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Cold Chain Infrastructure

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Cold Chain Infrastructure

Country
Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Food and Beverage
Sub Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Food and Agriculture
Indicative Return
Describes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
> 25% (in GPM)
Investment Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Medium Term (5–10 years)
Market Size
Describes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
92,526 tons of seafood imported and 30,323 tons exported in 2020
Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.
USD 1 million - USD 10 million
Direct Impact
Describes the primary SDG(s) the IOA addresses.
Zero Hunger (SDG 2) Life Below Water (SDG 14)
Indirect Impact
Describes the secondary SDG(s) the IOA addresses.
Good health and well-being (SDG 3) Industry, Innovation and Infrastructure (SDG 9) Responsible Consumption and Production (SDG 12)

Business Model Description

Build cost-effective cold warehousing facilities with high infrastructure connectivity, such as the ones established adjacent to the seaport and the international airport, for storage of processed frozen food, including fish and other seafood products, that will be either exported, re-exported, or are imported for use in the domestic market.

Expected Impact

Provide controlled supply chains that address post-harvest losses and food insecurity, and enhance export and import activities.

How is this information gathered?

Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.

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Country & Regions

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Country
Region
  • Mauritius: Countrywide
  • Mauritius: Port Louis
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Sector Classification

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Sector

Food and Beverage

Development need
Mauritius' agro-industry mainly relies on sugarcane and tuna production (11, 3). Regarding climate change threats on food security and SDG 2, as well as environmental degradation, diversifying the agricultural production is key (6, 11). Thus, whole agro-industry value-chain should be re-envisioned through the promotion of sustainable, local production and consumption (11, 12).

Policy priority
Through its Strategic Plan 2016-2020, the Ministry of Agro Industry and Food Security aims to redirect the agricultural and agro-industry towards an efficient and profitable sector and rendering it more sustainable (3). The Government Programme 2020-2024 supports a cane industry reform, encouraging the shift to modern harvesting practices (6).

Gender inequalities and marginalization issues
Overall, 50% of agricultural production is estimated to come from the corporate sector (12), when small-scale, family exploitations constitute the majority of farmers. Yet, they only represent 17% of the total agricultural land while 83% of the lands are exploited by big companies, which are often active in the cane industry (11).

Investment opportunities introduction
Several markets offer untapped export potential, such as China, Indonesia, Japan, Brazil or the Philippines, including for agricultural and agro-processed products (9). The tourism industry also presents some local untapped potential, especially for agro-processed food (12).

Key bottlenecks introduction
There is a lack of norms and enforcement in the agricultural sector, inadequate investment in research and lack of preparedness to face climate change impacts (12). Mauritius has a strong dominance of the sugarcane industry in the sector, increasing competition for land to produce other crops and a lack of appropriate storage facilities (e.g. cold storage) (11, 12).

Sub Sector

Food and Agriculture

Development need
Developing sustainable agriculture and fishing practices is key to address import-dependency, price fluctuations, pressure on stocks and enhance small scale farmers' resilience (12). Considering the sector's GHG emissions and the high pesticides residues on soils and locally produced agricultural products, sustainability and innovation principles are needed in the sector (11).

Policy priority
The 2019 Voluntary National Review and Strategic Plan 2016-2020 include improving national food security through sustainable agriculture, bio-farming practices, sustainable fisheries and aquaculture (12, 32). The Government Programme 2020-2024 and the Ministry of Blue Economy's mission statement entail the industrialization of fisheries to render Mauritius a seafood hub (4, 5).

Gender inequalities and marginalization issues
In 2018, the gender pay gap in the primary industry, which includes agriculture and fisheries sector, was 43% in Mauritius (7). The female employment rate in the fisheries industry was 4%, while the female employment rate in the aquaculture sector was 18% (3).

Investment opportunities introduction
In 2019, the export of fish and fish products generated USD 342.6 million, contributing 19% of Mauritius exports and the fish sector reached USD 810 million turnover in 2018 (4, 32). 3.4% of GDP was contributed by the agricultural sector in 2013, and the sector is promoted by various incentives and schemes (12, 32).

