Kashmir Chasing One Lakh Ton CAS Capacity By 2015

Kashmir Chasing One Lakh Ton CAS Capacity By 2015

2 September 2013
The Economic Times
Masood Hussain

Srinagar: For decades policy makers asking trade and apple producers to improve post-harvest systems in apple did not trigger any result. After imported apple started triggering a challenge and falling returns became the sole outcome of glut in Azadpur Mandi, almost all the businesses are now in race to invest in controlled atmosphere storage (CAS). On Sunday, Chief Minister Omar Abdullah threw open a 2000 ton capacity after laying foundation stone of a 5000 ton store in its neighbourhood. Excited over the trend, Omar said it is the local investor who will help trigger the change. 'I have stopped talking to non local investors because they lack stakes (in Kashmir),' Omar said. 'They flee the day subsidies stop.' 'We have 22000 mts capacity in operation right now and another 55000 capacity is at various stages of implementation,' M Muazam, MD J&K's state industrial development corporation (SIDCO) said. 'As the demand for storage increases, the scope for additional investment into the sector brightens.' Apple is fundamental to the rural economy in Kashmir as it fetches Rs 4000 crore cash a year. Though per tree yield of apple is the highest in world, Kashmir is desperate to improve its 9 ton-hector yield and see how fast it can replace the old stock of trees. Though Himachal is secondary to India's apple basket, its early harvesting and closeness to the market bleeds Kashmir. Investments in the expensive CAS started in Kashmir through the JV route. The first initiative took off in Srinagar in 2004 when FIL Industries roped in CAS pioneer David Bishop and the British company International Controlled Atmosphere (ICA). It had French condensing units, German nitrogen generators, Dutch carbon scrubbers and British critical doors. In 2009, started Harshna Naturals - again a JV, with 4200 mts capacity and it proved a game changer. Its promoter Khurram Shafi Mir became the new icon of change as he introduced new models of business that bridged the gap between technology, farming and the market. 'In the first year, 95% of our capacity was hired to MNCs and only five percent was rented to farmers because there was no demand,' Khurram said in his state of the art facility that is about to double its capacity later this month. 'Now we have 25% capacity rented to MNCs and 75% was taken by the farmers because they have witnessed how yield appreciates off season if stored.' Khurram was fundamental in encouraging others to invest. 'There is lot of capacity untapped and it will take a long time that the real competition starts,' says Shikeh Imran whose store's foundation stone was laid by Omar on Sunday. 'Khurram has studied the apple market across the globe so we come to him for help and advice.' Farooq Amin whose pack house Golden Apple started functioning today wants to double the capacity in a year. 'We have huge infrastructure deficit so we must address our problems as fast as possible,' Amin, who owns a major spices chain said. Insiders in the market said the Rs 200 crore investment that has gone into the CAS has opened new opportunities. Every pack house employs around 50 people, mostly women. Increase in capacity has triggered fall in the costs: from Rs 1.80-kg-month a few years back to Rs 1.50-kg-month. Neelkant Bakshi who heads the Packolable Systems, an Indian company that manages the technology part for the surging CAS market said since MNCs have invested substantially in neighbouring Himacahal, the overall capacity has reached one lakh tons there. 'Given the trend in Kashmir, it will have more capacity in 2015,' Bakhshi said. 'Unlike Himacahal, all investors in CAS are local businesses and not MNCs.' He said the capacity is enormous. 'Italy and Kashmir produce the same quantity of apple every year - around two million tons. But Italy has 600 pack houses and Kashmir has four.'