Free Press Journal

Cold chain sector is growing at a CAGR of 15 per cent: Blue Star’s Thiagarajan

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Mumbai: There is a constant growth that is taking place in the cold chain sector. Presently, the sector is growing at a CAGR of 15 per cent, said B Thiagarajan, joint managing director of Blue Star. Even as the cold chain sector keeps growing every year, the demand for the cold chain system comes primarily from dairy, ice cream, pharma etc

“Fresh fruits can be the growth driver of cold chain sector,” added Thiagarajan. He also added that despite a growth of 15 per cent, penetration gap is still very high in the country. By 2022, India’s cold chain market is expected to reach Rs 470 billion mark, according to Ken Research.

During the World Food India 2017, there was a committed of about USD 14 billion. Thiagarajan stated this show the huge interest among investors in Indian agriculture especially in food processing. “Lot of our (Blue Star) customers are expanding their footprint into food processing.” But Thiagarajan believes that conversation of the commitment into investment depends strongly on elements like infrastructure development, ease of doing business, FDI and so on. “We have seen more and more conversation taking place in past few years.”


Citing example of Californian Orange, CII’s member Thiagarajan added, “We have to pick specific areas for specific commodities.” He added that farmers in regions like Tamil Nadu, Andhra Pradesh and Maharashtra should promote their bananas, mangoes and citrus fruits respectively. This former member of CII National Task Force on Cold Chain Development stressed the need to educate the farmers in clusters on ways to grow, maintain quality of the produce and most importantly, recognise one particular fruit as the identity of the region. He further added that bodies like CII have to work with farmers to entice them follow this system. This concept not only helps in procurement and reduces food losses. Like many others, Thiagarajan also strongly advocates the need for green operation.

Painting a positive picture of food processing for small and marginalised farmers, Thiagarajan said, “Cold chain is a critical component for farmers with small-land holdings. The procurement practises in the villages in the country is outdated and there is a need to upgrade it. By consolidating output from small land holdings of small and marginalised farmers, the true value of the produce can be achieved.” Food processing is expected to fetch the farmers their rightful price and will also bring down or stabilise food inflation.

Despite provision like developing and upgrading existing 22,000 rural haats into Gramin Agricultural Markets (GrAMs) which are electronically linked to e-NAM, there are chances for farmers to be duped by middleman. “Unless farmers don’t learn to market, they will end up relying on third party, ” he claimed. The key for the whole eco-system to function smoothly would be learning skills of farmers.

(Free Press Journal and Moneycontrol are organising a panel discussion on Cold Chain Solutions for Tomorrow’s India, on Friday, March 16, 2018 at 5:00 pm. Venue: IMC, Walchand Hirachand Hall, 4thfloor, Churchgate, Mumbai – 400020)

Panelists

Pankaj Khandelwal, MD, INI Farms
Pawanexh Kohli, CEO, NCCD
Kiran Malla, Director, Corporate Finance Strategy, EY
Ravichandran Purshothaman, President, Danfoss
B Thiagarajan, Joint Managing Director, Blue Star Limited

Moderator: R N Bhaskar, Consulting Editor, FPJ

(RSVP: Harish Tiwari: conferences@fpj.co.in)