Logistics market sees wave of investment from Japan, RoK

The logistics market has become more vibrant in recent times with large merger and acquisition (M&A) deals between Vietnamese businesses and foreign investors, especially those from Japan and the Republic of Korea.

According to the Ministry of Industry and Trade,in early last month, the Vietnam Maritime Corporation (VIMC) signed a jointventure contract with Japanese partner Suzue in the field of transportation andlogistics. 

Sumitomo Group has cooperated with SuzuyoCompany and a Japanese public-private investment fund, spending nearly 40million USD to buy 10 percent of stocks at the Gemadept Joint Stock Company ofVietnam.

In addition, Sumitomo will develop a mobileapplication that allows container drivers to pre-register loading and unloadingtime at ports and handle other paperwork.

Mitsui O.S.K Lines (MOL) Group, another giantfrom Japan, also aims to join the logistics market in Vietnam. In early July, theMOL went to survey the Vinh Tan International Port to consider bringing itsships to transport coal imported from Indonesia to the Vietnamese port. It alsostudied making woodchips in the port area.

Earlier in June, the MOL along with the VietnamInvestment and Seaport Services Joint Stock Company (VISECO), Construction andMechanics Joint Stock Company (HTM), and Golden Link established the MVG jointventure to implement the MVG Dinh Vu warehouse project.

Investment from the Republic of Korea inlogistics also offers many opportunities. The most notable deal in recent timeswas reached between Samsung SDS – a subsidiary of the RoK’s Samsung Group andVietnam’s Aviation Logistics Corporation (ALS) to set up the ALSDS jointventure and join logistics business at Noi Bai International Airport in Hanoi.

Samsung SDS signed a cooperation deal with MinhPhuong Logistics to tap the potential of the domestic goods transportation byroads.

Vietnam is now home to more than 1,300 logisticsfirms. Foreign businesses make up a mere 2-3 percent of total logisticsenterprises, but hold 70-80 percent of the market share.

The latest report of the World Bank showedVietnam’s national logistics capacity index has improved, ranking 39th out ofthe 160 countries in the world, and third in the Association of Southeast AsianNations (ASEAN), after Singapore and Thailand in 2018.

The logistics sector is forecast to account for8-10 percent of the country’s total gross domestic product (GDP) in 2025.

Foreign firms dominate Vietnam logistics market through recent M&As

Foreign firms dominate Vietnam logistics market through recent M&As

Foreign companies account for 80% of Vietnam`s logistics market, which is likely to be valued at US$87 billion by 2022.

VN’s logistics firms remain small despite potential

VN’s logistics firms remain small despite potential

There are 4,000 Vietnamese businesses operating in the logistics field but most of them are small-scale with weak human resource quality, the Ministry of Industry and Trade (MoIT) reported.  

Leave your comment on an article