Indian Cold Chain Logistics Industry and Snowman Logistics

Presented by
Salman Mohammed Shiras

MBA FA I
Logistics
Temperature
Control
Cold Chain
Logistics
A cold chain is a temperature-controlled supply chain.
An unbroken cold chain is an uninterrupted series of storage and distribution activities which
maintain a given temperature range.

It is used to help extend and ensure the shelf life of products such as fresh agricultural produce,
seafood, frozen food, photographic film, chemicals, and pharmaceutical drugs.

Uses product specific environment parameters.
Manufacturers
Precooling System
Reefers
Refrigerated railway wagons
Refrigerated cargo containers
End
Customers
Hotels, airports, ports,

factory, markets etc.
Cold Storages
Warehouses
Value Added Services
Transport
Reefers
Refrigerated railway wagons
Refrigerated cargo containers
Various industries covered under cold chain comprise agriculture, horticulture and floriculture,
dairy, confectionery, pharmaceuticals, chemicals and poultry, among others.

Highly fragmented 3500 players in unorganized sector & 30 players in organized sector.
Organized players account for only ~810% of cold chain revenues.
There are approximately 6,300 cold storages in India designed originally for single commodity
storage.
75 percent of the cold storage capacity is used to store potatoes, while only 23 percent fall in
the multi-product category.

65% of Indias cold chain storage capacity is contributed by Uttar Pradesh and West Bengal.
The current capacity is capable of handling less than 11% of what is produced.
Strengths
Weakness
Backbone of industries
Essential to preserve the quality of
products
High barriers to entry

Highly fragmented
Low technology penetration
Lack of trained manpower
SWOT ANALYSIS
Opportunities
Emphasis on exports
Growth of organized retail
Growth of end segments
Demand of pharmaceutical sector
Government Initiatives
Threats
Highly capital intensive
Lack of infrastructure
Recognized as sunrise sector.
Less than 10% of produce pass through a cold chain.

The Indian cold chain industry, expected to grow at a CAGR of ~28% over the next four
years and reach a market size of ~USD 13 billion in 2017.

Shift in technology of construction from conventional brick wall construction to sandwich
insulated panel and reinforced concrete (RCC) structures to pre-engineered buildings

(PEB) steel structures.
Energy-efficient practices like energy recovery systems, energy-efficient designs of
refrigeration equipment and automation.

Introduction of green technology & use of renewable energy
Development of reefer infrastructure in view of Indias exports thrust and potential.
Snowman Logistics Limited, founded in 1993, is an integrated pan-India temperature-
controlled logistics services provider.

Distribution network comprises primary and secondary transportation supplying, amongst
others, to QSRs, retail outlets, restaurants and hotels within a city.

Largest promoter and shareholder Gateway Ditriparks Limited.
Other shareholders are Mitsubishi Corporation, Mitsubishi Logistics Corporation, International
Finance Corporation and Norwest Venture Partners.

Manages 28 temperature-controlled warehouses across 15 locations [as of 31 March 2015].
Successfully completed the IPO in August 2014 at a price of Rs. 47. The issue was
oversubscribed ~60 times.

The Companys shares were listed on the BSE and the NSE in September 2014.
Snowmans
integrated source to stores operation comprises warehousing, primary

distribution, secondary distribution and value-added services (kitting, labelling, sorting and
bulk breaking).
Offers services across a spectrum of temperature- from ambient to chilled and frozen (i.e.-
25C to +20C).
Blast freezing facilities at temperature controlled warehouses in Bengaluru, Chennai,
Visakhapatnam, Kolkata, Mumbai, Ahmedabad, Delhi, Chandigarh and Surat.

During the year, warehousing capacities were added at Mumbai, Chennai, Bhubaneswar, Pune,
Surat and Visakhapatnam, taking the total installed capacity from 61,700 pallets at the start
of the year to 85,500 pallets which is a growth of 39%.
The Indian cold chain industry, expected to grow at a CAGR of ~28% over the next four years
and reach a market size of ~USD 13 billion in 2017.

Unorganized nature provides a vast opportunity.
Focus on multipurpose cold storages.
Focus on express distribution.

Potential future markets - F & V processing, pharma and e-commerce.
Ratio Analysis
Ratio
Formula
2015
2014
Fixed Asset Turnover ratio
Revenue/ Average Fixed Assets
10.46
1.59
Current ratio
Current Assets/ Current Liabilities
3.18
0.82
Debt-Equity ratio
Total Debt/Total Shareholder's Equity
0.17
0.59
Financial Leverage ratio
Average Total Assets/ Average Total Equity
1.31
1.75
Interest Coverage ratio
EBIT/ Interest Payments
2.19
2.22
Net Profit margin
Net Income/ Revenue
12.19
15.14
Operating Profit margin
EBIT/Revenue
23.17
24.77
Return on Assets
Net Income/ Average Total Assets
25.09
17.83
Return on Equity
Net Income/ Average Total Equity
0.059
0.101
Return on Total Capital
EBIT/ Average Total Capital
0.02
0.07
Annual Report
Research Reports
Wikipedia

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Presented by

Salman Mohammed Shiras

A cold chain is a temperature-controlled supply chain.

maintain a given temperature range.

seafood, frozen food, photographic film, chemicals, and pharmaceutical drugs.

Hotels, airports, ports,

dairy, confectionery, pharmaceuticals, chemicals and poultry, among others.

the multi-product category.

High barriers to entry

Recognized as sunrise sector.

Less than 10% of produce pass through a cold chain.

years and reach a market size of ~USD 13 billion in 2017.

insulated panel and reinforced concrete (RCC) structures to pre-engineered buildings

refrigeration equipment and automation.

Snowman Logistics Limited, founded in 1993, is an integrated pan-India temperature-

controlled logistics services provider.

others, to QSRs, retail outlets, restaurants and hotels within a city.

Finance Corporation and Norwest Venture Partners.

oversubscribed ~60 times.

integrated source to stores operation comprises warehousing, primary

Visakhapatnam, Kolkata, Mumbai, Ahmedabad, Delhi, Chandigarh and Surat.

and reach a market size of ~USD 13 billion in 2017.

Focus on express distribution.

Fixed Asset Turnover ratio

Revenue/ Average Fixed Assets

Current Assets/ Current Liabilities

Total Debt/Total Shareholder's Equity

Financial Leverage ratio

Average Total Assets/ Average Total Equity

Interest Coverage ratio

EBIT/ Interest Payments

Net Profit margin

Net Income/ Revenue

Operating Profit margin

Net Income/ Average Total Assets

Net Income/ Average Total Equity

Return on Total Capital

EBIT/ Average Total Capital

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