Godrej’s hot bet on cold storage

The creation of a highly specialised unit, Godrej Medical Refrigeration, at Godrej Appliances was the result of a couple of events happening at the same time. “It was around 2015 that we were having an interaction at a seminar with stakeholders, NGOs, and institutions to understand the challenges in the refrigeration space… and a gap in the medical refrigeration space was discussed extensively,” recalls Kamal Nandi, business head and vice president, Godrej Appliances, and a veteran Godrej hand. Retaining vaccine potency and preventing wastage due to breaches caused by power outages was an imperative, they realised.

Around the same time, Sure Chill, a U.K.-based startup, had developed a cooling technology, and was willing to license it out.

One thing literally led to the other and the company bought the Sure Chill technology and, in the process, acquired the cold-chain infrastructure focus that has become unexpectedly relevant and critical in the age of the Covid-19 pandemic. Consider how, in recent months, pharma companies and governments have joined forces to roll out the much-awaited vaccines. As recently as on February 9, Godrej Appliances launched its most advanced line of refrigerators with temperatures varying from 2° C-8° C, below -80° C, and -20° C. It is aware that mRNA-based vaccines to combat Covid-19 are temperature-sensitive and must be stored at very low temperatures. Pfizer, for instance, whose vaccine is being administered in the U.S. and the U.K., among other countries, needs to be stored at -70° C. (There are still no plans for an India roll-out although the infrastructure is now available.)

“The vaccination drive has made everyone realise the importance of a strong healthcare infrastructure,” pointed out Jamshyd Godrej, chairman of Godrej & Boyce, which owns Godrej Appliances, during the February 9 launch. “Over ₹35,000 crore has been budgeted for Covid-19 vaccination expenditure alone. And coupled with the overall strengthening of the medical infrastructure, we expect the vaccine cold chain in the country to get a big boost.”

The challenge is that although manufacturers of the vaccines have made chemical changes to the synthetic mRNA and wrapped it in a protective layer, they need to be stored at temperatures as low as below -80° C. During normal usage, when medical supplies are accessed from the refrigerator, ambient air can enter the storage chamber, raising the temperature and destroying molecules of mRNA vaccines. Sure Chill-lined refrigerators ensure that the rise in temperature is quickly absorbed by the cold walls to maintain the chamber temperature.

Further, to support its medical refrigeration units during long power outages, Godrej’s Solar Direct Drive refrigerators eliminate the need for a charge controller and battery. Such refrigerators are used in countries where there is non-availability of power or off-grid facilities access for fewer than eight hours a day or have recurring power outages that last for over 48 hours. “One-on one comparison of on-grid versus off-grid refrigeration may run up to five times in terms of cost but this is not the right way to evaluate them,” says Jaishankar Natarajan, associate vice president and head-New Business Development, Godrej Appliances. “The government looks at the cost of disease burden versus the cost of infrastructure and an off-grid solar-powered refrigerator is installed only in areas where power is not available or quality of power is suboptimal.”

The firm started getting breaks with international bodies, says Nandi, adding that “NGOs in India, too, were testing our products and they were convinced that this technology could give required results.”

The temperature was maintained even with power outages, says Natarajan, “That was a proof point to show to international bodies like Unicef.”

Apart from tech innovations, the edge that Godrej medical refrigerators has over local competition is that they have been World Health Organization (WHO) PQS certified. Refrigerators for storing vaccines are required by the WHO to meet certain performance standards for reliable performance even in extreme cases of ambient temperatures reaching 43° C to 0° C. Godrej has invested in an in-house testing facility for this purpose. Apart from that, all WHO PQS certified products are tested in a WHO-qualified lab. “We had our products certified in 2015 itself and these have been reviewed and renewed on an annual basis, apart from certification for every new model introduced,” says Natarajan. Added to this is the service arm of the brand, Godrej SmartCare, which is committed to 48-hour call closures in urban centres and 72 hours in rural centres. It has 680 service centres and more than 4,500 app-enabled Smart Buddy technicians plus 185+ Smart Mobile Vans for service resolution in the first visit.

It makes sense that Godrej Appliances is involved in this new phase of the cold-chain infrastructure push in India. After all, the Godrej group has been in the refrigeration business for close to 63 years, and has given India its first indigenously produced refrigerator in 1958. Till 2015, however, Godrej Appliances was retail-focussed with its refrigerators, washing machines, and air conditioners. Then came Sure Chill, says Nyrika Holkar, executive director, Godrej & Boyce, and Jamshyd Godrej’s niece. “It proved that temperatures could be maintained when our R&D teams started making our products.”

With orders pouring in, Godrej Medical Refrigeration has made a solid start and has already placed its units with several state governments and is supplying to 36 countries, including in Africa and South and South-East Asia. It said it participates in every national and international tender issued by Unicef. “Currently we are processing ₹150 crore worth of orders only for Covid-19 and expect to grow 30% year-on-year for the next five years,” says Natarajan. It is also receiving enquiries from PSUs joining the immunisation effort. The firm plans to invest in mobile refrigerated vans for immunisation.

According to Jamshyd Godrej, there is a growing need for precise temperature cooling solutions for several critical medical applications beyond Covid-19 vaccination. These could be vaccine administration centres, blood banks, organ storage banks, eye banks, sperm banks, stem cell banks, and pharma cold chain, including testing laboratories. As Nandi puts it, “Though we anticipate limited requirement in vaccines as of now, these refrigerated products are required for use in high-end labs for tissue, organ, and storage of dilutants.” Besides, there are several applications in animal husbandry, like poultry farms and fisheries, which also require precise cooling and storage, Godrej said.

He also pointed out that pharma firms were working to fight several potential viruses. H5N1, for example. “And these vaccines will continue to need a cold chain. In fact, recent scientific reports are exploring a promise shown by mRNA technology to fight cancer. These mRNA vaccines need ultra-low temperature freezers as well. Therefore, it is important for all countries to be ready with a proper cold-chain infrastructure,” he said, pointing to an overall market potential of ₹2,000 crore-₹2,500 crore annually

“We see this space growing significantly both in India and beyond,” says Holkar, and Godrej is putting in the money to back its belief.

(This story originally appeared in Fortune India's March 2021 issue).