DPR ON COLD STORE HAVING CAPACITY OF 5000 MT - Apicol…apicol.co.in/images/Model DPR on Cold...

DPR ON COLD STORE HAVING CAPACITY OF 5000 MT

INTRODUCTION: Assistance for setting up of new cold storage infrastructure

will be available only to multi-chamber cold storage units with technologies

which are energy efficient with provision for thermal insulation, humidity

control, advanced cooling systems, automation, etc., having specifications and

standards approved by the Ministry. Cold storages (Long term storage and

distribution hubs) upto 5000 MT capacity will be promoted under

NHM/HMNEH sub-schemes. In this context, for cold storages, 3.4 cubic metres

(cum.) (120 cubic feet (cft.) of chamber volume shall be considered equivalent to

one MT of storage capacity.

Assistance will be available to individuals, Group of farmers/ growers/

consumers, Partnership/ Proprietary firms, Self Help Groups (SHGs), Farmers

Producer Organization (FPOs), Pvt. Limited Companies, Corporations,

Cooperatives, Cooperative Marketing Federations etc through either

NHM/State Agriculture Policy' 2013.

Proposed Planning

The entire planning process has been based on the following

methodology followed for the project:

a. Analysis of Project Activities

b. Proposed Backward Linkages for Project

c. Planning of Activity, Area & Equipment Requirements

d. Marketing & Forward Linkages for Project

e. Location Advantages

f. Utilities & Pollution Control

g. SWOT Analysis

a) Analysis of Project Activities

The project is planned to undertake the following activities:

1) Multi-Chambered and Multi-Commodity Cold Storage with 4 nos

cold rooms each with 1250 MT capacity. (Total Capacity 5,000 MT)

2) Registration with NCDEX for facilitating forward trading activity.

3) Introducing the concept of Warehousing Receipt for providing easy

finance against stored stocks of Potato & other products to farmers,

traders etc.

