Aspada Investment Company will invest more than $2m to expand Schedulers Logistics fleet of cold-chain storage trucks to target under-served locations in India.
The Mumbai-based firm provides end-to-end cold storage and secondary distribution for the country’s fresh fruit, vegetable and food processing industries.
Thomas Hyland, co-founder and partner, Aspada Investment Advisors, based in Bangalore, told FoodProductionDaily the truck company will expand from 30 to 150 vehicles over the next two years using money from the Soros Economic Development Fund (SEDF) and the SONG Fund, an early stage venture capital firm funded by the SEDF, Omidyar Network, and Google.
“India is a very disorganised country and incredibly inefficient. There are opportunities to professionalise its network of cold-chain storage and open up regional access to other food producers,” he said.
“The SONG Fund was set up in India. It’s an exceptionally large market and the number one or two producer of agriculture second to China, with the largest dairy market in the world, in many cases it is also one of the least efficient producers, amongst the world’s lowest.
“It’s a country where there is a tremendous level of inequality and a lot of work needs to be done across many sectors. It’s a large market that’s a test bed for innovation and one where a market based solution can have a development impact. It can improve lives, which is important when we look at our investment.”
Arvind Gangoly, CEO, Schedulers Logistics, said the investment will allow the company to increase its presence in underserved regions, such as the eastern and north-eastern states to connect small manufacturers with major market hubs.
500kg controlled loads
He said it was one of the few players operating in Tier 2 and 3 towns in India that can offer temperature controlled loads as small as 500kg.
Hyland told FPD, there are vast pockets of societythat are not well connected and supply chains for fruit and vegetable in the north-eastern states are very poor because the roads to the main centre are not good.
“Only 7% of the entire country has organised logistics. The rest of it is an individual guy on a truck which runs on an ad hoc basis which leads to incredible inefficiencies,” he added.
“There are no trained drivers, no network and no route authorization like in the US. There is a great need for more sophisticated, organised logistics in the country. Statistics show 30% of all food rots, there is intense poverty, and the need for more efficient cold chains is critical.”
Hyland said Schedulers Logistics currently operates an asset light model. It owns about 30 trucks, but as the firm grows it will lease its vehicles, as opposed to buying them so that it can scale up faster.
Tier 1, 2, 3 is a term used to designate the size of a town on a grading system.
'Scratching the surface'
“The big cities such as Deli and Mumbai are Tier 1 whereas Tier 2 and 3 are poorly connected. India has a billion people, but it is not well served by cold chains or connected to cities. The idea is not to run more of the same but open up parts of the country which have been largely exploited,” he said.
“We believe the cold chain market in India will grow because there is a tremendous amount of wealth in the country and food processing is such a large market.
“Disposable incomes are rising, and there is a desire for QSR (Quick Service Restaurants), fast food franchises are growing rapidly and smaller towns demand better quality fruit and vegetable. For larger players to enter this market it requires investment.
“Schedulers will have a high impact on the food industry but it is only one of a handful of cold chain players, it’s such a niche space, but it is still not even scratching the surface.”