Cold storage market faces serious lack of capacity

The trend of shoppers going online en masse is driving demand for cold storage facilities, something that is in severe short supply in Vietnam.

Cold storage market faces serious lack of capacity hinh anh 1

Demand for cold storage is increasing sharply as consumers in Vietnam turn to online shopping. (Photo: Baodautu.vn)

Nguyen Quoc Trinh, chairman of the Long An Dragon Fruit Association, said June is the peak harvest season for many agricultural products in Long An, but exports remain difficult and local consumers have tended to switch online due to the COVID-19 epidemic, causing severe congestion and overload at cold storages.

Seafood is the other product that requires the largest cold storage capacity.

Trang Bui, senior director of markets, JLL Vietnam, said in fact seafood exports top the list.

During the peak COVID period, 30 - 50 percent of seafood export orders were cancelled, leading to an increase in inventories, forcing cold storages to work at maximum capacity.

Supply is constrained in part because cold storages take more time to build than other types of logistics facilities and more expensive than standard warehouses, she said.

They cost two to three times more, and the lease term is usually only 15-20 years, making the already scarce supply even scarcer, she said.

Besides, the industry requires expertise in temperature maintenance since each fruit, vegetable, meat, and fish has its own temperature requirements, and this explains why of the thousands of companies in the logistics sector only a few set up cold chains, she said.

JLL Vietnam said cold storage demand would continue to grow strongly for at least the next half decade as global consumers change their shopping behaviour due to the pandemic.

 

With its huge potential real estate for cold storage is now attracting the attention of investors, venture capital funds and lenders.

They are also considering it an alternative to traditional industrial real estate, while logistics companies looking to expand into new markets.

The Louis Holdings Group has invested 250 billion VND (10.7 million USD) in vegetable processing and cold storage facilities in Long An province.

Huynh Quang Vinh, general director of the Louis Holdings Group, said the plant would focus on exports of the main agricultural products of Long An province and surrounding areas such as jackfruit, dragon fruit, pineapple, and mango.

With a capacity of four tonnes per hour, it is expected that the plant will supply 15,000-20,000 tonnes of agricultural products to the global food supply chain.

Ken Research, a global publisher of market intelligence, said that in 2016-21 the Vietnam cold chain industry grew at a compound annual growth rate of 10.4 percent.

It expects the market to be worth 1.8 billion USD this year./.

Source: VNS

Vietnam faces shortage of cold storage warehouses

Vietnam faces shortage of cold storage warehouses

The growing tendency of consumers shopping online globally has led to a sharp demand for cold storage warehouses, but investment in cold storage facilities remains modest.

 
 

Other News

.
Banks await more foreign strategic investors
Banks await more foreign strategic investors
BUSINESSicon  22/11/2021 

Several banks are currently issuing dividend paying shares as well as making strong efforts in finding more foreign strategic investors to increase capital. 

Trading value at stock market reaches record high
Trading value at stock market reaches record high
FEATUREicon  22/11/2021 

Cash keeps flowing into the stock market, including during trading sessions when the VN Index falls.

Vietnam's import-export revenue forecast to hit new record in 2021
Vietnam's import-export revenue forecast to hit new record in 2021
BUSINESSicon  22/11/2021 

The Ministry of Industry and Trade (MoIT) has forecast that total import-export revenue this year may reach a new record, at between 640 - 645 billion USD, with a slight trade deficit.

Vietnam – RoK Industrial Park to take shape in Hung Yen
Vietnam – RoK Industrial Park to take shape in Hung Yen
BUSINESSicon  22/11/2021 

The northern province of Hung Yen has issued a decision on the establishment of the Vietnam – Republic of Korea Economic Cooperation Industrial Park (IP).

Land prices rise in suburban Hanoi due to planning rumours
Land prices rise in suburban Hanoi due to planning rumours
BUSINESSicon  22/11/2021 

The Hanoi property market is once again seeing a wave of increased land prices in suburban areas, thanks to rumours of some districts being developed under the model of "city within a city".

Vietnam aims to become a cashless country
Vietnam aims to become a cashless country
BUSINESSicon  22/11/2021 

Vietnam will continue to implement new technologies and policies in its bid to become a cashless country, said banking experts and policymakers in a conference on Friday discussing the current situation of cashless technology in the country.

