COLD STORAGE

1.0 INTRODUCTION Cold storages are meant to preserve the perishable commodities of food items for a longer period with retention of the original colour, flavour and taste. However, each commodity or item has certain life and they cannot be stored even in a cold storage for indefinite period. Storage beyond certain period may not be economical as well since payment of rent of cold storage increases the cost of the item. Hence, cold storages are used for high value items or when prices crash down due to bumper crop or for such items which are grown during the season but there is a demand round the year or for products like meat, fish or milk products which are quickly perishable. 2.0 PRODUCT Cold storages are being used for preservation of many food products since long. Their location has to be strategic and they should have easy access. Cold storages have demand all over the country. This note primarily looks into the prospects in Assam. Assam grows many varieties of fruits and vegetables. Consumption of meat, fish, chicken etc. is also on the higher side. Hence, a cold storage unit seems to have good scope. 3.0 MARKET POTENTIAL 3.1 Demand and Supply Location is a very critical aspect for the success of cold storage. It should be in close proximity of growing area as well as market and at the same time should be easily accessible for heavy vehicles round the year. Uninterrupted power supply is yet another pre-requisite. 3.2 Marketing Strategy

Many fruits and vegetables like pineapples, apples, plums, oranges, potatoes, brinjals, cauliflowers etc. are grown in Assam. Likewise, consumption of meat, chicken, fish etc. is also

65

5.00 lacs including erection and commissioning charges. but it is highly toxic in nature if mixed with oil containing high carbon percentage.5 Raw Materials Since this is not a manufacturing activity. handling and maintenance has to be very careful. Compressors suitable for using ammonia have to be selected as ammonia is cheap.4 Utilities Power requirement shall be 60 HP whereas water requirement shall be 700-750 ltrs.00 lacs. Diesel for generator set shall also be required. On outside walls. 5. there is a need to divide total storage space in different temperature zones depending upon local needs. 5. Different items are stored during different times requiring different temperatures.mtrs. 5.3.per sq. one coating of foam with vapour proof material is advisable. it is considered to be Rs. overhead perforated water pipes with tanks. there will not be any need of raw materials.per sq. They undertake supply.mtr. induction motor. shall be required which would cost around Rs. utility room and guard room is sufficient.substantial. Construction cost of cold storage is taken at Rs.7. Hence. a plot of land of around 400 sq. guard room and utility room. 66 . electric pump. erection as well as complete electrification of the plant.25 lacs.1 Land and Building For storage capacity of 100 tonnes. Temperature and humidity is maintained according to the items stored. Rooms with different temperature requirements must be properly insulated and protected from moisture.would take care of other assets like furniture and fixtures.500/. Total cost of 100 tonnes capacity would be around Rs.mtr.0 CAPITAL INPUTS 5. the total cost of construction works out to Rs. Hence. for office. Use of skewed door arrangements.3 Miscellaneous Assets A provision of Rs. Hence.mtrs. Thus. piping. per day. the size of the cold storage has to be around 150 sq.1. Hence.2 Plant and Machinery There are turnkey suppliers of cold storage plants. The main requirements are reciprocating compressors suitable for ammonia. there is a good scope for a cold storage unit.12. proper insulation and required circulation of cool air inside the storage area would make operations economical and improve profitability. due to special insulation and coating and other needs whereas that of office.000/. 4. ducting and insulation and standby generator etc.0 MANUFACTURING PROCESS A proper market analysis would throw light on storage needs and accordingly tentative plan for the whole year has to be drawn. blowers. A possibility of storing some milk products may also be explored. Ammonia gas cylinders shall also be required.000/.2. easily available and is of high latent heat of evaporation.mtrs.25. whereas non-storage area of 100 sq. 5.

) 1. 67 . They are assumed to be Rs.2 Machinery Cost (Rs.000 8.250 1.3 Miscellaneous Assets Total value of such assets will be Rs.0 TENTATIVE IMPLEMENTATION SCHEDULE Activity Application and sanction of loan Site selection and commencement of civil work Completion of civil work and placement of orders for machinery Erection.000 14.) 5. trial run expenses.Mtrs) 400 200 Total 8.1 Land and Building Particulars Land Building Area (Sq. 8.500 2. 8. 000/.25.00 lacs is made as explained earlier.75. administrative.5 Working Capital Requirements Banks would not finance pre-sales facilities as there is no production.6. interest during implementation period. etc. But there will be certain recurring expenses for which margin amount of Rs. market survey. 8. 000/-.0 MANPOWER REQUIREMENTS Particulars Technicians Godown Keepers Helpers Security Guards Nos.as spelt out before.) 2. Post-sales facilities are possible if there is a long-term firm contract with some reputed company or government agency.000 A provision of Rs. 2 2 2 2 Monthly Salary (Rs. installation and trial runs Period (in months) 2 1 4 1 8.500 7. 50.25.000 1.0 DETAILS OF THE PROPOSED PROJECT 8. establishment.00.000 2.4 Preliminary & Pre-operative Expenses There will be many pre-production expenses like registration.25. 12.000 7.000/is considered. travelling.500 3.000 4.500 Total Total Monthly Salary (Rs.

