Cold Storage Business: How to start a cold storage business? Know the complete details of cost and subsidy

India ranks second in the world in terms of production of fruits and vegetables. According to the database of the National Horticulture Board, after China, the highest production of fruits and vegetables in the world takes place in our country. The important thing is that even though India is progressing, a third of 500 billion fruits and vegetables are wasted every year due to storage inconveniences.

According to a report of the Government of India, there is a demand of about 61 million tonnes of cold storage in the country, but till now only 29 million tonnes of capacity has been developed. India is a tropical country, most parts of it are hot, due to which a large amount of fruits, vegetables and related food items get spoiled every year.

India ranks second in the world in terms of production of fruits and vegetables. According to the database of the National Horticulture Board, after China, India produces the highest amount of fruits and vegetables in the world. The important thing is that even though India is progressing, one-third of the 500 billion fruits and vegetables are wasted every year due to storage problems.

Very Few Resources To Preserve Fruits And Vegetables

The resources to store fruits and vegetables here are not as much as they should be, due to which farmers have to suffer a lot. The production of fruits and vegetables is increasing in India, but the resources to preserve them are very less.

Many refrigerator systems and machinery are required to transport all these to other areas of the country in a proper manner. To overcome this problem, the Government of India is taking new initiatives, so that farmers and gardeners do not face any problems, and consumers can get fresh fruits and vegetables at big and small shops.

Cold Storage Project Report

To build a cold storage, you have to prepare a cold storage project report. Crops like potatoes, tomatoes, peas, cabbage are seasonal, but they are available throughout the year. You buy it comfortably at every vegetable cart, because such vegetables are kept in cold storage, due to which they remain fresh.

You have to prepare a cold storage project report according to your objectives. So that it is easy to collect all kinds of information about the project.

What is cold storage?

Let us tell you that cold storage is a place or cabin where you can store food products and medicines in which you use a freezer. A cold storage unit is a setup of a refrigeration system that sets and controls the temperature at a prescribed level. The main purpose of cold storage is to reduce microbial growth and keep food items safe.

Two types of factors work behind setting up a cold storage unit. It includes vapor absorption system and vapor compression system, which help in creating three types of cold storage units. First industrial room, modular refrigerator room and combination refrigerator room.

Importance of cold storage in India

Along with vegetables and fruits, marine products are also produced in India, in which cold storage becomes very important. At the same time, ready-to-serve drinks, fruit juices, vegetable products are being exported in large quantities, cold storage becomes necessary for all these. In such a situation, cold storage facilities become a basic need for perishable food items.

Cold storage plays an important role in providing benefits and facilities to both farmers and consumers. Farmers can comfortably sell their produce at a good price without worrying that it may get spoiled.

On the other hand, crops also get damaged due to rain, hailstorm or weather conditions. In such a situation, if farmers keep their crops in cold storage, then they remain safe and reach the city markets comfortably.

The Government of India is helping you to get a loan from the bank to build a plant and cold storage. You can build cold storage with the help of National Cooperative Development Corporation.

If you want to start a business by making a 1000 MT cold storage project report, then the information given here will help you.

Lack of cold storage or cold room space is one of the major reasons for starting this business. Developing cold storage or cold chain facility in the country will benefit horticultural products economically, as well as you will get a good return on investment. Most of the population of the country is dependent on agriculture for livelihood, the financial condition of farmers and people doing horticulture along with people associated with this industry will also improve.

Eligibility for Cold Storage Business 

The person who wants to do cold storage business should be at least 18 years of age and the maximum age can be up to 65 years.

The person should have a bank credit score of at least 750 or more. A good credit history is important for getting a loan.

There should not be any bad record of non-payment of loan or loan taken.

License for Cold Storage

If you are building a cold storage, then keep in mind that its registration with a government agency is very important. For registration, you have to contact your nearest horticulture department. Food Safety License, License is mandatory for all food business operators under Section 92 of the Food Safety and Standards Act, 2006 and Food Safety and Standards Regulations, 2010.

