DPR ON COLD STORE HAVING CAPACITY OF 5000 MT

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1 INTRODUCTION: Assistance for setting up of new cold storage infrastructure will be available only to multi-chamber cold storage units with technologies which are energy efficient with provision for thermal insulation, humidity control, advanced cooling systems, automation, etc., having specifications and standards approved by the Ministry. Cold storages (Long term storage and distribution hubs) upto 5000 MT capacity will be promoted under NHM/HMNEH sub-schemes. In this context, for cold storages, 3.4 cubic metres (cum.) (120 cubic feet (cft.) of chamber volume shall be considered equivalent to one MT of storage capacity. Assistance will be available to individuals, Group of farmers/ growers/ consumers, Partnership/ Proprietary firms, Self Help Groups (SHGs), Farmers Producer Organization (FPOs), Pvt. Limited Companies, Corporations, Cooperatives, Cooperative Marketing Federations etc through either NHM/State Agriculture Policy' Proposed Planning The entire planning process has been based on the following methodology followed for the project: a. Analysis of Project Activities b. Proposed Backward Linkages for Project c. Planning of Activity, Area & Equipment Requirements d. Marketing & Forward Linkages for Project e. Location Advantages f. Utilities & Pollution Control g. SWOT Analysis a) Analysis of Project Activities The project is planned to undertake the following activities: 1) Multi-Chambered and Multi-Commodity Cold Storage with 4 nos cold rooms each with 1250 MT capacity. (Total Capacity 5,000 MT) 2) Registration with NCDEX for facilitating forward trading activity. 3) Introducing the concept of Warehousing Receipt for providing easy finance against stored stocks of Potato & other products to farmers, traders etc. 1) Multi-chambered and multi commodity cold storage Four Cold Rooms are proposed to be built each with a capacity of 1250 MT and a total capacity of 5,000 MT preservation of fresh horticulture produce by proper cold storage practices. This will reduce losses in supply chain which is at present estimated anywhere between 30% to 40% of the total produce. Modern cold stores are multi-chamber, multicommodity stores that use energy-efficient refrigeration equipment and

2 energy-conserving thermal insulation. Most horticultural produce (with a few exceptions like - onions) require high RH levels and, therefore, good humidification systems are essential. In addition, means to reduce ethylene levels are required and so are specialized equipment to kill air borne pathogens and bacteria. Besides fruits and vegetable, these modern cold stores can be used for dry fruits, spices, pulses, milk products etc. The desire to reach more distant markets, prolong storage life, and market a product that better satisfies consumers has a critical requirement of cold chain right from farm gate to distribution and selling point. Changes in Packing, Handling, Transportation, Marketing and Distribution of horticultural crops directly influence the Cooling requirements and results. The primary purpose of refrigeration is to aid preservation with a view to reduce wastages and at the same time bring economic prosperity to the growers. Since each fruit or vegetable is sensitive to various conditions in their own unique way, specific systems have to be designed to deliver optimum parameters in each chamber of the store. Good temperature management, is the single most important factor in delaying product deterioration; prompt cooling and maintenance of proper temperatures are both essential. For many products, this means maintaining a low temperature as much as possible without danger of freezing. It has been said that every hour saved from the moment of harvest and removal of the field heat can add a day to the useful shelf life of the product. Hence, location of cold storage facility in close proximity to the production belts is an obvious advantage. The desire to reach more distant markets, prolong storage life, and market a product that better satisfies consumers has a critical requirement of cold chain right from farm gate to distribution and selling point. Changes in Packing, Handling, Transportation, Marketing and Distribution of horticultural crops directly influence the Cooling requirements and results. The primary purpose of refrigeration is to aid preservation with a view to reduce wastages and at the same time bring economic prosperity to the growers. The proposed technology for the multi-chamber cold store has been selected based on the following key parameters required for obtaining the best results for the stored produce:- Rapid & Uniform Cooling Flexibility in Temperature Management across various chambers Humidity Management for High Humidity in Cold Rooms Ethylene Scrubbers for mixed storage of fruits & vegetables in cold room

