Marketing Plan

Ajay Cold StoragePhase 1 and Phase 2

Under the guidance of: - Presented By:

Prof. Mr. Sharad Gupta Parvesh Mittal

Overview

One of the major tagline which we have in our company for all the fruits and vegetables is

Zindagi. We have given this name in our company so as to give new life to the fruits and vegetables and could maintain the quality of products. Fruits and vegetables have a very short shelf life after harvest. In order to prevent post-harvest losses, they have to be processed immediately or stored under refrigerated conditions. Immediately after harvest, precooling to about 10 degrees centigrade is advantageous. Further cooling and storage at minus 8 to minus 10 degrees centigrade enhances the shelf life of the product. And we are one of the leading providers of the cold store facilities. Our headquarters is New Delhi and we are on a road of expansion of our business. Our recent plant in being opened up in Haryana (Rai, Kundli).

Packaging: - In terms of packaging we store the material in the cold store which is normally in crates.

Market:-Cold storage is a facility normally held by an individual to be provided to retailers to store their raw materials. The market is therefore specific to users and not wide as a consumer market.

Storage capacity: - The material to be kept under cold storage is received from the farms. It is stacked and cooled to a temperature of 8 degrees centigrade. The plant will be in continuous operation for three shifts a day with each shift of 8 hours duration. The storage capacity of the unit is 3000 tones.

Storage process outline:-The material received from the farms will be weighed and placed in crates with a customer and material code tag. The gross and net weights of the crate will also be recorded. Stacking will be in pallets with a supporting frame.

Vision

Doing our business in such a way that we will set the industry standards in service excellence by satisfying the needs and demands of our customers.

Also we will focus on service quality and efficiency.

Mission

We want to eradicate the wastage of fruits and vegetables by developing the reliable and timely cold chain stores so that customers are satisfied.

Scope of the study

To assess the requirements predominantly for fruits and vegetables and other products in the chill, mild-chill and frozen categories of cold-chain1. High value dairy products like ice-cream is included under frozen category in this study. Since no consumption statistics are available for floriculture, the same was not considered in this study.

Technology  

A cold storage unit incorporates a refrigeration system to maintain the desired room environment for the commodities to be stored. A refrigeration system works on two principles:

1. Vapour absorption system (VAS), and2. Vapour compression system (VCS)

VAS, although comparatively costlier, is quite economical in operation and adequately compensates the higher initial investment. Wherever possible such a system should be selected to conserve on energy and operational cost.

VCS is comparatively cheaper than VAS. There are three types of VCS systems available depending upon the cooling arrangements in the storage rooms i.e., diffuser type, bunker type and fin coil type. Diffuser type is comparatively costlier and is selected only when the storage room heights are low. The operational cost of such units is also higher. Bunker type is the cheapest and is preferred when storage room heights normally exceeds 11.5 m. Its operational cost is also low. Fin coil type, although about 5% costlier than the bunker type, is very energy efficient with low operational cost and higher space availability for storage of produce. Such system is used for units with room heights of 5.4m onwards. 

On, the left and above are the pictures of equipment’s which are used in cold storage warehouses to freeze the the fruits and vegetables. On, the left side is the equipment knows as AMONIA and on the above the equipment is known to be FEON. In, a survey and by visiting of cold storage it is found that now industry is using more of the feon plant as compared to amonia as feon technology is new in nature. This technology also helps in reducing the CO2.

When we are talking about CO2 we should understand how much co2 is released from cold storage in per hour time

One Kilo-Watt Hour of Energy Produced = 1.55 lbs. of CO2 Emissions into the Air

Major Step towards CSR & Sustainability

Des Moines Cold Storage Company receives Tec green certification for “Going Green”. And Ajay cold storage will be importing such machines from foreign countries so that we could reduce the CO2 emissions that comes out from cold storage machineries that we currently have. Ajay Cold Storage Company is also planning to import machinery to receive Tec green certification. We can also team up in future with Total Energy Concepts to save energy with the installation of a Power Quality Protection and Electrical Motor Optimization System Solution. These units protect electrical equipment from lightning strikes, dirty power, and poor efficiency. The net result is optimized system performance.

Source: http://totalenergyconcepts.com/news/PostId/25

TEC CERTIFIED GREEN PROGRAM

Becoming TEC Certified GREEN gives you the following benefits:

GOING GREEN RECOGNITION PRESS RELEASE IN THE LOCAL PAPER DOOR STICKER

GO GREEN

Our Environment is important and everyone needs to do their part in helping protect what we have. Reducing energy consumption is a MAJOR step in the right direction as it directly helps prevent toxic emissions from being released into our atmosphere from power plants.