Key bottlenecks introduction
As an island, agricultural space is limited and agricultural development may interfere with other land use options (53). High cost of labor and agricultural inputs, unfavourable agronomic conditions, aging farming community and unfavourable environment for aquaculture development are decreasing Mauritius' competitiveness compared to neighboring islands (12).

Industry

Agricultural Products

Pipeline Opportunity

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Investment Opportunity Area

Cold Chain Infrastructure

Business Model

Build cost-effective cold warehousing facilities with high infrastructure connectivity, such as the ones established adjacent to the seaport and the international airport, for storage of processed frozen food, including fish and other seafood products, that will be either exported, re-exported, or are imported for use in the domestic market.

Business Case

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Market Size and Environment

Critical IOA Unit
Describes a complementary market sizing measure exemplifying the opportunities with the IOA.

92,526 tons of seafood imported and 30,323 tons exported in 2020

In 2020, Mauritius imported 95,526 tons of frozen seafoods (fish and crustaceans, mollusks and other products) and exported 30,323 tons of seafood. The country's total domestic utilization was of 93,177 tons (42).

With the ratification of the African Continental Free Trade Area (AfCFTA), a boost in intracontinental exports by 81% and exports with non-African countries by 19% are expected by 2035, some of which requires cold chain storage (19).

In 2020, the total production of fresh fruits and vegetables in Mauritius was over 90,000 tons, which also require cold chain storage (20).

Indicative Return

GPM
Describes an expected percentage of revenue (that is actual profit before adjusting for operating cost) from the IOA investment.

> 25%

Froid des Mascareignes (FDM), a cold storage company, and Bella Amigo, providing refrigerated transport solutions, achieved gross profit margins of 45.8% and 29.3%, respectively (21, 22).

Investment Timeframe

Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.

Medium Term (5–10 years)

The Development Bank of Mauritius (DBM) offers a special loan for construction of warehousing facilities, among other agro industry businesses, with a moratorium period of one year and repayment period of seven years, implying medium term investment timeframe for cold chain infrastructure (60).

Ticket Size

Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.

USD 1 million - USD 10 million

Market Risks & Scale Obstacles

High Energy Requirement

Cold chain storage consumes extensive energy, which incurs high costs and requires back up power systems (26).

Market - Highly Regulated

The design and performance of cold storage facilities differs depending on the geographical area and intended use case (27). The lack of uniformed standards for storage facilities makes international operations difficult to manage (28).

Business - Supply Chain Constraints

There is a skills shortage in the Mauritius labor market for handling refrigeration and equipment in cold storage facilities (29).

Impact Case

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Sustainable Development Need

In Sub-Saharan Africa, 40% of food perishes before reaching costumers (30). Due to Mauritius' low warehouse capacity, postharvest losses are high, the quality of harvested commodities is deteriorating, posing dangers to the agro-processing business, local and global supply chain (31).

Mauritius is vulnerable to climate change impacts, extreme weather conditions, external shocks and global crisis, which makes food storage solutions vital to prevent supply chain interruptions (32, 33).

In Mauritius, food and fish export activities are constrained due to insufficient cold storage facilities, which undermine the export competitiveness of the country and make it unable to leverage global export opportunities (34, 29).

Gender & Marginalisation

In Mauritius, gender wage gap in the agriculture and fisheries sectors is 49%, most women are engaged in small-scale fish processing and trading. Women without access to storage facilities are the most vulnerable ones in the sector because of the input waste in fish handling and processing (58).

Improving nutrition and food habits through increased local production is critical for women's health in Mauritius, where the prevalence of obesity is projected at 17.8% among adult females compared to 6.5% among adult males (59).

As post-harvest fruit and vegetable losses are estimated at 25-30% in Mauritius due to reasons such as microbial infections and improper handling and storage processes, there is a demonstrable need to invest in proper post-harvest processes to protect the income of farming communities (61).

