Searefico ventures into logistics to welcome wave of FDI

April 03, 2024 | 14:00
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In anticipation of rising foreign direct investment inflows into Vietnam, Searefico has ventured into the logistics industry to capitalise on new opportunities.
Searefico ventures into logistics to welcome wave of FDI

Logistics industry holds ample potential

According to a report by the Vietnam Association of Foreign-Invested Enteprises, Vietnam has made a spectacular reversal by recording strong growth in foreign direct investment (FDI) attraction, while other many countries and regions have witnessed a decline in FDI inflows due to geopolitical uncertainties as well as structural changes and shifting global supply chains.

In 2023, Vietnam saw a sharp increase of 32.1 per cent in FDI registrations compared to 2022. Among them, investments in the manufacturing and processing industries continued to soar. FDI registrations in this field reached $23.5 billion in 2023, accounting for 64.2 per cent of total newly registered capital. The figures for 2022 were $16.8 billion and 60.0 per cent, respectively.

Industrial parks and economic zones continue to draw in foreign investors. In 2023, Vietnam’s industrial parks and economic zones pulled in $27.7 billion. The number of newly registered projects and the adjusted and realised FDI capital increased compared to the previous year. Many provinces have paid attention to the transition from conventional industrial parks to ecological industrial parks.

The positive growth of FDI, along with the relocation of many factories to Vietnam, have created stronger conditions for the logistic sector. According to economists, this, coupled with ample trade potential with the United States, opens up new opportunities for Vietnam’s logistics sector.

Searefico ventures into logistics industry

To seize these opportunities, Searefico JSC has formulated a comprehensive business strategy that prioritises logistics. In 2024, the company will mobilise resources to transition into the logistics segment. In line with this strategy, the company took the first step to launch a logistics warehouse named Searee in Danang in late March 2024.

The warehouse covers 8,000 square metres with a 3,000sq.m yard, which can be divided into 2-3 independent modules. The warehouse is designed flexibly with the ability to install a six-floor shelf system with floor loading of up to three tonnes per sq.m. It also has a new generation system of 10 dock levellers, serving all types of vehicles weighing 500kg and above, and 40-foot containers, ready to provide customers with modern and effective storage space.

The Searee logistics warehouse is located on National Highway 1A, next to Lien Chieu and Tien Sa ports. It also boasts convenient access to Danang International Airport, meeting the requirements for domestic distribution and goods flows for local markets and exports.

Commenting on this milestone, Nguyen Khoa Dang, general director of the Searee Refrigeration Electrical Engineering Corporation, emphasised that Danang offers a gateway to the sea in the Central Highlands and for Laos, Thailand, and Myanmar, as well as an international airport. He remarked that the Searee warehouse will contribute to perfecting the logistics system in the region.

At the same time, the project will help meet the increasing demand for storage and circulation of goods, promoting sustainable economic growth for Danang and the central region.

At the launch of the Searee Logistics Warehouse, Searee Engineering and Construction JSC (Searefico E&C) officially announced two important MoUs on cooperation. The first was with Japan's Okura Flexible Automation Systems (OFAS) to become an exclusive distributor providing palletizer, conveyor belts, and shorting system solutions. Searefico E&C also signed a market development agreement with Nanjing Inform Storage Equipment (INFORM), China's top group in smart shelves and warehouse equipment.

Searefico ventures into logistics to welcome wave of FDI

The MoUs pave the way for the company to access advanced technology and top-notch expertise from INFORM and OFAS in the warehouse and logistics sector. The MoUs will also help Searefico E&C leverage its strength to accelerate the progress of the Searee logistics warehouse, its engineering, procurement, and construction (EPC) activities, and the design and construction of smart warehouses to improve occupancy rates and operational performance.

At the same time, the tie-ups with two of Asia's leading companies will open opportunities for Searefico E&C to extend its reach to the global market through the network of its partners' subsidiaries.

It is clear that the launch of the Searee logistics warehouse and the partnership with two of Asia's leading suppliers in the field of high-tech logistics equipment are a testament to the strong transformation of Searefico from the mechanical and engineering sector to logistics.

Searefico ventures into logistics to welcome wave of FDI

Le Tan Phuoc, chairman of Searefico, said, "Our strengths lie in mechanical and electrical (M&E) for buildings, office towers, and shopping malls, but there are increasingly more competitive players in this field. If the company continues to focus on this segment, it will drag down the gross profit margin. Furthermore, facing a challenging economic environment with many unpredictable factors, we have to undergo a transformation. I realise that industrial property, not the civil sector, will be the future."

The launch of the logistics warehouse in Danang will be a stepping stone for the company to transition into logistics, warehouses, and industrial property.

Phuoc added that logistics will bring tremendous opportunities.

Searefico previously inked a deal with Phu An Thanh Industrial Park in the southern province of Long An and the northern port city of Haiphong to build cold storage and smart warehouses. However, these projects have been temporarily postponed since the Covid-19 pandemic.

Looking at the business situation at the beginning of 2024, Phuoc believes that difficulties have gradually passed and Searefico will reap fruits in the future.

"Cash flows at some projects are becoming positive again. At present, there are more positive signals compared with last year. Over the past three months, we have earned VND1 trillion ($40.2 million) in revenue from winning contracts with a focus on the logistics sector," he said.

It is clear that with a sharp vision and flexible business strategy, Searefico is tapping into the strong potential of the logistics sector, which is the right path for the company's board of directors in the long term.

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