Beruflich Dokumente
Kultur Dokumente
Final Report
Contents
BACKGROUND .............................................................................................................. 1
EXECUTIVE SUMMARY ................................................................................................ 2
SONEPAT DISTRICT PROFILE ................................................................................... 4
OPPORTUNITY ASSESSMENT .................................................................................... 7
RISK/CONSTRAINTS....................................................................................................20
MARKET SPEAKS ........................................................................................................21
ANNEXURE ...................................................................................................................22
BACKGROUND
About the Client
Shree Shubham Logistics Limited (SSL) (the client) is an end-to-end logistics solutions provider to commodity
stakeholders and provides services encompassing storage and preservation with a chain of dry and cold storage
units, weighing, testing and certification (grading and sorting facilities for standardization of agricultural produce),
collateral management for commodity financing against warehouse receipts/stocks with the help of banks,
fumigation and pest management, commodity procurement etc.
SSL has developed global standard agri-logistics parks in the states of Rajasthan, Gujarat, Madhya Pradesh and
Maharashtra. Currently, SSL is managing warehouses across 120 locations with storage capacity over 1.40 Million
Metric Tonnes.
Shree Shubham Logistics Ltd (SSL), hereafter referred to as the Client has commissioned CRISIL Research to
perform detailed market assessment for establishing new agricultural warehouses in 30 districts in India as part of
their Phase 3 expansion.
The 30 districts were selected post a secondary research based analysis encompassing 20 parameters (potential
demand, infrastructure related, risk/constraints) across 174 districts across the 6 states of interest of the client (UP,
AP, Chhattisgarh, Bihar, Delhi, Karnataka). The parameters used in the analysis considered indicators for agriwarehousing demand potential as well as the risks associated with it.
For the 30 districts selected, primary and secondary research activities were undertaken to perform detailed market
assessment that qualifies and quantifies the market opportunity for agri-warehousing. Further to detailed market
assessment, financial assessment was performed on 15 identified districts to assess financial viability of a
proposed warehouse in a selected location in the district.
Current
Capacity
(350,000 MT)
Cold Storage
Capacity
(350,000 MT)
Major aggregation
center
No significant
exports from the
district
1.94% historic
growth in
population
4*
4% increase in
trading factor
during 2010-12
Current demand
(297,500 MT)
Growth factor
(6%)
Peak
Utilisation
(85 %)
Current
Capacity
(350,000
MT)
2016-17
Expected Supply
(350,000 MT)
3.2 Economy
Sonipat district GDP growing at average rate of 10% during 2005-06 to 2009-10
Sonipat district has witnessed a significant growth of ~10%, slightly lower than the Haryana state.
80,000
68729
70,000
60,000
62898
58440
52735
50,000
40,000
30,000
20,000
10,000
2005-06
2006-07
2007-08
2008-09
2009-10
3.3 Infrastructure
Being one of the major industrial hubs in Sonepat district, Kundli has around 641 production units which is the 2nd
highest in the district. Various types of manufacturing units in Kundli industrial estate belongs to Home furnishing,
lights, rubber, books, sanitary and stainless steel etc. In recent times Kundli has also seen development of various
educational universities and institutions namely, Rajiv Gandhi Educational City - (comprising 10 educational
institutions), National Institute of Food Technology Entrepreneurship and Management (NIFTEM) etc.
Units
Geographical Features
Latitude
Longitude
Geographical area
Sq Km
Population
Male
Female
Total
No
No
No
798,948
681,132
1,028,393
Agriculture
Total area
Forest cover
Non agriculture land
Cultivable barren land
Hectare
Hectare
Hectare
Hectare
214,250
7,359
33,194
8,403
Railways length
Km
73
National Highway
PWD
Major District Highway
Other District/ Rural Roads
Kachha Road
Km
Km
Km
Km
Km
64
25
28
419
76
no.
13,039
Roads
OPPORTUNITY ASSESSMENT
The Kundli area is primarily a cold storage cluster. There are about 70 cold storages in this region. All these are
multipurpose cold storages catering to the cold storage demand arising mainly from Delhi. The Azadpur mandi in
Delhi is the largest mandi in Asia for fruits and vegetables. The arrivals in the mandis are from different regions of
India with apples coming from Himachal Pradesh, Jammu & Kashmir and other fruits like oranges, banana and
mango coming from Southern states like Maharashtra and Andhra Pradesh. Vegetables like potato come from
Uttar Pradesh, Punjab, and Haryana etc. Thus most of the arrivals are from different states and some are also
imported.
As per our interactions, we have learnt that the major commodities which are stored in the cold storages are pulses
(chana, rajma), spices, dry fruits and fruits. Chana comes majorly from Rajasthan, whereas spices come from
Andhra Pradesh and fruits from different parts of India.
Since, Azadpur mandi is the largest in the world in terms of arrivals and there was limited cold storage capacity in
Delhi to cater to cold storage demand, Kundli came up as an alternate destination for cold storage in the outskirts
of Delhi. Also Delhi, is a major trading hub, it acts as an aggregation point where the arrivals of crops are from
mandis and imports from other countries. At the same time, the dispatch of these crops is towards exports, to other
states and for local consumption.