3 Efficient Power management for minimizing power consumption 2) Registration with NCDX National Commodity & Derivatives Exchange Limited (NCDEX) is an online commodity exchange based in India. It provides a commodity exchange platform for market participants to trade in commodity derivatives NCDEX POTATO FUTURES provide a hedging platform to those who are natural physical traders of the commodity. Speculators who have knowledge & a view about the commodity can take positions in the Potato futures. Even arbitrages in calendar spread as well as cash & carry, can be done in Potato futures. Benefits to Farmers and Traders: Farmers and traders will become familiar with computers and online auctions. Farmers will have greater bargaining power versus traders. Farmers become more aware of crop quality specifications. Quality consciousness among farmers will increase. Farmers will have better understanding about banking. Literacy among farmers about bank transactions / operations will increase. Direct electronic fund transfer from buyers to sellers. Maintenance of Mandi trading records has become computerized. Greater transparency at every stage of transaction within an Electronic trading system allows buyers to bid in real time even when they are not physically present at the Mandi. E-auctioning system has enabled sellers to participate irrespective of proximity to the Mandi location. Tender results are announced daily at 1:00 pm so farmers do not face uncertainty. Platform for e-procurement NSPOT provides unique e-procurement platform for primary procurement activities. Availability of real time information and simple delivery process ensures that farmers are the direct beneficiaries of this trading platform. The users in the value chain can have simultaneous access to the Exchange on the buy side and procure at the best possible price. NSPOT has facilitated the state government agencies and farmer producer organizations (FPOs) to procure various agricultural commodities in the last couple of years.

4 b) Proposed backward linkages for the project The primary grading of vegetables will be carried out in the field or at the Cold Store. Tamarind is suitable for long term storage in the cold store as well as for utilization in the fruit processing plant. Graded vegetables will be put in field crates and palletized for storage in the Cold Store. Tamarind will be stored in cold store for longer period for tamarind concentrate preparation and any surplus will be released into the market during the late off-season period of March to June. The proposed business model for the Integrated Cold Store will be captive as well as paid services for quality grading-packing of mango and tamarind brought by farmers and traders on rental basis. Due care needs to be taken to ensure minimization of post harvest losses during this entire chain of handling of fresh fruits and vegetables. Sufficient area needs to be provided for rapid unloading of harvested produce being brought into crates from field. This requires parking and movement area for trucks at the unloading point and an unloading platform. To minimize the risk of damage of potato, tamarind etc. and to speed up the process, mechanized forklift trucks need to be used for loading, unloading and stacking purpose. Provisions for storage area of packing material, office area and tool room etc are to be kept in the cold storage complex. c) Planning of activities, area & equipment requirement The linking of facility to producers and onwards to markets is based on detailed planning for various activities to be carried out and scale of operations. The requirement of area and equipment for the proposed facility is envisaged as follows:- i. Rooms & capacities The number of Cold Rooms have been worked out based on the proposed stacking pattern for fruit, vegetables and capacities desired. Four Cold Rooms are proposed to be built, each with a capacity of 1250 MT with a total capacity of 5,000 MT. ii. Rapid cooling in rooms Room cooling is proposed to be carried out for the Fruits to allow for storage of the produce in the same rooms based on a 3-4 day cycle. The proposed stacking pattern, refrigeration system and air circulation system (complete with VFD) have been planned accordingly. Pressurized air flow within the room proposed to ensure forced movement through the crates is planned with high CFM fans in

5 evaporator units to meet the guidelines of NHB. Each of the rooms would require to maintain high humidity levels of 90-95% RH which is essential for sensitive produce & ripening activity which is proposed to be achieved by installation of adiabatic humidifiers complete with nozzles, RO and pressure pump. Display and control units for temperature, humidity, ethylene and CO2 levels in the ripening rooms, are proposed to be installed so as to ensure proper monitoring of these levels. iii. Temperature & humidity management The refrigeration system has been planned for accurate management and display of temperature & high humidity (90-99% RH) in all the rooms. Humidification system based on adiabatic type, with nozzles capable of delivering droplets of 10 micron size suitable for maintaining high humidity Levels as Indicated In the following table. Temperature & Relative Humidity Requirement for Different Produces PRODUCT TEMP. RANGE IN o RELATIVE HUMIDITY IN C %RH BEANS BRINJAL CABBAGE CARROTS CAULIFLOWER CUCUMBER LETTUCE LEMON ONION ORANGES PUMPKIN POTATO WATER MELON TOMATOES Source: USDA iv. Insulation & doors It is proposed to install PUF sandwich panels of suitable thickness for ceiling and walls, which are suitable for the positive temperature ripening rooms. The floor insulation is proposed with laying of PUF slab of suitable thickness complete with tar felt sheets and bitumen below the flooring. Each room shall be leak proof. The doors planned for the ripening rooms are insulated doors of sliding type to allow for ease of stuffing and de-stuffing of rooms. The insulation system planned for the

