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2012-01-19 - ammonia21.com

In recent years, numerous food scandals are reported in China.  To some degree, these food safety scandals reflect weak points in the country’s food supply chain that have led to both consumer health issues and wasteful inefficiencies for producers. On the other hand, food safety issues provide incitation for the country to update its cold chain industry. China’s cold chain industry is therefore entering a phase of unprecedentedly fast development in the foreseeable future.

 

 

In order to promote China’s cold chain industry, the Chinese government has promulgated the Development Plan for the Cold Chain Logistics of Farm Products in its 12th Five-year National Plan. China plans to establish a group of large-scale cold chain logistics distribution centers and foster a group of competitive cold chain logistics enterprises by the year 2015. 

 

8 key projects have been identified by the government with R&D of new cold chain logistics equipment and technologies will be a main focus in the plan. Through these projects, China aims to increase the proportion of the logistics of fruits and vegetable, meat, and aquatic products in the cold chain to over 20%, 30%, and 36% respectively, increase refrigerated transportation rate to around 30%, 50%, and 65%, and reduce the decay rate in transportation process to below 15%, 8%, and 10% respectively.

 

Potential business opportunities in China’s cold chain industry 

 

The development space for the cold chain industry in China is vast. The major cities of Shanghai, Beijing, Guangzhou, and Shenzhen are likely to develop as key cold chain logistic centers, along with major port cities such as Dalian and Qingdao. The number of frozen storage facilities is expected to grow 24% annually. The market is attracting more and more domestic and foreign investors. China’s cold chain industry will bring business opportunities to the refrigeration machines industry, the packaging material and machines industry, the transportation industry and third-party cold chain logistics service enterprises. 

 

 

The country still misses a large-scale and systemised cold chain logistics structure, to be able to meet the demands of modern agriculture development, resident consumption, and expansion of agricultural products export. It does not have adequate infrastructure capacity of cold chain logistics and associated technologies lag significantly behind. The proportion of transporting fresh and live farm products through the cold chain is rather low. 

 

According to China Research Intelligence (SHCRI), the annual growth of China’s food production is expected to reach 4% to 7%. An estimated 2,000 meat factories in China produce over 60 million tons annually. Frozen food represents 8.5 million, cold drinks 1.5 million, dairy products 8 million and aquatic food production reaches 44 million tons. 

 

However, China’s cold chain storage capacity is only 14 million m³, most of which is used for meat, fish and dairy products, while fruit and vegetables barely have a share in it. Only 2% of the approximately 400,000 rail wagons running in the country are refrigerated and only 25% of perishable goods benefit from cold chain transportation. 

 

There is still a wide gap between China's cold storage industry and auxiliary cold storage capacity, refrigerated transport equipment and other logistics technology equipment, fresh management in supermarkets and stores when compared to that in developed countries.  China urgently needs to work on food safety issues through investment in standards, agreed enforcement and infrastructure in its cold chain industry.