The following review of the Vietnam cold storage market
landscape provides an overview of the existing commercial cold storage
providers and their pricing, a demand analysis of key end-user groups,
investment activities, and legal framework.
first, the total designed capacity of Vietnam commercial cold storages was
estimated at 349,000 pallets in 2015: There are 20 professionally-managed
commercial cold storages in the South of Vietnam, 40–50 in the North, and many
other small independent cold storages.
second, there are four main sources of cold storage demand in Vietnam
including: seafood, meat, fruit & vegetables, and grocery retailing. All
segments pose potential opportunities for commercial cold storage providers.
However, each segment poses particular requirements for cold storage providers
to fulfill the market potentials. For example, key drivers for cold storage
development in Vietnam are seafood export activities, which indicates a need
for more cold storages near major ports. Hence, a holistic strategy of segment
targeting, location selection and marketing is required to maximize growth for
cold storage investors.
third, cccupancy rate is very high at over 90% at almost all cold storages: it
was surprising to find that the occupancy rate at almost cold storages is very
high at over 90%, and that some have even reached full capacity. It is not yet
peak season for seafood harvesting and export. The peak season is usually from
May to October. However, the occupancy rate might fluctuate constantly, as each
vendor only uses the storage for a couple of days to two weeks before shipping
the inventory out.
fourth, the average cold storage leasing price is US$0.70 a pallet per day: The
leasing price of cold storage ranges from US$0.56 – US$0.90 a pallet per day.
However, some cold storage providers separate their handling and docking fees
(for example, Hung Vuong adds US$1 per tonne for handling and loading costs),
while others like Swire include all of the basic services.
fifth, in terms of competition dynamics, there are four main groups in the
Vietnam commercial cold storage market, namely foreign-owned, local, logistics
companies, and others. Local providers dominate the market in terms of designed
capacity, whereas foreign-owned providers are the market leaders in storage
quality & management services.
sixth, competition landscape is most active among the top 5 players: There are
20 professionally managed cold storage providers and many other small
independent cold storages. Yet, small cold storages are not trusted by
end-users. As the leasing prices of cold storage providers do not differ much
from each other, the quality of storage facilities is a key to customers.
In term of transportation, Vietnam has an overall ranking position in Infrastructure
of 81/ 144 countries
Quality of overall
Quality of roads
Quality of railroad
Quality of port
Quality of air
2016 and 2020, Vietnam will need an average annual investment of about US$38
billion for various socio-economic infrastructure projects, mostly in the
transport network and electricity, irrigation, water, education and healthcare.
Transport infrastructure alone will require close to US$120 billion for the
whole period. Traditional funding sources such as the state budget,
international Official Development Assistance (ODA) funds and government bonds
can cover just some 50 per cent of the demand. Wider contributions are
therefore required from the local capital market as well as private investors,
under a Public Private Partnership (PPP) model.
are still at a very early stage of development in Vietnam and one of the keys
to success will be the private sector's active role throughout the development
of the programme. The government created a PPP office under the Ministry of
Transport and an inter-ministerial steering committee. A critical US$20 million
Project Development Facility and a Viability Gap Fund is slated to be
implemented by the end of 2015 that is expected provide up to US$1 billion of
state contribution required to make PPP projects.
the 127 projects calling for foreign investment up until 2020, (released in Aug
2014) a considerable percentage of the list is in the transport infrastructure
such as roads, railways, airports, seaports:
Bai-Ha Long highway, nearly US$1.8 billion.
Thanh Airport in Dong Nai Province, US$ 5.6 billion for Phase 1.
Hoa-Vung Tau railway, US$5 billion.
Giay-Lien Khuong highway, US$3.5 billion.
total capital called for by these projects is over US$58 billion.
of the best opportunities is that the transport infrastructure industry value
alone will grow by an average of four per cent year-on-year between 2015 and
projected growth in construction and related services in transportation:
and urban development
and residential waste treatment.
increasing adoption of Build Operate Transfer (BOT) and PPP models and the
track record and reputation of Australian infrastructure expertise, technology,
equipment and services offer significant opportunities for businesses in the
medium to long term, especially in:
services and technical assistance
Other areas of opportunity also include: supply
of metallic materials (aluminium, steel sheets), high-end architectural
interior products and designs, fire safety and building materials (energy
efficient, HVAC, lighting and high end building materials).