You have to go to the department and complete the registration process with the registration fee and required documents. Let us tell you that this license is under the terms of hygiene, safety and agreement.

Legal Permits, Documents and Process for Cold Storage

You have to go to the FSSAI website and fill Form-B. You can submit it online. After submitting the form, note the reference number. Within 15 days of submitting the application, you have to submit your license to the state authority. The documents include a copy of the receipt, fee payment or demand draft or receipt of online payment. In India, the license fee for setting up a 1000 metric ton cold storage unit is about Rs 1,00,000.

Loan Application Process for Starting a Cold Storage Business

The project report for the cold storage business also requires adding a loan application from the bank. Different banks have their own set of interest rates for this. You have to see from which bank you want to take a loan. To get a loan with the most reasonable interest rates, these guidelines have to be kept in mind-

1. Choose the bank according to your money requirement and business plan.

2. You have to give your personal details, address, phone number, email ID, anticipated business turnover, license number and details of legal permits.

3. After this, the verification process is completed by the representative of the financial institution. After that, the bank representative will assist you in the formalities of your loan application.

4. Once the bank is satisfied with the details given, it approves the loan and your loan amount is transferred to the bank.

Application For Cold Storage Subsidy

You can apply for subsidy. Nationalized banks provide loans up to 80 percent of the total investment. If you have to rent a premises, then the loan amount is increased to 90 percent of the total cost. The Ministry of Food Processing Industries (MOFPI) is helping in the form of machinery installation, technical works, construction works as well as about 50-75 percent of the expenditure.

You can apply online to set up a cold storage business. You have to enter all the details in the Industrial Promotion Assistance (IPA) form and apply for subsidy.

Let us tell you that for cold storage, the Bihar government offers subsidy to open a cold storage unit (type -2) under the Integrated Horticulture Development Mission Scheme. Under which farmers can build cold storage in the village. The government gives 50 to 75 percent of the total cost in subsidy.

At the same time, in Madhya Pradesh, the maximum grant assistance limit under the Integrated Horticulture Development Mission Scheme is 35 percent of the fixed cost of the project.

Premises for Cold Storage

The size of the premises depends on your business. If you are opening a small cold storage then less area will be required. For large scale, the minimum requirement is one acre. Your cold storage business should be near places where vegetables and food products are produced in large quantities, poultry farms, fisheries along with farms.

Marketing and Promotion of Cold Storage

A well-prepared marketing plan is very important for cold storage business. It proves to be helpful in promoting your cold storage brand. It is also very important to increase awareness about your cold storage among wholesalers, traders, supermarkets, nearby retail shops.

Working Capital for Daily Needs of Cold Storage

It is necessary to keep some amount aside for the beginning as well as for minor wear and tear, transportation expenses. For this, you should have a reasonable amount of money.

In the project on Cold Storage Service Unit, it is important to keep these points in mind-

Objective of opening cold storage

Promoter and management

Premises for cold storage

Market demand

Location of the project

Balance sheet estimate

Estimated profit

Loan and coverage ratio

Loan repayment

What are cold storage project reports useful for? 

Cold storage business project report is very important for chartered accountants as well as tax consultants, small business owners, students and engineers. Cold storage is prepared according to this report, which depends on its metric ton.

Kisan Rail with Cold Storage

The Railway Ministry has started Kisan Rail. Currently 100 Kisan Rails are running across the country. These trains carry food items including fruits and vegetables from one end of the country to the other, which are perishable quickly. There is cold storage in every bogie of this. Under this, farmers are also given a discount of 50 percent on the transportation of fruits and seeds.

This subsidy is available under Operation Green top to Total scheme. The train is container free, meaning that containers can be easily pulled from the moving vehicle. These containers contain vegetables, fruits, meat, food items. These trains with air conditioning facility are proving to be a boon for farmers and small and big companies.