Mandi arrivals
Imports
Exports
Aggregation
Local Consumption
Distribution to other
states
Since, Kundli is a part of Sonepat district; we have given the demand side analysis from the district point of view.
We have analysed the mandi arrivals of major commodities to proxy the arrivals of fruits to be stored in cold stores.
18.6
18
16.1
16
13.3
14
11.9
12
11.3
10.9
10.9
2010-11 E
2011-12 E
2012-13 E
10
8
6
4
2
2006-07
2007-08
2008-09
2009-10
270,000
254,830
258,096
2006-07
2007-08
265,669
265,941
266,214
266,486
2009-10
2010-11 E
2011-12 E
2012-13 E
220,000
170,000
120,000
70,000
20,000
2008-09
Wheat and rice form ~82 per cent of the agricultural produce
Wheat and rice constitute nearly 82 per cent of the total agricultural produce in the district, followed by sugarcane,
potato and bajra. The production in sugarcane has been declining consistently in the past decade, due to
preference for crops like wheat and rice. Other crops like maize, arhar (tur), cotton etc. form the rest of the pie.
Sonepat : Split of Crop production 2012-13
Others, 2.9%
Sugarcane,
15.1%
Rice, 23.2%
Wheat, 58.7%
Other Crops
Sonepat: Split of major crop forming Others, by production
Onion, 0.1%
Potato,
1.4%
Bajra, 2.3%
Cotton(lint),
0.2%
Rapeseed
and
Mustard, Arhar(tur),
Maize, 0.2%
0.3%
0.4%
Source: Ministry of Agriculture, Industry, CRISIL research
10
7.6
6.9
6.4
6.4
6.3
6.2
6.1
6.1
6
4.0
4
2
3.0
1.8
0.4
0.5
0.5
2.3
2.2
1.9
1.9
0.5
2.4
0.3
2.4
1.9
0.2
2.5
1.6
0.3
2006-07
2007-08
2008-09
Wheat
Rice
2009-10
2010-11 E
Sugarcane
2011-12 E
2012-13 E
Others
Rice is the 2nd largest crop in the district after wheat with an average production of ~230,000 MT in the last 5
years. Rice production is expected to register a CAGR of 7 per cent till 2012-13. Sugarcane, as mentioned earlier
has been on a declining trend from 2006-07 to 2009-10. This trend has continued over the next three years to
2012-13. Other crops such as bajra, maize, rapeseed and mustard, arhar etc constitute the remaining ~ 3 per cent
of production.
Top six commodities constitute ~ 47 per cent of the total arrivals in Azadpur mandi
As mentioned earlier, to focus on the cold storage cluster, we have analysed the arrivals of Azadpur mandi that is a
mandi for fruits and vegetables only. Apple, banana, mango, potato, onion and tomato are estimated to account for
~47 per cent of total arrivals in 2012-13.
10
Tomato, 5%
Apple, 13%
Apple
Banana
Onion, 10%
Mango
Potato
Banana, 3%
Mango, 4%
Onion
Tomato
Potato, 12%
2010-11
2011-12
2012-13 E
Total arrivals in MT
4,532,445
4,503,677
4,510,554
Our analysis and market interactions suggest that apple arrivals are the highest in the months of September to
December, whereas that for mango is between April and July. Other major commodities like potatoes, tomatoes
and bananas arrive almost throughout the year. Out of these, mainly apples are stored in cold storages apart from
small quantities of grapes, oranges and mangoes seasonally.
11
There are no government warehouses in and around this region. The cluster of these cold storages forms an
aggregate capacity of ~350,000 MT. The major parties storing the food grains are traders and merchants of Delhi in
the Azadpur mandi.
12
Based on our interactions with warehouse players and key market participants, we learnt that many cold storages
have come up in the last 2-3 years. The prime reason for this being the proposed shifting of the Azadpur mandi to
Tikri, which is closer to Kundli. Also since there is no space for cold storages to come up in the city, it was
inevitable for new cold storages to come up on the outskirts and Kundli formed an optimal location.
In the early phase of setting up cold storages, some traders from the Azadpur mandi came up with these cold
storages and served the demand from other traders apart from their captive consumption. Later, as the
warehousing intensity of commodities increased with increase in trade along with commodities like spices and
pulses also being warehoused, the demand for cold stores also increased. Thus, the utilisation and rentals for the
same increased eventually making it a profitable business for these traders. This attracted other traders to come up
with cold stores of their own. With relatively low prices of land, easier land conversion norms of Haryana
government and high subsidy (maximum of Rs 1.2 crores) setting up a cold store became easier. Also, the major
part of investment is land. This has led to higher competition and increasing cold store capacities in the last two
years. Although, the average utilisation in this cluster has remained at similar levels of ~75 per cent, the rentals
have declined by 30-40 per cent. This shows the increasing competition due to the added capacities.
