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Philippines Cold Chain Market Report:2020 -Ken Research

Evolution of cold chain industry in Philippines commenced after the


construction of Philippines Nautical Highway System in 2003. It is also
known as Strong Republic National Highway and it is an integrated
network of highways and vehicular ferry routes. The highway is 919 KM
long and has reduced the previous usual travel time by 17 hours to the
different key cities in Philippines. It is also called the Roll-On/Roll-Off
system or the RO-RO system. RO-RO has accounted for a revenue share of
around 20.0% in cold chain transportation market of Philippines in 2015.

The Philippines cold chain market has witnessed significant growth after the
lau ch of Philippi es Natio al Cold Chai Progra i
. As per the
program, cold chain facilities were established in major areas of North,
Central and South Philippines. Contribution of cold chain to the overall
logistics market revenues of the country has augmented from ~% in 2010
to ~% in 2015. The Philippines cold chain market has witnessed significant
gro th after the lau ch of Philippi es Natio al Cold Chai Progra i
2004. As per the program, cold chain facilities were established in major
areas of North, Central and South Philippines.

The project has been implemented in collaboration with the private sector.
Assistance was provided to interested entrepreneurs and investors to setup their own cold chain enterprises. Government initiatives, high domestic
co su ptio a d arket s gro i g food safety co cer s ha e propelled
the Philippines cold chain market over the period 2010-2015. Additionally,
there has been a gradual shift of people purchasing frozen products from
supermarkets instead of wet markets in Philippines over the past five
years. Revenues of the cold chain industry have amplified from USD ~
million in 2010 to USD ~ million 2015, reporting a CAGR of ~% during the
period.

Cold chain transport and cold storage are the two major components of a
cold chain industry. Cold chain transport has been the dominant segment
as it has acquired a revenue share of ~% in the cold chain market of
Philippines during 2015. On the other hand, cold storage has garnered a
share of ~% in the cold chain market during 2015. Lower share of cold
storage in the cold chain market of Philippines has been perceived on the
grounds of rising cost of power/electricity in Philippines over the period.
Power rates in Philippines have surged from PHP 7.6 per KWH in
December 2010 to PHP 8.6 per KWH in 2015. On an average, power
accounts for 50% of operating costs of cold storage warehousing in
Philippines. Thus inclining cost of power has been the major reason
behind smaller revenue share of cold storage warehousing in 2015.

Perishable products such as fish, meat, vaccines, cakes, fruits and vegetable
are perishable commodities which require cold chain logistics. Meat and
seafood have accounted for the largest revenue share of ~% in the
Philippines cold chain market during 2015. Philippines produced around
2.4 million tonnes of sea food in 2015. Furthermore, as of 2015, its
average per capita sea food consumption is around ~ Kg annually, one of
the highest in the world. Philippines have a large meat and seafood
arket hich has co pli e ted the cou try s cold chai i dustry
remarkably, over the period 2010-2015. Philippines cold chain market has
been segmented on the basis of B2B and B2C segments. Over the period
2010-2015, B2B has accounted for a dominant share of revenue in the
Philippines cold chain market. However, ecommerce has grown
considerably in Philippines over the past five years.

With a revenue share of ~%, Jentec Cold Storage Inc has been the most
dominant player in the Philippines Cold Chain market during 2015. Apart
from Jentec, there are other major players in the market as well. Glacier is
another company which is recognized as one of the main cold chain
service providers in the county. Glacier s refrigerated arehouses ha e
been established in close proximity to several retail and food service
distribution centers. Furthermore, Glacier also provides cold storage
warehouses for rent. Glacier has garnered a second largest revenue share
of ~% in 2015.Polar Bear, Royal Cargo, Royale Cold Storage, Vifel and Igloo
are also operating at a large level in the Philippines cold chain market.
Polar Bear and Royal Cargo have accounted for a market share of ~% and
~% in 2015 respectively.

Philippines cold chain market has witnessed notable growth over the period
2010-2015. Growing demand for temperature controlled products in the
country, entry of several new players and government initiatives and
programs have propelled the cold chain market over the period 20102015. Additionally major players such as Royal Cargo, Jentec Cargo and
Glacier have expanded their cold storage capacity and operations in the
country over the period 2010-2015. The future prospects of the cold chain
logistics industry in Philippines look quite promising. The growth of the
Philippines cold chain logistics market is expected to accelerate over the
forecasted period 2016- 2020 owing to Philippines Cold Chain Project and
other cold chain programs. Furthermore, augmenting sales of Pharma and
other temperature controlled products will provide the impetus for
growth in Philippines cold chain logistics market over the period 20162020. These factors will augment the revenues in the Philippines cold
chain logistics market at a CAGR of ~% from 2016 to 2020.

Cold chain transportation has been defined as transportation of temperature


sensitive products along a supply chain by using thermal and refrigerated
packaging techniques and the logistical planning. This has been done to
protect the integrity of these shipments. Revenues of cold chain
transportation market of Philippines have enhanced at a CAGR of ~% over
the period 2010-2015. Infrastructural development by the government,
increasing number of food businesses and inclining number of cold chain
companies in the country have propelled the market over the period
2010-2015. Increasing exports of temperature controlled products in
Philippines has also supported the growth in the market over the period
201-2015. Market size of cold chain transport in Philippines has enhanced
from USD ~ million in 2010 to USD ~ million in 2015.

