Cold Storage Industry in India
Industry boundary
Vertical scope: The below diagram depicts the key activities performed in a cold chain. Of these, packaging, precooling and cold storage are typically provided by the same player. These activities are together referred to as cold storage operations, and form the ‘vertical scope’ of our industry analysis.
Horizontal scope: Cold chain logistics are used for a variety of products such as pharmaceuticals, dairy products, farm produce, fish, flowers etc. However, we will be looking at cold storage operations specifically for fruits and vegetables commonly referred as ‘farm to table’.
Business modal: Cold storage operators for fruits and vegetables can function …show more content…
Cold storage involves three major inputs – labour, capital and technology at each stage. The cost of these inputs, affects a company’s profitability.
Important Suppliers: Many small local players providing not so sophisticated refrigeration systems . The major foreign players providing better technological systems to Indian companies are Hurree Group of Finland, AG Refrigeration Systems, Blue Star, and GE Equipment Manf. Etc. They provide the necessary equipment for all three stages. So for better technology
Substitutes for Products: There are various options available at each stage. You have broad range of technologies to choose from. Take for example the pre-cooling stage; you have five methods – vacuum cooling, forced air cooling, hydro cooling, icing and room cooling. Each method involves a different set of suppliers and the company can choose amongst each method depending on its capital budget. Similar trends exist in the other two stages and therefore, the company enjoys a higher bargaining power.
Switching Cost: All the equipments are expensive and highly capital intensive. The three stages are interlinked and to switch from one technology to another would involve huge investment. So the supplier once established has the power to dictate terms to the company. But since switching of a supplier for a given technology is not difficult.
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