Unshackling the cold chain industry
National Center for Cold Chain Development (NCCD) is an autonomous body established by the Government of India with an agenda to promote cold-chain sector in the country. Pawanexh Kohli, CEO & Chief Advisor, NCCD talks about the nitty-gritty of this secto
Q Could you throw some light on the initiatives undertaken by NCCD for the development of cold chain infrastructure in India?
NCCD has been frequently proposing and contemplating ideas on how to create more business opportunities in the cold chain segment. This of course also means redefining the business concepts, moving the perception away from mere space rental models to one based as a supply chain intervention. We brought awareness on all the major missing components in the logistics framework and guided them into government programmes and schemes. The majority of such recommendations have been adopted in various policy initiatives for the next phase of cold chain development. A toll-free number has been provided for reefer transporters to record en-route bottlenecks. On an international level we are collaborating with allied agencies for improved knowledge sharing. Moreover, conducting the first of its kind training programs, both international and domestic, is another special initiative by NCCD.
As a part of government policy direction, energy efficiency and the greening of cold chain is another opportunity promoted by NCCD. Technologies and system standards that minimise energy consumption, while promoting alternate and hybrid applications are now part of government support structure. Having modern staging pack houses at village level is a thrust item, and is a strategic inclusion in the recently revised support schemes.
The NCCD has helped develop guidelines for the minimum system standards that will be applicable when seeking government financial support. These were developed so as not to specify individual equipment designs and specifications but to give direction towards useful solutions. The rationalisation of government schemes will help redefine the entire concept of cold chain i.e. move it away from being perceived as only static cold storage to a dynamic supply chain which serves as a pipeline for effective and useful flow of fresh foods, dairy produce, medical goods and other food products.
Q According to you, what are the factors that will facilitate the effective functioning of the cold chain industry?
Funding of cost effective projects and better and more effective operational equipment can be brought into use as key factors. Towards this, the budgetary allocation of ` 5,000 crore as the warehousing infrastructure fund, was made open ended for all components coming under cold chain wherein not just cold warehouses but reefer trucks, pre-coolers and pack houses could avail the benefit of this fund. This fund manifests as a low interest loan, available through NABARD, and can be availed directly by all private entities.
India has declared cold chain as a thrust area since we are also the world's largest fresh whole food consumers and with an equally large farming society cold chain is in itself the greatest value-addition for perishable crops, since with correct use, it provides access to market as well a choice of markets to the farmers. Proper use of cold chain is another key factor. Here, business players need to understand that cold chain is about the business of food. Hence, securing the source and its market linkage is a key to their access. Selecting the right set of infrastructure components becomes important to the business model. A cold store is only a middle link for those who supply food, and to capture more value in the chain, those who create pack houses will find themselves as leaders in the race to create wealth. It’s time to move away from a mindset that believes in storing food - it is of no use to hoard perishable products if such intervention does not open access to more and newer markets. For this, the next major factor is transport linkage.
We are taking India towards a future ready food distribution system. Once our domestic distribution is rectified, we will find ourselves in a state of plentiful. The excess production that is wasted will be useful surplus and we will then need access to markets outside India. Thus, the major thrust area headed for this is developing perishable gateways at sea ports. The need is already palpable.
Another key factor is having integrated logistics players in this field those who can realise that this is the only sphere where a logistics provider can transform into the primary value provider. Industry has to realise the strategic advantage of being in the food distribution business and the legacy they can establish. In the fresh food trade, the supply chain directly impacts the value realisation, more than the source or factory. But for that we are lacking visionary leadership in this sector. Instead of waiting for government policy to drape them, a business leader has to recognise and seize the clearly evident demand supply opportunity.
(The second and final part of this interview will appear in the March edition of CARGOTALK)
CEO & Chief Advisor, National Centre for Cold Chain Development (NCCD)