Concor-IDF JV falls through

Container Corporation of India's plans for setting up a cold chain network in India has hit a roadblock. The joint venture it has had with Indian Development Fund has ceased to exist.

"We found the project to be financially unviable, as steel prices have risen considerably over the year," Rakesh Mehrotra, Concor managing director told Business Standard.

IDF officials said the project went cold with Concor unable to decide whether to go ahead with the project, despite it being viable. "The joint venture is dead," an IDF official said.

Mehrotra however said Concor had not shelved the project altogether, adding that it would look for new partners. He added that Concor was open to striking up a partnership with IDF again. "We are still looking at the possibility of setting up such facilities," he said.

He also said the locations which the company wanted on a priority basis were Mumbai, Delhi and Bangalore. "While looking at reports it was found that certain concerns need to be addressed immediately. Concor is looking at ways to modify the earlier project to make it feasible," he said.

In March 2004, Concor had entered into a partnership with IDF to form Freshways Enterprises Private Ltd. The company had an equity base of Rs 100 crore (Rs 1 billion) with both IDF and Concor holding equal stakes in the new company. The cold-chain plan of Concor involved transporting perishable products from source to end-user.

Concor had announced its intention of setting up cold chains as far back as May 2002.

The project was divided into two phases with plans of setting up facilities in Delhi, Bangalore and Mumbai by 2005 at a cost of Rs 300 crore (Rs 3 billion) initially.

The second phase involved extending the controlled atmosphere store chain to Ahmedabad, Kolkata, Chennai, Hyderabad and Nagpur.

These stores were to be networked by inbound and outbound logistics consisting of reefers and refrigerated trucks. Concor intends to set up about 14 such stores by 2008.