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 who have strong financial and technological potential, 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 joint venture contract with Japanese partner Suzue in the field of transportation and logistics.

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

In addition, Sumitomo will develop a mobile application that allows container drivers to pre-register loading and unloading time at ports and handle other paperwork.

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

Earlier in June, the MOL along with the Vietnam Investment and Seaport Services Joint Stock Company (VISECO), Construction and Mechanics Joint Stock Company (HTM), and Golden Link established the MVG joint venture to implement the MVG Dinh Vu warehouse project.

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

Samsung SDS signed a cooperation deal with Minh Phuong Logistics to tap the potential of the domestic goods transportation by roads.

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

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

The logistics sector is forecast to account for 8-10 percent of the country’s total gross domestic product (GDP) in 2025.

Source: VIR