Understanding the Value Chain of Cold Chain Industry:
Industry is dominated majorly by unorganized player, which leaves plenty of space for organized sector to grow at double digit rate in next 4-5 year
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Operational Value Chain
1) Post harvesting, the harvested crops are store in cold storage.
2). These are further processed which includes washing, sorting, grinding and pre-cooling. These services are done in Processing Center.
3). Additional services like Ripening, Chilling and Freezing are also delivered to these processed crops.
4). These processed crops are then again moved to cold storage where they are stored in cooling centers.
This whole value chain requires Cold Chain Logistics Solution.
Value Chain of the Industry:
Cold Storage are used for multiple purpose: 1. Bulk Cold Storage: Long duration storage. 2. Multipurpose Cold storage: Short Term handling of products. 3. Small cold Storage: Pre-Cooling facilities mainly for export oriented items.
4. Frozen Food stored: Freezing facility for Fish, Meat & Dairy Product. 5. Controlled Atmosphere Stores: Technology that can alter the atmospheric gaseous content. 6. Mobile Storage: Mini Small cold storage Centre for storing basic amenities.
Transportation / Distribution: 1. Reefer Trucks: Empowered by integrated diesel driven motor, acting as cold rooms on wheels. 2. Reefer Container: Multi-modal containers with integrated refrigeration equipment. It has a temperature controlled range from -25 to +20°C.
3. Reefer Vessels: Reefer Vessels can carry any frozen or cooled cargo including fruits, vegetables, meat and fish from the range of -30 to +12°C.
Though there is plenty of space available for growth, the cold storage industry is highly capital intensive which makes the business operationally difficult.
We will discuss in our next tweet.
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Zurich axioms are simple rules in order to learn about betting to win.
The First Major Axiom:
ON RISK
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Govt. of India recently passed 3 Farm bills relating to Agriculture sector to bring speedy reforms in Agriculture.
To attract more private investments from the big FMCGs like ITC [E-Choupal] and doubling Farmers income by 2022.
1. Farmers’ produce Trade & commerce (Promotion and Facilitation Act), 2020.
- This Act allows farmers to sell their crops to any trader not necessarily to APMC. Before farmers used to sell at APMC but now it can sell it to anyone.
Pharma Sector has seen a huge boost in sales and profits. There are still many companies which have ath sales and profits & are heading towards ath share
Techno Funda - part 2
Auto ancilliary sector has not been performing well. however, there is an increase in sales and if there is an increase in sales and profit in next 2-3 quaters then many stocks in these sectors can become multibagger.
Updates:
Past few years the growth drivers macro factors are
• GST- This had made good growth in the decentralization of the supply chain making a good place for organised share.
• Consolidation of contract manufacturing companies.
• Digital and E-Commerce increasing demand.
• Achieved the highest sales growth.
• Started the contract manufacturing for toilet cleaner in Sailvassa with capacity of 1000KLPA per day. Plant site was built in 7 months.
Merger:
• Beverage plant in Mysuru in progress.
• Malt Beverages plant in Coimbatore is in progress.
Here are the Key highlights of the conference call 😀
Business Updates:
• Business is now coming to new normal
• Witnessed good traction using RPA, cloud, IOT, mobility,
and analytics
• Digital offerings continue to contribute over 40% of revenues
• Served 26 Million Dollar+ customer
• QoQ came mostly from volume growth.
• Digital service is expected to grow more than other segment.
• Margin improvement was due to Work from home, saving of travelling cost and rupee depreciation.
-It will take a year or two to reach at Pre-Covid Levels
-They are trying to get more international business
-Planning to expand their Bangladesh business
-There was some loss in average selling price this quarter
-They are 2nd largest Luggage company in the World
Strategy:
-E-comm sales is 27% and this is going to be their material channel ahead
-It will continue to be in this range
-Amazon and Flipkart would be like their departmental/retail stores and simultaneously they would be having their exclusive stores also