1) Multi-chambered and multi commodity cold storage

Four Cold Rooms are proposed to be built each with a capacity of 1250

MT and a total capacity of 5,000 MT preservation of fresh horticulture

produce by proper cold storage practices. This will reduce losses in

supply chain which is at present estimated anywhere between 30% to

40% of the total produce. Modern cold stores are multi-chamber, multi-

commodity stores that use energy-efficient refrigeration equipment and


energy-conserving thermal insulation. Most horticultural produce (with a

few exceptions like - onions) require high RH levels and, therefore, good

humidification systems are essential. In addition, means to reduce

ethylene levels are required and so are specialized equipment to kill air

borne pathogens and bacteria. Besides fruits and vegetable, these

modern cold stores can be used for dry fruits, spices, pulses, milk

products etc. The desire to reach more distant markets, prolong storage

life, and market a product that better satisfies consumers has a critical

requirement of cold chain right from farm gate to distribution and selling

point. Changes in Packing, Handling, Transportation, Marketing and

Distribution of horticultural crops directly influence the Cooling

requirements and results. The primary purpose of refrigeration is to aid

preservation with a view to reduce wastages and at the same time bring

economic prosperity to the growers. Since each fruit or vegetable is

sensitive to various conditions in their own unique way, specific systems

have to be designed to deliver optimum parameters in each chamber of

the store. Good temperature management, is the single most important

factor in delaying product deterioration; prompt cooling and

maintenance of proper temperatures are both essential. For many

products, this means maintaining a low temperature as much as possible

without danger of freezing. It has been said that every hour saved from

the moment of harvest and removal of the field heat can add a day to the

useful shelf life of the product. Hence, location of cold storage facility in

close proximity to the production belts is an obvious advantage. The

desire to reach more distant markets, prolong storage life, and market a

product that better satisfies consumers has a critical requirement of cold

chain right from farm gate to distribution and selling point. Changes in

Packing, Handling, Transportation, Marketing and Distribution of

horticultural crops directly influence the Cooling requirements and

results. The primary purpose of refrigeration is to aid preservation with a

view to reduce wastages and at the same time bring economic prosperity

to the growers. The proposed technology for the multi-chamber cold

store has been selected based on the following key parameters required

for obtaining the best results for the stored produce:-

• Rapid & Uniform Cooling

• Flexibility in Temperature Management across various chambers

• Humidity Management for High Humidity in Cold Rooms

• Ethylene Scrubbers for mixed storage of fruits & vegetables in

cold room


• Efficient Power management for minimizing power consumption

2) Registration with NCDX National Commodity & Derivatives

Exchange Limited (NCDEX) is an online commodity exchange based

in India. It provides a commodity exchange platform for market

participants to trade in commodity derivatives NCDEX POTATO

FUTURES provide a hedging platform to those who are natural

physical traders of the commodity. Speculators who have knowledge &

a view about the commodity can take positions in the Potato futures.

Even arbitrages in calendar spread as well as cash & carry, can be done

in Potato futures.

Benefits to Farmers and Traders:

• Farmers and traders will become familiar with computers and

online auctions.

• Farmers will have greater bargaining power versus traders.

• Farmers become more aware of crop quality specifications.

Quality consciousness among farmers will increase.

• Farmers will have better understanding about banking. Literacy

among farmers about bank transactions / operations will increase.

• Direct electronic fund transfer from buyers to sellers.

• Maintenance of Mandi trading records has become computerized.

• Greater transparency at every stage of transaction within an

Electronic trading system allows buyers to bid in real time even

when they are not physically present at the Mandi. E-auctioning

system has enabled sellers to participate irrespective of proximity

to the Mandi location.

• Tender results are announced daily at 1:00 pm so farmers do not

face uncertainty. Platform for e-Procurement NSPOT provides

unique e-Procurement platform for primary procurement

activities. Availability of real time information and simple

delivery process ensures that farmers are the direct beneficiaries

of this trading platform. The users in the value chain can have

simultaneous access to the Exchange on the buy side and procure

at the best possible price. NSPOT has facilitated the state

government agencies and farmer producer organizations (FPOs)

to procure various agricultural commodities in the last couple of

years.


b) Proposed backward linkages for the project

The primary grading of vegetables will be carried out in the field or at

the Cold Store. Tamarind is suitable for long term storage in the cold

store as well as for utilization in the fruit processing plant. Graded

vegetables will be put in field crates and palletized for storage in the

Cold Store. Tamarind will be stored in cold store for longer period for

tamarind concentrate preparation and any surplus will be released into

the market during the late “off-season” period of March to June. The

proposed business model for the Integrated Cold Store will be captive as

well as paid services for quality grading-packing of mango and tamarind

brought by farmers and traders on rental basis. Due care needs to be

taken to ensure minimization of post harvest losses during this entire

chain of handling of fresh fruits and vegetables. Sufficient area needs to

be provided for rapid unloading of harvested produce being brought into

crates from field. This requires parking and movement area for trucks at

the unloading point and an unloading platform. To minimize the risk of

damage of potato, tamarind etc. and to speed up the process, mechanized

forklift trucks need to be used for loading, unloading and stacking

purpose. Provisions for storage area of packing material, office area and

tool room etc are to be kept in the cold storage complex.

c) Planning of activities, area & equipment requirement

The linking of facility to producers and onwards to markets is based on

detailed planning for various activities to be carried out and scale of

operations. The requirement of area and equipment for the proposed

facility is envisaged as follows:-

i. Rooms & capacities

The number of Cold Rooms have been worked out based on the

proposed stacking pattern for fruit, vegetables and capacities desired.

Four Cold Rooms are proposed to be built, each with a capacity of 1250

MT with a total capacity of 5,000 MT.

ii. Rapid cooling in rooms

Room cooling is proposed to be carried out for the Fruits to allow for

storage of the produce in the same rooms based on a 3 - 4 day cycle. The

proposed stacking pattern, refrigeration system and air circulation

system (complete with VFD) have been planned accordingly.

Pressurized air flow within the room proposed to ensure forced

movement through the crates is planned with high CFM fans in


evaporator units to meet the guidelines of NHB. Each of the rooms

would require to maintain high humidity levels of 90 - 95% RH which is

essential for sensitive produce & ripening activity which is proposed to

be achieved by installation of adiabatic humidifiers complete with

nozzles, RO and pressure pump. Display and control units for

temperature, humidity, ethylene and CO2 levels in the ripening rooms,

are proposed to be installed so as to ensure proper monitoring of these

levels.

iii. Temperature & humidity management

The refrigeration system has been planned for accurate management and

display of temperature & high humidity (90-99% RH) in all the rooms.

