Want to be in the loop?
subscribe to
our notification
Business News
LOGISTICS ACQUISITIONS ATTRACT BILLIONS IN US DOLLARS
Merger and acquisition deals in the logistics sector are being driven by an acceleration in infrastructure investment in Vietnam.
Lineage, one of the world’s leading temperature-controlled industrial REIT and integrated solutions providers has been the latest transaction in logistics industry by setting up a joint venture with Hanoi-based cold-storage warehouse operator SK Logistics.
Although the financial terms of the transaction were not disclosed, Brooke Miller, Asia Pacific president at Lineage commented that partnering with SK Logistics is a remarkable opportunity for the company to continue delivering its cold storage solutions in the Asia Pacific region.
“Vietnam is an important market for Lineage, and partnering with a reliable and proven operator like SK Logistics helps us to continue delivering excellence in supply chain solutions in the region,” Miller said.
SK Logistics’ two cold storage warehouses, totaling almost 400,000 square feet, represent a strong increase in capacity in the north of Vietnam for Lineage. These facilities offer storage, distribution, stamping, weighing, classification, packing, and picking services for important customers in the region.
Toan Thang Commercial Service Development Company is expanding its operations following the acquisition in August of more than 21.2 million shares from Saigon Port JSC, equivalent to 9.83 per cent of capital.
After the transaction, Toan Thang became a major shareholder of Saigon Port.
At the end of May, Gemadept sold all 84.66 per cent of its equity in Nam Hai Dinh Vu Port to a group of investors including Vietnam Container JSC (Viconship). This transaction brings Viconship into the largest logistics enterprise in the northern port of Haiphong, commanding 30 per cent of the market share.
At the same time, PSA Cargo Solutions Vietnam Investments Pte., Ltd. of Singapore spent nearly $54 million to purchase 24.46 million shares, equivalent to 24.9 per cent of the charter capital, at Southern Logistics JSC (Sotrans).
Sotrans is a major name in the international freight forwarding industry and its strength is 230,000sq.m of warehouse system in the centre of Ho Chi Minh City, surrounding areas, and industrial parks adjacent to the Saigon River.
In addition, Sotrans also holds shares in Southern Port JSC, Dong Nai Port, Vietranstimex, and Southern River Road.
At its AGM held in June in Ho Chi Minh City, chairman Tran Tuan Anh said that after nearly two years of negotiations, port operator PSA had become a strategic shareholder of Sotrans.
“We see many development opportunities in the seaport and logistics fields after cooperating with PSA. In the coming years, Sotrans’ funding opportunities will be many and will become a dominant and important unit in Vietnam. The enterprise hopes that shareholders will accompany the board in the next stages of development and that cooperation will bring good results in the long term,” Anh said.
Along with those deals, in July, America LLC fund bought 20,200 shares of Dinh Vu Port Investment and Development JSC, increasing the ratio holding from 4.97 to 5.02 per cent of charter capital and becoming a major shareholder of this enterprise.
In its draft project to restructure over 2021-2025, Vietnam Maritime Corporation planned to reduce the parent company’s capital ownership ratio in five ports (Can Tho, Cam Ranh, Quy Nhon, Danang, and Cai Lan) to 51 per cent.
At present, the Vietnamese logistics market has more than 30,000 domestic businesses and 25 global forwarding corporations in many different business forms. Around 5,000 of these businesses are participating in international activities, with nearly 70 medium or large-scale logistics centres. According to Agility’s annual ranking in 2023, Vietnam is in the top 10 emerging logistics markets in the world, and ranked fourth in Southeast Asia.
Michael Kokalari, chief economist at VinaCapital, assessed that Vietnam is one of the countries with the fastest growing logistics service industry in the world. However, it is still fragmented.
“This provides attractive opportunities for private company funds and other investors capable of helping domestic businesses grow revenue and profits by applying international best practices,” said Kokalari.
According to a VinaCapital report, the industry has grown 14-16 per cent annually in recent years, and total logistics expenditures in Vietnam are over 20 per cent of GDP, among the highest in the world and due to the industry’s innumerable inefficiencies.
“We see several potential strategies. These are investing into top logistics companies, aggressively growing assets into an integrated platform which offers clients economies of scale, identifying particular assets which need capital for upgrading or re-purpose, and driving new business by increasing efficiencies and consolidation,” Kokalari explained.
The adoption of global practices, such as digitalisation, together with capital injections are critical to all of these strategies, he added, although capital injections are particularly essentially if the investors’ strategy is to grow the capacity of the target firm – by adding additional trucks in a trucking firm, for example, or by adding additional cranes/heavy equipment in a port/warehouse business.
Source: VIR
Related News
VIETNAM’S GDP TO GROW 5.5% THIS YEAR – WB
This forecast is based on the assumption of a moderate recovery in manufacturing exports in 2024, fueled by rebound growth of 8.5% year-on-year in the fourth quarter of 2023 and 17.2% year-on-year in the first quarter of 2024, reflecting strengthening global demand, said Dorsati Madani, senior country economist at the WB in Vietnam.
FARE REFUND FOR VISA REJECTION
Cathay Pacific will offer full refunds for cases of visa rejection to provide you with the confidence to explore the world with ease. If you are planning to fly to a destination that requires an entry visa, you can now book with greater peace of mind.
FOUR COMMODITIES POST Q1 EXPORT VALUE OF OVER 5 BILLION USD
The total export turnover of agricultural, forestry, and fisheries products in the first three months of 2024 is estimated to reach 13.53 billion USD, an increase of 21.8% compared to the same period of 2023.
MOIT PROPOSES SCHEME TO BOOST RENEWABLE ENERGY PROCUREMENT
The proposed Direct Power Purchase Agreement (DDPA) mechanism, outlined in the draft decree, targets organisations and individuals consuming electricity from the 22kV power grid or higher, with a monthly consumption averaging 500,000kWh. However, residential households are excluded from direct procurement.
REAL ESTATE BONDS PLACE PRESSURE ON ISSUING FIRMS
The ministry’s recent report underscores concerns within Vietnam’s corporate bond market for 2023 and 2024. It emphasizes the critical need to address hindrances to the real estate sector in line with the objectives provided in Government Resolution No. 33/NQ-CP, which aims to stabilize the industry.
DA NANG CUSTOMS FOCUSES ON DEVELOPING CUSTOMS-BUSINESS PARTNERSHIPS
Da Nang Customs Department issued an action plan for developing customs-business partnership in 2024. One of the new events this year is the workshop on “Settlement reports for enterprises engaged in outsourcing, export production and export processing” held in Da Nang Customs Department on April 16, 2024.