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China has huge potential for pharma market growth if facilities improve

CHINA has enormous potential for growth in pharmaceuticals, according to New York research firm Seabury Group.

Asia's share of the global perishables market grew from 13 per cent in 2006 to 20 per cent in 2015, with pharma making up only 18 per cent of that perishable market.

Swire's sophisticated cold storage facility in Shanghai stands in stark contrast to China's typical cold chain storage warehouses, where you can see cargo placed on the floor on open platforms.

By contrast, Swire's Shanghai's facility is a secured warehouse with completely sealed storage units for various temperature ranges, some as low as minus 18 degrees Celsius, and has a wide staging area maintained at temperatures ranging from zero to four degrees Celsius.

'Apart from the protective gear that you see people wearing, you really don't recognize that this is cold storage,' director Clement Lam of the Hong Kong office of logistics giant John Swire & Sons was quoted as saying in a report by New York's Air Cargo World. 'This is a US-style concept that we brought to China.'

With 60 years of experience in the cold-chain business, Swire is currently the third-largest cold storage operator in the world, Mr Lam said, and one of its fastest growing markets is China. Swire Cold Chain Logistics now operates five facilities in China, located in Guangzhou, Shanghai, Langfang, Ningbo and Nanjing, with three others under development in Xiamen, Chengdu and Wuhan.

China has enormous potential for growth in pharmaceuticals. Asia's share of the global perishables market grew from 13 per cent in 2006 to 20 per cent in 2015, with pharma making up only 18 per cent of that perishable market.

From this low base, pharmaceuticals that require cold-chain care have seen a compound annual growth rate (CAGR) of 7.7 per cent over the last decade, compared to 4.4 per cent CAGR for the entire Asian perishables market during the same period, according to a report by the research firm Seabury Group. Most of this temperature-sensitive pharma traffic passes through China.

While the biopharma market is still considered to be in its infancy in China, the potential is astounding, said International Air Transport Association's (IATA) general manager for Hong Kong and Macau, Yvonne Ho.

Global spending on cold-chain logistics is expected to reach US$16.7 billion by 2020, making it one of the fastest-growing sectors in air cargo. Leading most of this growth will be China, which Ms Ho named as the number-one country in the world's top 21 emerging pharmaceutical markets.