Humidification system based on adiabatic type, with nozzles capable of

delivering droplets of 10 micron size suitable for maintaining high

humidity Levels as Indicated In the following table.

Temperature & Relative Humidity Requirement for Different Produces

PRODUCT TEMP. RANGE IN o

C

RELATIVE HUMIDITY IN

%RH

BEANS 4-7 90-95 BRINJAL 0-20 85-90 CABBAGE 0 95-99 CARROTS 0-20 98-99 CAULIFLOWER 0-20 90-95 CUCUMBER 7-10 90-95 LETTUCE 0 95-99

LEMON 7-10 90-95 ONION 0-2 65-75 ORANGES 0-10 85-90 PUMPKIN 10-13 70-75 POTATO 1.5-4 90-95 WATER MELON 2-4 80-90 TOMATOES 13-21 85-90

Source: USDA

iv. Insulation & doors It is proposed to install PUF sandwich panels of suitable thickness for

ceiling and walls, which are suitable for the positive temperature

ripening rooms. The floor insulation is proposed with laying of PUF slab

of suitable thickness complete with tar felt sheets and bitumen below the

flooring. Each room shall be leak proof. The doors planned for the

ripening rooms are insulated doors of sliding type to allow for ease of

stuffing and de-stuffing of rooms. The insulation system planned for the


Cold rooms consists of insulated composite structural panels with core

insulation of polyurethane of suitable thickness.

v. Accessories

The accessories required for managing operations in the Ripening cum

Cold Store include mezzanine floor for holding of fruit, Pallets for

stacking of crates or boxes, Electronic Weighing Platform for weighing

of fruits, Carton Strapping Machine for Packed Fruit Cartons ready for

dispatch to markets, Hand Pallet Trucks for movement of crates within

Cold rooms, Trolleys for movement of Packed Fruit Cartons, Power

Back up system with Generator set.

d) Marketing & forward linkages for project

In absence of storage facilities in the locality, potatoes and other

vegetables are mainly marketed in weekly markets and a portion is

transported to other destinations by train/road. Transportation of

vegetables to the markets is made by truck. The markets are located at a

distance of 5-35 km from major production belts in the district. The

arrival of vegetables during Kharif season is usually August to

November while Rabi vegetables are marketed from December to May.

The market potential for Premium fruits and vegetables in India can be

categorized between Fresh fruits sold “fresh” during the season and

Store produces stored in Cold or Cold Store to be sold in “off season”.

The market potential for such fruits in India has two dimensions –

Seasonal Sale of Top quality fruits which are duly washed, graded and

packed for sale in the fresh market; and Off-Season Sale of quality

Indian fruits taken out of Cold Store or Cold Store and Imported fruits

which are being imported for sale during this period. The marketing of

Cold Store services to farmers & traders has excellent potential given the

absence of similar facilities in the entire region. The benefits of Cold

Store are now well recognized in terms of better product quality & price

realization.

e) Location advantage

The site proposed for Cold Store in Odisha along with a proposed

integrated market complex with fruit processing unit and farmers’

education information centre would provide a holistic single window

platform for the farmers as well as the traders. There are many big

farmers who can take up high value crops provided market infrastructure

is created.


f) UTILITIES AND POLLUTION CONTROL

One 50,000 litre overhead tank and two 6” diameter functional bore

wells have been proposed to be installed in the complex, Three Phase

electricity line is also essential to ensure proper power supply. Cold

store is a non –polluting industry (falling under Green category) as it is

largely a service industry catering to storage of perishables like fruits

and vegetables. No toxic or industrial waste is generated in the process.