50 23. 9.75 Financial assistance in the form of grant is available from the Ministry of Food Processing Industries.23 : 1 31% Amount 8. volume or size of items to be stored and so on.40 lacs is calculated @ 12% per annum assuming repayment in 5 years including a moratorium period of 1 year.3 Utilities The annual cost at 100% utilisation will be Rs.00.75 2. towards expenditure on technical civil works and plant and machinery for eligible projects subject to certain terms and conditions.0 PROFITABILITY CALCULATIONS 9.75 2.5 Depreciation It is calculated on WDV basis @ 10% on building and 15% on machinery. 9.25 0. 16. Govt.35 16. 9.25 12.00 lacs.00 0.4 Interest Interest on term loan of Rs. 9. of India. 1750/.per ton is assumed and accordingly annual rent works out to Rs. 68 . 21. in lacs) Item Land and Building Machinery Miscellaneous Assets P&P Expenses Contingencies @ 10% on Land and Building & Plant & Machinery Working Capital Margin Total Means of Finance Promoters' Contribution Term Loan from Bank/FI Total Debt Equity Ratio Promoters' Contribution 7. an average rent of Rs. Actual utilisation is expected to be 60% and 75% during first 2 years respectively.1 Production Capacity & Build-up Cold storage would work for all the year and hence its capacity would be to store 1200 tonnes during the year.40 23.6 Cost of the Project & Means of Financing (Rs.8. 6.2 Sales Revenue at 100% Rent of cold storage would vary according to the temperature to be maintained. Hence. and third year onwards it is restricted to 80%. 9. duration of storage.000/-.00 0. temperature differences according to season.

96 1.47 2.50 1.75 60% 12.45 0.87 4. in lacs) Amount 15.75 (Rs.05 0.10.83 3.41 3.96 5.10 0.80 3. in lacs) No.00 3.04 -4. A Particulars Installed Capacity Capacity Utilisation Sales Realisation B Cost of Production Utilities Salaries Stores and Spares Repairs & Maintenance Selling & Administrative Expenses Total C Profit before Interest & Depreciation Interest on Term Loan Depreciation Profit before Tax Income-tax @ 20% Profit after Tax Cash Accruals Repayment of Term Loan 3.24 0.42 0.60 1st Year 2nd Year 3rd Year -------.1200 Tonnes ------75% 15.48 6.54 0.07 7.33 5.84 1.75 80% 16.82 1.50 2.54 4.80 11.35 0.[B] Fixed Cost Break-Even Point [D] ÷ [C] 3.95 9.40 0.36 6.24 1.75 4.0 BREAK-EVEN ANALYSIS No [A] [B] Particulars Sales Variable Costs Utilities (85%) Salaries (65%) Stores & Spares Selling Expenses (50%) [C] [D] [E] Contribution [A] .01 1.25 5.40 1.80 2.30 0.74 0.94 0.96 7.71 48% 69 .68 1.16 4.45 0.80 4.66 8.80 2.60 1.0 PROJECTED PROFITABILITY (Rs.80 8.36 0.

83 6. 3.52 ÷ 4. Surya Kiran.79 3.37 3.84 1.18 25. 19. Ltd. 2. Roop Nagar.04 0.41 5. 25930681/85 Frick India Ltd.41 Degree of Total Leverage = FL/OL = 1. New Delhi-110001.57 7.80 -1.31 3.1.47 6.88 1. Ramakrishna Samadhi Road.41 = 0.50 22. New Delhi. Kirti Nagar Industrial Area.44 8.80 5.02 3. 7/17.01 6.80 3.34 1.75 lacs.44 0.04 1.91 ----------------------------. KG Marg.75 3.50 18% 3.36 Operating Leverage = Contribution/EBT = 9.97 47.12 2.41 1. Some 1. in lacs) 4th Yr 6.88 3.87 0.23 4.24 2nd Yr 5.12.42 3.23 1.11 (Rs.01 4. in lacs) 16% 3.87 8.38 3.74 3.46 3.04 8.47 4.80 ÷ 4.36 ÷ 2.23 8. 23.700054 Freezking Industries Pvt. of the machinery suppliers are Sundersingh and Sons.51 3. Works. 4.48 4. 32.33 1.83 2. 1/6.83 3. 809.55 3. New Delhi-110015.10 4.60 Cost of the project is Rs.04 5.0 [A] LEVERAGES Financial Leverage = EBIT/EBT = 5.05 = 1.23 2.86 ----------------------------- [C] Internal Rate of Return (IRR) (Rs.56 [B] Debt Service Coverage Ratio (DSCR) Particulars Cash Accruals Interest on TL Total [A] Interest on TL Repayment of TL Total [B] DSCR [A] ÷ [B] Average DSCR 1st Yr 4.110006 Punjab Engg. 23322381/384/391 70 .57 3rd Yr 5.59 1.84 20% 3.05 = 2. Tel No.57 4.82 23. The IRR is around 18%.67 5th Yr 8.84 1.10 5.37 Year 1 2 3 4 5 6 7 Cash Accruals 4. Tel No.83 1.54 3.10 4. Kolkata.10 5.27 0.

Sign up to vote on this title
UsefulNot useful