Dr Prashant Mishra

Cold Chain and Snowman Logistic ( My observation no

recommendation)
(source -Google search )
First we should understand what is cold chain –
Cold chains are a kind of supply chain that specializes in the storage, transport,
and preservation of cargo that needs to be maintained at a specific
temperature or within an acceptable temperature range.
What is Transported Through a Cold Chain
Cold chains evolved due to a growing need for temperature-controlled logistics
that could safely transport large quantities of food over great distances.

Over time, however, cold chains have become an essential part of modern
supply chain solutions to transport more sensitive or vital cargo over great
distances through diverse climatic conditions.

Cold chains are vital in the storage and transport of the following products:

Food & Beverages

• High-end foodstuffs
• Fruits & vegetables
• Meat & seafood
• Poultry & dairy
• Processed & ready-to-eat food
Medical Goods
• Vaccines
• Pharmaceuticals & healthcare products
• Biologics (tissue samples, live cultures, etc., meant for medical
research)
Temperature-sensitive Chemicals
• Paint
• Volatile chemicals
Other Temperature-sensitive Items
• Plants & flowers
• Synthetic products
• High-tech electronic/electrical components
• Photographic film
While an important part of cold chain logistics management is maintaining low
temperatures to preserve perishable goods, not all cold chain cargo needs to
be transported at sub-zero temperatures. In winter, for example, some fruits &
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vegetables need to be kept warm to preserve their texture or to ensure they

last longer. Different cold chain cargo needs different temperature and
ambient conditions to be maintained, which is why cold chain logistics is also
known as temperature-controlled transport or cool chain logistics.
Temperature Standards for Cold Chain Logistics
Temperature-controlled transport is generally categorized into the following
temperature ranges:

• (-28 °C to -30 °C) Deep freeze — seafood, meat exports.

• (-16 °C to -20 °C) Frozen — meat, certain types of produce.
• (2 °C to 4 °C) Chill — fruit & vegetables, fresh meat, certain dairy products.
• (2 °C to 8 °C) Pharma — medicines, vaccines.
• (12 °C to 14 °C) Cool-chain — fresh produce, processed food, over-the-
counter drugs.

What Are the Parts of a Cold Chain Logistics Operation

The cold chain has four main components, each of which must work flawlessly
to ensure the safe transport and storage of cold chain products:

1. Temperature-controlled storage — specialized refrigerated facilities where

cold chain cargo is stored until it’s shipped out to a distribution center or
its destination.
2. Temperature-controlled transport — customized insulated cold containers
that help transport goods via airways, waterways, roadways, or railways.
3. Trained and diligent personnel — who are familiar with the complexities of
handling sensitive cold chain cargo.
4. Efficient operational and management procedures — to minimize risk
during day-to-day operations as well as contain it in case of unexpected
incidents.
Managing cold chain warehousing and distribution is usually outsourced to
third-party logistics operators (3PLs).

Cold Chain Technologies

Cold chain transportation relies on several methods to keep goods at proper
temperatures. How long the transport is, the size of the packaged shipment
and seasonality are all factors that affect which method is used.

• Gel packs – Often used for medical and pharmaceutical shipments.

• Dry ice – Can keep goods frozen for extended time periods. Used for
dangerous goods, pharmaceuticals and food. Sublimates rather than
melts when coming in contact with air.
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• Liquid nitrogen – Used primarily to transport biological cargo (organs,

tissues).Extremely cold, keeps items frozen for longer periods.
• Eutectic plates – Also called cold plates, similar to gel packs but can be
reused.
• Reefers – A temperature-controlled, insulated van, semi, truck or
standard ISO container. Allows for temperature-controlled air
circulation.

Quilts – Insulated quilts can be wrapped around or placed over freight and are
used to keep temperatures constant, so frozen items will remain frozen for a
longer time.

Indian Cold Chain Market-

India cold chain storage and logistics market is anticipated to register growth
of more than 16% during 2020 - 2024, owing to growing processed food and
healthcare industry.. Though the cold chain storage and logistics market in
India is witnessing healthy growth, high operative cost and lack of
standardization in the industry are likely to hinder the market growth ..

