The Cold Chain

Project - Cold Chain
by
AV MOLECULES
The Cold Chain Consultants
AV Molecules - The Cold Chain

Consultants
Contents
Part I - Cold Chain National Overview
Part II - Business Intelligence - Chennai
Part III - Immediate Competitors
Part IV - Cold Store Facility Design
Part V - Conclusion
Consultants
Part I - Cold Chain National Overview

Consultants
While international logistics experienced exponential growth in

1990s, Indias logistics sector lagged behind
Logistics cost in India , at 13% of
GDP, is quite high vis--vis global
average
The logistics industry in India is a fragmented market with a lack of organized players. This
Inefficiencies such as inadequate infrastructure and a system of double taxation has meant
that logistics spend in India is much higher than in other countries (as shown in Exhibit 1)
This leaves room for improvement through consolidation and enhanced service scope
Multiple taxes mandated setting

up scattered warehouses, thereby
limiting logistics growth
Till FY07, Indian states followed a system where sales tax was levied on intra state sales
along with a 4% Central Sales Tax on inter state sales. Manufacturers would therefore set
up warehouses and manufacturing hubs in every state to avoid paying CST therefore
limiting the need for logistics service providers to offer anything beyond warehousing
Growth in logistics was stunted

due to inadequate infrastructure
Infrastructure in India has struggled to keep pace with economic growth, creating
bottlenecks at roads, railways, seaports which lead to a lack of consistency in service
delivery. This lack of consistency has prevented Indian logistics providers to offer enhanced
logistics solutions to clients for implementing services like just-in-time inventory
Country
Logistics cost / GDP
Logistics activities performed by

professional logistics providers
India
13-15%
<10%
US
9.9%
57%
Europe
10.0%
30%-40%
Japan
11.4%
80%
Exhibit1: Cross country Logistics cost comparison

Sector
Total Investment required by 2012
Ports
USD 20 bn
Railways
USD 15 bn
Roads
USD 40 bn
Exhibit2: Indias key Transportation Infrastructure requirements till 2012
Exhibit3: The Indian Logistics industry contributes to 12.7 of GDP
However, things are looking up for the Indian logistics - driven by 15%+ growth in Indias
international trade
Gradual phasing out of double

taxation system
To induce growth, the government will remove the Central Taxation System in phases .
This is allowing manufacturers set up large regional warehouses that can supply smaller
warehouses in other states. This will require integrated logistics solutions that only 3PL
logistics providers can provide which will force more outsourcing of logistics
Indias merchandise exports have almost doubled in just few years

Indias international Trade booms
as the world sources more
Share of export of goods plus services in GDP has tripled to 20.5% in the last 15 years
Maximum import tariff - once well over 100% - is now down to 12%
International Trade has been and is expected to keep growing at levels in excess of 15%
Better infrastructure is unlocking

the potential of logistics solutions
Poor infrastructure while leading to higher costs and untimely delivery of goods, has also
restricted the evolution of 3PL solutions. However, improving infrastructure and further
investments of more than USD 200 billion over the next five years are expected to go a
long way in enhancing the cost effectiveness of solutions provided by logistics companies
~30%
~20%
1995
Exhibit3: Containerized international trade has
grown faster than total international trade
2005
Exhibit3: Share of Merchandized trade in

total GDP has gone up in India
Exhibit3: 15%+ CAGR is expected for container

growth (appx. 2.1 times GDP growth)
and 30%+ growth per annum in the domestic organized

Retail sector
Indias Rural Opportunity
720 million consumers spread over 627,000
villages are set to fuel Indias massive retail
boom
Contribution of 10% of Indias GDP and Ninth largest retail market in the world
Higher disposable purchase incomes will take the retail boom into Tier 1, 2 and 3 cities of
India. This will generate demand for sophisticated pan country logistics solutions.
Reliance Retail is targeting to reach over 1500 towns. Home grown retail giants ITC and
Godrej are expanding their rural retail network across hundreds of rural hubs over India.
Organized
31
Retailers in India have announced USD 24 billion worth of expansion
Unorganized
6
280
174
2005
2010
Exhibit1: FY05-10 growth in the organized

and unorganized retail sector in India
Shopping Malls
400 - 600
Large Supermarkets
1400 - 1500
Department Stores
200 - 300
Hypermarkets
30 - 35
Exhibit1: Retail Projects in India under

development till 2010
Exhibit1: Retail Projects in India under development till 2010
bringing the Indian logistics sector to an inflection point..

