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Alluring opportunities at the cusp

Rise in population, rapid urbanisation, increase in per capita income and changing consumption habits in the GCC have powerful implications for the cold chain industry.

| | Jun 8, 2014 | 4:24 pm
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B Surendar

B Surendar

Rise in population, rapid urbanisation, increase in per capita income and changing consumption habits in the GCC have powerful implications for the cold chain industry. The impact of the four factors has never been more acutely felt than now.

The population in the GCC will likely touch 53 million by 2020; it currently stands at over 40 million. And according to the World Urbanisation Prospects report, issued by the UN Department of Economic and Social Affairs, in the second half of last year, an estimated 45 million people in the GCC will be living in dense urban clusters by 2020. According to the report, that works out to a mind-boggling 85% of the total estimated population in the GCC.

The GCC has seen strong GDP growth. The GDP is likely to touch USD 1.8 trillion by next year, from USD 1.1 trillion at the beginning of the decade. And the per capita income is likely to touch USD 38,000 by 2015.

Urbanisation and growth in per capita income alone are strong drivers for an increase in consumption of food in the region. These two factors mean entire sections of the population with an inclination for ready-to-eat chilled and frozen food.

These changes in consumer habits represent an opportunity for the cold chain industry to contribute to the need for food that is protected from temperature abuse. In the months and years to come, manufacturers of refrigerating equipment and specialised refrigeration consultants and contractors are going to be busier than ever. While there are tremendous opportunities for meteoric financial growth, there is no ignoring the fact that there is an equal opportunity for working hard to get things right.

For long, the region has been characterised by bad practices in refrigeration infrastructure design and construction and equally deplorable installation and after-sales efforts. The result has been inefficient and unreliable cold storage facilities and other features.

Regulation is making its presence felt, especially in the UAE, as is enforcement, although there is no hiding the fact that the strength in numbers of enforcement officers is still below the desired level. While regulation and enforcement are key elements that can contribute to better cold chain infrastructure, perhaps the most powerful ally is a strong culture of food safety among food establishments and the cold chain industry.

A percolating culture will lead to self-discipline and the vision to balance commercial considerations with responsibility towards society to build better cold storage facilities, with an emphasis on energy efficiency (important for sustaining the business as much as for safeguarding the environment) and reliability.

The cold chain industry in the GCC stands at the cusp of an opportunity for getting things right at the very foundation level of the new paradigm of rising populations, urbanisation, increase in per capita income and changing habits. Its credibility and success depend on how it responds to the possibilities.

– B Surendar
Twitter: @BSurendar_HVACR


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