Mumbai, Maharashtra – Tata Motors will provide 200 fully equipped reefer trucks to Kool-ex, a pan-Indian pharmaceutical cold chain logistics company, in a new strategic agreement.
Dow Polyurethanes is believed to be supplying polyurethane raw materials. An unnamed third party is insulating the trucks.
In addition to the 200 lorries in the initial deal, Kool-ex plans to further expand its cold chain warehousing across India, and will focus on its business on pharmaceuticals.
It could also increase its number of refrigerated lorries ‘from 400 to 800 in the coming years’, according to Rahul Agarwal, director, Kool-ex Cold Chain.
These expansion plans come in response to stringent pharmaceutical transport guidelines. India’s Central Drugs Control Organisation (CDSCO) announced in July 2018 that it is bringing in tight rules on storing and transporting pharmaceuticals.
‘The CDSCO guidelines are one of the factors behind the expansion; along with the tremendous growth in temperature-sensitive products in the pharmaceutical industry,’ Agarwal said.
In addition, Kool-ex is also considering a $10-12 m investment in an insulated warehouse in Pune, Maharashtra. This is likely to become operational in January 2021.
Tata is largely funding the reefer deal. As Agarwal explained: ‘Tata entities will provide capital in a mix of equity and debt. This will go towards the capex and working capital of these new vehicles. Tata Motors has picked up CCDs [compulsorily convertible debentures] of Kool-ex redeemable after 7 years. The total amount invested is more than $14 m.’