In terms of type, India cold chain storage and logistics market has been
categorized into temperature-controlled storage and temperature-controlled
transportation. Of these categories, temperature-controlled storage segment is
accounted for the majority market share, backed by growing government
support for cold storage infrastructure and increasing demand for processed
food.

Cold chain storage and logistics market in India is highly unorganized as

around 70%-80% market is characterized by unorganized players. However,
it is slowly moving towards organized business structure due to growing
health awareness and technological advancements. Some of the leading
players in India cold chain storage and logistics market are Gati Kausar,
Snowman Logistics, Kool-ex, DHL, Cold Star Logistics, M J Logistics, Gubba
Cold Storage, Kuehne + Nagel among others.
According to BDB india Private limited Indian cold chain is still at a nascent
stage. Although, there is large production of perishables but still the cold chain
potential remains untapped due to multiple reasons like high share of single
commodity cold storage( Potato) high initial investment (for refrigerator units
and land); lack of Basic Enabling Infrastructure (roads, water supply, power
supply, drainage, etc.); lack of awareness for handling perishable produce and
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lapse of service either by the storage provider or the transporter leading to

poor quality produce.
India is currently the world’s largest producer of milk, second largest producer
of fruits and vegetables and has a good amount of production of seafood, meat,
and poultry products.

Drivers of growth of Cold Chain sector in India ( Source BDB india Pvt Ltd)

Changing Consumer behavior – The advent of modern trade supermarkets has

changed consumer behaviors and has created a whole new organized food retail
demand chain. The availability of processed, frozen and fresh categories of
vegetables, dairy, fruits and meats requires use of temperature controlled
supply chain from origin to the final customer.

Farming behavior – Farmers are shifting towards cultivation of fruits and

vegetables due to better yields and remunerative value, as compared to the risks
and investments in grains. This, in turn, is driving the requirement of cold stores
closer to farms.
Modern Healthcare – Most of the latest innovations in cutting edge medicine,
vaccines and bio-pharmaceuticals as well as clinical trial materials are all heat
and humidity sensitive and requires to be stored at temperatures ranging from
negative 45 to positive 25 degrees Celsius. India’s vaccine, bio-pharmaceutical
and clinical trials market is estimated to grow significantly, there will be a strong
demand for efficient cold chain facilities in the coming years.
Traditionally, India’s cold storage was developed majorly for bulk products like
onions and potatoes, with major facilities concentrated in Uttar Pradesh, West
Bengal, Punjab, and Gujarat.

Agriculture sector wastage

Almost 40% of produce goes to waste due to improper storage and

transportation facilities in our country . UK at present stores 70% of its
agricultural produce in Cold Chains while India is at only 4%. Implementation of
a cold chain management system can reduce food product wastage by almost
75%. Thus, increasing the capacity to export produce and increasing the overall
GDP of India. The advantages of this are manifold, an extended lifecycle for
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perishable products, reduced wasted of food products and a larger market

reach which then leads to a greater customer base.

One of the challenges faced by the farmers when it comes to the

implementation of Cold Chain are the lack of infrastructure allotted to the cold
chain sector. Without the appropriate technical knowledge, farmers are unable
to store produce in a manner which keeps it fresh long enough to be exported.
Another glaring issue is that the farmers depend heavily on middlemen. This
inefficiency of the supply chain makes it near to impossible for farmers to
access those facilities which can help reduce wastage..

. Proper storage facilities, along with appropriate temperature controlled

transportation will help to reduce the problems of wastage which occurs most
at the post-harvest stage!

Snowman logistic

Cmp 38 rs MCAP -636 cr BV 25.1

• Established in 1993,
Gateway acquired majority shareholding of Snowman in 2006
• Promoted by Gateway Distriparks Limited, one of India’s largest logistic
solutions provider
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Established Market Position: SLL continues to be a leading integrated

temperature-controlled logistics service provider operating on a pan-India
basis. Its operations majorly include warehousing and transportation services.
It also provides retail distribution services through a consignment agency
model. Also, the company has established relationships with some marquee
corporate clients.
Clients - Company’s clientele comprises prominent brands from diverse
industries like pharmaceuticals, meat and poultry, seafood, fruits & vegetables,
ice cream, confectionery, dairy products, quick service restaurants, ready-to-
eat, processed foods, and industrial products, among others
Infrastructure
(A)Warehousing • 1,13208 pallet capacity in 31 warehouses( Latest data
source- interview with Indian Transport & Logistics News,Mr Sunil Nair on 26
sept
• Multi-facility use of environment–friendly refrigerants
• Chambers designed to accommodate products in the temperature range of
+25 to –25°C.
• 100% power backup with multi–generator
• Blast freezer with a refrigerant temperature of –40°C
(B)Distribution

