Polar Nexus Integrated Cold Storage Business Plan › Section 4 › Industry & Market Analysis

This section sizes the market, identifies the demand drivers, and
explains the energy economics that increasingly separate winners from
losers in South African cold storage.

4.1 Market size and growth

The South African cold chain market — encompassing refrigerated
storage, refrigerated transport, packaging and monitoring — was valued
at approximately USD 6.3 billion in 2023 and is projected to reach
roughly USD 20.6 billion by 2030, implying a compound annual growth rate
of around 18%. Within this, refrigerated storage is the dominant
segment, representing just over half of total market value. The cold
storage segment is forecast to grow from about USD 3.9 billion in 2024
to over USD 10 billion by 2030, a CAGR of approximately 18%.

Figure 4

In a continental context, the African cold chain logistics market is
estimated at around USD 14.5 billion in 2025, growing toward USD 18.3
billion by 2031. South Africa is the largest single national market on
the continent, holding an estimated 30% of organised African cold-chain
capacity — a reflection of its sophisticated retail sector, export
agriculture and relatively developed logistics infrastructure. The
combination of a high domestic base and rapid growth makes South Africa
the natural anchor market for a scalable cold-chain platform.

4.2 The agricultural export engine

Cold storage demand is tightly coupled to agricultural output and
trade. South African agricultural exports have set consecutive records:
USD 13.7 billion in 2024 and USD 15.1 billion in 2025, the latter a 10%
year-on-year increase, generating an agricultural trade surplus of USD
7.3 billion. The export basket is dominated by cold-chain-dependent
products — citrus, table grapes, apples and pears, berries, stone fruit,
nuts and fruit juices. Citrus growers packed 203.4 million 15 kg cartons
in the 2025 season, 22% above 2024, while total fruit exports were
valued at roughly USD 4.9 billion in 2024.

Figure 5

Africa remains the largest destination for South African agricultural
exports (44–53% of value depending on the quarter), followed by Asia,
the Middle East and the European Union. This export intensity creates
sustained, partly counter-seasonal demand for pre-cooling, blast
freezing, storage and export consolidation — services that command
premium pricing during peak harvest windows. For an inland facility with
airport and corridor access, export consolidation is a natural
complement to domestic distribution, smoothing utilisation across the
year.

4.3 Demand drivers

• Urbanisation and a growing middle class
  expanding demand for chilled and frozen protein, dairy and convenience
  foods.
• Retail and QSR formalisation requiring reliable,
  accredited cold distribution backbones.
• E-grocery and last-mile cold delivery driving
  demand for urban-edge cold consolidation points.
• Export growth and stricter import-market
  standards raising the bar for traceable, compliant cold
  handling.
• Pharmaceutical and life-sciences cold chain
  adding a premium, high-margin demand layer.

4.4 The energy dimension — risk turned into advantage

Electricity is the single largest controllable operating cost in cold
storage, and in South Africa it has become both expensive and uncertain.
National average electricity tariffs have risen approximately 190% since
2014 and over 400% since 2010, consistently outpacing inflation, with
further increases of 12.74% in April 2025 and a further increase in
April 2026. While load shedding eased dramatically through 2024 and into
2025 — down roughly 82% in the first half of 2025 — the system operator
has warned of a renewed risk of “unserved energy” from 2027 to 2030 as
around 5.26 GW of coal capacity retires.

Figure 6

This environment rewards operators who control their own generation.
The levelised cost of rooftop solar in South Africa is now approximately
R0.95/kWh over a 25-year life, against a grid cost approaching R3.00/kWh
— and the gap widens with every tariff increase. Embedded private solar
capacity has surged from 1.2 GW in 2021 to over 6.1 GW by 2024. Polar
Nexus’s 3.2 MWp solar array with 4 MWh of battery storage is expected to
offset close to 40% of grid electricity, materially lowering the largest
variable cost, improving resilience against any return of supply
disruption, and qualifying for the Section 12B accelerated capital
allowance on renewable energy assets. Energy strategy is therefore not a
sustainability footnote — it is a core source of durable competitive
advantage.

4.5 Macroeconomic & regulatory context

The project is being developed into a supportive, if demanding,
macroeconomic and regulatory environment. South African inflation has
moderated toward the mid-point of the Reserve Bank’s 3–6% target band,
and the policy interest rate environment (with prime around 11%) is
reflected in the indicative 11.5% cost of senior debt assumed in this
plan. The Rand remains volatile, but the Company’s revenues and costs
are predominantly Rand-denominated, limiting direct currency exposure;
export-linked demand provides a partial natural hedge, as a weaker Rand
tends to boost export competitiveness and therefore cold-storage
throughput.

Several regulatory and policy developments are directly favourable to
the project:

• Energy market liberalisation: the lifting of
  licensing thresholds for embedded generation and the expansion of
  wheeling and energy-trading frameworks make on-site solar and battery
  investment both legal and economically attractive at scale.
• Section 12B capital allowance: accelerated tax
  depreciation on renewable-energy assets improves the after-tax economics
  of the solar-plus-storage system.
• Food-safety regulation: tightening domestic and
  export-market standards reward accredited, traceable operators and
  disadvantage informal capacity.
• Trade access: South Africa’s network of trade
  agreements supports agricultural exports, though shifts in arrangements
  such as AGOA introduce some demand uncertainty in specific corridors — a
  risk diversified by the breadth of the Company’s target segments and
  destination markets.
• Transformation policy: B-BBEE objectives are
  addressed through ownership, procurement and skills development,
  supporting access to public-sector and development-finance capital and
  customers.

Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of Polar Nexus Integrated Cold Storage (Pty) Ltd.