China cold chain: Kerry Logistics opens JV with local firm to meet rising demand

By Tingmin Koe contact

- Last updated on GMT

Kerry Logistics has teamed up with Chinese firm Shanghai Zhizhen Logistics to meet demand for cold-chain food services in China.  © Getty Images
Kerry Logistics has teamed up with Chinese firm Shanghai Zhizhen Logistics to meet demand for cold-chain food services in China. © Getty Images

Related tags: Cold chain, Logistics, Kerry, Joint venture

Kerry Logistics is opening a new firm in China - Kerry Cold Chain Solution - after the firm highlighted the sector’s "enormous growth potential".

Formed with local Chinese firm Shanghai Zhizhen Logistics, Kerry Cold Chain Solutions will provide services from upstream to downstream, handling raw ingredients to dairy product additives.

It will do so using its own ambient and cold chain facilities, which spans more than 1 million sq ft in China, while utilising local expertise at the same time.

In addition, it owns a temperature-controlled facility of over 50,000 sq ft in Shanghai featuring automated storage and retrieval systems.

The cold store is fully automated to ensure that the temperature is maintained constantly.

"The market for food-related cold chain logistics in Mainland China is immense with enormous growth potential. There is also ample room for technological growth to reach international standards. Intending to fill a gap in the market, we welcome the collaboration with Zhizhen Logistics, which marks an important strategic step for Kerry Logistics to extend its footprint in the domestic cold chain logistics market, enhancing our service offerings and competitiveness,”​ Edwardo Erni, Managing Director - China and North Asia of Kerry Logistics said.

Moving forward, there are plans to provide high-end food cold chain logistics for niche food products.

Last year, Illinois-based Havi also teamed up​ with Shenzhen firm SF holding – a major Chinese express courier services to open a cold chain logistics firm in China.

Challenges and opportunities

As compared to the other advanced economies, China is still lagging behind when it comes to food related cold chain services.

According to Erni, one of the biggest challenge that the cold chain logistics industry faced in China is the discrepancies in the levels of technological advancement within the industry.

In addition, the cold chain logistics industry in China is heavily regulated in order to maintain health and safety standards.

The Chinese authorities have been coming out with policies to improve the situation.

Earlier in March this year, 24 ministries, including the National Development and Reform Commission (NDRC), have announced a proposal​ to promote high quality logistics services in the country.

A part of the proposal concerns the promotion of cold chain network services and infrastructure for agricultural products.

For example, the proposal suggests the establishment of a third party platform for inspecting the entire cold chain logistics, strengthen control over the temperature of the entire cold chain process and reduce instances of broken chain.

This is to ensure the quality and safe consumption of fresh food and agricultural products.

There are also plans to develop new cold chain operating models, such as connecting e-commerce channels selling fresh foods with cold chain house delivery and central kitchen with delivery of ingredients via cold chain.

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