Vietnam’s logistics industry receives Asian investment

July was a special month for Vietnam’s logistics industry as it witnessed a series of deals between Vietnamese firms and Japanese partners, including the cooperation agreement between VIMC and Suzue and the investment of Sumitomo in Gemadept.

Japanese capital has been present in Vietnam’s logistics industry for a long time . Vijaco, a subsidiary of VIMC, for example, teamed up with five Japanese partners, namely Kanematsu, Suzue, Meiko Trans, Kamigumi and Honda Trading, to set up a joint venture in 1994.

Shibusawa Warehouse Ltd spent $9.2 million to buy Vinafco shares in 2014. Mitsui O.S.K Lines (MOL) invested $1.2 billion in the Hai Phong International container terminal in 2016. Meanwhile, SG Holdings spent $9million to acquire 80 percent of shares in Phat Loc Express in 2016.

More recently, in early July 2019, MOL came to survey the Vinh Tan International Port (VTIP), considering the possibility of letting MOL’s ships carrying coal imports from Indonesia dock at the port.

In the north, MOL, together with Viseco, HTM and Golden Link set up a joint venture, MVG, which will implement the MGV Dinh Vu storehouse project.

Analysts noted that Japanese investors in recent years were acquiring shares in Vietnam’s logistics firms instead of penetrating and exploiting the market themselves. SG Holdings, for example, four years after joining the market, decided to make investment in Phat Loc Express.

There have been some changes in Japanese investment in Vietnam. Kitagawa Hironobu from Jetro Hanoi said Japanese investors don’t want to miss attractive opportunities.

In 2018, the amount of Japanese goods made in Vietnam and sold in the domestic market accounted for 27.6 percent of total goods made by Japanese invested enterprises.

Kobayashi Yoichi from JCCI noted that technology transfer from Japan to Vietnam has begun increasing, especially in the context of the US-China trade war escalation.

As for South Korea, FDI from the country came to Vietnam later than Japan, but it is substantial. According to the Foreign Investment Agency (FIA), South Korean investment in Vietnam accounts for 20.3 percent of total registered FDI capital and the number of South Korean businesses in Vietnam has reached 7,000.

In such conditions, the cooperation between Vietnamese and South Korean businesses in the logistics industry promises great opportunities.

Samsung SDS, a subsidiary of Samsung, has joined forces with ALS to set up ALSDS joint venture, doing business at Noi Bai Airport. It has also cooperated with Minh Phuong Logistics to exploit the domestic road cargo transport market.

Meanwhile, CJ Logistics spent $100 million to buy into Gemadept Logistics holdings nd Gemadept Shipping Holdings in 2018.