Long An leverages HCMC proximity to boost logistics credentials

Long An’s efforts to leverage its position as a bridge between Ho Chi Minh City and the Mekong Delta have seen it emerge as a new logistics hub.

The province, which borders HCMC, is welcoming a wave of Japanese investment, as evidenced at the Long An-Japan investment promotion conference jointly organized last week with the Japanese Consulate General in HCMC.

Two Japanese companies - Sojitz Corporation and Kokubu Group, announced at the July 28 conference they will expand their cold chain logistics business in Vietnam.

Sojitz and Kokubu established New Land Vietnam Japan JSC (NLVJ) as a joint venture in 2016, aiming to run a four-temperature logistics chain in southern Vietnam.

For the expansion plan, NLVJ has joined hands with Vietnamese logistics company New Land Co. Ltd. to establish the Vietnam Japan Long An LLC (NLVJ LA).

NLVJ LA is 51% owned by Sojitz, 44% by Kokubu, and 5% by New Land Co. Its head office is located at Lot 14 and Lot 14A, Tan Duc Industrial Park in Long An’s Duc Hoa district. The two lots form a 58,000-square meter site where the new, three-sided joint venture will build another logistics center which is four-temperature with a maximum storage capacity of 39,000 pallets.

The new facility, about 30 km southwest of downtown HCMC, will have a fleet of around 70 trucks. It will be constructed by Daiwa House Vietnam, a subsidiary of Japanese real estate developer Daiwa House, Sojitz said. It did not disclose when the project would break ground or the capital that would be invested in it.

“Based on these market conditions, Sojitz, Kokubu, and New Land aim to expand Vietnam’s food value chain by strengthening the cold chain logistics functions of Huong Thuy Manufacture Service Trading Corporation, one of Vietnam’s major wholesalers jointly operated by the three companies,” Sojitz said in a release.

MV-Neptune Co. Ltd., a Japanese logistics firm, obtained an investment certificate on July 25 for a $45 million logistics site project inside the Nam Thuan Logistics Park. The park is located within the Nam Thuan Industrial Park in Duc Hoa district, Long An province.

Just weeks before the latest wave of Japanese investors visited the province to gauge business opportunities, Vietnam’s Dong Tam Group launched container handling services at the Long An International Port on June 24.

“We plan to reach one million TEUs by 2030 and handle 10 million tons of general cargo through the port,” Peter Hendrik Slootweg, CEO of Long An International Port Operation & Management JSC, said at the ceremony.

The port, located in the province’s Can Giuoc district, operates six ship-to-shore (STS) cranes and 18 rubber-tired gantry (RTG) provided by Japan’s Mitsui E&S Machinery. Further investments will be made to constantly upgrade equipment towards reaching the one million TEU target, the Dong Tam Group said.

The Long An-based private conglomerate also said it has invested more than $500 million in the port’s warehouses, yard space of up to one million square meters, truck fleet, modern equipment and facilities to achieve its goal of becoming a “one-stop logistics shop.”

The day it launched the container handling service, Dong Tam also inaugurated seven berths at the port. The Long An International Port will expand to 10 berths, including one for liquefied petroleum gas (LPG) and one for large cruise ships to welcome domestic and international tourists.

Dong Tam, Japan’s Mitsubishi Corporation, and consulting partner Greenbank have signed an MoU on further developments at the Long An International Port. Greenbank is a UK-based engineering group of companies providing design, manufacturing, supply and installation services.

Alibaba’s logistics arm

Long An is also a destination for Cainiao Network, the logistics arm of Alibaba Group.

Cainiao Network’s Cainiao P.A.T. Logistics Park covers 23 hectares in the province’s Ben Luc district and lies along the route linking HCMC with the Mekong Delta, Vietnam’s rice bowl and also a hub for fisheries and fruits.

In February, major Vietnamese marine shipping company Vsico became a tenant at Cainiao P.A.T. by leasing 30,000 m2 of premium warehouse space for its logistics operations. Vsico serves several Japanese clients.

17 new IPs in the pipeline

Long An’s emergence as logistics hub is tied in with its plans to establish 17 new industrial parks (IPs), bringing its total to 51 by 2030, with a total area of nearly 12,500 hectares, according to the provincial People’s Committee. The 17 new IPs will together cover nearly 3,200 hectares.

With the latest additions, Long An would rank second in the country in terms of the number of IPs behind Binh Duong province, presenting significant investment opportunities for both Vietnamese and foreign companies.

Texas-based project development company Energy Capital Vietnam (ECV) has become a new investor in the province as part of a consortium which includes Saigontel, Allotrope Partners (an international clean energy advisory firm specializing in emerging markets and technologies), Chart Industries (listed on the New York Stock Exchange as GTLS), and Babcock & Wilcock (a global clean power production firm).

The consortium signed an MoU with Long An on July 25 to study the development of a carbon-neutral industrial park under a circular economy model meeting European and U.S. standards.