Cold Storage Business Plan
Cold Storage Business Plan is a detailed business plan that incorporate all information related to cold storage business and is created before starting the business.
Updated: June 1, 2024
Cold Storage Business Plan :
Cold Storage Business Plan is a detailed business plan that incorporate all information related to cold storage business and is created before starting the business.
Information like products' details and services with the employee's details like your full name and address, etc. are included in a Cold Storage Business Plan. Vegetables and fruits are preserved from spoiling for a longer period of time with a cold storage facility. Higher returns for a longer tenure can be offered by a cold storage business. However , the initial investment is much higher compared to other small businesses.
Cold storage are of two types depending on the different facilities available. It can be either product-specific cold storage except for potato, and or can be multi-purpose. The returns of multi-purpose cold storage is much higher than the other one and are quite profitable overall.
Necessity of a Cold Storage:
- Cold storage is necessary for extending the marketing period, shelf life of any food item, post-harvesting, avoiding gluten, and reducing transporting bottleneck during the higher production of food items.
- It also help maintaining the product quality.
- Perishable commodity wastage can be reduced by cold storages.
- Remunerative costs can be offered to farmers and it can also make farm products readily available to consumers in fresh condition at affordable and competitive prices.
- The need for cold storage business are increasing globally with increasing demand for packaged and processed foods and changing lifestyle habits.
Types of Cold Storages Machinery:
Industrial cool rooms, combi refrigerators, and modular room refrigerators are the three types of facilities available for cold storage .
Requirement of Cold Storage Business:
- The land which will be used as a cold storage facility must be converted to a non-agricultural land.
- A permission letter from the local authority is required before constructing the facility.
- Cold storage facility are permitted to work for only for 12 hours per day.
- Cold storage facility must have proper drainage with a road connectivity and there should a site elevation.
- The load bearing strength must be checked by soil testing.
- Pressure and vacuum testing of refrigeration system must be done as safety precautions.
- The place must be equipped with alarms, fire extinguishers and exists.
- A water softening plant must be installed incase soft water is not available as it must be used.
- An insurance of the cold storage facility must be there.
Starting a Cold Storage Business:
You need to have a Cold Storage Business plan in hand before starting the business containing all information related to cold storage business. There are some other points that need to be consider as well. These include:
Finalizing the Location:
- The location of cold storage plants is the first thing that you need to decide in this business which should be kept in close proximity of the consumer centres or producing farms.
- The location or area is also decided by the volume of produce that a businessman wants to store.
- The size of the premises depends on the size of the business you are planning to set up. A small-scale business would require a small area, where as the minimum requirement is one acre for a large-scale business setup.
Selection of Equipment:
- The selection of equipment that can function flawlessly throughout the year should be done carefully keeping in mind the fluctuating temperatures across seasons.
- Equipment that is to be used in summers when the weather is immensely hot must be selected cautiously, keeping in mind heavy loads and power cuts.
- Some factors such as age of the equipment, fan, light, and product load besides ceiling, wall, floor, etc. need to be focused on before finalizing which equipment are to be used for cold storage.
- The size of the cold storage unit is dependent on the size of the premises.
- The product load, the levels of efficiency as well as the age of the equipment, insulation material and its thickness, storage capacity and temperature settings are things to consider for appropriate cold storage equipment.
- The right equipment is required to sustain contingencies as the monsoons as well as the summers bring about numerous power outages.
Basic Requirements for an Ideal Cold Storage Plant:
- Storage Space Humidity should be 85 to 90 percent.
- Cold storage room dimensions should be 14 ft. x 10 ft. x 10 ft.
- Storage Materials should be Fruits and Vegetables.
- Initial Temperature should be 28-35 degrees Celsius.
- Storage Unit Capacity should be 10 Metric Tonne (MT).
- Refrigeration Capacity should be 30000 Btu/hour.
- Insulation material should be 60mm Polyurethane Fibre (PUF)
- Assumed outer temperature should be 43 degree Celsius.
- Temperature requirement can be (+-)2-4 degree Celsius.
Cleaning and Maintenance:
- Cleaning and maintenance of cold storage plants is very much important.
- The machinery should be checked regularly for humidity level and temperature.
- The preserved produce also need to be checked regularly.
- Timely servicing or cleaning of trays, containers, and storage bins is a must.
- You must ensure the interior of the cold storage unit is free of unwelcome odor and there are no leakages or spillages.
Promotion of product and target Audience:
- The good marketing strategies and effective implementation of advertising and promotional campaigns can help in the success o a cold storage business.
- An entrepreneur should target all the different market segments such as traders, promoters, marketers, wholesalers, warehouse companies and retail markets, and supermarkets in urban as well as rural areas in the starting and later stage.
- Business owners can discuss with business growers, producers, exporters and distributors, etc. to enhance growth in profit and sales.
Arranging Funds:
- Arranging funds or a cols storage business is one of the most challenging task as the investment is quite high.
- Investing from from the savings is not a good option as you might need them to fulfill urgent requirements or in case of a cash crunch.
- Business owners can take business loans from various financial institutions like banks and NBFCs to meet their requirements.
- The investment is required in land acquisition, construction of cold storage building, licensing, obtaining permissions, arranging necessary utilities like electricity, water, etc.
- A significant sum of the capital is also required in purchasing cooling machinery.
