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Sorry State of Market studies

“What goes wrong with Market Studies”

Frequently I am asked to vet and assess market studies, business plans and DPRs (Detailed Project Reports) on the topic of supply chain, albeit specific to the Indian backdrop. This, after the document owner has, in all earnest, already paid a hefty amount to the researcher for the study and evaluation. 

These impulses to seek second opinions are retrospective in nature... One understands this reaching out, since no matter how big the hospital, one's personal physician is still a trusted referral!

Where I get utterly flummoxed, is the lack of quality & authenticity in the documents I am provided. Whereas, one ought to be barely dotting an odd alphabet (or none, preferably), the entire diagnosis and the conclusions suggested are often suspect. Especially when it comes to those on the topic of cold chain... I fail to grasp what is passed off as a study sometimes. Recently, there was once again a spate of annual releases on the cold chain sector, focus India. I was provided a couple to assess and confirm upon. I repeat, I failed to understand...

Cold-chain Investment requirements (India)

Total investment projected in cold chains over the next 5/10 years

As per estimates by the National Centre for Cold-chain Development (NCCD), the total investment expected in India’s cold chain in the next 5 years is approximately USD 6 to 10 billion. These estimates are based on the following, basis current costing norms (and could be higher). This investment estimate does not include cost of land and added cold-chain ancillary requirements -
  • Current gap in cold storage infrastructure estimated about 36 million metric tonnes
  • Estimated investment of $ 5 billion in storage infrastructure alone; at average cost of $ 127 per ton capacity for multi-product storage other ancillary infrastructure. The land and other infrastructure would require further $ 5 billion investment.
  • Specialised storage systems like Controlled Atmosphere cold stores would involve a higher investment cost of $ 580 per ton capacity.
  • Further investment would be needed for upgrading technology of existing cold storages, which is estimated at $ 27 per ton capacity. Such upgradation involves thermal integrity, refrigeration installation, handling systems, etc.
  • These cost estimates are linked to norms for minimum design standards as established by the government.
  • In refrigerated transport, the capacity is required to grow 3 fold to fully service the existing and more for growing storage capacity. Current estimate of refrigerated transport indicates an available on road capacity of only 3.6 million MT.
  • An estimated $ 1 billion investment will be required for long haul refrigerated transportation. A refrigerated vehicle of 10 ton capacity currently costs $ 44,000/.