Cold storage demand surges during the COVID-19 season – this is a trend of Vietnamese Cold Chain – Voltrans Logistics

Cold storage demand surges during the COVID-19 season – this is a trend of Vietnamese Cold Chain

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Below some update market status in Vietnam side.

1/ New demand of Cold storage in this COVID season:
According to vietnamnews.vn, Food accounts for about 80 percent of cold storage demand in Việt Nam, according to data.
However, that figure is rising as the F&B industry suffers and food export orders are cancelled.
From mid-March, the demand for cold storage has been rising in Hà Nội. According to Tan Bac Nam Cold Storage Firm, demand doubled last month. A representative from the firm said many restaurants had closed and needed to put their stocks in cold storage.
Meanwhile, the owner of a 3,000-tonne cold storage facility in HCM City said his unit was full until the end of April so he could not receive any more goods despite the demand.
Seafood was reported to have the highest demand for cold storage.
According to the Việt Nam Association of Seafood Exporters and Producers (VASEP), 20 to 40 per cent of seafood export orders had been delayed, while 20 to 30 per cent had been cancelled.
VASEP General Secretary Truong Đinh Hoe said that due to the prolonged pandemic, seafood enterprises were in serious shortage of cold storage, forcing them to cut purchases of fresh produce.
Hoe also said it would be difficult for Viet Nam to find new markets once consumption resumed after the pandemic.
VASEP has asked the Ministry of Agriculture and Rural Development to propose to the Government and State Bank incentive policies to support local enterprises to build cold storage facilities.
This would include zero interest loans for the first two years and a 50 per cent interest rate reduction for the next four years for long-term loans to build cold storage units with a minimum capacity of 5,000 pallets.
It also asked for a 50 per cent reduction of corporate income tax for the first two years for cold storage businesses.

2/ This is a trend of the Viet Nam Cold Chain, under forecasting
According to vneconomictimes.com In these circumstances, real estate research firm CBRE Việt Nam told local media the lack of cold storage units was an opportunity for the industry. The growth of online sales and multi-channel retail could be an advantage for firms with cold storage units near metropolitan areas.
FiinGroup expects Vietnam’s cold chain industry will reach $169 million this year, fueled by the development of the processing industry and modern retail.
The cold chain market is fragmented, with 44 specialized providers serving rising demand from food sectors including meat and seafood imports and exports and food processing. Approximately 80 percent of demand for cold chains comes from food sectors.

The robust development of modern trade retail, such as consumer food services, supermarkets, and convenience stores, is also considered a key driver of the sector. Modern trade retailers are optimistic, with a rise of 40 per cent in the number of outlets in 2018, to 4,200.

These players also tend to outsource cold chain logistics given the robust expansion and requirement for logistics cost optimization, creating a bright outlook for domestic cold chain logistics providers. By segment, given the fragmented nature of the market and rising demand, FiinGroup expects consolidation in cold transportation in the next few years.

Cold storage in Vietnam has seen aggressive expansion by both local and foreign players in recent years. According to FiinGroup, total designed capacity of rented cold storage in Vietnam reached 600,234 pallets in 2018.
The market is more developed in Vietnam’s south thanks to high demand from seafood exports and retail. Meanwhile, the northern market saw a resurgence in 2015, with a rise in designed capacity from 26,750 pallets (2015) to 71,750 pallets (2018). As a result, the north is facing a temporary supply surplus and low utilization rate, especially for new facilities. FiinGroup forecasts that the north will reach equilibrium in the next two or three years.
Given the rising demand for cold storage, many providers, especially foreign firms such as CLK and Anpha, plan to make new investments with a total additional capacity of approximately 60,000 pallets for cold storage during the 2019-2023 period.
Cold transportation in Vietnam has two main segments: cold container and bulk. Approximately 11 percent of container throughputs via seaports (equivalent to 2 million TEUs in 2018) are refrigerated containers, driven by the continuous increment in import-export activities and infrastructure improvements.

End of the text, our teams, Voltransers, could handle full cold logistics services, cold warehouses, cold-trans, import&export, seafood & fruit professionally.