What was wrong
What has changed
Infrastructure
Infrastructure bottlenecks led to higher transit times

and higher costs
Investments of USD 200 million in infrastructure

helps logistics players provide effective solutions
Taxation
Multilayer tax system prevents outsourcing of

logistics functions
Central Taxation System phase out to spurt

demand for logistics outsourcing
Manufacture
Outsourcing
Production & Consumption centers close to one

another limited need to outsource logistics
Increasing global manufacturing outsourcing driving

demand for logistics outsourcing
3PL providers
Lack of integrated logistics providers to service

corporates
Increasing proportion of integrated logistics

providers to serve corporates
Technology
Low investment in technology adds limited value

from outsourcing (tracking ability low)
Increasing investments in technology encourages

outsourcing (tracking ability improving)
from where, the logistics sector is expected to see a minimum

of 10% CAGR for the next few years..
Strong International Trade
Indias international trade moving in containers is growing at more than 20% per annum
and is creating a demand for logistics / transportation infrastructure service providers
Booming Domestic Retail Sector
Global giants Wal-Mart, Tesco, Carrefour and Metro have already announced their plans of
entering the Indian retail market place fuelling the 30%+ growth
Increased sourcing from India by

global giants
Major international giants like Dell, Cisco, Ikea, Wal-Mart are due to increase their sourcing
from India from 5% of their total volumes to 30% of their total volumes
Significant untapped market

opportunities due to sectoral
inefficiencies
Only 3% of Indian companies currently outsource their Logistics Functions to Professional

Logistics companies (Third Party Logistics) since they would manufacture and warehouse
in close proximity. With the CST phase out and booming international trade / domestic
retail growth this is going to change and represents a significant opportunity
Growing acceptance for Supply

Chain Management products
Indian manufacturers are increasingly turning to professional Supply Chain Management

companies to bring down their costs and be more competitive
Exhibit: CAGR in the Indian Logistics Sector in : 2002 - 2008
Source: ETIG, Logistics India Ready Reckoner, Oct 2004
Exhibit: CAGR in the Indian Third Party Logistics Sector : 2002-2012
Source: 2006 Frost & Sullivan Strategic Analysis of Third Party Logistics Markets in India
Market size of Commercial Refrigeration in India
Demand in India for value added foods provided through

organized retail outlets is evolving
Income and changing lifestyle driving shift in consumption

patterns
Leading to the rise of food service chains in India..
Processed food consumption to be 3X in 10 years
The evolving demographic landscape will have a strong positive

bearing on the Retail landscape
Yet the logistics setup serving this market remains highly

fragmented, underdeveloped and disorganized
Comments
Cold Chain industry is highly
fragmented with a large number of

small players
Most cold storages are family

owned
However, a few organized players

exist in select cities
Most family owned Cold Storages
offer conventional warehousing

whereas the organized players
extend more modern warehousing
facilities
Some organized service providers

include:
Snowman
Radha Krishna Foodland
Western
Savla
There are very few organized players in Indias Cold Chain

industry
In summary
Part II - Business Intelligence

COLD STORES IN CHENNAI

Consultants
Snowman Logistics Ltd
National/Local
National
Cold Store location In Chennai
Sriperumbadur
Other Locations
Delhi, Calcutta, Mumbai, Bangalore, Goa,

Ahmadabad, Cochin, Nagpur, Pune
Land Area
3 acres.
Capacity in pallets/tons
500(frozen), 2400(chilled)
Storage type
palletized
Type of products stored
Processed food, imported fruits, raw material,

fruit pulps, rubber components, frozen
vegetables
Type of MHEs
Pallet jack, fork lift
Refrigerant
Freon
Value added services
Secondary distribution
Reefer transport
Yes, 360 trucks
Charges
Frozen: Rs 1500 to 2000, chilled: Rs 1000 to

