In conversation with Damrong Darasakd, Director of Supply Chain Operations we tried to understand the Cold Chain Market in Thailand. We discussed the major challenges and government policy factors affecting the growth of the market.
“Currently, the market has crossed the infancy stage and reached the Growth stage with continuously increasing demand for frozen storage service driven by meat and seafood”
Q1. At what stage do you think the Thailand chain market is currently? Is it an emerging market, high-growth or mature market?
Currently, the market has crossed the infancy stage and reached the Growth stage. It is still growing marked by the new developments, technology and trends coming up in the market
Q2. How did the market grow in past 5 years?
The cold chain market in Thailand grew at a rate of 10-12% from 2012 to 2022. The factors responsible for double-digit growth include e-commerce industry expansion and growing demand for frozen and processed food.
Q3 Do you think international economic factors affect Thailand’s cold chain market? If so, how?
With the recent international developments like the Russia-Ukraine conflict, and the USA china trade wars, the international currency market was highly affected. As a result of changes in prices of currencies like the Thai Baht, Japanese Yen etc, investment in the cold chain industry was affected and became costly due to an increase in interest rates.
Moreover, Thailand is the major exporter of agriculture and seafood, which drives the cold storage industry. Such international events also adversely affected international trade volumes.
Q4. Could you give an idea about the seasonal demand patterns in the cold chain industry?
There are mainly two times in the year in which there is a nationwide demand for cold chain logistics services. The occupancy rate is at its peak during mid-April due to the Songkran festival celebrated from April 13th to 15th and the second being during the New Year celebrations from 28th December to 1st January.
Q5. There are different types of temperature ranges required for storing different types of products, what are the common products for each of the temperature ranges?
Yes. Different types of products require different temperature ranges. There are three major types of ranges:
Dry/Ambient temperatures ranging from 15-25C are required for normal products such as Rice, Cereals, Grains and others. Chiller temperature ranges from 0C to 10C and is required for products like fruits and vegetables, dairy products and others. Product segments such as meat, beef, seafood, and processed frozen food require frozen storage ranging from -15C to -25C.
Q6. What are the major trends in customer preferences in Thailand?
The customer preference in Thailand is constantly evolving over the years. Currently, people are preferring plant-based food items and healthy food options with less fat and sugar content, eco-friendly packaging and products.
Frozen and ready-to-eat food segments have increasingly become popular in Thailand, due to which demand for cold storage services has increased.
The growth of e-commerce and online delivery has further supplemented the growth of cold storage companies in Thailand.
Q7. What are the major players providing cold chain solutions in Thailand?
Thailand’s cold storage market is dominated by players big players like JWD Logistics, Thai Yokorei co Ltd, Thaimax Cold storage, Piti Group, Havi logistics etc. while some major companies in transportation are Kerry cool express, SCG Express, DHL supply chain solutions, Inter Express logistics etc
Q8. Can you tell me the major end users driving the cold chain industry in Thailand?
Meat, seafood, frozen food, fruit and vegetable processing companies are the major evident end users driving the cold chain industry in Thailand.
Thailand is among the top 10 exporters of fruits in the world. Some of tropical Thai fruits are very popular such as durian, mangosteen, and longan .
Q9. What technological solutions are being adopted by Cold Chain companies in Thailand?
Companies have started adopting various software for the management and monitoring of cold storage and transportation operations in Thailand. Major solutions are Enterprise resource planning (ERP), Order management systems, Warehouse Management systems, Temperature management systems and others. Temperature monitoring through temperature sensors and GPS tracking of transportation trucks have become quite common technology practices.
Q10. What factors are driving the adoption of technological solutions in the food logistics industry?
Major factors which are driving the adoption rate are as follows:
Increasing demand for food delivery- Fast delivery of food items and ready-to-eat food requires better technological integration for quality control.
Shortage of skilled labour: Rising labour costs and the shortage of qualified skilled labour have led to higher technology adoption
Sustainability trends- Customers are becoming more aware of the environmental impacts and food waste, hence they prefer companies which employ eco-friendly techniques of production.
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