The waste-water does not contain any toxic elements and can be released

in the septic tank and soak pit to be constructed within the project. DG

set for power back-up is to be installed complete with sound-proof

enclosure adhering to CPCB guidelines. The height of the stack will be

suitable for emission of smoke etc. at permissible limit and reduce noise

pollution. Safety provisions in terms of protective masks and hygienic

clothing covers will be provided to workers. Fire fighting and detection

systems will be installed within the factory building. Green cover will be

provided within the building periphery by planting of trees and approach

road will be macadamized.

g) S-W-O-T ANALYSIS

A SWOT analysis is to be made for the proposed cold storage unit in the

district in the following manner.

STRENGTH:

• Availability of required quantity of raw material, market, land

(non-agriculture high land), electricity (HT Line passing nearby),

water

• Proximity to a railway station, National High Way, markets and

production centres.

• Willingness of the farmers and businessman for storage.

• Availability of organization, manpower and funds to run the unit.

• Cheap Labour.

WEAKNESS:

• Need of a dumping yard for rotten products.

• Higher cost of storage.

• Higher electrical tariff

• Farmers not aware about utility of cold storage.

OPPORTUNITY:

• Large number of nearby markets.


• Opportunity for increasing crop productivity and production in

the locality.

• Scope for outside procurement and storage by the traders.

• Hike in Electricity charges.

• Change in Government regulatory policy.

ECONOMIC ANALYSIS Considering the SWOT analysis and the facilities already available it is

justified to go for a new cold storage unit in the area. From the location

point of view and possibility of forward and backward linkage the

proposed unit should be technically feasible. Product flow and market

flow go in favour of the plant.

Possible Alternatives

There are various options available for the proposed project.

Option-1: A 5000 MT cold storage is established and run on a rental

model. Which means farmers/ traders can store their produce mainly

potato. In such situation, 100% capacity utilization is not possible

though the potato producers would be benefited. Because, the local

produce if stored on rental basis may be taken out any time within 7 – 8

months. But remaining period of the year, the space will be unutilized

whereas the electricity charges and manpower cost etc., is to be met for

the whole year. Which means the rental earning of 7-8 months will be

utilized for maintaining the cold store for the whole year.

Option-2: A 5000 MT cold storage is established and run on a combined

model of rental and trading. This means certain percent of storage space

will be used as rental where as remaining space can be utilized by

promoter to store potato by way of procuring at reasonable price during

harvest period and selling out beyond the season at a higher price. This

option is therefore more attractive proposition than the previous one.

Economic Analysis

To take appropriate investment decision the economic analysis of all the

options have been worked out and given here under. For this purpose, a

break even analysis of the proposed cold store with installed capacity of

5000 MT for Cold Storage with and without provision of trading are

given in tables below.


Assumptions for analysis Power consumption : a. Consumption 200 Unit per hour. b. The unit will run 80% time in a day. c. Cost of power @ Rs 4.40 per unit. 2. Trading Margin: a. The Cold store owner will have a margin of Rs 2.50 if it buys @ Rs 5.00 per KG during harvest and sells @ Rs. 9.00 per KG.

Break Even Analysis for 5000 MT Cold Store to be run on different models

Ratio of training vs.

Rental

30/70 40/60 50/50 0-100

Capital Cost 46837000 46837000 46837000 46837000

Cost of storage per MT for 1 year

4734815 4734815 4,734,815.00 4734815

Revenue from Rent @ 100% utilisation

7500000 7500000 7,500,000.00 7500000

Revenue from Trading of potatos (Rs 2.50 per KG)

3750000 5000000 6,250,000.00 00.00

Total Revenue 11250000 12500000 13750000 7500000

Profit during one year 6515185 7765185 9015185 2765185

Break even (No of year) 7.18 6.03 5.19 16.93

As per the calculation above, it may be seen that the proposed unit will

attain break even after 16.93 years of installation if the unit will be

operated on fully rental model i.e. the space will be utilized by

producers/traders on payment of rents @ Rs150 per quintal.

• The project will attain breakeven in 5.19 years if 50% of the

storage space will be used for own trading and remaining 50%

used for rental.


• The unit will reach break-even point in 6.03 years if it will be

operated on 40% own trading and 60% rental model.

• Similarly, the unit will attain breakeven in 7.18 years if it will be

operated on 30-70 model of own trading vs rental. It may be noted

that the electricity charges assumed in the calculation is Rs 4.40

per unit i.e. the current rate. However, if the subsidy on electricity

charges as recommended by task-force on potato is made

available to the project, the viability would improve substantially.

