Want to be in the loop?
subscribe to
our notification
Business News
FOREIGN FUNDS PUMPED INTO VIETNAM LOGISTICS MARKET
Vietnam's logistics industry is likely to grow strongly at 12-14% a year, according to many foreign investors.
Many million-dollar deals
Investment and merger and acquisition (M&A) in the logistics service industry in Vietnam have tended to increase dramatically. Top investors come from Japan, Singapore and South Korea.
In July, Vietnam Maritime Corporation (VIMC) signed a joint venture contract with its Japanese partner, Suzue, on shipping and logistics business. Sumitomo Corporation recently cooperated with Suzuyo and a Japanese public-private investment fund to spend nearly US$40 million buying a 10% stake of Gemadept Corporation of Vietnam. Sumitomo Corporation’s ambition is to build a logistics system connecting factories with ports to serve the export of manufactured products in Vietnam. By acquiring a stake at Gemadept, Sumitomo’s leaders will develop a mobile application that allows container drivers to pre-register the time of loading and unloading at ports and handle other paperwork.
Mitsui O.S.K Lines (MOL), another Japanese investor, also visited Vinh Tan International Port (VTIP) to consider bringing its vessels that transport coal imported from Indonesia to the port.
South Korean investors are equally fast as they have poured millions of US dollars into Vietnam's logistics sector. The featured shark deal was struck by Samsung SDS, a subsidiary of Samsung Group of South Korea, to cooperate with Aviation Logistics Joint Stock Company (ALS) to establish ALSDS Joint Venture and run logistics business at Noi Bai International Airport (Hanoi). In addition, Samsung SDS signed with Minh Phuong Logistics on domestic overland freight transportation.
Besides, Mr. Shamir Rahim, Managing Director of Singapore Waterway Transport and Logistics Company, expressed his desire to collaborate with Vietnam’s logistics business community to turn this potential into reality and ensure logistics supply chains and digitalized goods flows to benefit both sides.
The Vietnam Logistics Business Association (VLA) and the Singapore Logistics Association (SLA) signed a cooperation agreement in 2018. This platform has supported increasing logistics investment projects of Singapore.
Fully tapping Vietnamese logistics market
Mr. Nguyen Tuong, Deputy Secretary General of the Vietnam Logistics Business Association, said the logistics service industry has made impressive growth in recent years. According to the 2018 World Bank Logistics Performance Index (LPI), Vietnam ranked 39th out of 160 surveyed countries, 25 places higher than in 2016 when it stood at No. 64 out of 130 countries, and ranked third in ASEAN (after Singapore that secured the 7th position and Thailand that stood at No. 32). Vietnam’s logistics also topped emerging markets.
However, he also admitted that Vietnam's logistics industry is still exposed to many weaknesses that need to be addressed. For example, shipping costs in Vietnam are three times as high as other countries,, and are uneven across its regions because taxes, road tolls and surcharges are quite high, which in turn reduces the competitiveness of the Vietnamese logistics market with other countries. Another hardship is the weak infrastructure of the logistics industry. Although this industry has grown very strongly over the years, many freight shipping stages by road, by riverway or by rail are still tough.
Nevertheless, many domestic logistics companies have still made bold investment as they anticipate the development prospects of the Vietnamese logistics industry. Mr. Nguyen Thanh Phuong, Chief Executive Officer of Sao Do Group, said, his company owns 1,329-ha Nam Dinh Vu Industrial Park, including the seaport region with seven container and general cargo berths designed for ships of 40,000 DWT, a 105-ha warehouse area, and a 210-ha nontariff area. Statistics showed that, by the end of 2018, after 10 months of operation, the port has welcomed about 200 ships headed for international routes such as to Japan, South Korea, Singapore, Hong Kong and Shanghai, with a cargo throughput of around 200,000 TEUs.
The above figures show that the Vietnamese logistics market is strongly resilient, not only an appetizing pie for foreign investors to bite but also for domestic investors to get rich if they have capital and technology, because of significant capacity for expansion.
Source: VCCI
Related News
![Card image cap](/uploads/Logo/Cathay%20%281%29.jpg)
EXPLORE HONG KONG WITH A COMPANION
From now until 19 August 2024, you can enjoy our exclusive Fly 2 Hong Kong offer on round-trip Economy flights from USD364^ for 2 persons, sponsored by Hong Kong International Airport. Bring along a travel buddy and experience together the excitement and charm of our vibrant home city.
![Card image cap](/uploads/news/Factory%201.jpg)
BUSINESSES INCREASE WISHES FOR SPECIALISED INDUSTRIAL PARKS
Data centres, industrial parks (IPs) reserved for high-tech production, and parks serving Chinese, the United States, Taiwanese, or Japanese investors are gradually being formed to welcome new funding waves, according to Truong An Duong, general manager of North Vietnam and Residential at Frasers Property Vietnam.
![Card image cap](/uploads/news/economic.jpg)
VIETNAM’S H1 ECONOMIC GROWTH QUITE IMPRESSIVE: ADB COUNTRY DIRECTOR
Country Director of the Asian Development Bank (ADB) for Vietnam Shantanu Chakraborty has expressed his impression of the Southeast Asian nation’s economic growth of 6.4 per cent in the first half of this year. The growth was mainly driven by strong trade recovery, where export grew by 14.5 per cent and import by 17 per cent over last year, he told the Vietnam News Agency. However, he said, the domestic segment remained sluggish.
![Card image cap](/uploads/news/Infrastructure13.jpg)
REAL ESTATE FIRMS AGGRESSIVELY RESTRUCTURING BOND DEBT
From the start of 2024 to July 5, the market saw 133 private placements and ten bond public offerings, totalling over VNĐ140 trillion. 65.6 per cent of this value was from the banking sector, while real estate bonds accounted for only 24.6 per cent, or over VNĐ34.5 trillion.
![Card image cap](/uploads/news/Eco2.jpg)
GOV’T UNVEILS ACTION PLAN TO ACCELERATE INDUSTRIALISATION
Vietnam aspires to become among the top three industrial powerhouses in ASEAN, with the industrial sector contributing over 40 per cent to GDP. The manufacturing and processing sector is expected to account for around 30 per cent of GDP, with a strong emphasis on high-tech products aiming for over 45 per cent of the sector's value. To further drive the economy, the service sector is projected to contribute over 50 per cent to GDP, with tourism alone generating 14-15 per cent.
![Card image cap](/uploads/news/Industrial%20Zone.jpg)
VIỆT NAM TARGETS FULL MOBILE BROADBAND COVERAGE ON HIGHWAYS, INDUSTRIAL ZONES BY 2025
By 2025, Việt Nam aims to achieve one hundred per cent mobile broadband coverage on all national highways, expressways and railways under a plan to enhance the quality of Việt Nam’s mobile telecommunications network by 2025, which has been approved by the Ministry of Information and Communications (MIC).