INCREASING DEMAND for perishable goods makes the Philippines an attractive market for the cold storage industry, according to a global infrastructure investor.
“The Philippines is an emerging and attractive market for the cold storage industry due to the rising demand for perishable goods,” I Squared Capital told BusinessWorld.
According to the company, the demand is driven by rapid urbanization and growing population.
“With over half the roughly 120 million population living in urban areas, there is a large and concentrated consumer base for fresh and frozen products that continues to grow,” it added.
Meanwhile, increasing purchasing power, growth in the food processing sector and the expansion of e-commerce were also among the drivers.
In the next few years, the company expects demand to be driven by quick-service restaurants and the protein-based food sector, “as consumer preferences continue to evolve with rising income.”
“(This is expected to fuel) the import and consumption of more meat, seafood, and other products requiring cold storage,” it said.
Further, it said that as agricultural continues to evolve and modernize, especially for quality-focused export markets, demand for more cold storage for fruit, vegetables, and grains will grow.
The company also expects demand to come from the expansion of online grocery shopping and food delivery services, the expansion of high-value non-food products such as vaccines and pharmaceuticals, as well as stricter food safety regulations.
Last week, I Squared Capital broke ground for the expansion of Royale Cold Storage’s facility in Plaridel, Bulacan, which will add 1.5 hectares to the current five-hectare site.
Royale Cold Storage is among the portfolio companies of I Squared Capital.
In the Philippines, the company has committed to invest $2 billion across energy, digital, logistics, and food sectors. — Justine Irish D. Tabile