All these regions lie along the NH 1 which connects Delhi to Karnal also known as G.T.Road. Thus this cluster
provides high road connectivity. The new proposed fruit mandi in Tikri, which would replace the Azadpur mandi, is
just 5 km from Kundli village. This has led to price escalation in this region. The land rates are in the range of Rs
7000-10000 per sq yard which translates to Rs 3.4 - 4.8 crore per acre, depending upon the proximity to NH1 from
the location of cold storage. The average land rates in this cluster is estimated to be ~ 4 crore per acre.
13
Location
HSIDC Kundli
HSIDC Kundli
HSIDC Kundli
HSIDC Kundli
HSIDC Kundli
HSIDC Kundli
Kundli village
Kundli village
Kundli village
Kundli village
Kundli village
Nathupur
Nathupur
Nathupur
Nathupur
Nathupur
HSIDC RAI
HSIDC RAI
HSIDC RAI
350,000
Total capacity
Source: CRISIL Research
As mentioned earlier, the aggregate capacity of this cluster is ~350,000 MT with an average size of ~ 5,000 MT.
The utilisation levels range from 70-80 per cent with average utilisation of ~ 75 per cent. Most of these are
multipurpose cold storages and their rentals are more or less the same.
Commodity
Rental
Chilies (month)
Fruits (month)
Pulses (month)
Rs 12-15/40 kg bag
Rs 10-12/box
Rs 15-20/50 kg bag
14
Medium
Medium
High
High
High
High
High
Medium
High
High
Medium
High
High
High
Medium
High
High
High
High
High
High
High
High
High
High
High
High
High
High
High
High
High
High
High
High
High
High
High
Dedicated Weighing
Equipm ents/Technolo
services
gy (Lifting Machinery)
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
Medium
Medium
Medium
Medium
Medium
Medium
Medium
Medium
Medium
Medium
Medium
Medium
Medium
Medium
Medium
Medium
Medium
Medium
Medium
Note: Rankings: Low-Poor Quality, Medium- Medium Quality, High- Good quality
Observed construction quality-include parameters like, height, ventilation and relative newness of the building
Soucrce: Industry,CRISIL Research
The observed construction quality of many cold storages is high with boundary walls and a secure environment.
However, they did not have dedicated weighing service like own weigh bridges. Since, the customers are mainly
wholesalers and traders, who have their own means of financing, none of the cold storages provided collateral
management services.
15
5-10%
5-10%
5-10%
5-10%
5-10%
5-10%
5-10%
5-10%
5-10%
5-10%
5-10%
5-10%
5-10%
5-10%
5-10%
5-10%
5-10%
5-10%
5-10%
Wholesellers/traders/
Industrial Custom ers
90-95%
90-95%
90-95%
90-95%
90-95%
90-95%
90-95%
90-95%
90-95%
90-95%
90-95%
90-95%
90-95%
90-95%
90-95%
90-95%
90-95%
90-95%
90-95%
16
1.94 per cent growth in population and hence the growth in consumption
ii)
We expect the above historic factors to maintain the same trend, going forward.
17
CAGR: 6.0%
4,00,000
3,75,587
3,54,327
3,34,271
3,50,000
3,00,000
3,15,350
2,97,500
2,50,000
2,00,000
1,50,000
1,00,000
50,000
2012-13
2013-14
2014-15
2015-16
2016-17
4,00,000
(19,444)
3,50,000
3,50,000
3,00,000
389
3,50,000
3,15,350
43,697
21,412
3,50,000
3,34,271
3,54,327
3,50,000
67,319
3,75,587
3,50,000
2,97,500
2,50,000
2,00,000
1,50,000
1,00,000
50,000
2012-13
2013-14
2014-15
Demand
2015-16
2016-17
Supply
The current cold storage demand of 297,500 MT is estimated to grow by a CAGR of 6 per cent to 375,587 MT in
2016-17. The current supply of warehouses is 350,000 MT and no additions are expected to come in near future.
Thus, 67,319 MT of additional cold storage capacity is estimated to be required. The opportunity is estimated
18
based on the 90 per cent optimal utilisation of the existing supply in the long term, which is in line with the market
trend.
19
Naxal activity
Risk Intensity
Low
Drought intensity
Medium
Flood intensity
Medium
Medium
20
MARKET SPEAKS
This section presents the summary of market interactions with key market participants in the district
Nowadays
as apples which are being supplied from Shimla and J&K are also stored in cold storages
there itself, the requirement for cold storage has partially reduced in the Delhi region Manager, Private
cold storage
The possibility of Tikri being the replacement of Azadpur mandi has led to a craze to set up cold storages
here. Owner, private cold storage
The competition is very high. The rentals here are half the rentals offered in Lawrence Road (cluster of
cold storages in the city) just to have higher utilisation. Manager, private cold storage
Earlier say one trader used to serve four other traders. Now, two of those have set up their own
warehouses thus increasing the competition. Owner of cold storage and trader in spices
21
22
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