Khanya Cold Chain Business Plan — Operations

Receiving, put-away, picking and despatch, temperature monitoring and the food safety disciplines a cold store must maintain.

Operations

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8.1 Organisation
8.2 Cold chain integrity
8.3 The distribution fleet
8.4 The cost base and where it does not flex

8.1 Organisation

Function	Year 1	Year 2	Year 3	Year 4	Year 5
Warehouse operators and forklift drivers	11	15	18	19	20
Refrigeration and maintenance technicians	2	3	4	4	5
Drivers and crew	3	6	9	11	12
Despatch, planning and control room	3	4	5	6	6
Quality, food safety and compliance	1	2	2	3	3
Sales and customer service	2	3	4	4	5
Management and administration	3	4	4	5	5
Total	25	37	46	52	56

Payroll escalates at 5.5 per cent a year rather than at inflation, because the national minimum wage, R30.23 per ordinary hour from 1 March 2026, has consistently risen faster than prices. Cold work also carries a wage premium and higher turnover than ambient warehousing: operators working an eight-hour shift at −25°C require rotation, protective clothing and rest breaks that ambient operations do not.

The refrigeration technicians are the least substitutable hires in the business. A store of this size cannot rely wholly on an external maintenance contract for an ammonia plant; response time on a compressor failure is measured in hours before product is at risk, and the goods in trust are worth many multiples of the plant.

8.2 Cold chain integrity

Control	Design
Temperature monitoring	Continuous logging per chamber and per zone, with automated alarming to on-call staff and a full audit trail retained for customer and certification purposes
Tolerance bands	Documented per product regime, with the load-shifting drift band in Section 4.2 defined inside the customer specification rather than at the edge of it
Dock discipline	Air locks, rapid doors, and a maximum door-open standard. The dock is the largest avoidable refrigeration load and the largest temperature-excursion risk
Traceability	Pallet-level WMS with batch and expiry tracking, supporting recall within four hours
Vehicle integrity	Telematics with reefer temperature logging on every vehicle; data joined to the WMS record so the chain is unbroken from chamber to customer door
Claims	Provisioned at 0.75% of storage revenue in Year 1, improving to 0.36% by Year 5

8.3 The distribution fleet

Figure 12. Distribution economics — fully absorbed cost per kilometre against the rate achieved.

	Year 1	Year 2	Year 3	Year 4	Year 5
Vehicles	3	6	9	11	12
Utilisation, revenue km / total km	68%	78%	84%	87%	88%
Cost per kilometre	R23	R23	R24	R25	R27
Revenue per revenue-kilometre	R31	R32	R33	R35	R37
Segment EBITDA	(469 533)	589 528	2 211 991	3 422 895	4 183 832
Segment EBITDA margin	-12.2%	6.4%	14.1%	16.5%	17.4%

The fleet is a customer-acquisition cost that eventually pays for itself

The fleet loses R469 533 in Year 1 at 68 per cent utilisation, and reaches only a 17.4 per cent margin at maturity against 37.7 per cent for the cold store. On its own merits it does not justify the capital. It is in the plan because customers will not award storage contracts to an operator who cannot move the pallet, and because a delivery relationship is far harder for a competitor to displace than a storage relationship. The fleet is therefore capped deliberately: it grows only to serve stored volume and never chases third-party line-haul work, where an operator of this size would be competing against specialists at a structural cost disadvantage. Utilisation below 75 per cent in any sustained period is a signal to stop adding vehicles, not to go looking for freight.

8.4 The cost base and where it does not flex

Cost line	Year 1	Year 5	Behaviour with occupancy
Electricity	R2 453 707	R3 925 873	Partly fixed. An empty chamber still draws a substantial fraction of a full one’s refrigeration load
Payroll	R6 628 000	R18 071 974	Stepped. Shift cover, technicians and the control room exist at 46% occupancy as they do at 88%
Property lease	R5 947 200	R7 795 566	Entirely fixed, escalating at 7.0% a year regardless of what is stored
Fleet running costs	R1 997 491	R9 659 689	Largely variable with kilometres run; the vehicles themselves are a stepped commitment
Other operating costs	R9 730 000	R17 673 126	Insurance, maintenance, IT, certification and administration — mostly fixed
Claims and stock loss	R152 311	R177 908	Variable with volume but improving as a percentage with process maturity

Roughly 75 per cent of the Year 1 cost base does not move with occupancy. That is the arithmetic behind every finding in this plan: it is why Year 1 loses money at 46 per cent, why an eight-point occupancy move swings Year 3 EBITDA by R8.5 million, and why revenue rising 122 per cent between Years 1 and 3 against costs rising 62 per cent produces the margin expansion the plan depends on.

An empty pallet position is not a free pallet position

The intuition that unused capacity costs nothing is wrong in cold storage and it is worth stating explicitly. A frozen chamber at 50 per cent occupancy draws a substantial fraction of the refrigeration load of the same chamber at 90 per cent, because the heat load is driven by the envelope, the door openings and the air volume rather than by the product. Stored product is in fact thermal ballast that makes the chamber more stable, which is the physical basis of the load-shifting strategy in Section 4.2. The consequence for pricing is direct: the marginal cost of storing one additional pallet in an existing chamber is close to the handling cost alone, which is why the trigger points in Section 12.4 instruct management to accept poor rates for term rather than hold out for the rate card with the building half empty.

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