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Cold Chain Logistics: Why Will Administering the Pfizer and Moderna Vaccines be a Challenge for India?

Editor, TRANSFIN.
Nov 27, 2020 6:28 AM 5 min read
Editorial

The past week brought several positive developments in the fight against the coronavirus. Pfizer, Moderna and AstraZeneca released the results of the clinical trials of their vaccine candidates, all showing high efficacy and raising optimism that the pandemic may be nearing its end.

Don’t take off your face masks yet, though. Because even after a vaccine against COVID-19 is finalised, the world will have to confront its next big challenge: distributing and administering the vaccine far and wide. And in as little time as possible.

To remain potent, vaccines need to be stored in cold temperatures. Very cold temperatures. This is a challenge for governments and companies because:

  1. Not every country has advanced cold storage infrastructure and even among the ones that do have modern cold stores, the capacity may be limited.
  2. Ideally, the vaccine would have to be administered to everyone on the planet - that’s 7.8 billion people living everywhere from hilltops and desert hamlets to jungles and faraway islands! How do you ensure swift last-mile connectivity whilst maintaining low temperatures?

Which is why it may be pertinent to look at the cold chain network - particularly in India - and understand the opportunities and challenges faced by the sector.

What is Cold Storage?

A “cold store” refers to a refrigerated chamber designed to store goods at a temperature below the outdoor temperature, often in freezing conditions.

The goods stored include fruits, vegetables, seafood, meat, medicines, wines, dairy products, chemicals etc.

The temperature environments in cold storage facilities can be normal (>20°C), mildly chilled (10°C to 20°C), chilled (0°C to 10°C) or frozen (<18°C).

A “cold chain” includes the cold storage facilities in addition to things like refrigerated transport, retail display infrastructure and even the fridge or refrigerator in your household.

 

The Importance of Cold Storage

Since the food supply chain is so vast, significant and sensitive, poor cold storage infrastructure can be costly for a country. Particularly for farmers, who won’t be able to get the best prices for their produce if poor storage facilities inhibit them from selling the same far and wide.

In advanced countries, since over 90% of perishable agricultural products and food products go through extensive integrated cold chains, post-harvest losses are kept at a minimum. But in developing countries like India, a majority of perishable agricultural produce and food products face high levels of post-harvest losses due to insufficient cold chain infrastructure.

 

Cold Storage Industry in India - Challenges

As a leading producer of agricultural products and generic drugs, India is heavily dependent on improving its cold storage infrastructure to sustain demand.

Presently, the overall cold storage capacity in India stands at 37-39 million tonnes. And this capacity is unevenly distributed, with the top 10 states accounting for 91% of capacity. The “rot” runs deeper, so to speak, once you delve deeper: states like Uttar Pradesh and West Bengal, which are the top two when it comes to capacity, have poor transport networks vis-a-vis road connectivity and refrigerated trucks, leading to untapped potential. On the other hand, states like Andhra Pradesh and Maharashtra, which are the top fruit-producing areas, account for only 3-5% of net capacity each.

The industry also faces rabid underutilisation of facilities. Most cold storage facilities in the country are single-purpose in nature - typically used to store vegetables like potatoes. This has led to only c. 75% of capacity being utilised, and even then many facilities remaining idle for six months due to seasonality of produce.

Then there's the problem of lack of infrastructure - specifically that of pack houses (99.6% supply gap), ripening chambers (91% supply gap) and temperature-controlled vans (85% supply gap).

Considering the present crisis, infrastructure limitations are dangerously inhibitive. In fact, the Pfizer-BioNTech vaccine requires an optimal temperature of -60°C to -90°C. That’s a temperature range India’s cold chain capacity can’t even sustain. As for Moderna’s candidate, it needs to be stored in -20°C, which is doable in India but highly limited.

 

 

Which leaves us with the AstraZeneca-Oxford vaccine. Fortunately, this can be stored in normal fridge temperatures, in the 2-8°C range. But amidst a global pandemic, a country would be better placed if it’s able to opt for every possible option available to battle the virus.

 

Cold Storage Industry in India - Opportunities

To boost cold storage infrastructure in the country, the Government has tried to introduce many incentives in the past decade. These include tax deductions (in 2013, tax deduction of up to 150% was offered for investments in cold storage infrastructure), setting up of Mega Food Parks, permitting 100% FDI, reduction in excise duties, and granting of "infrastructure status" for Priority Sector Lending (PSL).

This year, propelled by the pandemic, further initiatives were introduced. These included subsidies for transportation facilities, geo-tagging of warehouse units, credit-linked grants, and a $13.3bn Agriculture Infrastructure Fund to boost construction of facilities.

 

Cold Storage and COVID-19

Before the pandemic, the global cold storage market size was valued at $94.02bn (in 2018). The sector was enjoying robust double-digit growth on the back of strong demand, increased automation, and the rise of the online food delivery industry.

COVID-19 accelerated this trend. Governments around the world diverted more capital to enhance their cold chains, knowing that a future vaccine would need to be kept in refrigerated environments for long periods of time.

Now that future is here. But are we ready?

Coming to the vaccine itself, it will likely be a two-dose regime - needed to be administered in two rounds, a few weeks apart. In a country of 1.3 billion, this would mean ensuring the supply and distribution of 2.6-3 billion doses. To say nothing of the doses that India would be exporting to other countries. All in all, a monumental challenge.

 

India’s Cold Storage Industry Gears Up

The Government aims to initiate mass vaccination drives early next year and see 200-250 million vaccinations by July. (All of this in the heat of summer, FYI. All the more need for better cold storage facilities.)

But experts opine that cold chain capacity would have to be at least doubled at the earliest for such drives to be a success.

Last month, the Government kick-started a massive exercise to map out facilities across the country. The National Expert Group on Vaccine Administration for COVID-19 was formed to coordinate strategies. On Tuesday, the Prime Minister discussed cold storage preparations with states.

Both public and private sector entities are being roped in. These include companies in the pharmaceutical sector, food processing industry and agro businesses as well as restaurants and food delivery startups. The goal is to identify cold storages - big and small - down to the taluka level.

India's existing Universal Immunisation Programme (UIP) infrastructure will be tapped to reach the last mile, from cities to the hinterland. But private sector participation will also be crucial.

FYI: India's UIP is one the largest in the world, with over 700 refrigerator vans, 70,000 vaccinators and 28,000 functional cold chain points. Significantly, around 95% of these are located below the district level. The programme is used to administer the BCG, polio and hepatitis vaccines.

In the end of the day, the challenge of vaccine administration involves both manufacturing and distribution. The latter becomes more rife with obstacles in a large and complicated geography like India.

FIN.

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