Cold chain transport market of Philippines can be divided into sea


transportation, road transportation, air transportation. Philippines are
very strategically located on the global landscape. It is very well connected
to different continents via the sea route. Liner Shipping Connectivity of
Philippines has been reported at ~ in 2015 which have inclined from ~ in
2010. The Liner Shipping Connectivity Index captures how well countries
are connected to global shipping networks. Backed by this, sea
transportation has accounted for ~% of cold chain transport revenues of
Philippines in 2015. Out of this, ~% has been garnered by RO-RO i.e. ferry
service of Philippines .On the other hand road and air transport have
garnered a revenues he of ~% and ~% in 2015 respectively.

Domestic cold chain transport has accounted for a revenue share of ~% in the
cold chain transport market of Philippines in 2015. On the other hand
international cold chain transport has captured a lower revenues share of
~% in the cold chain transport market of Philippines during 2015.
Domestic cold chain transport has accounted for a revenue share of ~% in
the cold chain transport market of Philippines in 2015. On the other hand
international cold chain transport has captured a lower revenues share of
~% in the cold chain transport market of Philippines during 2015. Cold
chain transportation market of Philippines can be further bifurcated into
rented and owned cold chain vehicles.

Majority of the revenues in Philippines cold chain market have been


contributed by the cold chain transport market over the period 20102015. The share of cold chain transport in the overall revenues of cold
chain market of Philippines has inclined from ~% in 2010 to ~% in 2015.
Factors such as development of transport infrastructure in the country,
growing frozen food retail sector and expanding cold chain fleet size of the
country have driven the revenues of the market by a CAGR of ~% over the
period 2010-2015. Ecommerce in Philippines has been predicted to
witness a rapid growth in Philippines over the period 2016-2020. Thus the
B2C sector has been anticipated to enhance at considerable pace over the
next five years. This will boost the revenues of the cold chain transport
market of Philippines over the period 2016-2020. Additionally, further
development of transport infrastructure, inclining food service
establishments and expanding frozen food exports are likely to augment
the revenues of cold chain transport market from USD ~ million in 2015 to
USD ~ million in 2020.

Cold storage market of Philippines has witnessed a sudden surge especially


over the period 2013 to 2015. Such positive growth has been perceived on
the grounds of augmenting number of cold storage warehouses, and
enhancing warehousing capacity of existing players in the market over the
period 2010-2015. Additionally, government regulations and initiatives to
maintain quality of perishable food products have also supplemented the
growth in the cold storage market over the period 2010-2015. Despite
witnessing significant growth, revenue share of cold storage market in the
overall cold chain industry of Philippines has declined from ~% in 2010 to
~% in 2015. Average storage capacity of a cold storage facility in
Philippines has been noted at around ~ pallets in 2015. While the average
revenue of a cold storage warehouse in Philippines is USD ~ per pallet per
day. Philippines cold storage market has enhanced at a CAGR of ~% over
the period 2010-2015. Such growth has amplified the revenues from USD
~ million in 2010 to USD ~ million in 2015. While capacity of the market
has inclined from~ pallets per day in 2010 to ~ pallets per day in 2015.

Navotas, Quezon City, South Cotabato and Paranaque also comprise of large
number of cold storage warehouses. Novatos has captured a share of ~%
in the total number of warehouses in Philippines during 2015, whereas
Quezon City has accounted for a share of ~% warehouses in Philippines
during 2015. Cold storage facilities in Philippines are either rented or self
owned. There are a large number of small players in Philippines cold
storage arket as of
. These players do t ha e the fi a cial
capability to set up a cold storage unit. Monthly rental for an average 2700
x 3600 x 2300mm 9.7sqm, 20cubics, cold storage facility in Philippines is
around PHP ~. While cost of establishing a self owned cold storage unit is
significantly high. It has been witnessed that, on an average, there is a
decrease in freezing cost per kilogram of ~% in a plant with a capacity of
4500 kg/h compared with one of 1800 kg/h when a person rents out a
facility.

Cold storage market in Philippines has witnessed considerable growth over


the period 2010-2015. A similar trend in the market is expected over the
period 2016-2020.It has been expected that several new cold chain
warehousing facilities will be established in Philippines over the period
2016-2020. This is likely to provide significant boost to the cold chain
warehousing market of Philippines throughout the forecasted period
2016-2020. Furthermore, growing consumer demand for frozen food
rather than food from wet markets has also been anticipated to provide
ample support to the cold storage warehousing market of Philippines over
the period 2016-2020. Philippines cold storage warehousing market of has
been projected to augment from USD ~ million in 2016 to USD ~ million in
2020 by a CAGR of ~% over the period 2016-2020.

Source: https://www.kenresearch.com/automotive-transportation-andwarehousing/logistics-and-shipping/philippines-cold-chain-marketreport/8219-100.html

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Ken Research
Ankur Gupta, Head Marketing & Communications
Ankur@kenresearch.com
+91-9015378249
Website : www.kenresearch.com

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