Page 1

Chief Advisor to

Principal Advisor


Globalisation  Process Integration.  Bilateral trade.  Diminishing world,

singular demands.  Right-Cost Country

optimisation.  Business friendly

Global Banking.  Borderless consumer.


Growth in initial areas extends parity.

Demand outpaces development.

Parity feeds demand; new consumption.

Bottlenecks raise costs.

Lack of development creates bottlenecks.

Aspirations provide further scope.

High costs restricts; feeds aspirations.

Enduring Scope is Unending Opportunity.


Chain of business       

Chain of transactions. Chain of information. Chain of operations. Chain of processes. Chain of policies. Chain of people. Value chain. Demographics, National Priorities, Sustainability, Technology, Information, Affiliation.

Enduring Scope is Unending Opportunity.


Uneven, non-holistic development of resources! Cold-chain requires integration across total activity chain!

Changing priorities, impatient populace – short cuts! Fear of missing the bus – short term strategy for long term solutions!


Integrated infrastructure development. Reverse haulage – capacity utilisation. Market capture – barriers and tariffs. Training and Skilled deployment. Rapid demo-graphic changes. Changing global strategies. Technology adaption. Investment inertia.


Trend is to move from post-facto control mode to first mile preventive mode.

FSMA / FSSAI / Others

Impacts independent development agendas; changed deployment of resources.

Benefits stakeholders from early compliance; lowered rejects, opens strategic options.

More inclusion among stakeholders.


Prevent

Inspect

Recall

Partner

Controls

Compliance

Response

Administer

Resource

Costs

Onus

Business

Labs

Fees

Distrust

New markets

Skills

Procurement

Sharing

New pricing


The largest producer of milk (133 million tonnes). Largest producer of mangoes (15 million tonnes). Largest producer of bananas (29 million tonnes). Largest exporter of beef (1.52 million tons), largest buffalo livestock (105 million). Second in fruit (80 mlllion tonnes) and vegetable production (160 million tonnes). Third-largest producer of fish (8.3 million tonnes). Third largest pharmaceutical producer, 8% of global production.


Human population of 1.22 billion. with a GDP of USD 1.94 Trillion.

Post harvest value loss ~18-40% of farm produce. Foreign Trade USD 795 billion.


Coastline is more than 7,500 km long. Interspersed with more than 200 ports. International cargo: 95% by volume and 75% by value is carried by sea. Ports capacity 1,247 million tonnes, doubling by 2017. Railways: 87,087 km, across 7,083 stations and operates more than 18,000 trains every day. 4.2 million km Roads : National Highways 76,818 km, State Highways - 154,522 km, District Roads - 2,577,396 km, Rural Roads - 1,433,577 km.


not a single perishables gateway! only ~8000 reefer trucks. limited reefer rail options. Containerisation at 20%.


4th largest electricity consumer, fifth largest installed capacity (246 GW) with 11.5% renewable capacity. 300 clear days, Solar radiation 4 to 7 kWh/m2; area 3.287 million sqkms. Solar reception 5000 Petawatt-hours per year. Fifth largest in wind power; 18,634MW in 2013. Among lowest ecological footprints of 0.9 gha/person. Starkly different, tightly clustered; six major climatic zones.


DTR: (Tmax) – (Tmin) of 20°C Shortfall of power, reliance on diesel gensets. Insulation and energy efficiency standards. Portability options min.


1250 1200 1150 1100 1050 1000 950 900 850 800

1.5 1.0

 Continuous urbanisation of India due to expanding development.

0.5 0.0

Total population million

32.0 31.0 30.0 29.0 28.0 27.0 26.0 25.0 24.0

% of total

millions

 Indian Economy: growing at more than 8% for last decade, population growing @ 1.5% annually for last two decades.

2.0

Urban population %

1250 1200 1150 1100 1050 1000 950 900 850 800

Population annual % change 2.5

% Growth

millions

Total population million

 Projections: on-going Key socioeconomic changes and four fold growth in the size of middle to rich class Indian households; resulting doubling household consumptions by 2020.  Young populace, aspirations overreached and to stay stretched.


GDP USD 1.94 trill in 2012 from 1.25 trill in 2006 (+56% in 6 years). Spending growth: $991 billion in 2010 to $3.6 trillion by 2020 (5.8% of global consumption, doubling from 2.7%). 1,870,000 Consumer Food outlets (2012).

785 593 474

FY07

Purchasing power, Rise in income

>2 x from 2005

FY09

Per Capita Disposable Income

Increased Demand for (Cold Chain) Quality Foods

6%

FY11

Per Capita Disposable Spending

India Spends on Food and Grocery

4%

Others

10%

60% 17%

Easy consumer credit

565

354

3%

Quality & Hygiene consciousness

735

444

FY05

Increase in consumer class pop.

1003

Domestic spend (USD from â‚š) 31-Jan-2012

Changed consumer mindset

Clothing and Fashion Electronics Beauty and Welness Furniture and Fixtures

Source: Boston Consulting & CII, IRIS, MoSPI- Govt of India.