PROJECT OUTLAY AND IMPLEMENTATION SCHEDULE Considering the SWOT analysis and the available facilities it may be

decided to whether to go for a new cold storage unit. If the location point

of view and possibility of forward and backward linkage are positive

then the proposed unit is technically feasible. Product flow and market

flow should go in favour of the plant.

Project Cost

The Tentative Capital outlay for the Project is estimated at Rs 483.37

lacs asper details given below.

Particulars Rs. In Lakhs

Land Nil

Building 325.51

Insulation & Refrigeration for Cold Room 116.50

Contingency 10.34

Deposit 2.00

Pre-operative Exp 14.02

Margin Money for Working Capital 15.00

Total 483.37

The installed capacity is 5000 MT for Cold storage, about 70% of the

commodities will be stored on rental basis and 30% from own

procurement. Existing rental charges of the cold storages varies between

Rs.150/- to Rs 175/- per quintal of potato for a storage period of 7-8

months.

Land

The promoter should have own land measuring 2 acre.

Source of Finance

The Project is proposed to be funded, through a mix of Owned Corpus

funds and financial support from Banks. Subsidy as admissible from

Government of India under “Mission for Integrated Development of


Horticulture (MIDH) Scheme or APICOL for setting up of Cold Store or

from any other sources may be ascertained.

Implementation Schedule

The land for project has all the necessary amenities & utilities. Approach

road, water & power are readily available at the site of the project. The

proposed facility is being planned using faster construction techniques

for structure and PUF panels which will facilitate a shorter execution

time. Equipments are readily available in the country and the contractors

/ vendors are willing to supply all the necessary equipment within the

required schedule. The following time schedule of 9 months (36 weeks)

is proposed for making the project operational:

Sl.

No

Activity Time & Farmer

1 Approval for

Financial Grants

4 weeks

2 Civil Work, Electrical &Site Development 20 week

3 Procurement & Installation of Equipment for Refrigeration, Insulation, Fruit and Vegetable Sorting, Ancillary Equipment

30 weeks

4 Utilities & Finishing Work 2 week

5 Trial Runs & Commissioning 2 week

Note: Activities listed at serial no.2, 3 and 4 can be undertaken simultaneously.

Hence, the total project can be completed in a time span of 36 weeks.

SOCIO-ECONOMIC AND ENVIRONMENTAL BENEFITS OF THE PROJECT


The project is likely to provide wide-spread social benefits to the

farmers in the region which are discussed below:

• Development of value addition centre for the fruits and vegetable

growers in the region.

• Promotion to uniform quality and graded fruit and vegetables

which is likely to fetch better realization for farmers.

• Introduction of transparent dealings and fair practices.

• Facility can function as Resource centre and provide farmers

training in post harvest handling to ensure high quality and

distribute kits.

• Minimization of Post harvest losses can result in value creation

for the farmers with resultant economic benefit.

• Direct and indirect employment opportunities for local population

as the project starts operations.

• Benefits of Cold Store will facilitate improved market linkages of

farmers and their produce with major markets of the country.

• Cold Storage Technology has been proven in Indian context, an

improvement in price realizations of 50% to 100% as compared to

fresh fruit sales. Farmers can have the option to store & market

their produce as per the market opportunities available rather than

resort to panic selling.

• Project has entered into direct service and marketing linkages with

large group of farmers in the belt which will facilitate better price

recovery mechanism for such farmers. The proposed project will

fulfill the potato requirement in the district, as every month the

district importing potato from nearby district and states after its

potato harvesting season.

• The Proposed project will provide the healthy and safely ripened

banana which is proposed to be ripened through natural ripening

technology by using ethylene generators. The proposed location

is free from any environmental problem such as polluted water

and air. Space can be created for dumping of rotten produce

without any environmental impact on the community. Thus the

plan is justified from environmental point of view.

Annexure-I


INDICATIVE LAYOUT PLAN

DPR ON COLD STORE HAVING CAPACITY OF 5000 MT - Apicol…apicol.co.in/images/Model DPR on Cold...

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