How to Start Controlled Atmosphere (CA) Cold Storage Setup in Pakistan

Establishment of controlled atmosphere cold storage provides refrigerated storage and preservation facilities for several fruits, vegetables & flowers. Because of technology advancements and logistic strategies, the controlled atmosphere cold storage of perishable items has become an important stage in the distribution between manufacturers/processors and retail locations. The controlled atmosphere cold storage will ensure the increased availability and improved quality of high value perishable fruits and vegetables for both export and local sale, which would otherwise perish or deteriorate.

Modified Controlled Atmosphere (CA) Cold storage is proposed to be located at in any of the major cities across Pakistan. This project is designed for storing fruits and vegetables using different compartments of the unit for storing multiple products, where relative temperatures for respective products can be maintained Product(s) include Apple, Mango Citrus and other fruits and vegetables.

Total Cost Estimates is Rs.180.26 million with fixed investment Rs.176.15 million and working capital Rs.4.11 million. Given the cost assumptions IRR and payback are 16 % and 5.71 years respectively. The most critical considerations or factors for success of the project are:

  • Careful selection of good location and purchase of land at competitive price.
  • Effective marketing and distribution of the product particularly to the exporters, industrial units and super store buyers.
  • Complete adherence to best agronomic practices is critical to the success of this project; therefore, technical knowledge & experience of the entrepreneur in the field of horticulture and in fresh fruit processing business is absolutely necessary.
  • Ensure Energy efficient construction hence low operating/fuel costs due to efficient insulation
  • Selection of quality fruits on the basis of best analysis of cost and revenues for a given season; cost efficiency through better management.
  • Awareness about HACCP standards and Strict Quality assurance of process and products.
  • Better insulation technology and compartmentalization of cold storage as compared to the rest of the cold storage in Pakistan
  • Compartmentalization i.e. compartments has the provision of storing different commodities at their respective temperatures.
  • Appropriate post-harvest arrangement for transportation of product to the processing unit in case of ‘own stock’ business model.
  • Appropriate storage arrangement and internal control for processed fruits; cold chain refer container arrangements for transportation to local and international markets.
  • Properly trained seed staff should be engaged and comprehensive staff training programs to be adopted for capacity building.
  • Careful selection of good location and purchase of land at competitive price.
  • Effective marketing and distribution of the product particularly to the exporters, industrial units and super store buyers.

Technology for CA Cold Storage in Pakistan

CA cold storage is a used for storing produce such as vegetable and fruits in an atmosphere that is considerably different from normal air with respect to CO2 and O2 levels. The CO2 and O2 levels within gas tight stores are monitored and adjusted to preserve the storage items. Due to metabolic activity of the respiring fruits and vegetables in the store and leakage of gases through doors and walls, the gas mixture will constantly change. The gases are therefore measured periodically and adjusted to the predetermined level by the introduction of fresh air or nitrogen or passing the store atmosphere through a chemical to remove CO2.

Best Location for Cold Storage Plant in Pakistan

CA Cold Storage can be set-up in any major city with significant population such as Karachi, Hyderabad, Lahore, Rawalpindi, Islamabad, Multan, Peshawar and Quetta preferably near Sabzi Mandi or fruit & vegetables trading hub. This business can also be done in all small second tier towns in addition to suburban towns of large cities.

Pakistan produces a variety of fruits and vegetables like potato, apple, mangoes, dates, banana, cherries, kiwi, apricots, pomegranates, peas, carrots, etc. Pakistan’s total annual production of fruits amounts to nearly 7 million tons and that of vegetables to approximately 7 million tons with approximately 4 million tons of potato production.

However, it is estimated that in Pakistan 35%3 of fruits & vegetables produced each year are lost because of poor harvest conditions. This loss if calculated approximately amounts to 4.9 million metric tons and its estimated local market value reaches somewhere near US $ 800 million. The major reasons for this loss are careless harvesting, rough handling, inadequate transportation, and storage facilities. Pakistan’s Agricultural lands in Punjab, Sindh receive all four seasons and therefore throughout the year cultivation and harvesting of different vegetables, and fruits are scattered evenly across the year.

Operational Capacity of CA Cold Storage

In the proposed controlled atmosphere cold storage there would be a capacity to store high end imported or local products which can be stored for a duration of about 06 months and more. The proposed products would be Apple and Kinow due to their storage life in CA cold storage up to six months.

The proposed cold storage facility has a maximum storage capacity of storing 1,000 metric tons. It will be functional throughout the year. Proposed capacity utilization is 50% with annual growth rate of 10%. This growth rate would be capped at 95% in 5th year.

Target Market of Cold Storage in Pakistan

Target market would be Growers, whole sellers, retailers, hyper stores, Importers and Exporters of fruit and vegetables. Most of the existing local Cold Storage’s are constructed on locally developed methods, which maintain a uniform temperature for all commodities stored. The goods are not stored at their recommended relative storage temperatures and life, and because of this, the quality of stored commodity is badly affected. Vegetables and fruits require specialized post-harvest treatment, appropriate temperature and relative humidity control for their proper & optimum storage, which most of the existing local cold stores lack. Following are the potential customers of cold storage:

  • Growers Wholesalers and Traders
  • Importers and Exporters
  • Retailers and/or Hyper stores

Investment for CA Cold Storage Plant in Pakistan

All the figures in this financial model have been calculated for estimated sales of Rs. -35.28 million in the year one. The capacity utilization during year one is worked out at 50% with 10% increase in subsequent years up to the maximum capacity utilization of 95%. The following internal rate of return, payback period and net present values can be studied in the pre-feasibility study of a CA cold storage business in Pakistan by SMEDA.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Related Articles