New Technological Change in Cold Chain Industry
According to Harsh Mittal, Senior Research Analyst at Ken Research, “Cold chain logistics infrastructure network can be improved by covering all major food consumption and production areas. New technologies involving the use of IOT in the monitoring of the cold chain and new refrigeration technology such as NXT COLD employing Electronic Refrigerant Injection Control Technology can be used to improve energy efficiency as the biggest cost of running a cold storage plant is of electricity.”
Ken Research estimates that the cold chain market in Oman is expected to grow at CAGR of 11.4% for the next five years to reach over USD 75 million by 2022.”
Oman have been chosen as a hot spot for cold chain sector due to strategic location and rapid diversification of economic activities basis which the sector has seen increase in investment activities. The government has made huge attempts to diversify the economy and reduce its dependence on oil. The logistic sector has been identified as the major sector which can contribute to the GDP of the country because of the strategic geographical location of Oman. With the development in the logistics sector and increase in the trade amount of goods with temperature dependent storage requirement, the demand for cold storage infrastructure have continued to prosper.
Early Stage Cold Chain Sector
Cold Chain sector in Oman is currently in its early growth stage however, there are limited players which provide cold chain services to varied end users such as meat, vegetables, dairy, poultry and pharmaceuticals. Cold storage capacity, which is generally measured in the number of pallets, stands at 400,000 as on December 2017 and looking at the focus of the government to make Oman a gateway to all the goods that arrive at GCC by developing the infrastructure and employing the latest technology,
Oman cold chain market is highly concentrated in nature and is at the nascent stage because of poor infrastructure, imperfect logistics system and low promotions. The major players in the country in the cold chain services include Agility Logistics, Al Madina Logistics, Enhance Oman, AL Khaleej Cold Store and ILS Logistics. Cold chain companies compete on various factors including the storage capacity, number of pallets, space, distribution network, number of clients, service verticals and others.
Compelling Potential with Growing End User Industries
Growth in end user industries for cold chain services such as pharmaceuticals, meat & seafood, frozen food and others have increased the demand for both cold transport and cold storage in the country. E-commerce industry has grown at a significantly high rate which has given a boost to the cold chain industry. However, despite of surge in demand, the occupancy rate of the cold storage facilities across the industry currently stands at around 60%. Cold Chain companies usually hold the inventory for 60-90 days. The price for the cold storage facility is OMR 0.35 per pallet per day.
The growing consumption of food and increasing food safety concerns in the market as well as the growing trend among Omani people for the consumption of frozen meat and seafood is anticipated to propel the demand of cold chain services in Oman. In addition to this, growth in pallet capacity by cold chain companies and establishment of global logistics partner will support market growth.
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Ankur Gupta, Head Marketing & Communications