Cold Storage Industry in India
Cold Storage space Operations Academic Group23 twentieth Jan 2010 Industry border
Vertical opportunity: The under diagram describes the key actions performed in a cold cycle. Of these, the labels, precooling and cold safe-keeping are typically provided by the same player. These activities are with each other referred to as cool storage businesses, and constitute the вЂvertical scope' of our market analysis. Lateral scope: Chilly chain logistics are used for various products including pharmaceuticals, milk products, farm produce, fish, blossoms etc . Nevertheless , we will be taking a look at cold storage space operations particularly for fruits and vegetables commonly referred since вЂfarm to table'. Business modal: Cool storage workers for fruit and veggies can function because both dealers as well as providers. In their capability as traders, they choose the products straight from the maqui berry farmers, package these people, store them and then sell off them to significant retailers. On the other hand we are constraining our opportunity to chilly storage operations as service providers, where the frosty storage workers are involved by either the producers or (most commonly) customers (mainly) organized retailers to render the labels, pre-cooling and storage companies. Geographic jar: We will be taking a look at this industry at the pan-India level Obstacles to access
Economies of scales: It is just a largely untapped, fragmented & full of unorganized small size players. Not any player offers achieved financial systems of scale and thus a new a new competitor with deep pockets may enter this kind of industry and still be at a major price advantage. Capital Requirement & Technology: The cold cycle logistics is a highly capital-intensive industry (cost of property and refrigeration equipments) using a large-size cold chain has a payback length of as high as five years. Incumbency advantages 3rd party of size: Existing players like Snowman have developed expertise simply by operating in this kind of industry for longer periods on time & work with imported the best online equipment, which will new traders would get difficult to imitate. Access to syndication: Lack of a great organized distribution system, arguments by the trucker's union & bottle necks in cold storage during transit creates a risk to fresh entrants. Another reason for no competitiveness in this industry is the lack of a strong retail entrance. However , India is witnessing a transformation in the retail front which presents a boost to fresh distribution players too. Retaliation to new entrants: Frosty chain players face resistance from farmer's community as this industry promotes hoarding of foods. A farmer would be required to sell his excess create to retailers at reduced price, who consequently might be in an advantageous location to sell the merchandise at a higher price in off-season by leveraging cold storage. Overall large barriers to entry, which will be the case at a later date too while the industry will mostly stay capital intense. Barriers to exit
Exit boundaries: Because the progress opportunity the industry shows one can conveniently sell off his organization to another entrant or a preexisting player to give him financial systems of range or more geographic coverage. Though when there are enough players, due to excessive capital opportunities and particular assets getting out industry would be very difficult. Advantage Specialization: Cool chain assets are capital intensive & are not multi-purpose. Heavy investment in capital & technology will act as a buffer for incumbents to keep this sector. Higher break even time period will likely act as a deterrent for players to shut shop. Mental Barriers: Farmers from far off regions get the services of a single cold safe-keeping in a big region. Closing down might cause lot of inconvenience to these farmers who does be using the rose to save all their excess create from spoilage which in turn will be disadvantageous for the incumbent's brand photo. Interrelated Businesses: Incumbents like Snowman Iced Foods Ltd have an integrated storage, controlling and travel infrastructure for...