- Various updated machinery are available now that ensures long term sustainability and better performance.
- You might need to consider working capital expenditures and other monthly costs including staff salaries, utility bill payment, and other promotional expenses.
Benefits of Cold Storage:
- Fruits and vegetables can be preserved for a longer duration by using cold storages. So, the wastage of vegetables and fruits can be reduced.
- It can also be used to store medicines or vaccines.
- Consumers can get off-season farm products at affordable rates.
- Remunerative price can be provided to farmers.
- Processed or packaged food can be offered to customers.
- It helps to protect the nutrient value of the products when they are frozen.
- Non-vegetarian products like meat, fish, milk, milk-related products can be stored in freezers set at appropriate temperatures.
- Cold storage is necessary for extending the marketing period, shelf life of any food item, post-harvesting, avoiding gluten, and reducing transporting bottleneck during the higher production of food items.
- It also help maintaining the product quality.
- Perishable commodity wastage can be reduced by cold storages.
- Remunerative costs can be offered to farmers and it can also make farm products readily available to consumers in fresh condition at affordable and competitive prices.
- The need for cold storage business are increasing globally with increasing demand for packaged and processed foods and changing lifestyle habits.
- The land which will be used as a cold storage facility must be converted to a non-agricultural land.
- A permission letter from the local authority is required before constructing the facility.
- Cold storage facility are permitted to work for only for 12 hours per day.
- Cold storage facility must have proper drainage with a road connectivity and there should a site elevation.
- The load bearing strength must be checked by soil testing.
- Pressure and vacuum testing of refrigeration system must be done as safety precautions.
- The place must be equipped with alarms, fire extinguishers and exists.
- A water softening plant must be installed incase soft water is not available as it must be used.
- An insurance of the cold storage facility must be there.
- The location of cold storage plants is the first thing that you need to decide in this business which should be kept in close proximity of the consumer centres or producing farms.
- The location or area is also decided by the volume of produce that a businessman wants to store.
- The size of the premises depends on the size of the business you are planning to set up. A small-scale business would require a small area, where as the minimum requirement is one acre for a large-scale business setup.
- The selection of equipment that can function flawlessly throughout the year should be done carefully keeping in mind the fluctuating temperatures across seasons.
- Equipment that is to be used in summers when the weather is immensely hot must be selected cautiously, keeping in mind heavy loads and power cuts.
- Some factors such as age of the equipment, fan, light, and product load besides ceiling, wall, floor, etc. need to be focused on before finalizing which equipment are to be used for cold storage.
- The size of the cold storage unit is dependent on the size of the premises.
- The product load, the levels of efficiency as well as the age of the equipment, insulation material and its thickness, storage capacity and temperature settings are things to consider for appropriate cold storage equipment.
- The right equipment is required to sustain contingencies as the monsoons as well as the summers bring about numerous power outages.
- Storage Space Humidity should be 85 to 90 percent.
- Cold storage room dimensions should be 14 ft. x 10 ft. x 10 ft.
- Storage Materials should be Fruits and Vegetables.
- Initial Temperature should be 28-35 degrees Celsius.
- Storage Unit Capacity should be 10 Metric Tonne (MT).
- Refrigeration Capacity should be 30000 Btu/hour.
- Insulation material should be 60mm Polyurethane Fibre (PUF)
- Assumed outer temperature should be 43 degree Celsius.
- Temperature requirement can be (+-)2-4 degree Celsius.
- Cleaning and maintenance of cold storage plants is very much important.
- The machinery should be checked regularly for humidity level and temperature.
- The preserved produce also need to be checked regularly.
- Timely servicing or cleaning of trays, containers, and storage bins is a must.
- You must ensure the interior of the cold storage unit is free of unwelcome odor and there are no leakages or spillages.
- The good marketing strategies and effective implementation of advertising and promotional campaigns can help in the success o a cold storage business.
- An entrepreneur should target all the different market segments such as traders, promoters, marketers, wholesalers, warehouse companies and retail markets, and supermarkets in urban as well as rural areas in the starting and later stage.
- Business owners can discuss with business growers, producers, exporters and distributors, etc. to enhance growth in profit and sales.
- Arranging funds or a cols storage business is one of the most challenging task as the investment is quite high.
- Investing from from the savings is not a good option as you might need them to fulfill urgent requirements or in case of a cash crunch.
- Business owners can take business loans from various financial institutions like banks and NBFCs to meet their requirements.
- The investment is required in land acquisition, construction of cold storage building, licensing, obtaining permissions, arranging necessary utilities like electricity, water, etc.
- A significant sum of the capital is also required in purchasing cooling machinery.
- Various updated machinery are available now that ensures long term sustainability and better performance.
- You might need to consider working capital expenditures and other monthly costs including staff salaries, utility bill payment, and other promotional expenses.
- Fruits and vegetables can be preserved for a longer duration by using cold storages. So, the wastage of vegetables and fruits can be reduced.
- It can also be used to store medicines or vaccines.
- Consumers can get off-season farm products at affordable rates.
- Remunerative price can be provided to farmers.
- Processed or packaged food can be offered to customers.
- It helps to protect the nutrient value of the products when they are frozen.
- Non-vegetarian products like meat, fish, milk, milk-related products can be stored in freezers set at appropriate temperatures.