How to Start a Cold Storage Business
Do you want to be part of the food business but don't know which way to go? Why not start your own cold storage business and freeze your way to a profitable business.
Read on and we'll tell you how and what to do in order to cash in on this venture.
Starting Your Own Cold Storage Business
The cold storage business has been around since the 1800s, but during that time the only industry using it were the breweries and they mainly rely on the unsanitary practice of ice-harvesting. By the 1900s, the idea of cold storage has seeped into the meat packing business, until finally in the mid 20th century; these refrigeration facilities have been installed on trucks which were used to transport perishable foods to long distances.
Nowadays most companies prefer to outsource their cold storage facility to relieve themselves of the trouble of having to construct and maintain their own cold storage facilities. This is where independent refrigerated warehouse owners can come in.
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Steps to Start a Cold Storage Business
Here is a step-by step procedure that you can follow to start your own cold storage business:
- Determine which industry or industries in your area need cold storage and how much of these need s have already been supplied. If you realize that there is still a demand that has not been supplied, and then fill that void. Make a careful study on how to go about your plans and execute them. You can seek advice from other people who are in the same business and get good ideas.
- Once you determine that you can make it, you can test run by starting small. For example you can purchase a freezer van to be used as bait storage and cater to commercial fishermen and other small-scale companies. This test does not involve a very high financial threat. But take into consideration a slightly higher initial operational expense. This can be expected for all start-up businesses, because the operations are not that efficient yet.
- Your test run should give you an idea if you want to go on full scale or not with the cold storage business.
- Should you decide to continue, you can now try to secure a means to fund or finance your venture. You can choose to stick to your initial market base or expand to cover more.
- A crucial part of the business is marketing. You need to recognize your base market as well as your competitors. So who is your market? The first could be the fishermen who were your sole market during your testing phase. You can expand your market by selling what your customers are selling. You can not only store merchandise but also package them and then sell them depending on what the demand is. This way not all your eggs are stored in one basket and you remain in a competitive edge.
Here is a Video of Modern Cold Storage
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Jestin James
Startup Biz Hub - Senior Advisor (Staff)
Raghunath Natarajan
Startup Biz Hub - Advisor (Staff)
Raghunath Natarajan
Startup Biz Hub - Advisor (Staff)
Raghunath Natarajan
Startup Biz Hub - Advisor (Staff)
- You need to decide your budget, startup cost for a cold storage can be in a range of 5,000,000 INR to 20 crores. You have to figure out it. This varies with the size of the plant and machines needed for it. Construction area will vary with the size.
- You can see around and decide what your area is good at producing because you should procure that and sell to the Indian market when it is needed more to get the max profit.
- If you have the business plan and collateral then all the nationalised banks should be able to help you. But you have to walk around to find a interested manager from various banks. Banks will get the subsidy money directly from the government.
Raghunath Natarajan
Startup Biz Hub - Advisor (Staff)
Raghunath Natarajan
Startup Biz Hub - Advisor (Staff)
Raghunath Natarajan
Startup Biz Hub - Advisor (Staff)
Raghunath Natarajan
Startup Biz Hub - Advisor (Staff)
Raghunath Natarajan
Startup Biz Hub - Advisor (Staff)
Raghunath Natarajan
Startup Biz Hub - Advisor (Staff)
Raghunath Natarajan
Startup Biz Hub - Advisor (Staff)
Raghunath Natarajan
Startup Biz Hub - Advisor (Staff)
Raghunath Natarajan
Startup Biz Hub - Advisor (Staff)
Raghunath Natarajan
Startup Biz Hub - Advisor (Staff)
@Alok Sharma, read my reply to @ajay, you need a plant of 5000MT for your requirement. You need 6-7.5 acre land for this cold storage. Sorry, i have no engineer to refer from your area. Consult some local cold storage owner to find someone locally.
Raghunath Natarajan
Startup Biz Hub - Advisor (Staff)
Estimated project cost for 1000mt cold storage:
1cr to 1.5 cr,it will vary depending on the land cost.
land required:
1000mt=0.3 to 0.5 acres
3000mt=1 acre
5000mt=2acre
1. consultants for project feasibility reports
2. manufacturers who can supply the necessary cold store machinery and insulation
3. consultants who can oversee the construction of the project
the facility is to be set up in utarakhand near nainital and budget is about 1.0 crore. brgds, umesh rana
@umesh rana, sorry Umesh we don't have any vendors for machineries nor we have any cold storage consultant from your state to help you. You can look for local consultants using google, facebook, orkut. You can also consult local cold storages for finding some consultants.
Raghunath Natarajan
Startup Biz Hub - Advisor (Staff)
Raghunath Natarajan
Startup Biz Hub - Advisor (Staff)
@Anita, you need 10-15 crores rupees for a 5000MT cold storage. Startup cost will highly depend on how much automization you do for your cold storage. You need at least 3-4 acres of land. For financing you need to work on a business plan.
Raghunath Natarajan
Startup Biz Hub - Advisor (Staff)
1) From whom can I study the market requirement for cold storage ?
2) Can I merge medical and vegetables in same cold storage ?
I am bit not sure where should I start the research work from
My contact details are email diktesh@gmail.com.
@diktesh, the best way to start your research is by visiting near by cold storages, meet the owners or managers. Ask them as many questions you can. In India people don't mind answering the questions.
Raghunath Natarajan
Startup Biz Hub - Advisor (Staff)
@Amit Patel, thanks Amit. Yes, you can store lemon as well. Sorry to say that I don't have a cold storage consultant yet to refer. I am looking for one knowlagious person, I will inform you all once i get someone.
Raghunath Natarajan
Startup Biz Hub - Advisor (Staff)
I wouldn't want to get into the same thing as them (they produce jams, syrups, Crushes and toppings, etc) but into something different so that they would not feel threatened that I am their new competitor at the same time, I could realize my food processing business dreams. Hence, when I came across an article on cold storage, I was deeply interested. I understand that to start the business, I would need min. 50 Lakhs. As far as my investment is concerned, I have a covered built-up area of about 10,000 Sft in the heart of the city (Bangalore) very close to the Railway station which is my own family's, and there is also a chance to hiring a further 4000 sft approx. next door at a reasonable rent. Further, I have about 60 KW of Sanctioned power and apart from the above, I can invest a further 35-40 lakhs.
Please let me know that would the above infrastructure and finance suffice to start off this project..?? If I could get hold of a decent consultant to draft me a factual business plan, maybe I can generate a further 15-20 lakhs either in the form of loans or invest from friends and relatives. Please send me your most valuable advice in this regard. Thank you.
@Shabbir, your money is enough to start a small cold storage. I would never use the place that you have in the center of the city for this reason. Rather you can use the same place for renting to someone else for good return and find a place little away from the city to start a cold storage, this will reduce your investment. You might be thinking, wait a minute i have a place why not use it but you have to think like a businessman who always look for maximum return. Find a local consultant to help you in drafting a business plan and for getting the subsidy.
Raghunath Natarajan
Startup Biz Hub - Advisor (Staff)
@Shabbir, sorry to say that i have no one to represent from Bangalore area. You can get some information about the local cold storage consultants from the existing cold storages or use Google to find some. I will prefer to ask some local owners to get some contacts.
Raghunath Natarajan
Startup Biz Hub - Advisor (Staff)