Glowing Prospects for Cold Stores in Asia
Demand for cold storage facilities has never been higher
In the US, the spike in online grocery is spurring growth for cold stores. Real estate services and investment firm CBRE Group Inc. expects that up to 100 million sq. ft. of cold storage warehouse space will be added in the US by 2023.
Here in Asia, the rise in consumer demand for perishable food items and the need to maintain the quality and shelf life of food, cosmetics are driving industry growth.
Australian financial and business information service company FiinGroup expects that between 2019 and 2023 foreign cold store operators in Vietnam – possibly Asia’s most promising investment destination - will add another 60,000 pallets of rented cold store facilities.
According to FiinGroup’s database, Vietnam has a total designed capacity of rented cold store of 600,234 pallets in 2018. Most are in the country’s south, its industrial heartland and the base of its burgeoning seafood export.
In India, the arrival and growth of supermarkets has changed consumer behavior creating a whole new organized food retail demand chain. India is also the world’s largest producer of milk, second-largest producer of fruits and vegetables, and the fourth-largest producer of chicken.
As fresh food metabolizes throughout the shelf life, the higher the temperature, the faster is the natural degradation. As green vegetables and fruits wilt within days in 30 degrees Celcius but can stay fresh for a month when stored at 0 degrees Celcius, and meat goes bad in a matter of hours in tropical heat, proper storage is needed to ensure India’s produce stays fresh.
Market research firm IMARC projects the Indian cold chain will grow at compound annual growth rate of 14.8% during 2019-2024 to reach INR 2,618 billion (US$35.3 billion) by 2024 from INR 1,121 billion (US$15 billion) in 2018.
Preferred Storage System for Cold Store
As investment in cold storage facilities are high, as much as 10 times higher than the cost of an ambient warehouse, companies would want to optimize the use of their facility.
How should they go about this?
The short answer is to pack more in a given space by increasing the density of the warehouse and maximizing the available height. One storage system which can help companies achieve this is the Mobile Racking System (MRS).
What are the plus points in installing the MRS?
Compact storage solution. It consists of banks of selective pallet racking mounted on an electrically driven mobile base, set on tracks embedded into concrete floor. As each bank can have four to eight movable racks, the system can slash the required storage footprint by as much as half when compared with a selective rack installation.
Maximize storage density. As much of the cost is in the first 2 meters, companies can maximize the advantage of mobile pallet racking by extending up to 16 meters high.
Easy picking. With direct access to pallet locations, picking is made easy with modern control system. At the touch of a button, the aisle opens up giving order pickers 100% selectivity, much like any selective pallet racking system. Zone picking is also available with the standard aisle being separated into 2 or 3 order picking aisles. With radio frequency controls on the material handling equipment, the racks can be moved immediately once the handling equipment leaves the aisle. As it takes less than a minute to reopen the next aisle, 20-25 pallet movements per hour is achievable.
Safe and accident-free work. The MRS is equipped with emergency stop switches, photoelectric access barriers, manual release systems, proximity sensors as well as photoelectric safety barriers to ensure an accident-free working environment.
Economical. With a smaller footprint as compared with selective pallet racking, land and building cost is lower with the MRS.
Savings on utilities. By being smaller, it enables companies to cut down on energy use for refrigeration and lighting. It is estimated that a cold store with an MRS uses up to 50% less energy than that of a conventional cold store.
Modular and scalable. A modular system, the MRS is ideal for an expanding operation as it can be easily scaled up to meet increasing demand.
What about the cost you may wonder?
While the MRS is more costly than selective pallet racking due to the electro-mechanical design and components used, it achieves almost double pallet positions in the same footprint over a selective pallet racking. With a smaller footprint, Mobile Racking System reduces both building costs and storage space. At a time of rising land and labour costs in the region, the savings companies can enjoy is considerable. With less refrigeration and lighting, operational costs are also lower.
Demand for cold store is growing at a steady clip. Those who are planning to build new facilities or expanding their existing facilities to capitalize on the demand growth would do well to give the MRS a serious look.
