Cold Chain Service to Expand in China

. ( China Ministry of Agriculture has reported an outbreak of FMD. )

Japanese trading company Marubeni announced on Tuesday that it is embarking on a joint venture with Chinese logistics startup G7 to lease refrigerated trailers to Chinese customers seeking to meet the fast-growing demand for fresh food.

The new business, with registration capital of $24.7 million, plans to lease 5,000 trailers in three to five years, Reuters reported. Marubeni owns a unit in the U.S. called PLM that currently operates cold chain trailers.

“The space for growth in demand and development [of cold chain logistics] is huge,” said Jun Hirasawa, chairman and chief executive of Marubeni (China) Co. Ltd.

The use of cold chain transport is as high as 98% in the U.S. Japan and Europe. Currently, China is between 20% and 40%. The demand for cold chain transport in China is rapidly rising as consumers are becoming increasingly willing to pay for safe, fresh food.

According to Reuters, China’s cold-chain logistics market, worth about $36 billion last year, is expected to reach $68 billion by 2020, according to an article published by the China Federation of Logistics and Purchasing last year.

In addition, Beijing is promoting more transportation of chilled and frozen meat rather than live animals, partly due to the risk of spreading African swine fever (ASF). ASF is a highly contagious disease that affects pigs only. It does not infect humans and does not pose a threat to the food supply.

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