International Finance Corporation (IFC) is lending $6.5 million to help the food supply chain company expand its cold storage facilities in various locations in India, thus reducing wastage and promoting food security.
The World Bank arm is already an equity shareholder in Snowman Logistics and invested $5 million in the firm in 2009. Other investors in Snowman include Gateway Distriparks Ltd, Mitsubishi Corporation, Mitsubishi Logistics Corporation and Nichirei Logistics Group Inc.
“IFC is supporting this growing company to foster efficiency and organisation in the emerging logistics sector. An efficient farm-to-market cold food supply chain helps producers lower their distribution and inventory costs and access retail markets in a cost-effective manner,” a statement said.
“We offer state-of-the-art cold storage services for commodities, which promotes food security and stabilises prices,” said Ravi Kannan, CEO of Snowman Logistics. “Expansion of our storage facilities will help Snowman become a leading player in the emerging retail and food sector.”
About one-third of India’s farm produce is lost on account of wastage due to inadequate transportation and storage facilities. In addition, the $390 million agricultural logistics industry is highly fragmented.
“IFC’s investment in Snowman will help lower overall logistics costs and reduce wastage associated with Snowman’s clients, most of whom are in the agriculture and food sector,” said Anita M. George, IFC director for Infrastructure in Asia. “This is an ongoing strategic partnership with Snowman.”
Snowman provides cold chain services for a variety of products, connecting more than 100 cities and distributing to more than 4,400 outlets. Its temperature-controlled storage infrastructure is currently spread across 16 facilities, including Mumbai, Chennai, Bangalore, Hyderabad, Kochi, Kolkata, Ludhiana, and Vishakhapatnam, among others.
Other private equity investments in the cold chain logistics players include Swastik Roadlines (India Equity Partners) and JICS Logistics (IL&FS Private Equity). Also, IDFC Private Equity has recently invested in Staragri Warehousing and Collateral Management Ltd, which plans to foray into cold chain.