1500
Major customers
Sri Ram distribution, McCain, EDS agro

foods, Reliance retail, Capricorn, Innovative
foods
National/Local
IG International
National
Thandalam, Sriperumbadur
Other Locations
Delhi, Amravati, Mumbai, Bangalore
Land Area
11000 sq ft.
500(frozen under construction), 300(chilled)
Storage type
Non - palletized
imported fruits
Type of MHEs
N/A
Refrigerant
Freon
N/A
Reefer transport
Yes, 60 trucks
Charges
Major customers
N/A
Own captive use
Consultants
National/Local
Western Farmfresh
National
Cold store location In Chennai
Poonamallee
Other Locations
Mumbai, Bangalore
Land Area
15000 sq ft..
1200(frozen)
Storage type
palletized
Processed food, Frozen sea food
Type of MHEs
Refrigerant
Reefer transport
Charges
Major customers

Freon
Yes, 30 trucks
Frozen: Rs 1500 per pallet
Own, Venky`s, Hindustan Coco cola, various
sea food customers, processed food customers,
EDS agro foods, Capricorn,
Consultants
National/Local
Snowfield
local
Vanagram
Other Locations
N/A
Land Area
15000 sq ft.
Storage type
palletized
Imported fruits, French fries, ice cream raw

material, frozen vegetables
Type of MHEs
N/A
Reefer transport
Yes, 360 trucks
Charges
Rs 1000
Major customers
McCain, EDS agro foods, Shree Impex, D

Monivannan, Arul traders, RK foods, KRK,
NPK, PRG, Mother dairy

Consultants
Om Shakti Cold Chain Pvt

Ltd
National/Local
local
Maduravoyal
Other Locations
N/A
Land Area
12000 sq ft.
Storage type
Non - palletized
Processed food, imported fruits, green peas,

sweet corn
Type of MHEs
N/A
Refrigerant
Ammonia
N/A
Reefer transport
Charges
Major customers
N/A
Rs1000
CMK marketing, Various fruit importers

Consultants
National/Local
SPD Cold Storage

local
Velappalchavadi
Other Locations
N/A
Land Area
10000 sq ft.
10000 mt.
Storage type
Non - palletized
imported fruits
Type of MHEs
Refrigerant
Reefer transport
Charges
Major customers
Pallet jack
Ammonia
Nil
Rs 1000
Sri Ram distribution, McCain, EDS agro foods
Various fruit importers,

Consultants
National/Local
Kern Agro
local
Chettippedu / Bangalore highway
Other Locations
N/A
Land Area
10000 sq ft
1200(chilled)
Storage type
Non - palletized
imported fruits
Type of MHEs
Manual
Refrigerant
Ammonia

Reefer transport
Charges
Major customers
Nil
Nil
Rs 1000
Madura Exports, EDS Agro, Various fruit
importers

Consultants
National/Local
Devraj Agro Foods

local
Madhavram / Red hills Area
Other Locations
N/A
Land Area
10000 sq ft
1200(chilled)
Storage type
Non - palletized
Red chili / Spices
Type of MHEs
Manual
Refrigerant
Reefer transport
Charges
Major customers
ammonia
Nil
Nil
Rs 1000
Spice and Red chili traders

Consultants
Nature Fresh Cold Store
National/Local
local
Porur
Other Locations
N/A
Land Area
10000 sq ft
800(frozen)
Storage type
palletized
Processed food, ice cream
Type of MHEs
Manual
Refrigerant
Ammonia

Reefer transport
Charges
Major customers
Nil
Nil
Frozen: Rs 1500 to 2000
Suguna, Shanti chicken, Balaji sea food,
schedulers logistics, Presco/ Polo

Consultants
National/Local
Jaya Cold Store

local
Pallavaram
Other Locations
N/A
Land Area
5000 sq ft.
500(frozen)
Storage type
Non - palletized
Not known
Type of MHEs
Not known
Nil
Reefer transport
Charges
Major customers
Nil
Not known
Capricorn

