The report titled “UAE Cold Chain Market Outlook to 2025 – By Cold Storage (Ambient, Chilled and Frozen Warehousing) and Cold Transport (Land, Sea and Air), By End User (Dairy Products, Meat and Seafood, Pharmaceuticals, Fruits and Vegetables and Others) and By Ownership (Integrated and Contract Logistics)“ provides a comprehensive analysis on the Cold Chain Market in the UAE. The report covers various aspects including overview and market size, market segmentation, stakeholders, value chain analysis, major players, competitive landscape, operating and profitability model, end-user potential in the cold chain industry and many other influential factors. The report concludes with market projections and analyst recommendations highlighting the major opportunities and cautions for the cold chain market players.
UAE Cold Chain Market Overview and Size
The cold chain market in UAE is at growth stage. It has consolidated its position as a global transshipment hub due to its central location in the GCC region. The high dependence of the country on imports to meet its food requirements has necessitated the development of cold chain facilities. In the review period 2014-2019, the UAE cold chain market has increased at a positive CAGR of 6.6% largely due to rising food and pharmaceutical imports, growth of the dairy industry, increasing number of modern grocery retail stores, government initiatives to reduce dependence on oil-exports and others.
UAE Cold Chain Market Segmentation
The cold storage market is dominating the market and contributed majority revenue share to the cold chain industry. The high demand for perishable products such as dairy, meat and seafood and pharmaceuticals have led to the growth of cold storage facilities in the country. Majority of the cold storage warehouses are located in free-zones in Dubai and Abu Dhabi like DAFZA, JAFZA, DIP, DIC, KIZAD etc.
UAE has a strong cold transportation market owning to the strategic geographical position on the trans-continental trade route and multi-modal connectivity in UAE. Land freight dominates the market in terms of Revenue followed by sea with air being least used due to its expensive prices.
UAE Cold Warehousing Market Segmentations:
By End-User Application (Dairy Products, Meat and Seafood, Pharmaceuticals, Fruits and Vegetables and Others): Dairy industry accounts for the majority revenue share in 2019 due to its robust output in recent years. Meat and Seafood contributed the second highest revenue share followed by other categories such as Pharmaceuticals, Fruits and Vegetables and other products.
By Ownership (Integrated and Contract Warehouses): Integrated logistic facilities generate larger revenue share. This is majorly due preference of logistics companies to invest into warehouses and closely monitor operations themselves as opposed to outsourcing them.
By Temperature Range (Ambient, Chilled and Frozen): Chilled storage was observed to be the leading revenue share segment to the cold storage industry owing to robust demand for dairy, pharmaceuticals and other processed foods in the country. The remaining revenue was contributed by ambient and frozen storages, UAE being one of the largest consumers of meat and seafood in the world.
By Areas (DAFZA, ZAFZA, DIP, DIC and Others): Dubai accounts for the highest share in the revenue of the cold storage market as it acts as a hub from where products are transported to other regions .Many vast tax-free trade zones existing there, amongst which Dubai Industrial Park is the largest by volume.
UAE Cold Transportation Market Segmentations:
By Mode of Transport (Land, Sea and Air): Cold transport through land contributed the highest revenue to the cold transport industry as food imports into the country through ports are transported to different cities via land transport. Majority of the domestic transportation takes place through the well-developed road infrastructure in the country as most places are quite accessible via road.
By Location (Domestic and International): Cold transportation to international markets accounted for majority of the revenue of the UAE cold transport industry due to the reliance of the country on imports for its food requirements. While domestic cold transport accounted for less than 20% of the cold transport revenue.
By End-User Application (Dairy Products, Meat and Seafood, Pharmaceuticals, Fruits and Vegetables and Others): Dairy industry has positively impacted cold chain industry followed by Meat and Seafood. Other categories include Pharmaceuticals, Fruits and Vegetables and other products.
By Ownership (Contract and Integrated):
The cold chain market in the UAE is dominated by 3PL facilities, generating largest share in market revenue. This is majorly due to the large number of 3PL operators providing wide variety of services and increasing shift towards outsourcing cold transport requirements by cold chain companies.
UAE Cold Chain Market Future Outlook and Projections
In future, it is anticipated that UAE Cold Chain market in terms of revenue will increase at a double digit CAGR of 11.2% during the period 2019P-2025F. Positive growth in the market is attributed to rise in manufacturing activity in the pharmaceutical sector, growth in dairy industry and rising food imports. Improvement in infrastructure and entry of new players due to simplification of industry regulations and government initiatives to boost the logistics sector is expected to propel the growth of the market. Additionally, increasing adoption of warehouse automation technologies such as EDI, RFID, AS/AR and others are expected to improve operational efficiency in UAE cold chain market over the forecast period 2019P-2025F.