Agriculture cultivated area: 150 million hectares

180

Horticulture Production 160 140

Million Metric Tons

155.0 146.6 128.4 129.1

120

• Area under 100 Horticulture: 23 million 80 hectares (15%) 60

$260 billion to Indian GDP by Agriculture • 35% of this is from Horticulture.

134.1

101.2

x 2.8

88.6 81.0 65.6

58.5

68.5

71.5

74.9

50.9

40 20

x 2.6

43.0 28.6

0

Fruits

Vegetables

Plantation Crops

Others

Within Horticulture, perishable commodities trends higher & drives growing demand for perishable handling. Others: includes Spices, Loose Flowers, Nuts, Mushroom, Aromatic/medicinal and Honey . Source: Horticulture Division, Ministry of Agriculture and CrossTree Analysis


Inflationary trend (40 years) shows Food as prime driver with perishables contributing highest.

This may indicate that demand for perishable products continues to outstrip supply. This also indicates a lack of efficient supply systems which continues to feed inflation in food items. Continual demand for food distribution and cold chain is foreseen over coming decade.

Trends - Annual Average WPI Inflation (from 1970 to 2012)

10.5 9.9 10.2 9.5

Inflation %

Despite producers showing robust response by increasing supply, yet inflationary pressure exists.

11.5

9.2

8.5 8.5

7.9

7.5

6.5 5.9 5.5

6.6

5.9 1971-72 to 1981-82

1982-83 to 1993-94

1995-96 to 2004-05

2005-06 to 2011-12

All Commodity

10.2

7.9

5.9

6.6

Primary Food

8.5

9.2

5.9

9.9

F&V

9.0

10.6

7.5

9.2

Milk

7.1

9.0

5.7

10.1

Eggs, Meat, Fish

11.0

9.4

6.4

11.8

Source: RBI, Office of Economic Adviser, MoCI, Govt of India


40

Total 20

3.7

4.9

4.9

2007

2008

2009

8.3

7.2

6.1

24.7

21.5

18.4

15.6

13.4

11.5

32.4

28.4

Exports

30

10

36.7

Indian Pharmaceutical USD Billion

13.5

10.5

16.7

• Growth in Asia outstripped all regions.

0 2010

2011

2012F

2013F

2014F

2015F

Higher-than-average growth in vaccines & specialty pharmaceuticals and heightened regulatory requirements continues to drive cold chain for pharma. 10 8

• Asia & India continue to grow into a major hub for Bio-Pharma, cold chain demand from the sector continues to rise. Cold chain shipment growth by region $0.6 to 0.8 billion (33% Growth)

BioPharma Logistics Spending (USD Billion) North America

Europe

Asia

Rest of World 0.8

6 4

• Global Cold chain logistics spend from $5.2 billion in 2008 to $6.9 billion in 2012.

0.6 1.0 1.5

0.6 1.2

1.5

1.7

1.9

Rest of World

1.1 2.2

2012e 2008

Asia

$1.5 to 1.9 billion (27% Growth)

2.3

2

Cold Logistics Growth USD Billion $1.0 to 1.5 billion (50% Growth)

Europe

$2.1to 2.7billion (29% Growth)

2.1

2.5

2.7

3.2

2008

2009

2012e

2015e

North America

0 0

0.5

1

1.5

2

2.5

Notes : Figures exclude clinical trials which is separate specialised logistics. Sources: Cold-Chain BioPharma Logistics Sourcebook 2011 & UN Comptrade database, Orkash and CrossTree Analysis

3


2,000

160

800.0

140

700.0

Modern Retail

120

600.0

Traditional

1,200

100

500.0

1,000

80

400.0

800

60

300.0

40

200.0

20

100.0

1,800

Food Service Outlets (‘000)

1,600 1,400

600 400 200 0

0

780.5

Size of Retail Market (USD Billion)

486.4 396.1

27.8

41.4

88.6

0.0

2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E 2015E Standalone (LHS) Leisure (RHS) Retail (RHS)

2010

2012

2015P

Traditional

 India is 5th largest retail market worldwide.  1,968,000 Consumer Food outlets by 2015. Organised Retail Market is growing despite FDI. This feeds demand for cold chain. Simultaneous growth in the food service sector accelerates need for the cold-chain.

Others

90%

Clothing & Fashion

89%

Beauty & Wellness

88%

Furniture & Furnishings

Food & Grocery Note : Total Food Service Outlets is a sum of Standalone , Leisure and Retail outlets Source : Euromonitor, IBEF, IRIS and CrossTree Analysis

96%

Electronics

77% 99%

Modern


As of last recorded national level data , India has 6488 cold storage with a cumulative installed capacity of approximately 30 million Metric Tons . CC Market U$ Billion Storage

6.9

2.1 0.2

4000

2007-08

3000

0.9

2010-11

25000

88%

2014-15

20000 15000

Number of Cold Storages

2000

35000 30000

Storage Transport

1.9

5000

Cold Storage Availability

Segments

3.8

6000

Number

12%

Transport

10000

Installed Capacity in '000 tons (Cumulative)

1000

5000

0

0 1955

1960

1965

1970

1975

1979

1986

1955-1986

2004

2007

2009

2010

2011

2012#

In the Last Decade

Key Trends • More than 25% of the cold storage units (~10 mill tons) have been built post 2004. • Growth (CAGR 2004-12 ) : Numbers of Cold Storage : 3.57%, Capacity : 5.19%. Growth in Transport capacity 22% • Current short fall of 4000 reefer trucks, govt states another 30+ million tons capacity needed.

