been carried out based on figures of 2 nd year of operation. The details are given in ANNEXURE-P. The CASH BEP in term of installed capacity is worked out at 63% at second year of operation.
CHAPTER – SEVENTEETH ECONOMIC CONSIDERTION AND SOCIAL RESPONISIBILTY The project is being set up at Village-Jora, Tehsil-Jaisingh Nagar, Distt.Shahdol. It will provide direct employment to ten persons at the full capacity of the project. The aim of the entity is to fulfill the requirement for cold storage facility. This project will provide additional agricultural and food marketing infrastructure to cope up with the large expected marketable surpluses of agricultural and allied commodities and will provide competitive alternative infrastructure that sustain incentives for quality and enhanced productivity thereby improving farmers’ income. The functional infrastructure unit is situated in fruits/vegetable growing belt and having good network of grower. Since the proposed unit has a modern investment and there is an ample scope to enhance their profitability within stipulated course of time due to multiple commodities procurements facilities in proposed unit. The other benefits are as:
?Large
crop and material base offering a vast potential for agro processing activities,
? Rising income levels and changing consumption patterns, ? Favorable demographic profile and changing lifestyles, ? Opening of global markets, ? Availability of capital subsidy from NHM/NHB to start a
business opportunity in local areas by converting their raw materials to value added products as per the local/domestic/export demands of the consumers/market. This project as a whole will keep aim to create general awareness and provide education and training to farmers and entrepreneurs on agricultural producing and marketing including quality certification.
CHAPTER – EIGHTEENTH CONCLUSION We feel pleasure in submitting the final project report on cold storage with annual installed capacity of approx. 5390 MT (approx. 53900 bags per annum). In this study an economic analysis has been presented for the said product. The total capital outlay for the project is Rs. 400.00 Lacs. The cash profit generation is from the first year itself. Hence, it would pay Government exchange by way of various taxes. The above report has been prepared with intention to help the entity in obtaining term loan to the extent of Rs. 300.00 Lacs (Includes Rs. 165.00 Lacs as Government Subsidy) and promoters are abreast with entire funding system of project. All the data furnished in the aforesaid project is based primarily on desk research, discussions with experienced and knowledgeable persons in the relevant line of trade and industry, also referring Government publications. In the light of all technical financial projection made in the annexure, consultant can confidently say that unit is technically feasible and financially viable and promoters would have bright future ahead of them. The propose unit to set up cold storage unit there is a vast growing demand in area market of storage facility for potatoes, tomato, vegetables, horticultural crops etc. The said firm has already started the process toward the implementation of the project the firm can hope fully implement the said project as per schedule of implementation given in the project report. Considering the availability of all infrastructure facilities, good storage potential of the cold storage unit in the area the project may be termed as technically feasible and economically viable. The financial parameters and economic indicators of the project are satisfactory and are expected to generate adequate surplus to service the equity as well as the borrowings. Backward Linkage with farmers with reference to either providing services or purchase of raw material: The promoter also itself engaged in production of fruits/vegetables as well as having good contacts with the progressive farmers of their area. The beneficiary has already its own raw materials for sorting, grading, washing & minimal processing as per the demand of market. Moreover number of other farmers willing to provide their raw materials for storage of produces. Approx. 500-1000 farmers to be benefited. Forward Linkages- Analysis of domestic and export markets, tie up made for sale of Produce and branding aspect: Due to the shortages of storage capacity in the area, the farmers have to go faraway places for