Consultants
National/Local
Abad Cold Storage

local
SIPCOT/ Sriperumbadur
Other Locations
Cochin
Land Area
10000 sq ft.
1000(chilled)
Storage type
Palletized
Processed food, Own sea food, Meat
Type of MHEs
Fork lift
Refrigerant
Reefer transport
Charges
Major customers
Freon
N/A
N/A
Rs1500 to 2000
Own sea food, meat customers, meat traders,
Al kabir

Consultants
Immediate Competitor
Snowman Logistics Ltd.

Consultants
Scale of Business
Freezer
Capacity
In Pallets
Chilled
Capacity
In Pallets
BALLABGARH ( Delhi
)
1120
30
10333.35
Mumbai (New Project)
2240
760
37024
LUDHIANA
PHILLAUR
560
60
5758.69
BANGALORE
3560
20
5758.69
CHENNAI
3020
900
40828.35
COCHIN
816
20
7373.28
HYDERABAD
560
20
5758.69
VIZAG
560
20
5758.69
CALCUTTA
1120
60
10333.35
CALCUTTA CITY
STORE
300
NIL
1345.49
MUMBAI
1120
20
11905.00
MUMBAI- CITY STORE
100
NIL
1506.95
PUNE
560
20
8159.04
GOA
70
NIL
1506.95
NAGPUR
200
20
4930
AHMEDABAD
1008
192
14208.83
TOTAL = 19056
16914
2142
172489.35
List of Branches
17 Cold Storages. ( ISO 22000 & ISO

14001 Certified).
19,000+ pallet positions for Frozen &
Chilled products.
12,11,199 + CFT of temperature controlled
space.
150+ owned and leased reefer vehicles and
transport assets.
Warehouse
build up area in
Sq. Feet
Solutions & Services

Warehousing
Temperature controlled warehousing.
Inventory management.
FEFO management.
Transport Management & Distribution

Refregerated cargo movement.
Part cargo collection and distribution.
PAN India Movement.
Own fleet of vehicles for local distribution.
Additional Services
Consignment agency business.
Bulk breaking , packing re-packing,labelling.
Technical Description of
Snowmans Cold Store
Technical
The cold store walls are made of CFC (Chloro-fluro

Carbon) free pre-fabricated PUF panels sandwiched
between food grade PCGI (pre-coated galvanized
steel) on both the sides. The structure is properly
covered with steel sheeting to protect from rain and
wind (Pharma grade to be installed if required)
The refrigeration system is designed to operate with

environment friendly R404A running on
reciprocating compressors with suitable air handling
units and evaporative condensers with proper control
system.
Snowman Logistics Limited
33
Services Warehousing
Battery operated Reach Truck to handle operations in palletized
condition
Computerized First In First Out system controlled by custom built
software
State of the art refrigeration systems
Full power back-up
Environment friendly refrigerated gas
Air locked truck docking system
Separate storage chambers for vegetarian/ non vegetarian foods
Strict hygiene standards
Trained manpower ensuring guaranteed safe storage
34
Services Transportation
Point to Point (Full Truck Load) Service
Customized Milk Run & Door Pickup, Door

Delivery
Dedicated run for the customer
Part Cargo Consolidation & Movement
Chilled, Frozen & Ambient Movement
Facilitates Last Mile Distribution, Multimode for

Air Shipment
35
Services Distribution
Indenting, Order Bookings and Category Management

Invoicing & Receivable Management
Inventory Management, Supply & Tax Administration
Safe handling of Payment Collection process from customers

through dedicated teams.
Reverse Logistics & safe disposal of Expired & Excess Stocks as per
Government Norms
Statutory norms follow up including Tax Management like Sales Tax,
Octroi, Cess, etc.
36
Snowmans Network
Phillaur
Ballabgarh
CFS
Gurgaon
Delhi
Punjab
Jaipur
Patna
Ahmedaba
d
Baroda
Calcutta
Surat
Mumbai
CFS
Nagpur
Nasik
Baramat
Punei
Hyderaba
Vizag
CFS
d
Goa
Bangalore
CFS
Chennai
CFS
Cochi
n
Coimbatore
Existing Warehouse. Total No.

