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Agriculture Storage And Warehousing With Cold Storage

Agriculture Storage and Warehousing with Cold Storage- India Set to see Rs. 45,000 Crores Investments in Warehousing by 2020 A warehouse describes a facility serving the purpose of storing goods. In ecommerce, warehouses are mainly used to keep items on stock to make sure the short delivery times needed can be fulfilled. Agriculture, which is the backbone of Indian economy contributes to the overall economic growth of the country and determines the standard of life for more than 50% of the Indian population. India holds the second largest agricultural land in the world with approximately 179.9 million hectares under cultivation. The country has emerged as a major player in agriculture in the global scenario. Warehousing refers to the activities involving storage of goods on a large-scale in a systematic and orderly manner and making them available conveniently when needed. In other words, warehousing means holding or preserving goods in huge quantities from the time of their purchase or production till their actual use or sale. The agricultural warehousing and food processing industries contribute significantly to warehousing. Warehousing plays a very vital role in promoting agriculture marketing, rural banking and financing and ensuring Food Security in the county. It enables the markets to ease the pressure during harvest season and to maintain uninterrupted supply of agricultural commodities during off season. Hence, it solves the problems of glut and scarcity, which are the usual problems in agricultural marketing. Though warehousing is an independent economic activity, yet is closely linked with production, consumption and trade. Warehousing is now seen as an integral part of the supply chain where goods are not only stored for safekeeping, but also where other value processes are implemented, thereby minimizing wastage and costs. India has total agri warehousing capacity of around 91 MMT at present to store and conserve such large quantities with state agencies owning 41% of the capacity and the balance distributed among private entrepreneurs, cooperative societies, farmers, etc. Agricultural warehousing accounts for fifteen percent of the warehousing market in India and is estimated to be worth INR 8,500 crore. Indian logistics market is expected to grow at a CAGR of 12.17% by 2020 driven by the growth in the manufacturing, retail, FMCG and e-commerce sectors. In recent times, the Indian warehousing segment has evolved significantly, resulting in a gradual metamorphosis from the traditional concept of go-downs, which gradually moved to becoming modern formats of warehouses. This demand shall be driven by a combination of growing GDP, maturing industry segments, GST implementation, rising external trade and share of organized retail. The warehousing sector has seen good growth in past few years due to various reasons. The ‘Make in India’ campaign ran big throughout the country encouraging enterprises to manufacture their products within India. India’s exports have considerably grown, which means the volume of goods being produced locally has increased. This has also propelled the demand for warehouses. The retail business also showed exponential growth because of relaxed FDI norms. This attracted both private and foreign investment. Agricultural warehousing accounts for fifteen percent of the warehousing market in India and is estimated to be worth Rupees 8,500 crore. It is however perceived to be inadequate and unorganized. Warehousing in India has been linked to food security and agricultural growth. Warehousing is now seen as an integral part of the supply chain where goods are not only stored for safekeeping, but also where other value processes are implemented, thereby minimizing wastage and costs. The warehousing market in India is anticipated to grow at a CAGR of ~% from USD ~ billion in FY’2014 to USD ~ billion in FY’2019. This significant growth in warehousing revenue receipts would be due to the major growth in the organized retail industry, commodity markets, and growth in industrial manufacturing and development. Cold Storage India is the largest producer of fruits and second largest producer of vegetables in the world. Cold food storage is the most basic food preservation method. The cold storage facilities now available are mostly for a single commodity like potato, orange, apple, grapes, pomegranates, flowers, etc. which results in poor capacity utilization. A cold storage is a temperature-controlled supply chain network, with storage and distribution activities carried out in a manner such that the temperature of a product is maintained in a specified range, needed to keep it fresh and edible for a much longer period than in normal ambient conditions. This system facilitates long distance transport of various products as well as makes seasonal products available over the entire year. Requirement of cold storage in the next five years may be in excess of 12 lakh tonnes. India has seen a dramatic increase in the production of perishable products including fruits, vegetables, meat, poultry and dairy. It ranks first in global milk production with an annual rate of 138 million tons – and hosts more than 50% of milk product processing. With vegetable production of 280.4 million tons, it ranks second globally and only hosts 6% of total processing. There has also been steady growth in the fish and meat industries due to export potential. Current cold storage capacity in India totals 31.8 million tons. Growth has averaged 3 to 4% over the past 10 years, and 10.5 mil- lion tons of space was created in the last seven years. Ownership is mainly in the private sector, with the public and cooperative sectors only comprising 10% of capacity. The sector’s value is estimated at $6.5 billion (USD) and market growth has averaged between 15 to 20%. This pace is expected to be consistent over the next five years. Currently, India has 6,300 cold storage facilities unevenly spread across the country, with an installed capacity of 30.11 million metric ton. These are mostly used for storing potatoes. However, the market is gradually getting organized and focus towards multi-purpose cold storages is rising. More than 50% of the cold storage facilities in India are currently concentrated in Uttar Pradesh and West Bengal. Indian cold storage market is expected to grow at a CAGR of 16.09% by 2020 driven by the growth in the organized retail, Indian fast food market, food processing industry and e-commerce sectors. Cold storage market in India is expected to be worth US$ 8.57 billion by 2020. The cold storage market in India is highly fragmented with more than 3500 players in the unorganized sector and around 30 players in the organized sector. The global cold storage market size was valued at USD 73.96 billion in 2016. The market has benefitted significantly from the stringent government regulations governing the production and supply of temperature-sensitive products. The industry is poised for unprecedented growth over the forecast period owing to growing organized retail sectors in the emerging economies. The retail sector in emerging economies, such as India and China are increasingly getting organized. This trend among others is expected to augment the cold storage market demand over the forecast period. Government policies to de-regulate the entry of foreign player has increased the Foreign Direct Investment (FDI) in the organized retail sector. Consumers are increasingly purchasing frozen foods from the organized retail stores. With the increased demand for the chilled and frozen foods and growth of the organized retail sector the demand for the cold storage market is expected to grow over the projected period. The organized retail supports different outlet formats depending on the proximity from residential and consumption cluster and spending power. The offline mode of the organized retailing is categorized into convenience stores, supermarket, and hypermarket based on the product range and surface coverage. The market demand is expected to increase over the forecast period as refrigerated warehouse continue to get automated. The warehouse automation comprises cloud technology, robots, conveyor belts, truck loading automation, and energy management. 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