Vietnamese, Danish investment funds launch logistics infrastructure platform

Denmark's A.P. Moller Capital and Vietnam's VinaCapital, two major investment funds, have established a joint platform to increase investments in transportation and logistics infrastructure in Vietnam.

According to a VinaCapital announcement on Monday, Vietnam offers high growth opportunities in transporation and logistics thanks to the Southeast Asian nation's large population of about 100 million, consistent economic growth, and its strong and stable regulatory and investment climate.

The cooperation, which will be majority-owned by a fund managed by A.P. Moller Capital, will build and boost a portfolio of assets that target top returns in private capital infrastructure. Investments and major decisions will be decided jointly.

"Logistics is a critical part of Vietnam’s economic growth story, and VinaCapital has a successful track record in the sector over the 20 years we’ve been in business, including investments in Gemadept and Transimex, as well as warehouses and industrial parks," said Andy Ho, chief investment officer at VinaCapital.

The partnership can create an investment platform that has the potential to transform the logistics industry in Vietnam, Ho added.

Investment in Vietnam’s logistics sector is on the rise as investors seek to make further inroads into the market with a fast-growing middle class, and cash in on the country's status as an emerging global production hub.

The logistics sectors in Vietnam and Southeast Asia are set to receive a significant boost following a new partnership between the World Bank’s private-sector arm IFC and two regional leading companies, with more than $2 billion to be invested over the next five years. Over the next 12 months, IFC, the largest global development institution focused on the private sector in emerging markets, will help Singapore’s YCH Group and Vietnam’s T&T Group develop a bankable and sustainable project.

Cainiao Vietnam, a subsidiary of Alibaba Group’s logistics arm Cainiao Network, announced on March 16 the signing of an MoU with SG Sagawa Vietnam of Japan’s Sagawa Express Co. to promote stronger collaboration in Vietnam's logistics sector. The partnership gives SG Sagawa Vietnam access to Cainiao's premium warehouse facilities in southern Vietnam to support their current and new global clients.

In March, e-commerce heavyweight Lazada Logistics Vietnam inaugurated a commodity sorting center called Lazada Logistics Park at the Song Than 1 Industrial Park in Binh Duong province bordering Ho Chi Minh City. The two-hectare facility has a capacity of one million parcels per day, and is the biggest and most modern logistic center in the industrial province. Lazada said its new sorting center is equipped with modern technologies such as artificial intelligence (AI) and machine learning, and 99% of the sorting lines are automated.

Freight transport volume in Vietnam reached 188.6 million tons in April, up 21% year-on-year, according to the General Statistics Office (GSO). In the first four months of this year, the country’s freight transport volume was 737.1 million tons, up 17.2%.

Since the beginning of this year, cargo transport volume in the domestic market has risen 17.5% year-on-year to 723 million tons, while that in foreign markets increased 5.1% to 14.1 million tons, the GSO noted.