6 Cold rooms consists of insulated composite structural panels with core insulation of polyurethane of suitable thickness. v. Accessories The accessories required for managing operations in the Ripening cum Cold Store include mezzanine floor for holding of fruit, Pallets for stacking of crates or boxes, Electronic Weighing Platform for weighing of fruits, Carton Strapping Machine for Packed Fruit Cartons ready for dispatch to markets, Hand Pallet Trucks for movement of crates within Cold rooms, Trolleys for movement of Packed Fruit Cartons, Power Back up system with Generator set. d) Marketing & forward linkages for project In absence of storage facilities in the locality, potatoes and other vegetables are mainly marketed in weekly markets and a portion is transported to other destinations by train/road. Transportation of vegetables to the markets is made by truck. The markets are located at a distance of 5-35 km from major production belts in the district. The arrival of vegetables during Kharif season is usually August to November while Rabi vegetables are marketed from December to May. The market potential for Premium fruits and vegetables in India can be categorized between Fresh fruits sold fresh during the season and Store produces stored in Cold or Cold Store to be sold in off season. The market potential for such fruits in India has two dimensions Seasonal Sale of Top quality fruits which are duly washed, graded and packed for sale in the fresh market; and Off-Season Sale of quality Indian fruits taken out of Cold Store or Cold Store and Imported fruits which are being imported for sale during this period. The marketing of Cold Store services to farmers & traders has excellent potential given the absence of similar facilities in the entire region. The benefits of Cold Store are now well recognized in terms of better product quality & price realization. e) Location advantage The site proposed for Cold Store in Odisha along with a proposed integrated market complex with fruit processing unit and farmers education information centre would provide a holistic single window platform for the farmers as well as the traders. There are many big farmers who can take up high value crops provided market infrastructure is created.

7 f) UTILITIES AND POLLUTION CONTROL One 50,000 litre overhead tank and two 6 diameter functional bore wells have been proposed to be installed in the complex, Three Phase electricity line is also essential to ensure proper power supply. Cold store is a non polluting industry (falling under Green category) as it is largely a service industry catering to storage of perishables like fruits and vegetables. No toxic or industrial waste is generated in the process. The waste-water does not contain any toxic elements and can be released in the septic tank and soak pit to be constructed within the project. DG set for power back-up is to be installed complete with sound-proof enclosure adhering to CPCB guidelines. The height of the stack will be suitable for emission of smoke etc. at permissible limit and reduce noise pollution. Safety provisions in terms of protective masks and hygienic clothing covers will be provided to workers. Fire fighting and detection systems will be installed within the factory building. Green cover will be provided within the building periphery by planting of trees and approach road will be macadamized. g) S-W-O-T ANALYSIS A SWOT analysis is to be made for the proposed cold storage unit in the district in the following manner. STRENGTH: Availability of required quantity of raw material, market, land (non-agriculture high land), electricity (HT Line passing nearby), water Proximity to a railway station, National High Way, markets and production centres. Willingness of the farmers and businessman for storage. Availability of organization, manpower and funds to run the unit. Cheap Labour. WEAKNESS: Need of a dumping yard for rotten products. Higher cost of storage. Higher electrical tariff Farmers not aware about utility of cold storage. OPPORTUNITY: Large number of nearby markets.

8 Opportunity for increasing crop productivity and production in the locality. Scope for outside procurement and storage by the traders. Hike in Electricity charges. Change in Government regulatory policy. ECONOMIC ANALYSIS Considering the SWOT analysis and the facilities already available it is justified to go for a new cold storage unit in the area. From the location point of view and possibility of forward and backward linkage the proposed unit should be technically feasible. Product flow and market flow go in favour of the plant. Possible Alternatives There are various options available for the proposed project. Option-1: A 5000 MT cold storage is established and run on a rental model. Which means farmers/ traders can store their produce mainly potato. In such situation, 100% capacity utilization is not possible though the potato producers would be benefited. Because, the local produce if stored on rental basis may be taken out any time within 7 8 months. But remaining period of the year, the space will be unutilized whereas the electricity charges and manpower cost etc., is to be met for the whole year. Which means the rental earning of 7-8 months will be utilized for maintaining the cold store for the whole year. Option-2: A 5000 MT cold storage is established and run on a combined model of rental and trading. This means certain percent of storage space will be used as rental where as remaining space can be utilized by promoter to store potato by way of procuring at reasonable price during harvest period and selling out beyond the season at a higher price. This option is therefore more attractive proposition than the previous one. Economic Analysis To take appropriate investment decision the economic analysis of all the options have been worked out and given here under. For this purpose, a break even analysis of the proposed cold store with installed capacity of 5000 MT for Cold Storage with and without provision of trading are given in tables below.

