RSA Cold Chain Breaks Ground on Facility Expansion Phase II in UAE
UAE-based cold chain solutions provider RSA Cold Chain has announced the commencement of construction on its Phase II facility expansion project in Dubai. RSA Cold Chain has collaborated with Group AMANA for the construction project. This new facility is set to increase the company's network capacity, boosting its offerings for the food sector. It will also help meet the growing customer demand in the region’s market, according to a press release published via Zawya.
Expansion Project and Investment
In March this year, Americold Realty Trust announced an investment of $3.9m (Dh14.3m) for 49% of Cold Chain equity. Following this collaboration, the company soon began planning for the facility expansion that resulted in the ground-breaking event. RSA Global Group CEO and co-founder Abhishek Shah said: “This ground-breaking ceremony marks the initiation of a journey that promises not only increased operational capabilities but also enhanced efficiency and innovation in meeting the evolving needs of the food and beverage industry in the region.”
The service offerings for the food sector will include bonded and non-bonded storage options and a comprehensive end-to-end cold and frozen supply chain solution. Officials from the RSA Cold Chain and Group AMANA attended the ground-breaking ceremony to mark this milestone.
UAE Cold Chain Market Outlook
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. 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, and increasing number of modern grocery retail stores. The high dependence of the country on imports to meet its food requirements has necessitated the development of cold chain facilities.
Market Segmentation and Infrastructure
The market is divided into several key segments based on operations and infrastructure:
- Cold Warehousing: The cold storage market is dominating the market and contributed majority revenue share to the cold chain industry. Chilled storage was observed to be the leading revenue share segment.
- Cold Transportation: UAE has a strong cold transportation market owning to the strategic geographical position. Land freight dominates the market in terms of Revenue followed by sea with air being least used.
- Strategic Locations: Majority of the cold storage warehouses are located in free-zones in Dubai and Abu Dhabi like DAFZA, JAFZA, DIP, DIC, and KIZAD.
End-User Application and Demand
The demand for cold chain services is driven by various industries. The following highlights the market distribution by end-user:
- Dairy industry: Accounts for the majority revenue share in 2019 due to its robust output.
- Meat and Seafood: Contributed the second highest revenue share, as UAE is one of the largest consumers of meat and seafood in the world.
- Pharmaceuticals, Fruits and Vegetables: These categories represent significant other influential factors in the cold storage industry.
Regional Market Dominance
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 exist there, amongst which Dubai Industrial Park is the largest by volume. 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.
