VN
ENNew opportunities with investment capital in logistics
After supply chain disruptions due to the impact of Covid-19, logistics businesses continue to pour capital into the Vietnamese market, despite still facing many challenges in 2022.
1. Attraction of the logistics and supply chain market in Vietnam
At the end of December 2021, YCH Group (Singapore) - the world's leading corporation in logistics and T&T Group officially started construction on ICD Vinh Phuc Logistics Center - Vietnam Superport, with a total investment capital of nearly 3,900 billion VND .
ICD Vinh Phuc Logistics Center has a planned area of more than 83 hectares, with a designed customs clearance capacity of about 850,000 TEU.The project is expected to go into operation in 2024, with phase I to be implemented from 2022 to 2023, phase II to be implemented from 2024 to 2025.
Mr. Robert Yap, Executive Chairman of YCH Group shared: “This is the first project in the ASEAN smart logistics network (ASLN) to support the ASEAN Connectivity Master Plan 2025 - a policy to promote integration. among ASEAN members. The project will apply modern technology to prepare for the future of the logistics industry as well as build an integrated supply chain, ensuring fast and safe transportation."
The project was started right after Vietnam decided to live with the SARS-CoV-2 virus, proving YCH's long-term investment commitment to the Vietnamese market. The group plans to expand its investments in Vietnam, such as increasing warehouse capacity and investing in another logistics infrastructure project. Since its presence in the Vietnamese market in 2009, YCH has built a wide network throughout Vietnam with logistics facilities as well as domestic partnerships.
Most recently, BW Industrial Development Joint Stock Company (BW) also acquired land with an area of about 74,000 m2 in Bac Tien Phong Industrial Park, developed by DEEP C Industrial Park in Quang Ninh.
This deal marks BW's presence in Quang Ninh and the third consecutive cooperation with DEEP C in BW's expansion process in key industrial markets in Northern Vietnam.
Mr. Lance Li, General Director of BW said: "Vietnam has emerged as the country that benefits the most from the shift in supply chains caused by the impact of the epidemic. We see room for growth in the industrial real estate sector and will continue to invest heavily in international quality factories and warehouses in Vietnam.”
It can be seen that foreign investors continue to place their trust in the prospects of the logistics and supply chain market in Vietnam. HSBC's report points out that disruptions in Vietnam's supply chain have attracted the attention of the international community in 2021.
Encouragingly, after the third quarter recorded the heaviest production contraction in a decade, manufacturing activity has recovered to its pre-Delta expansion rate. In the fourth quarter of 2021, there was strong growth, with an increase of 8% over the same period last year.
The report also points out that the positive recovery in manufacturing activity also reflects improvements in the export sector. After a period of strict quarantine in the third quarter of 2021, Vietnam's exports recovered quickly, increasing nearly 19% in the fourth quarter. Meanwhile, textile, garment and footwear exports, although severely affected, have regained their performance as before the Delta mutation appeared. For the whole year 2021, Vietnam's exports increased by 19%.
2. Risk of supply chain disruption
Although Vietnam's supply chain is showing signs of recovery, Mr. Stephen Olson, a research expert at the Hinrich Foundation, said: "Vietnam may face the possibility of supply chain disruption, at least temporarily." the first half of 2022, especially with the Chinese market. It seems that China is deciding to prioritize fighting the pandemic over facilitating trade ahead of the Beijing Olympics and the 20th Party Congress later this year."
Also according to Mr. Olson, China seems willing to accept short-term trade disruptions to ensure the two major events run smoothly.
The emergence of the Omicron variant is also a concern for supply chain disruptions. Mr. Olson noted that the impact of the Omicron variant on global supply chains will largely depend on the duration and severity of lockdowns and border closures imposed by key trading countries. of Vietnam has been applied. “Vietnamese companies should prepare for the possibility of trade disruptions for at least the first half of the year and possibly longer,” Mr. Olson said.
Evaluating the Vietnamese market, Mr. Jan Segers, Vietnam Country Director at Noatum Logistics shared: "Currently, we have not recorded any problems with the supply chain. However, customers are turning more to air freight. Regarding the outlook for 2022, we believe that Vietnam will definitely achieve the expected GDP growth rate after the deep decline in the third quarter of 2021. In addition, increasing FDI capital will help Vietnam overcome Covid-19
