More foreign investment flows into Vietnam's logistics sector

22 Mar '22

2 min read

Pic: Shutterstock

More foreign investment is pouring into Vietnam's logistics market—despite regulatory barriers—to seize development opportunities after the pandemic. With Vietnam's role in the global supply chain rising, the logistics sector, still dominated by smaller domestic players with traditional warehouses, will continue to develop at a faster pace, expert say.

Recently, GLP announced the establishment of GLP Vietnam Development Partners with an investment of $1.1 billion. Similarly, WHA Corporation PCL (Thailand) has announced a plan for a new revenue stream by investing 50 billion baht ($1.51 billion) over the next five years. Part of this will be used to expand in Vietnam.

WHA plans to expand 352 hectares of an industrial park in Nghe An province in the first quarter of this year.

According to the country’s ministry of industry and trade, more than 4,000 logistics companies operate in the country.

Statistics of the Vietnam Logistics Association show that in the period from January to September 2021, more than 2,500 logistics companies had to suspend operations, while more than 570 others had to completely stop operations.

Moreover, with customer habits shifting to e-commerce, the sharp increase in the number of e-commerce businesses is expected to continue, leading to a rise in demand for warehousing and delivery services, according to a report in a Vietnamese newspaper.

However, foreign investors will also face some challenges. For example, such enterprises cannot hold more than 51 per cent of shares in a domestic logistics business, and there are also requirements for the infrastructure used such as warehouses and vehicles.

Fibre2Fashion News Desk (DS)

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