storages of potatoes. Thus there is ample of potential for more modern technology based cold storage units in that area. When growers or small-scale food processors sell directly to consumers who are geographically in proximity, they are able to readily assess demand and other market information. However, as this proximity is broken, the task of relaying market information to the producers is left to intermediaries. These intermediaries are subject to a variety of conflicting pressures including, of course self-interest, resulting in the producer receiving distorted or quite often, no worthwhile market information. While this can be a concern even in developed economies, communication technologies, being more abundant, tend to ameliorate the problem. In India, however, players at almost each stage of the chain, and most certainly the farmer, are cut off from the realities of the end-market place and end-consumer due to the absence of adequate communication infrastructure. In addition, as the number of ‘hands’ touching the produce or relaying the information increases, quality is eroded, both of the goods being transported and the information being transmitted. A firm that practices the philosophy of market orientation seeks to sense, serve and satisfy customer needs better than the competition. It is as much a philosophy as a practice. Some of the key aspects of market orientation involve systematized ongoing attention to acquiring and utilizing market intelligence, investing in product and service development that create competitive differentiation, and fostering an organizational culture that internalizes this philosophy and expresses it in all its actions. The marketing literature has identified high market and technological turbulence as ripe conditions for seeing the full benefits of market orientation on firm performance. In the case of emerging markets, domestic firms are typically protected by government regulations from the winds of change from the outside, and this can often lull domestic firms into preserving the status quo. When governments decide that economic growth is possible only by opening markets to international influences, they set up the conditions for turbulence, oftentimes unleashing a tsunami for existing businesses. Not being used to sophisticated business practices such as systematically gathering market intelligence or investing in ideas and technology for new products and processes, these businesses flail about in their efforts to become more market oriented. In developed markets, information gathering, methods of transmission, and its utilization in product and process development have been continually refined over the decades. On the other hand, in emerging markets, the historical lack of demand for such market information has severely limited the information industry and information infrastructure. Occasional entrepreneurial insight and vision coupled with limited trial and error by experimentation become substitutes for the systematic development and utilization of the “information infrastructure” that is lacking. Although the systematic “sensing” of market needs and trends, and competitive offerings yields substantial benefits in staying competitive, the widespread availability of such information to all competitors in the market levels the playing field and raises the overall quality of business practices. Firms advantaged by unique insights and new product and process
development capabilities are bestowed with a competitive edge in “serving” the market by effective differentiation. Access to technological inputs and skills to convert ideas into products are essential ingredients for successful differentiation. In emerging countries, even when entrepreneurial vision provides the insight, absence of technical know-how and skilled labor severely limit the ability to offer innovative solutions to the market. It becomes important to nurture an organizational culture that values inter-functional coordination and empowers all levels of employees to focus on the customer to understand their needs and develop innovative solutions to satisfy them. Inter-functional coordination can produce superior results in customer satisfaction as a result of developing solutions for customer needs that are holistic in approach. Leadership that actively encourages such an orientation becomes an essential prerequisite for achieving market orientation in the firm. In emerging economies rampant unemployment and consequent concerns of job security and deference to senior management may tend to restrict the free flow of ideas upwards from the front lines of customer contact that is so essential for a culture of market orientation to thrive. This calls for a leadership that is visionary in sensing the market as well as in earning the trust of employees to be open in sharing their ideas. During the course of the deliberation, the following general decisions were also taken by the Empowered Committee on the minutes of the meeting of seventeenth empowered committee (EMC) of National Horticulture Mission (NHM) held on 03.08.2012. 