A Cold Storage Plant is one of the most profitable and essential agro-industrial projects in Bangladesh. Because agriculture is the backbone of the country, yet a huge percentage of perishable crops—like potatoes, vegetables, and fruits—spoil due to poor post-harvest preservation. Every year, millions of tons of potatoes are lost simply because there is not enough cold storage capacity. Therefore, investing in a cold storage facility not only brings financial gain but also directly supports farmers and ensures food security.
Importance of Cold Storage Business in Bangladesh
Bangladesh produces more than 10 million metric tons of potatoes annually, along with a large quantity of onions, tomatoes, fruits, and fish. However, less than 4 million metric tons can currently be stored in existing cold storages. The shortage creates a strong demand for modern, energy-efficient, and strategically located storage facilities.
Most important, this business ensures stable prices of perishable goods throughout the year. Because when crops are stored safely, supply remains stable even during off-seasons, allowing farmers and traders to earn consistent profit. Besides that, the government encourages private investment in cold chain infrastructure, providing tax benefits and easy financing.
Project Overview
| Particulars | Details |
|---|---|
| Project Title | Cold Storage Plant Project |
| Project Location | Potato and vegetable-producing zones (e.g., Bogura, Rangpur, Munshiganj, or Comilla) |
| Project Capacity | 5,000 Metric Tons (MT) of storage |
| Estimated Project Cost | BDT 250 million (approx.) |
| Employment Generation | 35–50 people |
| Expected Project Life | 20 years |
| Primary Product/Service | Storage services for potatoes, onions, fruits, and vegetables |
| Target Customers | Farmers, traders, exporters, and food processors |
A cold storage project requires proper location planning. Because it must be close to farming zones and have good road access for trucks. The site should also have reliable electricity, water, and drainage facilities.
Technical Description
The plant should include temperature-controlled chambers, insulation, humidity control systems, backup generators, and automated monitoring.
| Section | Capacity / Specification | Description |
|---|---|---|
| Storage Chambers | 10 rooms × 500 MT each | Insulated rooms with automatic temperature control |
| Temperature Range | 0°C to +10°C | Adjustable based on stored product |
| Refrigeration System | Ammonia-based or Freon-based | Energy-efficient compressor units |
| Power Backup | 250 kVA diesel generator | Ensures uninterrupted operation |
| Construction Type | RCC and insulated sandwich panels | Designed for long-term durability |
| Machinery Origin | China / India / Europe | Energy-efficient compressors and condensers |
| Automation | Digital temperature & humidity control | Ensures accurate product preservation |
Land and Building Requirements
| Item | Unit | Quantity | Rate (BDT) | Total (BDT) |
|---|---|---|---|---|
| Land | Acre | 0.5 | 30,000,000 | 30,000,000 |
| Land Development | Lump Sum | – | 2,000,000 | 2,000,000 |
| Building (Storage & Office) | sq. ft | 15,000 | 2,500 | 37,500,000 |
| Boundary, Road, Drainage | Lump Sum | – | 2,500,000 | 2,500,000 |
| Total Land & Building | 72,000,000 |
Most important, location selection is the backbone of the project. Because transportation costs and product freshness depend heavily on how close the facility is to farming areas and wholesale markets.
Machinery and Equipment
| Item | Quantity | Rate (BDT) | Total (BDT) |
|---|---|---|---|
| Refrigeration System (Compressor, Condenser, Evaporator) | 1 set | 45,000,000 | 45,000,000 |
| Insulated Panels and Doors | 1 set | 12,000,000 | 12,000,000 |
| Generator (Diesel, 250 kVA) | 1 set | 5,500,000 | 5,500,000 |
| Cooling Tower and Pumps | 1 set | 3,000,000 | 3,000,000 |
| Control Panel & Electrical System | 1 set | 4,000,000 | 4,000,000 |
| Material Handling Equipment | 1 set | 2,000,000 | 2,000,000 |
| Installation & Commissioning | Lump Sum | – | 3,500,000 |
| Total Machinery Cost |
Miscellaneous Fixed Assets
| Item | Quantity | Total (BDT) |
|---|---|---|
| Office Furniture & Equipment | Lump Sum | 1,000,000 |
| Laboratory / Testing Equipment | Lump Sum | 500,000 |
| Vehicle (Pick-up Van) | 1 | 2,000,000 |
| Pre-Operating & Startup Cost | – | 2,500,000 |
| Total | 6,000,000 |
Total Project Cost Estimation
| Component | Amount (BDT) |
|---|---|
| Land & Building | 72,000,000 |
| Machinery & Equipment | 75,000,000 |
| Miscellaneous Fixed Assets | 6,000,000 |
| Preliminary & Pre-Operating Expenses | 4,000,000 |
| Working Capital (6 months) | 18,000,000 |
| Total Project Cost | 175,000,000 BDT (Approx.) |
Means of Finance
| Source | Amount (BDT) | Percentage |
|---|---|---|
| Promoter’s Equity | 70,000,000 | 40% |
| Bank Loan | 105,000,000 | 60% |
| Total | 175,000,000 | 100% |
Banks and financial institutions in Bangladesh, such as BKB, Agrani Bank, or IDCOL, often support cold storage projects due to their agro-linked importance and low default risk.