of Pallets = 16,508
Erection / Expansion of
existing warehouses of 201112. Total No. of Pallets =
27,000
Erection / Expansion of
existing warehouses for 201213. Total No. of Pallets =
Our Transport Network
18,000
CFSContainer Freight
Station
37
Snowmans Customers
Cold Store Facility & Design
Initial Building Consideration

Size & Configuration
Bulk Cold Store
Industrial Cold Room
Stacking Arrangement
Building Design Consideration
Insulated Structure Panels
Comparison between Polyurethane & Polystyrene
Refrigerated Room Construction
Refrigeration System

Consultants

Consultants
COLD STORAGE FACILITY DESIGN

B. Initial Building Considerations
1. Location
a. Convenient to producers, shippers and distributors.
b. Easy access from highway truck routes.
c. Ample space for truck movement, utility space and future
expansion.
d. Adequate power and water supply.
e. Provisions for surface, waste and sanitary water disposal.
f. Consideration of zoning limitations and fire protection.
g. Location away from residential areas, where noise of outside
operating equipment would be objectionable.
h. Plant security and safety.
i. Favorable undersoil bearing conditions and good surface
drainage.
j. Lower priced labor supply.
Consultants

2. Size and Configuration
The size and configuration of a refrigerated facility are
determined
by the following factors:
a. Frequency and transport used in the receipt and
shipment of goods.
b. Relative volumes and percentages of goods intended
for chiller or freezer storage.
c. Volume of goods intended for short-term or long-term
storage.
d. Product type and packaging.
Consultants

Consultants

Consultants

3. Stacking Arrangement
a. Pallet stacking without racks
b. Pallet stacking using rack system
Four Pallets High

Five Pallets Deep

Consultants

C. Building Design Considerations
A typical refrigerated facility should have the following
essential items and functions:
1. Refrigeration machinery room, including electrical utilities
2. Refrigerated loading docks with seal-cushion closures on doors
3. Doors - automatic, sliding, hinged, bi-part, sectional,
emergency, etc.
4. Strip curtains
5. Pallet rack system, if applicable
6. Low-temperature storage
7. Freezer - blast, sharp, tunnel, etc.
8. Chiller - holding, blast, etc.
9. Preparation area - if required
10.Space for empty pallet storage and repair
11.Space for office, personnel welfare facilities, shop and battery
charging
12.Safety protective equipment
Consultants
13.Automatic sprinklers - if required in accordance with local fire

C. Building Design Considerations
Banana Ripening
0 /+10 C
0 /+10 C
+ 10 C Fish
Preparation AreaTube Ice Plant
and Storage
-35 C Fish Freezer
0 /+10 C
-25 C
Open
Court
Area
0 /+10 C
0 /+10 C
Machine
Room and
Electrical
Utilities
Area
Control
Room
0 /+10 C
0 /+10 C
0 /+10 C
0 /+10 C
0 /+10 C
-25 C
Boiler Room
-25 C
-25 C
+10 C Hallway
0 /+10 C
-25 C Storage
0 /+10 C
-25 C
0 /+10 C
0 /+10 C
-25 C
-25 C Storage
0 /+10 C
Maintenance
Forklift
&
Charging
Overhauling Area
Area
Stock Room
Engineering
Office (Mezzanine)
-35 C -35 C -35 C -35 C

Blast
Blast Blast -35 C
Freezer FreezerFreezer -35 C
0 /+10 C
Weighing Scale
0C Meat Chiller
+10C Meat
Preparation
Room
Warehousing Office
Dock Levellers
+10 C Refrigerated Loading Dock
Doors
with Dock Seals

Consultants
+10C MeatProduction
Preparation Rooms
Office

Consultants

Consultants

Consultants

D. Refrigerated Room Construction
Concrete Wall
Insulated Panels
With Metal Skin
On Both Sides
Vapor Barrier
Insulation Slab
Wire Mesh
Cement Plaster
Finish
Wall Thickness
Mechanically Applied Insulation

