1. The Cold Chain Industry in Malaysia is growing at a CAGR of ~7% with Companies Competing Intensely on Providing a Plethora of Services Under One Roof
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Malaysia is known as the halal industry hub which makes it one of the major trading partners of halal meat and other products. This induces the demand for the cold chain industry in the country. As a result, in the review period 2016-2021, the Malaysian cold chain market grew at a CAGR of ~7% with rising consumer demand for frozen and refrigerated foods. The Market is currently in the growing stage. There are not many players present in the sector which makes the overall industry consolidated. These cold chain operators in Malaysia offer a plethora of services under one roof, including packaging, labeling, batch separation, film-stretch application, and palletizing. The National e-Commerce Strategic Roadmap (NESR) is focused to accelerate the development of e-commerce activities and position Malaysia as a regional e-fulfillment hub in the near future. Due to this, the overall cold chain sector in Malaysia is expected to expand more in a few years.
2. The cold storage segment is dominating sector with the highest revenue share contribution to the cold chain industry.
The COVID-19 impact experienced by the cold chain industry in Malaysia was minimal. While the cold transportation industry witnessed a slight decrease in demand, especially during periods when containment measures were placed; the cold warehouse industry did not see much disruption in demand and supply. Rather, the adoption of Warehouse Automation is increasing. More and more warehouses are making space for technologies such as automated storage and retrieval systems for speeding order deliveries and implementing social distancing. Warehouses are trying to increase their capacity post-COVID for a variety of reasons such as increased Inventory on hand, and meeting increased demand.
3. Despite having great performance, the Malaysia Cold Chain Market often faces issues like Limited Technology Availability, Lack of Traceability, and Long-Term Contracts.
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There is limited tech availability in the cold chain market as IoT systems have not been fully developed to a level where they can facilitate seamless communication between service providers and buyers. Such a communication problem can cause delays in transportation and cause other problems as the goods are passed through multiple channels. Also, many manufacturers are hesitant to sign one multi-year contract with a single 3PL cold storage provider. Because there are so many service providers to choose from, manufacturers want to renegotiate contracts or find more value-added services with other companies. This creates a lack of long-term contracts in the sector. Moreover, Lower demand for cold chain service providers outside the central city and the reasonable time to deliver cold chain products within Malaysia are some challenges that the industry faces.
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