Finding more room to grow in logistics

Some heavyweight Singapore logistics companies have made their presence in Vietnam

Heavyweight Singaporean logistics firms like Neptune Orient Lines, Keppel Logistics, YCH Group, CWT Globelink and logistics infrastructure developers like Mapletree, PSA and Ascendas have already discovered opportunities in Vietnam.

Although there are challenges such as poor transportation infrastructure, these companies all view Vietnam as an attractive investment destination, given its sweet demographics, strong foreign direct investment with international corporations choosing Vietnam as an alternative production base to China and export growth that accelerated 18.3 year-on-year in 2012.

“Vietnam is an important market and represents a significant part of our regional activities and we remain optimistic about opportunities in the country,” said a Neptune Orient Lines spokesman.

Not surprisingly, logistics is among six sectors of cooperation that the Vietnam and Singapore governments want to focus on, according to the Connectivity Framework Agreement signed between the countries in 2005. This also facilitates the  business expansion of Singaporean firms in Vietnam’s logistics sector.

As a result, Neptune Orient Lines is planning to expand warehouse footprint in Vietnam from 70,000 to 100,000 square metres by focusing on inbound logistics, especially in retail and raw material and providing distribution centres close to the cities and industrial parks.

So far, Neptune Orient Lines is a leading provider of container transportation and logistics services in Vietnam.

Through its two core business segments – APL and APL Logistics – the firm provides local and multinational clients with premium container transportation and supply chain management solutions across a range of business sectors.

APL, a container liner business, handles 300,000 20-foot equivalent units annually in Vietnam. This ranks Neptune Orient Lines among the top three shipping lines in Vietnam. Meanwhile, APL Logistics handles 2.4 million cubic metres of cargo every year, with  compound annual growth of 14 per cent over the last five years.

“We have a good network, including services linking Vietnam to the world and a strong customer following,” said the Neptune spokesman.

CWT Globelink Vietnam, a subsidiary of Singapore’s CWT Globelink, has also expanded its presence in Vietnam rapidly. The firm started operations in March, 2006 and has evolved over the years to become a leading non-vessel operating common carrier operator and well known less-than-container load consolidation player in Vietnam.

Mapletree has also rapidly expanded its business in Vietnam. This company established its presence in Vietnam in 2005. Now Mapletree has three logistics parks in the country, namely Mapletree Logistics Centre and Mapletree Binh Duong Logistics Park in southern Binh Duong province and Mapletree Bac Ninh Logistics Park in northern Bac Ninh province.

In a recent interview with VIR, a Mapletree representative said the firm continued to look out for good investment and development projects in Vietnam to fuel its expansion in the future.