Expected Development Outcome

As a post-harvest operation, cold chain infrastructure can reduce food perish and post-harvest losses, which are critical for improving food security, increasing income, and lowering the economic and environmental burden (38).

Cold chain infrastructure ensures sustainability and resilience of the supply chain for local and international networks by extending the shelf life of products and minimizing spoiling risks in case of supply interruptions during the global crisis and extreme weather conditions (56).

Cold chain infrastructure enhances export competitiveness of Mauritius by leveraging export opportunities, which prevent the spoiling of foods and fish between cultivation and marketing while increasing food safety (56, 34).

Gender & Marginalisation

Investments in cold chain infrastructure create job opportunities for women in the cold supply chain, provide reliable access of foods and fishes for women traders and processors as well as ensure steady income for women vendors by diminishing postharvest loss (39, 57).

Increasing women’s access to cold storage facilities improves their business profitability and food safety while reducing post-harvest losses in fish handling and processing (58).

Primary SDGs addressed

Zero Hunger (SDG 2)
2 - Zero Hunger

2.1.1 Prevalence of undernourishment

2.1.2 Prevalence of moderate or severe food insecurity in the population, based on the Food Insecurity Experience Scale (FIES)

2.4.1 Proportion of agricultural area under productive and sustainable agriculture

Current Value

Food consumption of 6.2% of Mauritius' population's was insufficient in 2019 (40).

20.5% of the adult population in Mauritius suffered from moderate or severe food insecurity in 2018 (41).

7,352 hectares of food crops area was harvested in 2020 in Mauritius, representing 17% of total harvested area (42).

Target Value

N/A

N/A

In 2015, Mauritius Agricultural Certification Body under aegis of the Ministry of Agro Industry and Food Security has been set up to monitor the agricultural area under sustainable practices. Data is not available as of 2020 (32).

Life Below Water (SDG 14)
14 - Life Below Water

14.4.1 Proportion of fish stocks within biologically sustainable levels

Current Value

As a proxy indicator, Mauritius' ratio of artisan fish catch to maximum sustainable yield (of 1,700 tons) was 35.7% in 2020 (40).

Target Value

N/A

Secondary SDGs addressed

Good health and well-being (SDG 3)
3 - Good Health and Well-Being
Industry, Innovation and Infrastructure (SDG 9)
9 - Industry, Innovation and Infrastructure
Responsible Consumption and Production (SDG 12)
12 - Responsible Consumption and Production

Directly impacted stakeholders

People

Mauritius' population benefits from increased food security and sustainable food supply.

Planet

Environment benefits from reduced pollution and greenhouse gas emissions brought about by wasting food.

Corporates

Businesses in the cold supply chain, fishing, agro-processing, and organic farming benefit from cold chain infrastructure.

Public sector

Government benefits from an uninterrupted and resilient food supply chain for Mauritius' population.

Indirectly impacted stakeholders

Gender inequality and/or marginalization

Women and low-income communities obtain job opportunities in the development and maintenance of cold chain infrastructure.

Planet

Efficiency gains in agricultural supply chain through better storage decrease environmental footprint of the agricultural industry.

Corporates

Export and import traders, and transportation companies.

Public sector

Government benefits from greater export and import activities.

Outcome Risks

Cold chain infrastructure are resource intensive in construction and maintenance, which may negatively impact the environment (26).

Ammonia systems, while saving up to 40% energy, are not carbon free and contribute to depleting ozone layers (43). Refrigerators carry hazardous materials and require end-of-life recycling.

Coolant systems in the cold chain infrastructure contain combustible gas, such as ammonia, which may cause fire and explosion (44).

Employees operating in cold chain infrastructure are exposed to cold temperatures and other risks, which may damage their health (45).

Impact Risks

Lack of technical skills in handling refrigeration equipment in cold rooms and storage may result in limited delivery of services, hence lessen the positive impact (29).

Establishment and maintenance of cold room infrastructure may not be delivered according to environmental standards such as use of low global warming potential (GWP) refrigerants, limiting the expected impact.

Impact Classification

B—Benefit Stakeholders

What

Cold chain infrastructure provides controlled supply chains that address post-harvest losses and food insecurity, and enhances export and import activities.