1. In case of infrastructure projects under NHM where ever the cost of building is not defined in the guidelines. 55% of admissible project cost will be considered as building cost for computation of subsidy. 2. States should organize workshops in consultation with WDRA for making the cold storage owners aware of benefits of WDRA notification, RIDF funding, External Commercial Borrowings (ECB) and Foreign Direct Investment (FDI) in cold chain. 3. States should initiate action on the recommendations of Dr. Saumitra Chaudhuri Committee report. States to exempt the perishables from cess, farmers should be able to sell the perishables anywhere and states should clearly notify that which commodities have been exempted from the cess. The markets with turnover of more than Rs.10.00 crore should invariably have the electronic auction system. 4. The market infrastructure component under various schemes of DAC are linked with the market reforms. States need to amend the existing APMC Act and exempt perishables from market fees. 5. States should ensure to depute Mission Director for attending the meetings of EMC and EC of NHM. In case of exigencies, prior information should be sent to this Department. All SHMs will ensure that the projects are appraised at State Level with due
diligence and subsidy is worked out which is commensurate with promoter’s share and in no case subsidy should exceed the term loan sanctioned by the lending bank. The loan amount should be higher than the subsidy amount. MINISTRY OF LAW AND JUSTICE (Legislative Department) NOTIFICATION New Delhi, the 29th February, 2003 G.S.R. 114 (E)-The following Order made by the president is published for general information :- "C.O.192" THE SCHEDULED AREAS (STATES OF CHHATTISGARH, JHARKHAND AND MADHYA PRADESH) ORDER, 2003 In exercise of the powers conferred by sub- paragraph (2) of paragraph 6 the Fifth Schedule to the Constitution of India, the President hereby rescinds the Scheduled Areas (States of Bihar, Gujarat, Madhya Pradesh and Orissa) Order, 1977 in so far as it relates to the areas now comprised in the States of Chhattisgarh, Jharkhand and Madhya Pradesh and in consultation with the Governors of the States concerned, is pleased to make the following Order, namely
1) This Order may be called the Scheduled Areas (States of Chhattisgarh, Jharkhand and Madhya Pradesh) Order, 2003. (2) It Shall come into force at once. The areas specified below are hereby redefined to be the Scheduled Areas within the States of Chhattisgarh, Jharkhand and Madhya Pradesh A.P.J. ABDUL KALAM, President. " [F.No. 19 (5)/2002-L.I.] SUBHASH C. JAIN, Secy. Madhya Pradesh • Jhabua district • Mandla district • Dindori district • Barwani district • Sardarpur, Dhar, Kukshi, Dharampuri, Gandhwani and Manawar tahsils in Dhar district • Bhagwanpura, Segaon, Bhikangaon, Jhirniya, Khargone and Meheshwar tahsils in Khargone (West Nimar) district • Khalwa Tribal Development Block of Harsud tahsil and Khaknar Tribal Development Block of Khaknar tahsil in Khandwa (East Nimar) district • Sailana and Bajna tahsils in Ratlam district • Betul tahsil (excluding Betul Development Block) and Bhainsdehi and Shahpur tahsils in Betul district • Lakhanadone, Ghansaur and Kurai tahsils in Seoni district • Baihar tahsil in Balaghat district• • • • • •
Kesla Tribal Development Block of Itarsi tahsil in Hoshangabad district Pushparajgarh, Anuppur, Jaithari, Kotma, Jaitpur, Sohagpur and Jaisinghnagar tahsils of Shahdol district Pali Tribal Development Block in Pali tahsil of Umaria district Kusmi Tribal Devrlopment Block in kusmi tahsil of Sheopur district Karahal Tribal Development Block in Karahal tahsil of Sheopur district Tamia and Jamai tahsils, patwari circle Nos. 10 to 12 and 16 to 19 villages Siregaon Khurd and Kirwari in patwai circle No. 09 Villages Mainawari and Gaulie parasia of patwari circle No. 13 in Parasia tahsil, village Bamhani of patwari circle No. 25 in Chhindwara tahsil, Harai Tribal Development Block and patwari circle Nos. 28 to 36, 41,43,44 and 45 B in Amarwara tahsil, Bichhua tahsil and patwari circle Nos. 05, 08, 09, 10, 11 and 14 in Saunsar tahsil, Patwari circle Nos. 01 to 11 and 13 tro 26, and patwari circle No. 12 (excluding village Bhuli), village Nandpur of patwari circle No. 27 village Nilkanth and Dhawdikhapa of patwari circle No. 28 in pandurna tahsil of Chhindwara district. 3. Any reference in the preceding paragraph to a territorial division by whatever name indicated shall be construed as a reference to the territorial division of that name as existing at the commencement of this Order.
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