KSA Cold Chain Market Outlook to 2030

KSA Cold Chain Market overview

• The KSA cold chain market has witnessed significant growth in 2023, the market size was USD 1.35 billion. This robust growth is primarily driven by increasing demand for temperature-sensitive products, such as pharmaceuticals, fresh produce, and dairy, which require specialized storage and transportation solutions to maintain their quality and shelf life.
• Major players in this market include Agility Logistics, Tamer Logistics, Maersk, Mosanada Logistics, and Starlinks. These companies dominate the market by providing comprehensive cold chain logistics solutions, including storage, transportation, and value-added services like packaging and customs clearance.
• In October 2019, Agility, a leading global logistics provider, announced the opening of a new 900,000 square meter logistics park in Riyadh.This new facility, developed by Agility Logistics Parks (ALP), included 250,000 sqm of built-up, high standard warehousing and logistics facilities.The Riyadh ALP was part of a series of investments by Agility in Saudi Arabia valued at 1 billion Saudi riyals (SAR).
• Riyadh, the capital city, dominates the cold chain market in KSA due to its strategic location and robust infrastructure in 2023, hosting major players like Agility Logistics and Tamer Logistics. The city's central location makes it an ideal hub for distributing goods to other regions, thus enhancing its dominance in the market.

KSA Cold Chain Market Segmentation

By Type: The KSA Cold Chain Market is segmented by type into cold storage and cold transport. In 2023, Cold transport dominates the market due to the country's extreme climate, which necessitates efficient temperature-controlled logistics to maintain the quality and safety of perishable goods. High demand for fresh produce, dairy, and pharmaceuticals drives the importance of cold transport in ensuring timely and safe deliveries.

By End Users: The KSA cold chain market is also segmented by end users into dairy products, meat/seafood, pharmaceuticals, cosmetics, processed food and others. In 2023, dairy products were the leading segment. This is due to the high demand for temperature-controlled environments required for dairy storage to maintain product freshness and quality. driven by the necessity for cold storage solutions to preserve perishable products during transit.

By Region: The KSA cold chain market segmented by region into Riyadh, Jeddah, Damman, Tabuk, Madina, Makkah. In 2023, Riyadh was the leading segment. This central position drives high demand for cold storage solutions across various sectors including retail, healthcare, and logistics, reflecting its significant economic activity.

KSA Cold Chain Company Landscape

• TANKZEN Logistics Expansion: TANKZEN Logistics recently opened a new facility in Dubai, known as the Dubai DWC, spanning 6,000 square meters. This expansion reflects the companys strategy to strengthen its regional presence and enhance its capacity to serve key clients in the F&B, pharmaceutical, and retail sectors across the GCC countries.
• NAQEL Express Fleet Conversion Initiative: NAQEL Express has partnered with the National Transportation Solutions Company to convert its entire fleet by 2040. This partnership aims to upgrade the companys fleet for enhanced efficiency and environmental compliance, ensuring readiness to serve the expanding logistics needs of the Red Sea and Amaala regions.

KSA Cold Chain Industry Analysis

KSA Cold Chain Market Growth Drivers

• Reliance on Imports for Food Ingredients: Saudi food manufacturers heavily rely on imports for food ingredients, importing $3 billion worth of intermediate food products in 2023. This reliance drives the need for robust cold transportation solutions to maintain the quality and safety of these imported goods, supporting the growth of the cold transport market in KSA.
• Adoption of Modern Technologies: The adoption of modern technologies such as Transportation Management Systems (TMS) by companies enhances the efficiency of cold transportation. These technologies facilitate real-time tracking and optimized route planning, which has significantly contributed to the growth of the cold transport market in Saudi Arabia by improving service reliability and customer satisfaction.
• Rising Demand for Perishable Goods: The increasing demand for perishable goods, including fresh produce, dairy products, and meat, both domestically and internationally, is driving the expansion of cold chain logistics in KSA. Companies like Almarai have responded by expanding their cold chain networks, adding 1,100 refrigerated trucks and trailers to meet the growing demand for reliable cold transport solutions.

KSA Cold Chain Market Challenges

• Labor Availability: Saudi Arabia's cold chain market faces significant challenges due to a shortage of skilled and unskilled labor. This issue has been exacerbated by the implementation of dependent fees on expats in 2016, leading many foreign workers to leave the country. This labor scarcity impacts the operational capacity and service efficiency of cold chain companies.
• Limited Technology: The adoption of advanced technologies such as real-time monitoring systems, automated inventory management, and cloud-based data systems in KSA's cold chain market is limited. High costs, coupled with a lack of awareness and technical expertise, hinder the widespread implementation of these technologies, affecting the optimization of cold chain operations and overall market growth.

KSA Cold Chain Market Government Initiatives

• Infrastructure Enhancements for Cold Transportation: The Saudi government is investing in major road projects to facilitate cold transportation. This includes constructing new bridges like the King Fahd Causeway and upgrading existing road networks such as the Makkah-Jeddah highway. Additionally, the Riyadh-Qassim highway expansion, spanning 337 kilometers, significantly reduces travel times, improving the efficiency and reliability of cold chain logistics.
• Development of Specialized Sea Port Facilities: Saudi Arabia's government has enhanced its sea network with specialized equipment, including refrigerated containers at the Port of Dammam, maintaining temperatures from -25C to +25C. The Port of Jeddah features a cold storage facility with a 20,000-ton capacity, supporting temperature and humidity controls. The countrys 21 modern ports handle two million TEUs annually, accommodating around 12,000 ships and 200 berths.

KSA Cold Chain Market Future Outlook

Looking forward to 2030, the global specialty fertilizer market is expected to continue its growth, with a projected market size of USD 3.8 Bn. The demand for specialty fertilizers will be driven by the increasing adoption of precision farming techniques, growing awareness about sustainable agriculture practices, and government initiatives aimed at boosting agricultural productivity.

Future Trends

• Robotics and Automation: The future of the KSA cold chain market will see increased adoption of robotics and automation, like robotic palletizers and conveyor systems. Companies like SADAFCO are already implementing these technologies to enhance efficiency and reduce labor costs, which is expected to become a standard across the industry, driving significant improvements in productivity and cost management.
• Blockchain Technology for Traceability: Blockchain technology will play a crucial role in the KSA cold chain market by enhancing traceability and transparency. Saudi Aramco's partnership with Circularise blockchain for tracking CO2 emissions demonstrates the potential for blockchain to ensure product quality and safety throughout the supply chain. This trend is expected to expand, improving overall supply chain integrity and compliance.