Overview: The UAE contributes the second highest revenue share in the cold chain sector in the GCC region. Due to its central location in the GCC region, it has consolidated its position as a global transhipment hub. The development of cold chain facilities has been required due to the high dependence of the country on imports to meet the demand for food. Considering the extremely high temperatures and humidity levels during most of the year in the UAE, cold supply chain logistics practices have become more important for the country’s business. There is a roar in the construction of refrigerated facilities in the UAE. Heavy government and foreign direct investment in transport and storage infrastructure to reduce dependence on oil exports; For Expo 2020, the growing influx of tourists, especially groceries, dairy, meat, retail and consumer spending on international food and growing food demand are some of the major drivers of growth.
UAE Cold Chain Market Outlook 2025 – The UAE Cold Chain Market is enriching with the growing adoption of technology and automation in the UAE with the advent of the government’s economic diversification plan.
Market: The cold chain industry is expected to grow at USD ~ Mn in 2020, with a CAGR of 7% over the period 2015-2020. Meat and seafood, dairy and pharmaceuticals are important end users for the UAE cold chain market. The pharmaceutical sector has seen high growth rates, especially in the aftermath of the epidemic, and the UAE government has taken a number of initiatives to improve the infrastructure.
The Covid-19 disrupted the UAE’s cold chain market. However, the industry has not declined much due to the nature of the industry which has gained higher traction than other logistics markets due to the perishable goods and cold storage warehousing market. Market activities are concentrated in two major emirates: Dubai and Abu Dhabi, where most of the cold warehouses are located in the free-zone such as Jebel Ali Free Zone, DIP, DIC, Al Hour etc.
UAE Cold Chain Market Segmentation
By cold warehousing and cold transport: The cold storage market dominates the market and contributes most of the revenue to the cold chain industry. Cold Transportation distributes food and pharma domestically and internationally by land, sea and air. Some of the key growth drivers include increased retail distribution cold storage, new warehouses, large food and pharma stocks created by the government, increased imports of perishable goods, technological advances and growing end users in emerging markets. Seasonal demand is especially high during Ramadan.
United Arab Emirates Cold Warehousing Market Segmentation: Depending on the temperature range (ambient, cold and frozen): The demand for chillers and freezers was quite high in 2020 due to the increasing use of frozen and fresh food items.
By Ownership (integrated and contract warehouse): Integrated logistics facilities create a larger revenue share. This is mainly due to the choice of logistics companies to invest in warehouses and monitor their activities closely as opposed to outsourcing.
By end-user applications (meat and seafood, dairy products, pharmaceuticals, fruits and vegetables and others): Meat and seafood have shared the highest revenue due to the massive increase in demand for meat during the lockdown. Demand for this specialty has grown significantly as a result of recent corporate scandals.
By major emirates (Dubai, Abu Dhabi, Sharjah and others): Dubai accounts for the largest share of the cold storage market revenue as it serves as a hub from which goods are transported to other regions.
By Area (JAFZA, DIP, DIC, Al Aweer and others): Jebel Ali Free Zone Cold Storage Market is the largest revenue partner and organizer of more than 8,700 companies. It is considered to be the largest free zone in the world.
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UAE Cold Transportation Market Segmentation
By mode of transport (land, sea and air): Cold transport by land provides the highest revenue in the cold transport industry as food imported into the country through ports is transported to different cities through land transport.
By type of goods (domestic and international): The lion’s share of the UAE’s cold transport industry’s revenue is responsible for cold transport in the international market because the country is dependent on imports for its food needs.
By end-user applications (meat and seafood, dairy products, pharmaceuticals, fruits and vegetables and others): Meat and seafood have positively impacted the cold chain industry followed by dairy products. The UAE has one of the highest consumption rates for meat and seafood in the world.
By agreement and integrated logistics: The UAE cold chain market is dominated by 3PL facilities, which make up the largest share of market revenue. The main reason for this is the large number of 3PL operators providing different types of services and the increasing shift towards the need for cold transport outsourcing by cold chain companies.
Scenario of competition in the UAE cold chain market
Highly fragmented competition in the UAE cold storage market ~ 20 large companies gain market share. The market is concentrated in places like Dubai and Abu Dhabi Port and Free Zone. Growing urban population, improved transport infrastructure in the region and proximity to seas and airports are the main reasons for the development of cold chain business in the region. Cold chain companies in the country compete in many parameters like location, price, temperature range, product range, warehouse infrastructure, number of pallets, industry efficiency, client etc. Major players in the cold chain market include GAC, GSL, Mohebi Logistics, CEVA Logistics, RHS, Hellmann, DB Schenker and others.
Future Outlook and Forecast of UAE Cold Chain Market
The UAE cold chain market is expected to experience moderate growth in single digit CAGR in terms of revenue during 2020-2025F. The positive growth in the market is attributed to the increase in manufacturing activity in the pharmaceutical sector, investment in infrastructure, growth in the dairy industry and increase in imports and exports. The industry is expected to witness the entry of new players and new mergers and acquisitions among players. In addition, the increasing adoption of warehouse automation technologies such as EDI, RFID, AS / AR and others is expected to improve operational efficiency in the UAE cold chain market during the 2020-2025F forecast period.
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UAE Cold Chain Market Research Report with Post Size, Shares, CAGR Status, Future Outlook, Growth Analysis, Key Manufacturers and Forecast 2025: Why Research First appeared in Ken Research.