How Does Purchasing the TEC System take your facility GREEN? Lower your electrical usage: - thereby conserving energy which increases your bottom line

and reduces the amount of energy the utility company needs to generate, thereby reducing greenhouse gas emissions and carbon footprints.

Increase the useful life of your equipment: - motors, compressors, lamps, ballasts.  This also improves your bottom line and decreases the wasted energy necessary to manufacture new equipment.

Umbrella of Electrical Protection:-Protects all of your electrical equipment to eliminate any downtime and maintenance and repair costs, therefore reducing the amount of operation time needed when trying to catch up.

HVAC and Refrigeration Optimization With Smart Cool and Endo Cube units to optimize the cycles of refrigeration compressors…therefore reducing the amount of run time without affecting the temperature inside your facility so when we say "Turn down the A/C"…we are talking about the compressor run time which equals big savings!

Going Green has never been easier! You save money, save the environment, and support the Green Power and Building Initiative. That is what we call a win/win situation every time! Get your facility TEC Certified Green today and be recognized as a business that appreciates our environment and has done their part in protecting what we have!!!

Total Energy Concepts (TEC) is a national leader in Power Protection, Energy Management, Power Quality, Refrigeration and A/C Optimization and Control, Facility Grounding, and Lighting Solutions that help companies improve their bottom line by reducing expenses that drastically cut into company profits. They offer a complete system through a systematic approach that will reduce the amount of energy your electrical system uses without changing a thing with our operations and the best part is, it will completely pay for itself.

SWOT ANALYSIS

Product Offerings

24/7 Security Different chambers Lock & key facility Technical assistance 100% Quality Assurance Target Markets

Food Retail Chains Format OutletsFood World Food Supermarket 113Reliance Fresh Convenience Store 93 cities (700+ stores)Spencer’s Retail Retail Store 400Big Bazaar Hypermarket 250(2013)More Retail Store Department Store 500 +Food Bazaar Supermarket 50+

Source:

http://www.moneycontrol.com/news/business/big-bazaar-direct-to-have-250-outlets-by- oct-end-biyani_969162.html

https://en.wikipedia.org/wiki/Big_Bazaar http://www.reliancefreshdirect.com/mumbai/AboutUs https://en.wikipedia.org/wiki/More_(store)

Desired Storage Environment of Fruits and Vegetables in the cold storage

STRENGTHS Large domestic consumption

market Large production base of raw

material Breadth in crop base offering

scope for varied processing activities

WEAKNESS Inadequate infrastructure facilities High capital investments Lack of adequate quality control &

testing protocols Fragmented, inefficient supply chain

and increase in prices Seasonality of crops

OPPORTUNITIES Government incentives Increasing western influence on

Indian taste preferences driving the demand for processed foods

Increase in nuclear families and working population who prefer ready-to-eat/cook foods

THREATS Traditional preference for freshly

cooked food especially in rural areas

Affordability (e.g., processed fruits are significantly higher than fresh fruits)

High supply chain costs

Commodity Temperature (oC) Relative Humidity (%)Apple -1 - 3 90 - 98Apricots -0.5 - 0 90 - 95Beet root 0 - 2 95 - 97Broccoli 0 - 2 90 - 95Black berry -0.5 - 0 95 - 97Cabbage 0 - 2 90 - 95Carrots 0 - 2 90 - 95Cherries 0.5 - 0 90 - 95Grapes -1 - 1 85 - 90Lemons 4 - 15 86 - 88Lettuce 0 - 1 95 - 98Lime 3 - 10 85 - 90Mango 11 - 18 85 - 90Melon water 2 - 4 85 - 90Orange 0 - 10 85 - 90Peach -1 - 1 88 - 92Potato 1.5 - 4 90 - 94

Marketing Research

Regular Surveys and tele-feedback Site visit in various cold storage warehouses

Findings:-

The major factor in deciding the next location for Ajay cold Storage in (Rai, Kundli, Haryana) was the KPM project i.e. theHighway which is in process of becoming a business corridor b/wKundli-Gurgaon, Kundli-Noida-Faridabad.

Gap Analysis of Infrastructure Components and ACS is ready toFill that gap

Type of Infrastructure All India Requirement (A)

All India Created(B)

All India Gap(A-B)

Pack-house 70,080 nos. 249 nos. * - 69,831 nos.Cold Storage (Bulk) 341,64,411 M 31823700 MT - 32,76,962 MTCold Storage (Hub) 9,36,251 MT

Reefer Vehicles 61,826 nos. 9000 nos. - 52,826 nos.Ripening Chamber 9,131 nos. 812 nos. - 8,319 nos.