Hard limit for credit institutions buying corporate bonds
Hard limit for credit institutions buying corporate bonds
BUSINESSicon  22/11/2021 

Credit institutions with a bad debt ratio of more than 3 per cent are forbidden to buy corporate bonds, according to the latest announcement from the SBV.

Will work-from-home continue in post-pandemic Viet Nam?
Will work-from-home continue in post-pandemic Viet Nam?
BUSINESSicon  22/11/2021 

A mixture of online and offline, or hybrid, working is being applied in most big cities in Vietnam.

Vietnam rolls out electronic invoices
Vietnam rolls out electronic invoices
BUSINESSicon  22/11/2021 

The General Department of Taxation started to issue electronic invoices (or e-invoices) yesterday in Ha Noi, HCM City, Binh Dinh, Quang Ninh, Hai Phong and Phu Tho.

Stock market to be turned into main medium and long-term capital channel
Stock market to be turned into main medium and long-term capital channel
BUSINESSicon  22/11/2021 

After 25 years of development, the Vietnamese stock market is playing a more important role in attracting capital, supporting the commercial banking system. 

Vietnam-Australia investment, trade promotion centre inaugurated
Vietnam-Australia investment, trade promotion centre inaugurated
BUSINESSicon  22/11/2021 

Vietnamese Ambassador to Australia Nguyen Tat Thanh attended a ceremony to inaugurate the Vietnam-Australia Trade and Investment Promotion Centre on November 20.

'Revenge shopping', a chance for economic recovery
'Revenge shopping', a chance for economic recovery
FEATUREicon  22/11/2021 

After shopping centers in Ho Chi Minh City reopened, long lines of people were waiting for payment at fashion shops.

EU enterprises in Vietnam optimistic again
EU enterprises in Vietnam optimistic again
BUSINESSicon  21/11/2021 

The leadership of European Union enterprises in Vietnam has become more optimistic about Vietnam’s business environment after the social distancing has ended, and commerce and investment have begun the “new normal.”

Authorities, enterprises collaborate to respond to trade remedy lawsuits
Authorities, enterprises collaborate to respond to trade remedy lawsuits
BUSINESSicon  21/11/2021 

Vietnam is currently facing 208 trade remedy lawsuits, and this figure is expected to increase sharply in the coming time, causing the market share of Vietnamese goods to be at risk of shrinking in many export markets.

Vietnam and the ‘90% economy’
Vietnam and the ‘90% economy’
FEATUREicon  21/11/2021 

While Vietnam's economy is still struggling with difficulties, the world economy is recovering clearly, after a long period of paralysis due to the impact of the Covid-19 epidemic.

Black Friday 2021 launched in HCM City
Black Friday 2021 launched in HCM City
BUSINESSicon  20/11/2021 

The shopping festival Black Friday was kicked off on November 19 in Ho Chi Minh City.

Vietnam wins big tea contract with Malaysian partner
Vietnam wins big tea contract with Malaysian partner
BUSINESSicon  20/11/2021 

Nam Son Co., Ltd and Asia Tea of Vietnam will supply tea to Kong Wooi Fong Tea Merchants Sdn Bhd based in Malaysia under a contract worth up to 2 million USD.

Decrease in in seafood exports expected as a result of new Chinese policy
Decrease in in seafood exports expected as a result of new Chinese policy
BUSINESSicon  20/11/2021 

Vietnam’s seafood exports to China are likely to decrease sharply as Chinese customs are tightening control over imports.

Consumers more prudent with post-pandemic personal finances
Consumers more prudent with post-pandemic personal finances
BUSINESSicon  20/11/2021 

After giving birth to their second daughter, Thanh Van, a 39-year-old office worker in Hanoi, had to quit her job because she could not afford the cost of hiring a babysitter after a 30 per cent pay-cut due to the COVID-19 pandemic. 

Digital transformation to create new growth engine for Vietnam's agriculture
Digital transformation to create new growth engine for Vietnam's agriculture
BUSINESSicon  19/11/2021 

As digital transformation will help overcome most of the weaknesses faced by the local agriculture sector, it should be considered a breakthrough solution for sustainable growth and development in Vietnam.

 
 
 
Leave your comment on an article

OR QUICK LOGIN