By Ilona Wissenbach

FRANKFURT (Reuters) – Cold-storage specialist va-Q-tec is significantly expanding its fleet of 2,500 rental containers to meet growing demand to transport COVID-19 vaccines that need to be kept as low as -70 degrees Celsius (-94°F), its chief executive said.

The German company is in talks with all the major pharmaceutical manufacturers of COVID-19 vaccines, CEO Joachim Kuhn told Reuters in an interview.

Kuhn said the company would “significantly expand” its fleet of rental containers in the coming year. He did not specify how many extra containers were planned, though said it would not be to the extent of doubling the fleet.

Va-Q-tec is among a handful of high-end packaging providers who have found themselves in high demand as drugmakers and logistics firms prepare to transport such shots around the world. Its shares have risen by 230% this year, valuing the company at around $690 million.

The company’s turnover has increased by 30% annually over the past 10 years. “We expect this growth to continue in a similar form,” said the CEO, adding that global vaccine distribution might take several years.

“We are carefully increasing the number. With the market growing by more than 10% per year, we are not afraid that we will be left sitting on empty containers after corona.”

The Würzburg-based company completed a 25 million Swiss franc ($27.4 million) bond issue on Monday to help fund its expansion plans.

It manufactures “passive” containers, which use dry ice to keep the contents at ultra-cold temperatures for up to five or six days, as opposed to “active” containers that also use electric motors for cooling.

The vaccine candidate developed by Pfizer and BioNTech, which uses mRNA technology, needs to be kept at about -70 degrees Celsius, colder than the offerings from Moderna Inc and AstraZeneca PLC.

Kuhn said va-Q-tec had contracts with the world’s 20 largest airlines and major freight-forwarders. He said intercontinental transport with cargo flights was expected to be less of a problem than last-mile distribution on the road, given there was experience in transporting super-cold goods by air.

“To meet the demand for dry ice is not a big problem in our latitudes with sufficient regional production,” Kuhn said. “It will be a challenge in countries that do not have this infrastructure in Africa, Latin America or Russia.”

(Reporting by Ilona Wissenbach, Reuters TV; Writing by Jamie Freed; Editing by Pravin Char)