Investments in Mindanao cold chain facilities reach P600M

New cold chain facilities worth P600 million are being constructed in key growth areas such as Cagayan de Oro, Davao and General Santos, boosting efforts to establish Mindanao as a major food supplier both for the local and export market.

"The establishment of these new cold chain facilities indicate that there is still a lot of room for growth in the industry, especially since Mindanao continues to expand its production of  crops and livestock that are vital components of the food security program," said Anthony Dizon, president of  the Cold Chain Association of  the Philippines (CCAP). 

Two of the cold chain facilities being put up are owned by Jentec Storage Corp. which is spending P400 million for a 2,000-metric ton capacity facility in Davao City and a bigger 4,000-5,000 rated capacity facility in General Santos, mainly to address the increasing demand for this kind of infrastructure by the tuna canning industry. 

On the other hand, another CCAP member Polar Bear Freezing Co. is investing P200 million to build a similar facility in the charter city of Cagayan de Oro in Misamis Oriental. The facility will be used primarily for the livestock processing sector and the marine/fishing industry in this region.

Dizon said that the new investments coming in indicate Mindanao’s growing importance in the food supply chain in the country.

"Mindanao is already recognized as a major food supplier for both the domestic and international market. However, there is still a need to create more infrastructure such as better and cheaper transport systems as well as cold storage facilities that would allow an increase in shipments of these commodities to mainstream markets such as Metro Manila which has the capacity to absorb these products," noted Dizon.

He added that while such infrastructure has been increasing in years, there is still a huge gap between supply and demand.  

In the tuna canning industry for instance where six of eight tuna processing plants are in General Santos, the total demand for cold storage capacity is 60,000 metric tons compared with the current capacity of only 30,000 metric tons. 

The Northern Mindanao Vegetable Producers Association on the other hand which have consolidated their produce for better chances of selling to institutional markets like supermarkets, fastfood chains, hotels and restaurants, are constantly clamoring for postharvest handling facilities and cold chain technologies. Without proper handling and cold chain, about 50 percent of the vegetables produced are wasted.

Dizon said potential investments and other concerns of the cold chain industry will be discussed in the forthcoming 4th annual general membership meeting and training conference on June 21-22 in Davao City. 

"While there are major opportunities for investors in the industry, there are concerns that have to be addressed such as the increasing cost of labor and power which have been  raising the cost of doing business." 

Currently, CCAP comprises about 65 members that include cold storage owners and operators, refrigerated transport owners and operators, food processors, food importers, food distribution and logistics companies, retail and food service entrepreneurs, research organizations in food science and fastfood chains such as Jollibee Foods Corp., KFC, Red Ribbon, and supermarkets  Makro and Shopwise.