Cold Storage Business Plan

The cold storage business in our country is still in its infancy and has the potential to grow immensely. Cold storage employs various precision techniques and instruments to store bulk products, mainly fruits and vegetables, at low temperature and humidity levels. 

While India is the second largest producer of fruits and vegetables, cold storage is necessary to prevent produce from perishing before reaching the market. As per ICAR-Central Institute of Post Harvest Engineering & Technology, up to 16% of farmers’ output is wasted. 

To prevent such loss and improve post-production market reach, cold chain infrastructure is key. If you are planning to start this business, you must have a clearly drawn-out cold storage business plan. 

Read on to know more about how to prepare a business plan for cold storage and what components need to be included in it.

One of the major issues that Indian farmers face is the lack of storage facilities. This is an important component between the production and marketing stages. 

It is a huge challenge for the Indian food industry as India is one of the major producers of many fruits and vegetables. However, without proper cold storage facilities, a sizeable share of products goes to waste.

Hence, a cold storage business is needed to increase the shelf life of the products and empower small and marginal farmers. Moreover, it is also needed to maintain the quality of other perishable items, like beverages, medicines or vaccines, etc.  

Here is a guide on how to create a solid big or small cold storage business plan and script your success: 

1. Finding a Perfect Location & Purchasing the Land

The first step to implementing your cold storage unit business plan is to scout for the perfect location for setting up a cold storage unit. To maximise profits, you must establish your cold storage unit in close proximity to consumer centres and processing farms. 

Such a location would require you to spend less on transportation costs and help in earning a greater margin. The storage capacity of the unit will also determine the location or area. 

For instance, for cold storage with a capacity of 2500 metric tonnes, you will need to purchase land measuring at least half an acre.

2. Selecting the Equipment

Another step in your cold storage warehouse business plan needs to be the selection of the right machinery and equipment. This includes conveyor inline pallet and space retrievers, automatic stretch wrappers, freezer spacers, lift tables, washing stations and more. 

When choosing equipment for your cold storage unit, keep in mind the following factors:

• Storage capacity

• Temperature ranges

• Loads and power outages

Here are some of the basic requirements to set up a cold storage unit:

3. Getting the Required Funds

One of the most important aspects of your cold storage business plan is acquiring the funds you require. For any business to see the light of day, you need an infusion of capital. 

In case you lack funds to start your cold storage facility or warehouse, you can avail of a business loan. This is offered by many banks and NBFCs and will be easy to get considering the growth and need of such a business. 

4. Hiring of Employees

The success of any business depends on who governs and operates it. This is why hiring a skilled and expert workforce has to be an important component of your cold storage facility business plan.

When hiring for your business, assess your needs and hire a team of the right size based on that. You will be required to hire a technical expert to deal with cold storage technology. In addition, you will also need a manager to oversee accounts and finances. 

5. Getting the Necessary Registrations & Licences

Getting the required registration and licences also needs to be an important part of your cold storage business plan. To set up a cold storage unit, you will need the following:

• A certificate from the Food Safety and Standards Authority of India (FSSAI) by filing Form B from their website

• A land-use permit from the local authorities, i.e., municipal council/corporation

• A business registration certificate from the local authorities

• Permit for waste management disposal and treatment from the State Pollution Control Board

6. Maintenance & Upkeep

Your cold storage unit business plan also needs to make room for an important aspect of running this business, maintenance and upkeep. From cleaning spillages and maintaining hygiene to ensuring all systems are performing efficiently, this aspect is key. 

All machinery needs to be checked and serviced at regular intervals to prevent ice build-up, oil leakage, and proper working of blowers. In addition, checking door seals and keeping mould from forming is important. 

Moreover, to keep the quality of your products intact, make sure the humidity and temperature levels are set right. Take all the precautions to ensure these are maintained, no matter the disruption in power. 

7. Promotion of the Services

Every business in its formative stage needs a push through promotion and marketing to gain new customers. So, a marketing strategy must also be a part of your cold storage business plan.  

To promote your business more effectively, you must include all segments of the market, like:

• Producers

• Traders

• Wholesalers

• Retail markets and Supermarkets

Disclaimer: The interest rates mentioned in the above table are subject to change at the lender’s discretion. For further information, please contact the lender.

If you wish to take a loan to start your cold storage business, here are some basic eligibility requirements you need to fulfil:

• Nationality: You must be an Indian citizen

• Age: Your age must be between 25 and 65 years

• Employment Status: You must be self-employed with a stable income

• Business Ownership: Your business must be a sole proprietorship, partnership, limited liability partnership, or a private limited company 

At the time of applying for a business loan, you need to submit the following documents:

• ID proof: PAN card, Voter’s ID card, passport, or driving licence 

• Residence proof: Passport, lease agreement, Aadhaar card or utility bills 

• Bank statement for the last 6 months

• Income Tax Return

• Balance sheet and P&L statement for the last 2 years

• Cold storage unit business strategy

• Map of the facility’s location

• Copy of licenses, permits and registration certificates

• Proof of partnership agreement/Sole Proprietorship Declaration (if any)

• Certified copy of Memorandum and Articles of Association (if any)

In order to apply for a business loan and get access to funds to start a cold storage unit, follow these steps:

• Step 1: Click on 'Apply Now' on this page

• Step 2: Complete the application form by providing all the required details

• Step 3: Click on the 'Check Your Offer' button

• Step 4: Enter additional details

• Step 5: Compare the lenders and select the preferred one

• Step 6: Enter the desired loan amount, repayment tenure

• Step 7: Submit your application

On completing this process, simply await contact from a representative who will guide you with the next steps.

In conclusion, remember that a cold storage business is a great way to capitalise on the growing demand in the market. As per analysis, this business is all set to witness an upward trajectory with a CAGR of over 10.5% until 2028. 

To leverage this opportunity and get started, work on creating a strong cold storage business plan and organise your finances. 

Reference of all T&C necessarily refers to the terms of the Partners as regards to pre-approved offers and loan processing time amongst other conditions.