China has a dynamic and rapidly growing cold chain sector that relies on polyurethane to ensure food remains frozen or chilled, from the farm to the table. Jane Ho explains the market’s structure
The pace of growth in China’s cold chain logistics market showed little sign of slowing in 2019, being valued at CNY339bn ($49bn) in 2019, up 17% from 2018. The demand for refrigerated warehouses in 2019 also led to a small boom for companies refitting existing warehouses, and for companies making the panels used in the refitments, according to Qin Yuming, secretary general of cold chain subcommittee at the China Federation of Logistics & Purchasing (CFLP).
As fast as the market is growing, it is also consolidating. The country’s 100 largest companies by revenue now account for 16% of the market, up from a 14% in 2018, Qin said. But it still has some way to go to match the US, where 80% of the market is held by the top-three cold chain companies. Qin told a conference in Shanghai in August that a simpler dietary structure for American citizens contributes to this difference.
Increasing concentration in the Chinese sector is exemplified by the number of mergers and acquisitions that have occurred in the past few years. These include two transactions by New HAVI, a joint venture between global supply chain heavyweight HAVI and Chinese delivery giant SF Express.