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East Africa’s cold chain infrastructure (CCI) solutions market is growing

EA’s growing population (2.5x world growth rate) and incomes and increasing urbanisation and exports (legumes, avocados) is driving increased demand for food production. Changing consumer patterns, improved value chain margins, cheaper technology, drive to reduce post harvest losses and thereby increase supply (~40%) and development of government strategies has helped to support growth in cold chain solutions demand.

In East Africa, the cold chain solutions market is still nascent with Kenya at the forefront which has seen an influx of new companies, business models, and technology; solar refrigeration unit sales in East Africa represented 42% of total SSA sales in 2022 indicative of the region’s growing demand for solutions.

Growing trend of cold chain solutions geared towards addressing first mile losses across all value chains such as fresh fruit and vegetables (FFV), meat, fish, and dairy outside of the value chains known for cold chain use such as the floriculture value chain, certain key fresh fruit and vegetable (FFV) value chains, and aspects of dairy and meat value chains that used cold chain solutions.

Growing trend of companies entering the market to address value chain player needs. For example, Baridi developed a PAYG enabled solar powered cold chain storage solution targeted towards meat markets supplying local butcheries while Cold Solutions Kenya is developing a 15K sqm facility that will help businesses manage large scale storage and transportation across multiple value chains.

East African countries at a glance

  • Kenya and Uganda offer large opportunities for cold chain storage interventions owing to the large production volumes of fresh produce and export volumes with both benefiting from existing sector activity via multiple programs and private investments.
  • Ethiopia’s cold chain market is predominantly geared towards commercial export ventures (e.g., flowers), with limited engagement with first mile operators and traders. However, there is growing effort to boost the sector for produce, meat and dairy, as signalled by increasing government efforts.
  • Tanzania’s current production, population size and expected growth ensure that it remains a large market opportunity, however, limited sector activity and awareness signals a need for further private and public sector support to drive growth.
  • While Rwanda offers a smaller market opportunity, high government support and private sector engagement and a stable political system, leave it well placed for the piloting of innovate cold chain solutions to address end-to-end value chain needs prior to scaling in geographically large markets such as Ethiopia.

 

Expert of: Cold Chain Storage Market Assessment (EEP / NDF 2023)

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