Substantial amounts of domestic and foreign capital are being poured into major logistics projects in the south of Vietnam.
|Illustrative photo. (Source: VNA) |
Hanoi - Substantial amounts of domestic and foreign capital are being poured into major logistics projects in the south of Vietnam.
Last weekend, the Tan Cang - Cai Mep JSC and the Republic of Korea’s KCTC Vietnam signed a comprehensive partnership deal on providing warehousing and logistics services.
Founded in Vietnam more than a decade ago, KCTC Vietnam provides multimodal transport, cargo handling, warehousing, logistics consulting, and goods storage services, according to general director Park Hyun Bae.
With years of experience in logistics services, KCTC Vietnam aims to become a centre providing the best logistics solutions to customers in the East - South - North Asian regions, he said.
Meanwhile, the Tan Cang - Cai Mep JSC has operated a deep-water seaport of the same name in the southern province of Ba Ria - Vung Tau, Vietnam’s first, since June 2009, which is capable of berthing vessels of up to 160,000 DWT.
The two companies have cooperated over recent years to handle Out of Gauge shipments at ports in the Cai Mep area. The new partnership is therefore expected to better serve shipments by FDI firms in Vietnam and set the scene for the logistics sector to thrive.
Work, meanwhile, started in September on the second phase of the Long An International Port project in the Mekong Delta province of Long An. The 147-ha port is being developed in three phases with a total investment of nearly 10 trillion VND (430.7 million USD). It is designed to have seven wharves with two - wharves No 6 and 7 - built in the second phase and be able to berth vessels of up to 70,000 DWT.
Work on wharves No 4 and 5 is being fast-tracked so they will be operational by 2021.
Construction was completed on three wharves with a total length of 630 metres in the project’s first phase. As of 2019, Long An International Port had received nearly 1,000 domestic and foreign ships, including many of 50,000DWT, and handled about 1 million tonnes of cargo.
The project investor is working on legal procedures to expand the port and build two other wharves at an undisclosed date, which would be able to receive 100,000DWT ships.
This would increase its total number of wharves to nine with a combined length of 2,368 metres, making it one of the country’s longest international ports.
Experts estimate that Vietnam’s logistics market accounts for 21-25 percent of GDP, but the industry remains dominated by foreign investors holding a market share of some 80 percent. More foreign investment is expected to land into the sector in the future, as Vietnam is now a member of a number of new free trade agreements (FTAs), such as the EU-Vietnam FTA.
In August, the IFC, a member of the World Bank Group, announced it will provide a financing package of 70 million USD to the Vietnam-based Indo Trans Logistics Corporation (ITL Corp), to support the development of the logistics sector, thereby facilitating trade and enhancing Vietnam’s competitiveness amid COVID-19.
According to the IFC, Vietnam’s logistics sector has enjoyed strong growth over the last few years, which can be attributed to record-high foreign investment, mainly in manufacturing and processing, which require strong logistics, and from booming local consumption.
The loan will enable ITL Corp to provide higher quality and sophisticated logistics services to local manufacturers and small- and medium-sized enterprises (SMEs).
Meanwhile, European investors are eyeing injecting capital in developing Cai Mep Ha Port’s 984-million USD logistics services centre on an area of over 1,760 ha.
The project aims to provide seaport services and goods storage in bonded warehouses, frozen warehouses, and others, with a capacity of 3 million twenty-foot equivalent units (TEU) per year.