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The short answer
A cold room business in Nigeria usually starts with a converted 20ft or 40ft container fitted with insulation and a refrigeration unit, and power is the biggest running cost. In our labelled example, a 20ft unit drawing 3kW for 16 hours a day costs about ₦301,680 a month on Band A grid power at NERC's ₦209.50 per kWh, and storage fees at 70% occupancy leave about ₦438,000 a month before loan repayments.
What a cold room business does
A cold room owner rents out space at controlled temperatures. Frozen rooms hold fish, chicken, turkey and meat for frozen food sellers and farmers. Chilled rooms hold fruit, vegetables, drinks and some dairy. Most small businesses start with one frozen container because frozen protein is where demand is steadiest, then add a chilled unit if customers ask.
The business works where three things meet: many traders who need storage, unreliable power at their own shops, and a site you can keep cold for most of the day. Markets, fish landing points, poultry clusters and busy frozen-food areas are the usual locations.
Building or buying a cold room
| Option | What it involves | Notes |
|---|---|---|
| Converted container | Insulated panels and a refrigeration unit fitted into a 20ft or 40ft container | Quickest to set up; can be moved |
| Refurbished reefer container | An ex-shipping refrigerated container | Built-in unit; check compressor age and spare parts |
| Built cold room | Insulated panels inside a building | Larger capacity; permanent |
| Walk-in freezer | Smaller panel room | For a single business's own stock |
Prices depend on size, temperature, the refrigeration unit and whether the equipment is new. We do not quote a market price here: ask at least three installers for written quotes that include the compressor brand, temperature range, warranty, installation and after-sales service. As an example only, the profit model below assumes ₦12 million for a fitted 20ft frozen unit including installation.
Power: the cost that decides everything
A frozen room must stay cold through the night and through outages. Power choices are grid, generator, solar with batteries, or a mix. NERC's July 2025 supplementary orders set the Band A tariff at ₦209.50 per kWh, for feeders meant to supply at least 20 hours a day; lower bands pay less per kWh but get fewer hours.
- Example draw
- 3kW average while the compressor runs
- Example run time
- 16 hours a day
- Daily energy
- 3 × 16 = 48kWh
- Daily cost on Band A
- 48 × ₦209.50 = ₦10,056
- Monthly (30 days)
- ₦301,680
These are example figures; your compressor's rating, insulation, door openings and ambient heat change them. A generator covering outages costs more per kWh than the grid, so price your back-up for the hours your feeder actually misses. Check your band and supply hours with your DisCo before choosing a site.
How storage is charged
Owners commonly charge per carton, per bag or per kg, by the day, week or month, and sometimes a flat monthly rate per shelf or per space. Set clear rules on minimum periods, payment in advance, and what happens to goods left unpaid.
A monthly model (example)
- Capacity
- 800 cartons of about 10kg each
- Occupancy
- 70%, so 560 cartons
- Example fee
- ₦500 per carton per week
- Monthly revenue (4 weeks)
- 560 × ₦500 × 4 = ₦1,120,000
- Power
- ₦301,680
- Two attendants
- ₦200,000
- Maintenance and gas top-ups
- ₦80,000
- Site rent
- ₦100,000
- Monthly surplus
- ₦438,320
If the ₦12 million unit in this example is paid from savings, ₦438,320 a month takes a little over 27 months to recover it, before any major repair. If you borrow, repayments come out of that surplus. Occupancy is the lever: at 50%, revenue falls to ₦800,000 and the surplus to ₦118,320.
Who rents space
- Frozen food sellers holding cartons of fish and chicken between deliveries; see the frozen foods shop guide.
- Fish farmers holding a harvest when prices are low. A Nasarawa farmer told NAN in June 2025 that catfish had fallen from ₦4,800 to ₦2,800 to ₦3,500 per kg in a year; storage lets a farmer avoid selling on a bad day.
- Poultry farmers and processors with dressed birds.
- Caterers and restaurants before large events.
- Fruit and vegetable traders, for chilled rooms.
Pharmaceuticals and vaccines need validated cold chains with records and regulatory approval, which is a different business from general storage.
Risks to plan for
- Compressor failure: keep a service contract and know your technician's response time.
- Power failure: a few hours without power can spoil a room of stock and lead to claims.
- Disputes: issue a receipt for every carton in and out, signed by the customer.
- Theft: lock, light and guard the site; use a register for every access.
A registered business name helps with written storage agreements; the CAC fee schedule dated 29 May 2025 lists ₦20,000 for business name registration with a certified copy.
Where Pryme fits
A storage business issues many small receipts; with VerifyDoc.ai you can issue verifiable receipts that a customer can check are unaltered (receipts). Customers can pay into virtual account numbers so each payment is matched to them, inside a Pryme Business Account. For how matched payments work, read virtual accounts in Nigeria.
Questions people ask
How much does a cold room cost in Nigeria?
It depends on size, temperature and equipment. Get written quotes from at least three installers; our profit model uses ₦12 million for a fitted 20ft frozen container as an example only.
How much electricity does a cold room use?
In our example, a 3kW unit running 16 hours uses 48kWh a day, about ₦10,056 at the Band A tariff of ₦209.50 per kWh.
How much do cold rooms charge per carton?
Owners set their own rates, per carton, bag or kg by the day, week or month. Our example uses ₦500 per carton per week.
Is cold room business profitable in Nigeria?
It can be where demand is steady and power is reliable. In our example, 70% occupancy leaves about ₦438,000 a month; 50% leaves about ₦118,000.
Sources
- NERC: July 2025 Supplementary Order to MYTO 2024, Ikeja Electric (ORDER/NERC/2025/064) · accessed Oct 2026
- News Agency of Nigeria: Catfish farmers record boom in Nasarawa (Jun 2025) · accessed Oct 2026
- CAC: New Schedule of Fees (29 May 2025) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.