Source:-

NABARD Consultancy Services NCCD

Financials

Land and construction cost for the proposed unit

Storage area is 11000 square feet as detailed below.

Sl. Description Square Feet1 Cold store for fruits and vegetables 80002 Administrative office 5003 Machinery spares store 2004 Refrigeration room 20005 Toilet space 2006 Miscellaneous space 1007 Total 11000

Construction cost – Rs. 900 per square foot per floor. Total value of civil works – Rs. 99.00 lakhs Total cost of land and civil works is Rs. 101.00 lakhs.

Costing of machinery and equipment

Sl. Description Rs. lakhs1 Refrigeration equipment for cooling 250 tons of fruits and 250 tons

of vegetables stored in 5500 square feet each and to provide a temperature of 2 to 8 degrees centigrade

20.00

2 Ducting and wall paneling 10.003 Stand by equipment 5.004 Total 35.0005 Cost of pallets and stacking trays 2.0006 Fork lift vehicle 10.0007 Grand total machinery and equipment 47.000

Utilities per month

Sl. Description Rs. lakhs1 Power 111500 kwh @ Rs. 5.50 per unit 6.1332 Water 0.1003 Refrigeration gas 1.0004 Total utilities 7.233

Means of finance

Sl. Description Rs. lakhs1 Total Project Cost 167.2002 Equity 55.7333 Debt 111.4674 Working capital margin money 2.000

Source http://hsiidc.org.in/latest_announcements and

http://hsiidc.org.in/sites/default/files/E%20Documents/APPROVED%20ALLOTMENT%20RATES-2015.pdf

Controls

Implementation

Tight controlling measures for close monitoring of quality issues 5 active landline numbers for on the go assistance Quality testing and ensuring proper working of the product before supplying Online query solving Weekly monitoring of the reports from the personnel handling the online queries and

calls

Marketing Organization

Name Designation RoleParvesh Mittal Chief Marketing Officer Responsible for marketing

activities of organization in growing and promoting the company.

Vibhor Garg Finance and employee manager

Provide financial assistance and help to ACS and will engage in HRM

Prateek Parihar Regional Sales Manager Keep an eye on sales over all the regions

Appendix

SCHEME FOR FINANCING CONSTRUCTION OF COLD STORAGES/ GODOWNS

 

PURPOSE BEHIND SCHEME FOR FINANCING CONSTRUCTION OF COLD STORAGES /GODOWNS:-

To meet the production, investment, and consumption needs of the farmer, i.e. cultivation of crop, purchase of farm equipment, etc., allied activities and consumption needs like marriage, medical treatment, education, etc.

To cover farmers having proven track record and also new farmers who are either not availing any loan or if availing finance from some other Bank, can be taken over if the repayment record is clean and their existing loan account is standard asset. Alternatively they can close their account with their existing Banks and switch over to us.

 Eligibility:-

All Co-Operatives, Companies, Corporations, Partnership and Proprietary Firms, Agriculture Produce Marketing Committees/Boards, Agro Industries Corporations and Growers' Associations, Individuals.

 

Quantum of loan:-

 

50% of the project cost may be considered as term loan. The eligible amount of subsidy also would be allowed as term loan as the subsidy is back ended.

 

Margin:- 25% of the project cost to be contributed by the applicant

Repayment Period:- Maximum 120 months with 18 months moratorium

Subsidy: - Cold storage unit is eligible for subsidy of 25% of the project cost.

Source:- http://www.unionbankofindia.co.in/RABD_Long_Construction_Cold_Storage.aspx

Purpose To maintain the quality and extend the shelf life of fruits/ vegetables/ perishable agricultural products and to reduce losses after harvest. 

To provide farmers an opportunity to realize better price for their produce.

Construction of storage chambers alongwith concrete racks & staircases.

Installation of machineries/ plant required for running cold storage unit.   

Eligibility Individuals, group of individuals, co-operative societies, proprietary/ partnership concerns and joint sector companies in public or private sector.

Security  For limits upto Rs.1.00 lakh –a. Hypo. of assets created out of bank finance For limits over Rs.1.00 lakh -a. Hypo. of assets created out of bank financeb. Mortgage of property and/orc. Third party guarantee of adequate worth.   

Margin 15% to 25% of the project cost

Rate of interest Interest Rate as decided by the Bank from time to time.

Repayment Repayment period upto 9 years is allowed including a grace period of one year.     

.