The witnessed growth in the Cold Storage sector is accepted to only accelerate in the coming years Notes: 2009 and 2010 numbers only for NHB and NHM assisted cold storages. Numbers as of Dec 2012 Source: NHB, NHM, Directorate of Marketing and Inspection 2009, Orkash & Crosstree Analysis

(‘000) tons

7000


Capacity mostly focused on single product types – a long learning curve established Minimal outreach for foods and pharma – localised operations, earlier focus was storage. Chain approach to counter Irregular parameters across regions and within days. Fragmented development did not encourage holistic cool logistics for single source service. Refrigerated systems need adaption to India specific needs in design and capacity utilisation.


Capacity mostly focused on single product types – a long learning curve established Minimal outreach for foods and pharma – localised operations, earlier focus was storage. Chain approach to counter Irregular parameters across regions and within days. Fragmented development did not encourage holistic cool logistics for single source service. Refrigerated systems need adaption to India specific needs in design and capacity utilisation.


Agri/Foods identified as priority sector

Encourages Investments

NCCD takes shape

Focus on Market links development

Move to uniform VAT/GST

PPP, Grants, Negotiable Warehouse Receipts

100% FDI in food sector

Encourages holistic development

Liberalises Marketing Norms

Rationalises Tax Laws

Credits Grants & Subsidies

Liberalising FDI Inflow

Government as ‘Catalyst’ Increasing focus to create enabling infrastructure by govt. While this support was earlier focused on static cold storages, recent developments have been to include refrigerated trucks including containers. NCCD to play pivotal role to correlate industry expectations and policies.


NCCD as umbrella agency to address concerns.

Capital Investment Subsidy / RIDF Scheme

Public Entrepreneur Guarantee Scheme

Subsidies available for constructing Cold Chains by Govt. of India

Integrated Cold Chain Scheme

USD Billion

1500

Outlay Amounts for Infrastructure Development 1187.5 (Five Year Plans)

1000 593.9 500 40.9 0 Xth Plan

PPP-IAD NVIUC

XIth Plan

XIIth Plan

Initiatives for Infrastructure Development • Mega Food Parks Scheme. • Integrated Cold Chain Scheme. • State level Initiatives. • National Horticulture Board. • National Horti and FPI Missions.


Central Excise Duty • 100% exemption for specified equipments for storages or transport, self loading / unloading trailers / semi-trailers.

Customs Duty • Full exemption from basic customs duty for manufacture of refrigerated vans/trucks; biopolymer/bio-plastics; • Concessional duty of 5% for initial installing or expansion of a cold storage, cold room, processing, etc.

Service Tax Exemption • ‘Erection, Commissioning or Installation’ of Mechanized Handling Systems; Cold Storage and transport; • Cold-chain Service of storage and transporting agriculture produce. • Technical Testing; Analysis Service and ‘Technical Inspection and Certification Service’.

Capital Investment • Cold Chain & FDI: 100% FDI through automatic route. • Investment linked Tax deduction : 150% of capital investment deductible. • Government subsidy on investment: 40 to 55% subsidy on storage and transport


Industry, PSUs, Government, Investors, Entrepreneurs, Farming Associations & Knowledge Houses - All Working Together! Training, HRD and R&D Committee.

Technical Specification, Standards, Test Laboratory & Product Certification Committee.

2

3

1

Committee for Application of non-Conventional Energy Sources in Cold Chain Infrastructure.

Executive Committee Liaison with other NLAs and States

6

NCCD Members, other

4 5

cold chain sectors

Committee for Supply Chain & Logistics.


Cold Supply Chain (India): Poised for a Quantum Jump

Best practises for Sub-continent conditions, market. Skill development & training establishments.

Appropriate & integrated Infrastructure development. Adoption of energy efficient technology. Partner with Indian logistics companies. Adapting from mass storage to direct access storage. Manage and develop Multiple markets in region.

Anticipate ahead of a developing market.


Innovators and solutions biased companies. Technology Provision and implementation. Cold Logistics and Supply Chain services. Specialised Infrastructure designers and planners. Expertise in alternate energy, environmental protection.

Scalable, Energy efficient Refrigeration technology. Refrigerated Vehicles and last mile delivery systems. Education, Training & Cold chain management experts.

Knowledge Managers and Integration specialists.


Food / Pharma Exports

QSR Majors

Eggs, Beef, Ice Cream

Polio Eradicated


The Source and the Destination


www.nasa.gov Earth Gallery


Nodal Body for Cold-chain Development

Ministry of Agriculture Contact-NCCD@gov.in

Thaifex: Emerging markets opportunity  

Address at Cold chain World, Thailand

Read more
Read more
Similar to
Popular now
Just for you