Indonesia Cold Chain Market Grew 4-6%, ALFI Expects 8-10% for Next Five Years

Amid the pandemic covid-19 outbreak, the Indonesia cold chain market still grew up significantly, by 4-6%, according to Indonesia Logistics and Forwarders’ Association (ALFI/ILFA).

In his presentation to Taiwan-Indonesia Cold Chain Brands Live Streams Seminar organized by Taiwan External Trade Development Council (TAITRA), ALFI/ILFA Chairman Yukki Nugrahawan Hanafi named some factors that support this sector growth.

Yukki names at least five factors that encouraged the sector to get growth, including first, e-commerce industry with rising population opting for online shopping for grocery and food delivery; second, the increase of the pharmaceutical industry; third, elevated agricultural market with rising population for consumption, fourth, the increased demand of frozen foods and beverages, and fifth the rise in franchises in the country.

Yukki explained that the Indonesia cold chain industry would continue to grow in the next years to come, expecting a growth of 8-10% for next five years.

“The market will be majorly driven by increasing for perishable items including frozen food, pharmaceutical, meat, seafood and dairy products in the country,” Yukki said.

The character of cold chain logistics in Indonesia, according to Yukki, is mostly business to business (B2B) though the demand for B2C has been very strong recently.

Yukki explained that such potential market has attracted more players to do more investment in this sector. “New players are expected to enter the market and the existing players are expected to expand their market by increasing their offices owing to the increase in industrial activities in the country.”

“Additionally, the rise of demand for perishable products and fast delivery will raise both express logistics and cold chain market leading to an increase in Indonesia logistics and warehouse market,” he said.

According to data, some logistics service provider that have led the market share of this sector include: Diamond Cold Storage, Kiat Ananda Cold Storage, MGM Bosco, Dua Putera Perkasa, GAC Samudera, and Adib Cold Logistics.

Better SOP Needed

When it comes to logistics, the chain from farmer/fisheries to the table rely on quality storage and delivery. Yukki calls for a good SOP (standard operating procedure) and equipment supporting these activities to be strong and reliable.

He mentioned few numbers of challenges that currently faced by cold chain logistics players. Those challenges include: technology for delivery system remain lack of track and trace visibility; liabilities insurance for service provider (market awareness and regulation); number of logistics failure in storage and distribution remain high (10% & 20% respectively); and limited E-Commerce platform that can inform a capability of cold logistics.

 Triangle Collaboration for Better Growth

Yukki notes strong collaboration and willingness from triangle parties (Government, Industry, Education) to promote and improve the excellence of the cold chain industry in Indonesia.

He said few numbers of solution might be considered, including good infrastructure and facilities to collecting products from farm/fisheries, Connected Hub and spoke in transport and distribution (to maintain product quality, reduce cost and visibility), Strong Education platform and applicable technologies, and regulation governing market and industry toward growth of agriculture product.

 

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