The world over, the mission to deliver the Covid-19 vaccine is in full swing. Over a month ago, on December 2, 2020, the UK made the first move by giving approval for emergency use of a Covid vaccine — Pfizer’s BNT162b2 — which calls for specialised storage at ‘70deg C. Suffice it to say, cold chain logistics providers in the UK were ready and waiting for the green light.
That’s just what the Mumbai-headquartered Kool-ex, a leading cold chain logistics player, was aiming for in India, with the much-awaited vaccine also turning into a shot in the arm for its business.
“Covid-19 definitely impacted our business in terms of overall capacity utilisation, which was down to 80 percent in the initial months, but overall it has also presented us with new business opportunities such as transportation of Covid test kits at -18deg Celsius. With our capabilities of offering cold chain movements for primary, secondary and last-mile solutions coupled with cold storage solutions, we have now emerged as the frontrunner for transportation of Covid vaccines at all temperature ranges from+2 to 8 degree Celsius to -18 to 20 degrees and are even looking at options in the -70 deg Celsius range,” says Kunal Subhash Agarwal, co-founder and director, Kool-ex.
The cold chain industry in India can be categorised into pharma and food/ perishables. Kool-ex focuses on pharma which “requires more specialisation. We are the largest in terms of fleet strength and volumes moved. We would roughly be moving 35 percent of all pharma cold chain in India as of now,” reveals Agarwal.
In line with its vision to be an end-to-end pharmaceutical supply chain partner, Kool-ex is building on its over two decades of pharmaceutical cold chain transportation expertise. It has forged a number of partnerships that expands its value offering to customers including warehousing, secondary distribution, passive packaging and blockchain for the pharmaceutical sector.
At present, Kool-ex’s fleet consists of a mix of large long vehicles such as the 32-foot and 28-foot reefer containers, 14- and 10-feeters for local movements and last-mile deliveries, totalling just about 300 vehicles. Agarwal says, “These trucks travel an average of 7,500km a month for the long-haul and 1,500km month for the short-haul local vehicles respectively. On an average, the trucks are being operated in a mix of single and double shifts and running at an average speed of 40kph.”
The vehicles are designed specifically to meet the stringent requirements of the pharma industry, which requires them to maintain various temperature ranges such as a minimum temperature of minus 20deg C and from +2-8 degree C to +15-20deg C. Medicines need to be stored at temperatures ranging between -20 to +2-8 and +15-20 degree Celsius. For the potential Covid-19 vaccines, Kool-ex says the requirement is expected to be in the range of -20 deg Celsius and +2-8 deg Celsius.
Building pharma distribution centres
In terms of clientele, the company counts leading pharma companies such as AstraZeneca, Pfizer, Biocon, Bharat Serum & Vaccines, Johnson & Johnson, GSK (GlaxoSmithKline) and Zydus, some of whom are frontrunners to launch a vaccine in India. In September 2020, Kool-ex announced its partnership with IndoSpace, which is one of the largest investors, developers and managers of industrial real-estate and warehousing in India, to build customised, GDP/GWP compliant, temperature-controlled, pharma distribution centres across the country.
In the first phase the partners are jointly designing and setting up three warehouses close to Mumbai, Delhi and Bangalore by 2021. At 42,000 pallet positions in each warehouse, these are said to be the largest standalone cold chain facility in the country.
Speaking on the partnership with IndoSpace, Agarwal says, “Definitely. Today pharma companies operate in silos in terms of individual warehousing spaces and post-GST they have been looking for larger, more compliant, multi-client facilities along with a reduction in the number of warehouses managed, and give them a one-stop solution for all their needs.”
Kool-ex aims to offer a complete pharma passive packaging solutions in partnership with TESSOL (Thermal Energy Service Solutions) to design and supply passive cooling boxes for intercity and intra-city movement. “The plan is obviously to quickly be in a position to offer all solutions that any pharma co needs not just for the vaccine movements but eventually for all their products. The portable solutions are an important part of the whole cold chain and the products are already undergoing trials and validation,” reveals Agarwal.
Fleet of 300 cold chain vehicles
Kool-ex has a fleet of 300 cold chain vehicles in various sizes for primary, secondary and last-mile operations. At present, the company claims to be operating at 98 percent capacity utilisation, and the anticipated demand is huge. “This needs capacity build up in the coming months with a mix of new purchases as well as deploying certified vendor vehicles, thereby moving towards an asset-medium model,” adds Agarwal.
But on the other hand, with such high utilisation and the Covid-19 vaccine frontrunners demanding low temperature-controlled environment (upto -70 degree Celsius), Agarwal says Kool-ex will add capacity to cope with the demand once the vaccines are ready for general innoculation. “As far as the Pfizer vaccine is concerned, we are in the process of developing a portable solution for the same which would maintain the temperature at -70 degrees Celsius. The portable boxes would then be loaded onto vehicles / aircrafts as these solutions would maintain the temperature for a number of days and would also be re-usable multiple times.”
Kool-ex is “planning to add warehouses in Ahmedabad, Ambala, Nagpur, Hyderabad, Indore, Kolkata, Guwahati and a few more cities. The idea is to be able to cover all-India secondary movements within 24-48 hours from these strategically located warehouses. We are always on the lookout for meaningful partnerships with like-minded organisations who can add value to the process,” explains Agarwal.
Targeting Rs 500 crore revenue by 2025
Being a CV customer, Kool-ex has forged a strategic alliance with Tata Motors and Tata Finance. The partnership facilitates smooth vehicle purchase under single GST which are fully built up including the cooling solution, the reefer body and the tech to track vehicle and temperature in real-time. “I would say it’s a unique deal that cuts down idle time and gives us the opportunity to ramp up our fleet whenever its needed at short notice,” adds Agarwal.
In FY2020, it reported Rs 81 crore revenue. “The target for FY2021 is Rs 90 crore, Rs 120 crore by FY2022 while maintaining an EBITDA of 20 percent. By 2025, we aim to touch Rs 500 crores with an EBIDTA +30 percent,” says Agarwal.
Like any other business, Kool-ex will see stiff competition in the race to deliver the Covid vaccine as a number of other players are also in the fray but this firm will be banking on its experience.
This feature was first published in Autocar Professional’s December 15-2020 issue