End-to-end logistics service provider Gati is stepping on the gas to consolidate its cold chain storage and distribution business, encouraged by the Union Budget's granting of infrastructure status to the cold chain industry and announcement of eligibility for viability gap funding from the Finance Ministry for such storage projects.

Gati had drawn up plans to set up 10 cold storage facilities during the course of the next two to three years, as part of its Rs 200 crore expansion in the supply chain and cold storage space.

“We now plan to set up the first two of the proposed storage facilities at a cost of Rs 25 crore in 2011. We have the required land for the two facilities in Delhi and Bangalore. Each of these would have a capacity of 25,000 sq ft,” Mr Harry Lagad, Executive Director (Supply chain and cold chain solutions), Gati, told Business Line .

Wastage enormous

An estimated 40 per cent of India's fruit and vegetable production will go waste due to lack of adequate storage and transportation facilities. A recent FICCI study had put the wastage in value terms at Rs 58,000 crore, which is more than the total food production of fresh fruits and vegetables in the UK.

Government statistics indicate that India has about 5,400 cold storage facilities with a total capacity of about 24 million tonnes, with a majority of the capacity used for storing potatoes.

The CII had also recently pointed out that India's cold chain infrastructure will require at least Rs 18,000-20,000 crore worth investments over the next five years to meet the demand.

Mr Lagad said the cold storage and transportation industry was estimated at Rs 1,200 crore , which was expected to swell to Rs 40,000 crore in the next five years.

Capacity constraint

“The biggest bottleneck in this space is that we do not have adequate capacity and, more important, inadequate quality storage facilities.

Cold storage facilities should improve the product life cycle management, so that products like fruits and vegetables can be sold off-season too,” he pointed out.

The company is in talks with an overseas cold chain supplier to provide the design and technology, with the cardinal objective to enhance the product life so that farmers could get a better price for their produce during off-season.

“We plan to increase our cold storage (or reefer) trucks from the present 150 to 500 in the next two years. Here, we will have different franchises and partners in different regions in the country, who will also invest in the reefer trucks,” Mr Lagad said.

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