Insurance Assets created out of Bank finance, assets hypothecated/mortgaged to the Bank to be fully insured with Bank clause.

Source:- www.bankofindia.co.in/english/ coldstorage .aspx

Cold Storage FinanceEligibilityAll private cold storages/warehouses which are either debt free or financed by us subject to the following conditions:

I. The promoters of the cold storage/warehouse are persons of good repute and integrity.II. The capacity of the cold storage should be more than 5000 MT.

III. The cold storage/warehouse should be in good running condition and should have registered post-tax profits for the last 3 years

IV. Conduct of the accounts of the cold storage/warehouse with our bank/other banks should be satisfactory and all their existing accounts classified as “standard asset”.

V. New cold storages can also be considered for finance under the scheme subject to the controlling authority being satisfied about the promoter’s integrity and the project’s viability.

Features

Purpose : For financing private cold storages/warehouses for on lending to farmers against agricultural commodities stored in the cold storage/ warehouse.

Assessment of credit limit

: Equivalent to 60% of the value of their operating capacity or 60% of the average value of produce/commodities stored during the past 12 months whichever is lower. The sanction of limit is subject to the cold storage/warehouse submitting an undertaking to the Bank covering the points as detailed in Cir. No. AGR/2008-09/35 Dt. 29.11.2008

Disbursal : The disbursal of the loan amount will be restricted to 60% of the value of produce/commodities stored and belonging to farmers to whom onlending has been done by the cold storage/warehouse.

Ceiling on loan amount

: Minimum: `25.00 lacs;Maximum: `100.00 lacs

Security : Primary: NIL

Collateral : I. Equitable mortgage of the warehouse/cold storage i.e. they need to be debt free or financed by us. Equitable mortgage of the warehouse/cold storage should be compulsory and the value of the collateral coverage (inclusive existing and proposed loan) should be 100%. This is important.

II. Personal guarantee of the proprietor/partners/directors of the cold storage/warehouse.

Interest rate : CRA as applicable to Agricultural advances. Units with CRA of SBH (AGR-4) and below SHOULD NOT be financed i.e. only with CRA of AGR 1-3 may be financed.

Repayment : The cash credit account should be brought into credit balance by the end of November each year and will continue with the credit balance till the commencement of the next season.

Insurance : The structure as well as the commodities/produce stored should be insured by the owners of cold storage/warehouse for its full value and a copy of the insurance policy should be kept on record by the Bank.

Sanctioning authority

: These advances are to be treated as clean. Therefore, the sanctioning powers have to be exercised as per the powers delegated to the authority for sanction of “clean advances” i.e. by HOCC III / HOCC II / HOCC I.

Segmentation : The loans sanctioned under the scheme are to be classified as “Indirect Agricultural Advances” under priority sector.

Renewal : The limit is valid for 12 months and needs to be renewed every year.Renewal of the limit is subject to satisfactory conduct of the facility.

Source: - https://www.sbhyd.com/cold-storage-finance/

Questionnaires

1. Account Name & Address: ______________________________________________________

2. Are you the building owner or tenant? 3. Who is responsible for equipment and systems? ______________________________________ 4. Describe operations and type of goods in cold storage: _________________________________

______________________________________________________________________________________ ____________________________________________________________________

5. Are goods stored fresh or frozen: __________________________________________________ 6. How are goods packaged? _______________________________________________________ 7. Number of Cold Storage rooms: ____________Value in each $ ________________________8. Is there a “Peak Storage Season”? Yes ____ No _____ If yes, what is the length of the peak

season and value during that time: _______________________________________________________

9. Controlled atmosphere? Yes ____ No ____ please explain: __________________________ 10. Cryogenic storage (Flash Freeze) operations? _______________________________________ 11. Is ammonia used as refrigerant? Yes __ No __ _ Largest Single Exposure to Ammonia: $______12. If yes, are ammonia detectors installed “in rooms”? 13. Are Piping & Coils protected from impact?14. Frequency of re-calibration of detectors? 15. Will ammonia system automatically shut down if alarm is activated? Yes ____ No ____ 16. Are Isolation valves present? If not ammonia, type of refrigerant used? (i.e. R-22)

__________________________________________________List Critical Refrigeration/Other Equipment:

Machine Mfg. Size/Capacity %Refrigerator Age Repl. Value$ $$

17. Is there spare, back-up or redundant equipment? ______ if yes, explain _________________ ____________________________________________________________________________

18. List all incidents in the past 5 years: _______________________________________________ 19. What is the hold time for both fresh and / or frozen goods, should the power be down?

Questionnaires