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Growth of cold chain industry in South Africa.

20-Oct-2022   Mr. Ripfumelo Makaringe, Designation: Warehouse Manager , Sparta Beef   Author: Himanshi Kalota

In conversation with Ripfumelo Makaringe, Warehouse Manager at Sparta Foods, we tried to understand the Cold Chain Industry in South Africa. We also discussed the effect of pandemic and the future going forward.

 “The South African Cold Chain Industry is in growth stage. There can be seen an evident growth in demand with the view that the industry now handles a million pallets a day but there is also another side which shows challenges like energy crisis, loots and increasing crime rates which are hindering the growth of cold chain industry in South Africa.”

Q1. How would you like to describe the Cold Chain Industry in South Africa?

South Africa Cold Chain Industry is booming and a lot of infrastructural growth in the industry can be noticed. The market is fragmented with numerous small players. The cold transport segmentation is also increasing simultaneously. Also, there has been an increase in job opportunities in cold chain industry which confirms the growth of the industry.

Q2. Can you tell us about the challenges faced by the cold chain companies in South Africa?

South Africa has recently seen an increase in theft and loots which causes disruptions in cold logistics. These thefts cause problems to clients as well as companies, mostly the risk is transferred by the companies to the logistics firms which in turn transfers the risk to the insurance companies to assure protection.

Recently, the country is experiencing energy crisis (load shedding) and as the cold chain requires continuous supply of power to run temperature-controlled warehouses the companies’ cost has been increasing. 

Q3. What are your views regarding the impact of covid-19 on Cold Chain Industry?

I believe the industry has been resilient to Covid-19 and also, Covid-19 has helped the industry to increase its demand as there was shortage of goods and cold storage were able to store goods for more time. Also, Cold Chain Industry came under essential services as they stored meat, fruits and vegetables.

Q4. Can you explain the role of cold chain companies from the point of goods entering the country till reaching the end users?

Basically, the cold chain companies act as chain from bringing the goods from port till retailers. The chain starts with procurement of products from manufacturers and importers at procurements hubs which is then carried by 20-foot reefers to warehouses where the goods are being unloaded. In warehouses, the goods are stored in temperature-controlled pallets. According to client, the goods are then distributed to end users such as retailers, supermarkets, distributors and others.

Q5. Can you give more insight on cold stores ownership and dealership for logistics?

Roughly 25-30% of the cold stores are owned by the companies. Mostly, companies outsource their logistics as the transportation of goods from one place to another involves risk of loots which is a major challenge in the industry. So, most of the companies may provide logistics but not have their own logistics services.

Q6. According to you, where do you see the hub of warehouses of cold chain in South Africa?

As already mentioned, there can be seen an increase in land transport as the neighboring countries are developing. Hence, I would say Gauteng will or can be called as the hub. Gauteng has the majority of population of South Africa and majority of developments are happening in Gauteng. Durban also has access to port so it can also be known as the hub.

Q7. What do you feel are the major factors affecting Cold Chain Industry?

I would say factors like Gross domestic Production, Population, Export and Import, Inflation, Infrastructural Developments, Demand of Meat and Fruits and Vegetables are the general factors affecting cold chain industry. Now, looking specifically to South Africa the major factors can be disruptions due to loots, energy crisis and fluctuations in fuel prices.

Q8. Can you tell me the top users driving the cold chain industry in South Africa?

Meat & Sea Food and Fruits & Vegetables companies are the major evident end users driving the cold chain industry in South Africa.

Q9. What do you think is the future outlook of the South Africa Cold Chain Industry?

The free flow of goods across borders, increasing adoption of packaged foods, infrastructural developments, expansion of warehousing space, and new firms entering the industry can be seen the major drivers of the Cold Chain Industry in South Africa. The industry demonstrates a huge potential for growth in the future.

For more insights on the market intelligence, refer to the link below: -
South Africa Cold Chain Market Outlook to 2026F

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