Dedicated fleet of refrigerated vehicles( 289 total in march 2020 )now 300 (
source- interview with Indian Transport & Logistics News, Sunil Nair on 26
sept)
• Multi temperature vehicles
• Point-to- point service
• Part cargo consolidation & movement
• Chilled, frozen, and ambient movement
• Real time location update
• Plug-in support available at all facilities
• Last mile distribution facilitation, multi- mode for air shipment
• Customized Milk Run
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Share Holding Pattern

• Promotors – 40.25%
• Adani logistic 26%
• MITSUBISHI CORPORATION 0.76%
In December 2019, ALL, a wholly owned subsidiary of Adani Ports and SEZ
Limited signed a share purchase agreement with GDL to purchase GDL’s entire
40.25% stake in SLL in an all cash deal of INR2,959 million, which has now been
cancelled.
Financial Performance
(I am not good in assessing financial performance )
FY 20 was not good for company ( below expectation) because first half of
the year was dominated by a series of cyclones which impacted the sea food
business at various warehouses of the Company.
But overall financial performance of the company was not good in last 10
years , while top line in 10 years grown to almost 8 times but bottom line is
inconsistent and not grown and company was in loss in fy 17,fy 18 fy 20
Fy 20 segmental spilt .
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Growth plan of company

- Company is focusing in e-commerce space and new customer is one of
the largest player in this space ( source AR)
- Expansion plan for new facilities at multiple location ( Source AR)
- Increasing focus on Pharma logistic
interview with Indian Transport & Logistics News, Sunil Nair on 26 sept)
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So by looking at past performance Snowman logistic is not a good company to

invest in BUT it should be in watchlist Now because of certain events
1- Anticipated Vaccine against COVID ( Again it will be a temporary growth)
2- Growing pharma market specially biologics market which require very
strict temperature control system.( The failure to maintain drugs at their
prescribed temperature often results in loss of drug efficacy, which
ultimately hampers the pharma supply chain industry. Every year, the
global pharmaceuticals industry suffers a loss of products worth more
than $15 billion due to temperature fluctuations during transit.)
3- Recent Clearance of Some Bills by government
The Essential Commodities (Amendment) Bill 2020 ( Now Act ) with
provisions to remove commodities like cereals, pulses, oilseeds, edible oils,
onion and potatoes from the list of essential commodities ,it will provide
freedom to produce, hold, move, distribute and supply commodities, and
will lead to harnessing of economies of scale and attract private sector or
foreign direct investment into agriculture sector. It also intends to drive up
investment in cold storages and modernisation of food supply chain. . In
India, there is a surplus of most agricultural produces, but due to the
Essential Commodities Act, there is less investments in cold storage,
godowns, processing and exports. Whenever there is a bumper crop, the
farmers fail to get good returns due to fall in prices, and grains and
vegetables rot in fields
Farmers’ Produce Trade and Commerce (Promotion and Facilitation)
bill ( Now Act)which will create an eco-system where a farmer can sell his
produce anywhere in India. Farmers will save on marketing costs. At
present, a farmer can sell his produce only through APMC or a registered
licensee or the state government,This act will attract many private sector
and infrastructure development by private players , I think big private
players can develop their own warehouse at local level but for logistic they
will outsource it to logistic companies . .
My opinion – Indian cold chain logistic is at Inflection point but for
Snowman logistic I will wait and watch to see further performance (
Because of Poor Past show ) and depending on its performance I will
make my strategy .

Dr Prashant Mishra ( MBBS, MS, MCh)

Dr Prashant Mishra