9 Assumptions for analysis Power consumption : a. Consumption 200 Unit per hour. b. The unit will run 80% time in a day. c. Cost of Rs 4.40 per unit. 2. Trading Margin: a. The Cold store owner will have a margin of Rs 2.50 if it Rs 5.00 per KG during harvest and Rs per KG. Break Even Analysis for 5000 MT Cold Store to be run on different models Ratio of training vs. 30/70 40/60 50/ Rental Capital Cost Cost of storage per MT ,734, for 1 year Revenue from ,500, % utilisation Revenue from Trading of ,250, potatos (Rs 2.50 per KG) Total Revenue Profit during one year Break even (No of year) As per the calculation above, it may be seen that the proposed unit will attain break even after years of installation if the unit will be operated on fully rental model i.e. the space will be utilized by producers/traders on payment of Rs150 per quintal. The project will attain breakeven in 5.19 years if 50% of the storage space will be used for own trading and remaining 50% used for rental.

10 The unit will reach break-even point in 6.03 years if it will be operated on 40% own trading and 60% rental model. Similarly, the unit will attain breakeven in 7.18 years if it will be operated on model of own trading vs rental. It may be noted that the electricity charges assumed in the calculation is Rs 4.40 per unit i.e. the current rate. However, if the subsidy on electricity charges as recommended by task-force on potato is made available to the project, the viability would improve substantially. PROJECT OUTLAY AND IMPLEMENTATION SCHEDULE Considering the SWOT analysis and the available facilities it may be decided to whether to go for a new cold storage unit. If the location point of view and possibility of forward and backward linkage are positive then the proposed unit is technically feasible. Product flow and market flow should go in favour of the plant. Project Cost The Tentative Capital outlay for the Project is estimated at Rs lacs asper details given below. Particulars Rs. In Lakhs Land Nil Building Insulation & Refrigeration for Cold Room Contingency Deposit 2.00 Pre-operative Exp Margin Money for Working Capital Total The installed capacity is 5000 MT for Cold storage, about 70% of the commodities will be stored on rental basis and 30% from own procurement. Existing rental charges of the cold storages varies between Rs.150/- to Rs 175/- per quintal of potato for a storage period of 7-8 months. Land The promoter should have own land measuring 2 acre. Source of Finance The Project is proposed to be funded, through a mix of Owned Corpus funds and financial support from Banks. Subsidy as admissible from Government of India under Mission for Integrated Development of

11 Horticulture (MIDH) Scheme or APICOL for setting up of Cold Store or from any other sources may be ascertained. Implementation Schedule The land for project has all the necessary amenities & utilities. Approach road, water & power are readily available at the site of the project. The proposed facility is being planned using faster construction techniques for structure and PUF panels which will facilitate a shorter execution time. Equipments are readily available in the country and the contractors / vendors are willing to supply all the necessary equipment within the required schedule. The following time schedule of 9 months (36 weeks) is proposed for making the project operational: Sl. Activity Time & Farmer No 1 Approval for 4 weeks Financial Grants 2 Civil Work, Electrical &Site Development 20 week 3 Procurement & Installation of Equipment for Refrigeration, Insulation, Fruit and Vegetable Sorting, Ancillary Equipment 30 weeks 4 Utilities & Finishing Work 2 week 5 Trial Runs & Commissioning 2 week Note: Activities listed at serial no.2, 3 and 4 can be undertaken simultaneously. Hence, the total project can be completed in a time span of 36 weeks. SOCIO-ECONOMIC AND ENVIRONMENTAL BENEFITS OF THE PROJECT

12 The project is likely to provide wide-spread social benefits to the farmers in the region which are discussed below: Development of value addition centre for the fruits and vegetable growers in the region. Promotion to uniform quality and graded fruit and vegetables which is likely to fetch better realization for farmers. Introduction of transparent dealings and fair practices. Facility can function as Resource centre and provide farmers training in post harvest handling to ensure high quality and distribute kits. Minimization of Post harvest losses can result in value creation for the farmers with resultant economic benefit. Direct and indirect employment opportunities for local population as the project starts operations. Benefits of Cold Store will facilitate improved market linkages of farmers and their produce with major markets of the country. Cold Storage Technology has been proven in Indian context, an improvement in price realizations of 50% to 100% as compared to fresh fruit sales. Farmers can have the option to store & market their produce as per the market opportunities available rather than resort to panic selling. Project has entered into direct service and marketing linkages with large group of farmers in the belt which will facilitate better price recovery mechanism for such farmers. The proposed project will fulfill the potato requirement in the district, as every month the district importing potato from nearby district and states after its potato harvesting season. The Proposed project will provide the healthy and safely ripened banana which is proposed to be ripened through natural ripening technology by using ethylene generators. The proposed location is free from any environmental problem such as polluted water and air. Space can be created for dumping of rotten produce without any environmental impact on the community. Thus the plan is justified from environmental point of view. Annexure-I

13 INDICATIVE LAYOUT PLAN