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15 Mar, 2023
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Cold storage is a facility where business owners in the food and beverage industry preserve fruits and vegetables for a long duration. Cold storage is a one-time investment option requiring a substantial initial investment. However, the returns are high, and it has good growth potential over time. Apart from fruits and vegetables, food items like tobacco, beer, meat, poultry, fish products, etc, also need cold storage.
If you plan to establish a cold storage business in India, you can arrange the initial capital with a Business Loan. Here is a guide to starting and growing a cold storage facility in India.
Food wastage is a major global issue. Since India is primarily an agriculture-based economy, food wastage becomes more prevalent. That is why cold storage is necessary to extend the products' shelf lives, maintain their quality after harvesting, and provide fresh food products year-round.
A cold storage business minimises perishable waste and preserves produce. Therefore, cold storage is crucial to address food waste and enhance profitability. It helps extend the product's shelf life, avoid gluten, and reduce marketing and transportation time during high production periods without compromising the food quality.
Apart from these, cold storage also offers financial benefits to farmers, making their products more accessible to consumers in fresh states at competitive rates. As the demand for packaged foods increases, the need for cold storage facilities has grown globally.
Starting a cold storage business in India offers multiple benefits, including the following:
Also Read: How to Start a Business from Scratch in Simple Steps
A cold storage facility can be of two types: one for agricultural products like fruits, vegetables, meat, dairy, etc., and another for off-season goods like seeds, chillies, potatoes, etc.
Since keeping the products at low temperatures needs a lot of space, machinery, and equipment, the cold storage investment cost is usually higher than most other small-scale businesses. You might require investing in various areas, including space, land, permissions, water, electricity, etc.
Furthermore, the cold storage cost includes significant capital in machinery purchases. The business requires the latest machinery to ensure optimum cooling performance while facilitating long-term sustainability. Besides, you must stay prepared for other monthly costs like utility bills, staff salaries, marketing expenses, etc.
Before submitting a Business Loan application, evaluate the expenses you need to cover and decide upon an adequate loan amount sufficient to cover your needs. Then, check your Business Loan eligibility and prepare the necessary application documents.
Also Read: How To Start A Startup In India In 5 Steps in 2023
Do you want to know how to start a cold storage business? Here is a stepwise guide you can follow:
The first thing you must decide when starting a cold storage business is the location. As a general rule of thumb, you must choose a rural or urban location near your customer base, such as markets, malls, and other shopping areas where you need to deliver the products. It minimises your transportation costs and food wastage on the way.
Machinery and insulating panels consume most of the cold storage cost. Motors, chillers, and evaporative condensers make up a cold storage unit. The walls of cold storage rooms are made of polyurethane insulation panels. An ideal cold storage unit requires the following:
|
Humidity Level |
90% |
|
Size |
14 x 10 x 10 ft. |
|
Unit Capacity |
10 MT |
|
Refrigeration Power |
30000 Btu/hour |
|
Initial Temperature |
28-35o C |
|
Outer Temperature |
43o C |
Also Read: How to Start Your Own Trading Business in India
Since cold storage units store food products, you need to maintain optimum hygienic conditions in them. That is why regular cleaning and maintenance of the equipment are extremely important. You must regularly check the machinery's temperatures, humidity levels, containers, trays, and bins that need time and money.
The success of a cold storage business largely depends on your marketing strategy and its effective implementation. At various stages of the business, you must promote efficiently to your target audience, including traders, wholesalers, promoters, retailers, warehouse owners, supermarkets, etc. You may also promote your business to distributors and exporters to increase the demand.
Also Read: How to Start an Online Business from Home in 8 Steps
Since a cold storage investment plan requires significant capital, you must arrange the required funds from a Business Loan rather than exhausting your savings. The cost requirement largely depends on the facility’s size, number of chambers or rooms, types of products to store, etc. A Business Loan can provide the required capital to cover various expenses when planning to start or grow the cold storage business. Compare the different loan offers available in the market and finalise one that best suits your cold storage cost requirements.
A Business Loan helps start or expand a cold storage business in the following ways:
Also Read: How to Start a Food Business From Home in 2024
The Business Loan application procedure involves the following immediate steps:
Due to the high demand for cold storage facilities in India, a cold storage business can be an extremely profitable business to start. Since it has great growth potential, you can make the initial cold storage investment using a Business Loan and increase returns with optimum loan usage. Apply for a Business Loan of up to ₹ 40 Lakh at Hero FinCorp and get the required funding at competitive interest rates.
Also Read: How to Start Your Own Clothing Brand in 7 Steps
1. How profitable is a cold storage business?
Cold storage is highly profitable due to high demand and great growth potential.
2. Is cold storage in demand?
Since India delivers lots of fresh produce every season, they need cold storage facilities to prolong shelf life and stay fresh for long.
3. How much land is required for cold storage?
You will need around one acre of land for a cold storage unit of 5000 MT capacity.
4. How can a business loan benefit my cold storage business?
A Business Loan can benefit your cold storage business by providing the required funds at the right time without any branch visits or physical documentation.
5. How much funding can I apply for to start my cold storage business?
You can apply for a Business Loan of up to ₹ 40 Lakh to start and expand your cold storage business.
Disclaimer: The information in this content is for informational purposes only. Readers should verify independently, consult experts, and research before making decisions. Details about loans, terms, and rates may change; check with Hero FinCorp for the latest information. Individual circumstances may vary, and decisions should be based on personal considerations. The creators are not liable for consequences from using the information.
The act of paying out money for any kind of transaction is known as disbursement. From a lending perspective this usual implies the transfer of the loan amount to the borrower. It may cover paying to operate a business, dividend payments, cash outflow etc. So if disbursements are more than revenues, then cash flow of an entity is negative, and may indicate possible insolvency.
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