Who

Mauritius' population enjoy increased food security and enhanced trade opportunities, and efficient agricultural supply chain reduce waste and environmental footprint of the industry.

Risk

A lack of locally trained personnel and disregard for environmental concerns, such as use of low global warming potential (GWP) refrigerants, may limit the scale of impact for cold chain infrastructure.

Contribution

Cold storage infrastructure advances Mauritian food and fish processing industry, enhancing food security and sectoral capacity, in addition to sustainable sourcing and production.

How Much

Share of transportation and storage in Mauritian economy was 5.6% in 2020, remaining scalable with blue economy development, ensuring food security and supply of basic commodities (18, 29).

Impact Thesis

Provide controlled supply chains that address post-harvest losses and food insecurity, and enhance export and import activities.

Enabling Environment

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Policy Environment

Industrial Policy and Strategic Plan for Mauritius, 2020-2025: Supports the continued growth of Mauritius’ industrial capabilities, and envisions strategic objectives for eight sectors to be strengthened, including for fish processing export (29).

Ministry of Health and Quality of Life, Guidelines, 2006: Sets up guidelines for Cold Room and Refrigeration Plant 0 - 46,45 m2; 46,46 - 92,90 m2; above 92,90 m2 (for storage and hire only) (46).

Strategic Plan For the Food Crop, Livestock and Forestry Sectors, 2016 - 2020: Aims to improve food security and promote sustainable agriculture. Reducing import dependency and encouraging engagement in agri-business are also targeted (12).

Ocean Economy in Mauritius, 2017: World Bank document that summarizes individual government policies to increase Blue Economy's share in GDP and initiatives such as Seafood Hub that includes investments in longline vessels, cold storage, and fish processing (1).

Financial Environment

Financial incentives: A subsidy of 50% of the cost of purchasing and installing solar-powered cool rooms will be offered to registered planters farming on a minimum of one hectare of land, up to a maximum of Rs 400,000 (50).

Fiscal incentives: Companies engaged in storage and distribution of dry and cold products, storage, packaging and distribution of fruits and vegetables, and promotion and distribution of food products are eligible for low taxation of 3% as well as VAT and customs duty exemptions (51).

Other incentives: Mauritius Freeport is a duty free marketing and logistics hub (52). All goods imported into Freeport are duty and VAT exempt, and corporate tax is 3% for the companies operating in the zone (54).

Regulatory Environment

Food Regulations, 1999: Regulates the control of food safety and hygiene, including frozen foods and cold storage hygienic standards (47).

Free Port Act: Enables third-party freeport operators to provide storage space to businesses outside the freeport zone and extend warehousing period from 24 to 36 months in the freeport zone (48).

Employment Relations Act, 2019: Sets uniform rules for cold room workers and states that an employer cannot make an employee spend more than 30 minutes in a cold room (49).

Marketplace Participants

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Private Sector

Froid des Mascareignes (FDM), Bella Amigo Co Ltd, National Cold Storage (Hemraj Ghina & Sons Ltd.), Agricultural Marketing Board (AMB) Airport Cold Storage.

Government

Ministry of Agro Industry and Food Security, Ministry of Health and Wellness, Economic Development Board (EDB) Mauritius Freeport Authority, Agricultural Marketing Board, Mauritius Freeport Development Co.

Multilaterals

United Nations Food and Agricultural Organization (FAO), United Nations Development Programme (UNDP), European Union (EU).

Non-Profit

Mauritius Chamber of Agriculture, Sustainable Tuna Association.

Target Locations

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country static map
semi-urban

Mauritius: Countrywide

Cold chain infrastructure may be located near agricultural areas, which are spread across the island owing to local farmers' associations and government's Household Organic Project.
urban

Mauritius: Port Louis

Mauritius Freeport works as a duty free distribution and marketing hub for the region and provides warehousing facilities for exported and imported goods into the zone (52). Fish handling and processing facilities are located in the district due to easy access to the port (55).

References

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