Operating Cost Estimate
| Expense Head | Annual Cost (BDT) |
|---|---|
| Salaries & Wages | 6,000,000 |
| Power & Fuel | 9,000,000 |
| Maintenance & Repairs | 2,000,000 |
| Refrigerant & Spare Parts | 1,200,000 |
| Administrative & Office Expenses | 1,800,000 |
| Insurance & Security | 1,000,000 |
| Marketing & Transportation | 1,500,000 |
| Total Annual Operating Cost | 22,500,000 BDT |
Revenue Projection
| Item | Capacity Utilization | Storage Rent (BDT/MT/Year) | Annual Revenue (BDT) |
|---|---|---|---|
| Year 1 | 70% | 2,500 | 8,750,000 |
| Year 2 | 85% | 2,700 | 11,475,000 |
| Year 3 | 90% | 2,800 | 12,600,000 |
| Year 4 | 95% | 3,000 | 14,250,000 |
| Year 5 | 95% | 3,200 | 15,200,000 |
With increased utilization, efficiency, and improved customer relationships, annual revenue tends to grow steadily.
Profitability Analysis
| Year | Total Revenue (BDT) | Total Cost (BDT) | Profit Before Tax (BDT) |
|---|---|---|---|
| 1 | 8,750,000 | 22,500,000 | -13,750,000 |
| 2 | 11,475,000 | 22,800,000 | -11,325,000 |
| 3 | 12,600,000 | 22,000,000 | -9,400,000 |
| 4 | 14,250,000 | 22,500,000 | -8,250,000 |
| 5 | 15,200,000 | 22,500,000 | -7,300,000 |
| 6 onwards | 25,000,000 | 22,000,000 | +3,000,000 |
Typically, the payback period for a cold storage plant is 6–8 years, depending on financing costs, rental rates, and operational efficiency.
SWOT Analysis
| Strength | Weakness | Opportunity | Threat |
|---|---|---|---|
| Strong demand for cold storage facilities | High electricity cost | Expanding agri-business and food exports | Seasonal dependency |
| Government policy support | High initial investment | Rapid urbanization and cold chain expansion | Power interruptions |
| Steady rental income | Maintenance intensive | Scope for integrated logistics | Price fluctuations of agro-products |
Social and Economic Benefits
- Reduces Post-Harvest Loss: Farmers can store produce for longer and sell at better prices.
- Creates Employment: Direct and indirect jobs in construction, operation, and transport.
- Stabilizes Market Prices: Smooth supply helps prevent artificial price hikes.
- Encourages Export: Maintains quality for processed food and export items.
- Supports Rural Development: Promotes agro-based industry and regional growth.
Implementation Schedule
| Activity | Duration | Timeframe |
|---|---|---|
| Land Acquisition & Design | 2 months | Month 1–2 |
| Civil Construction | 5 months | Month 3–7 |
| Machinery Procurement | 2 months | Month 6–7 |
| Installation & Commissioning | 2 months | Month 8–9 |
| Trial Run & Training | 1 month | Month 10 |
| Commercial Operation | Month 11 onwards |
The total project implementation period is roughly 10–12 months.
Risk Factors and Mitigation
- Power Failure Risk: Install standby diesel generator and consider solar hybrid options.
- Market Risk: Sign yearly contracts with potato traders or associations.
- Technical Risk: Choose reliable refrigeration systems with proper maintenance support.
- Financial Risk: Secure soft loans with long repayment terms.
Financial Analysis Summary
| Financial Indicator | Value |
|---|---|
| Project Cost | 175 million BDT |
| Internal Rate of Return (IRR) | 16% |
| Payback Period | 7 years |
| Net Present Value (NPV) | Positive |
| Break-Even Point | 80% capacity utilization |
Therefore, the project is financially viable and socially beneficial.
Future Expansion Possibilities
Cold storage plants can evolve into multi-commodity cold chains—including frozen fish, meat, dairy, and pharmaceuticals. The future of this sector will depend on energy-efficient refrigeration, automation, and logistics integration.
Besides that, investors may also link cold storage with processing units like potato chips, frozen vegetables, or juice production for additional profit streams.
Government Policy and Incentives
The Bangladesh government offers:
- Reduced import duty on cold storage machinery.
- Low-interest loans from agricultural banks.
- Tax holidays for agro-processing industries.
- Subsidy on rural electrification and renewable power integration.
Therefore, investors have multiple policy supports that reduce both risk and cost.
Call to Action
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📩 Email: [email protected]
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