Insulated Structure Panel
Consultants

D. Refrigerated Room Construction
Insulated
Wall Panel
Concrete
Curb
Sub Base with

Base Slab
Wearing Slab
Two Layer Vapor Barrier
Ventilating Pipes
Insulation Slab
Floor Construction Details
Consultants

E. Refrigeration Systems
Refrigeration systems can be broadly classified as:
1. Unitary
a. Refers to units that are designed by manufacturers, assembled in factories and
installed in a
b. refrigerated space as prepackaged units
c. Units normally use HCFC refrigerants
d. Compressor sizes normally range from fractional Hp to 35 Hp
2. Applied
a. Refers to field-engineered and erected systems and form the vast majority of
large refrigerated facility systems
b. Installations generally have a central machine room
c. Designed and built using standard components like compressors, fan-coil
units, receivers, pump recirculation systems, controls, condensers and other
pressure vessels
d. Generally uses ammonia as refrigerant
Consultants

1. Unitary Refrigeration System
Evaporator
(Unit Cooler)
Condensing Unit

Consultants

2. Applied Refrigeration System
Unit
Coolers
Evaporative Condensers
Liquid Recirculators
MCC
Compressor Sets
Liquid Receiver
Liquid Pumps

Consultants

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Project - Cold Chain

AV Molecules - The Cold Chain

Part I - Cold Chain National Overview

AV Molecules - The Cold Chain

While international logistics experienced exponential growth in

Multiple taxes mandated setting

Growth in logistics was stunted

Logistics cost / GDP

Logistics activities performed by

Exhibit1: Cross country Logistics cost comparison

Total Investment required by 2012

Exhibit2: Indias key Transportation Infrastructure requirements till 2012

Exhibit3: The Indian Logistics industry contributes to 12.7 of GDP

Gradual phasing out of double

Indias merchandise exports have almost doubled in just few years

Better infrastructure is unlocking

Exhibit3: Share of Merchandized trade in

Exhibit3: 15%+ CAGR is expected for container

and 30%+ growth per annum in the domestic organized

Retailers in India have announced USD 24 billion worth of expansion

Exhibit1: FY05-10 growth in the organized

Exhibit1: Retail Projects in India under

Exhibit1: Retail Projects in India under development till 2010

bringing the Indian logistics sector to an inflection point..

What has changed

Infrastructure bottlenecks led to higher transit times

Investments of USD 200 million in infrastructure

Multilayer tax system prevents outsourcing of

Central Taxation System phase out to spurt

Production & Consumption centers close to one

Increasing global manufacturing outsourcing driving

Lack of integrated logistics providers to service

Increasing proportion of integrated logistics

Low investment in technology adds limited value

Increasing investments in technology encourages

from where, the logistics sector is expected to see a minimum

Booming Domestic Retail Sector

Increased sourcing from India by

Significant untapped market

Only 3% of Indian companies currently outsource their Logistics Functions to Professional

Growing acceptance for Supply

Indian manufacturers are increasingly turning to professional Supply Chain Management

Exhibit: CAGR in the Indian Logistics Sector in : 2002 - 2008

Source: ETIG, Logistics India Ready Reckoner, Oct 2004

Exhibit: CAGR in the Indian Third Party Logistics Sector : 2002-2012

Market size of Commercial Refrigeration in India

Demand in India for value added foods provided through

Income and changing lifestyle driving shift in consumption

Leading to the rise of food service chains in India..

Processed food consumption to be 3X in 10 years

The evolving demographic landscape will have a strong positive

Yet the logistics setup serving this market remains highly

Cold Chain industry is highly

fragmented with a large number of

Most cold storages are family

However, a few organized players

Most family owned Cold Storages

offer conventional warehousing

Some organized service providers

There are very few organized players in Indias Cold Chain

Part II - Business Intelligence

AV Molecules - The Cold Chain

Snowman Logistics Ltd

Cold Store location In Chennai