Vietnam’s cold chain logistics sector has experienced significant growth in recent years, driven by the country’s rapid economic expansion, a rising middle class, and increasing consumer demand for high-quality fresh and frozen products. As one of Southeast Asia’s fastest-growing economies, the importance of cold chain logistics in Vietnam is becoming more apparent. This document provides a comprehensive overview of the current state of Vietnam’s cold chain logistics, including the distribution of cold chain facilities and an in-depth analysis of the main facilities, their functions, and related investment policies.
Development Trends in Vietnam’s Cold Chain Logistics
Vietnam’s cold chain logistics industry began to take shape in the late 1990s, but real momentum did not build until the early 2000s. Over the past two decades, driven by rapid economic growth and greater integration with the global market, Vietnam’s cold chain logistics sector has undergone substantial transformation. According to the Vietnam Logistics Association, from 2010 to 2020, the cold chain logistics market in Vietnam grew at an average annual rate of 15-20%, significantly higher than the 8-10% growth rate of the overall logistics industry. Several key factors have contributed to this rapid growth:
First, continuous economic growth has boosted household incomes, leading to a higher demand for premium fresh and frozen foods. Second, the rapid development of Vietnam’s agriculture and aquaculture sectors has made cold chain logistics increasingly vital for maintaining food safety and quality. Third, the Vietnamese government has increased investment in cold chain logistics infrastructure, providing strong support for industry development. Finally, the rapid growth of e-commerce in Vietnam, especially in fresh food e-commerce, has provided new impetus for the expansion of cold chain logistics.
Despite these advances, Vietnam’s cold chain logistics industry still lags behind those of developed countries. According to the Ministry of Industry and Trade, only about 30% of Vietnam’s agricultural products are transported and stored using cold chain logistics, compared to 80-90% in developed countries. This gap highlights the current limitations of Vietnam’s cold chain logistics industry but also points to substantial growth potential in the future.
Distribution of Cold Chain Storage Facilities in Vietnam
Cold chain storage and transport facilities in Vietnam are mainly concentrated in the country’s northern, central, and southern economic hubs and their surrounding areas. Ho Chi Minh City and its surrounding areas account for about 45% of the total cold chain facilities in the country. Hanoi and its surroundings account for roughly 30%, while the central region, centered around Da Nang, accounts for about 15%. The remaining 10% is spread across other regions.
From a geographical perspective, Vietnam’s cold chain facilities are distributed in a “two poles and one belt” pattern. The “two poles” refer to the southern economic zone centered around Ho Chi Minh City and the northern economic zone centered around Hanoi, which have the most developed cold chain infrastructure and highest market demand. The “belt” refers to the coastal regions, particularly in central Vietnam, where there is high demand for cold chain logistics due to the seafood processing industry, leading to a concentration of cold chain facilities.
For transport facilities, Vietnam’s cold chain logistics primarily relies on road and sea transport. Road transport is the main mode of cold chain logistics, especially for short and medium-distance deliveries. Vietnam currently has about 5,000 refrigerated trucks, mainly concentrated around major cities like Ho Chi Minh City and Hanoi. Sea transport is mainly used for the import and export of cold chain products, with major ports such as Ho Chi Minh City Port, Hai Phong Port, and Da Nang Port equipped with specialized facilities for handling refrigerated containers.
Additionally, with the rise of e-commerce, dedicated fresh food distribution centers and front warehouses have begun appearing in major cities across Vietnam. Although these facilities are relatively small, they play a crucial role in improving the efficiency of cold chain distribution.
Overview of Key Cold Chain Facilities
1.Vietnam International Cold Chain Logistics Center (VICLC)
Located in Binh Chanh District near Ho Chi Minh City, VICLC is Vietnam’s largest integrated cold chain logistics facility. It was jointly established by Vietnam Logistics Group and Japan’s Mitsui & Co., with a total investment of about $200 million, covering an area of 20 hectares and a cold storage capacity of 100,000 tons.
1.1 Function
VICLC provides comprehensive cold chain logistics services for southern Vietnam, including cold storage, transportation, product processing, and quality inspection. The center is equipped with advanced automated storage and temperature monitoring systems, supporting a wide range of products with temperatures from -25°C to 25°C.
1.2 Investment Incentives
VICLC benefits from several government incentives, including a four-year tax exemption followed by a 50% reduction in income tax for the next nine years. The center also enjoys land lease fee reductions and other advantages.
1.3 Rental Rates
Cold storage rental rates at VICLC vary based on storage temperature and area size, generally ranging from $0.8 to $1.2 per square meter per day. Long-term tenants can receive additional discounts.
2.Hanoi International Logistics Center (HILC)
HILC is located in Long Bien District, southeast of Hanoi, and is the largest integrated logistics center in northern Vietnam, featuring extensive cold chain facilities. It was developed by the Vietnam Investment Development Group (VID Group) with a total investment of around $150 million, covering 15 hectares, with approximately 50,000 square meters of cold storage space.
2.1 Function
HILC offers one-stop logistics solutions for northern Vietnam, with its cold chain facilities primarily serving the food and pharmaceutical sectors. The center is equipped with modern refrigeration equipment that can handle a variety of temperature-controlled goods, from deep-freezing (-30°C) to ambient (25°C).
2.2 Investment Incentives
HILC enjoys several incentives from the Hanoi municipal government, including a two-year tax exemption and a 50% reduction in income tax for the next four years. The center also receives subsidies for infrastructure development and employee training.
2.3 Rental Rates
The rental rates for cold storage at HILC are slightly lower than in Ho Chi Minh City, typically ranging from $0.7 to $1.0 per square meter per day, with adjustments based on storage temperature and lease duration.
Da Nang Cold Chain Logistics Park (DCLP)
Located in Da Nang City, central Vietnam, near Da Nang International Airport and Da Nang Port, DCLP was jointly developed by the Vietnam Aquatic Products Group and a Singaporean cold chain logistics company. The total investment was about $80 million, covering 10 hectares with a cold storage capacity of 30,000 tons.
3.1 Function
DCLP specializes in providing cold chain logistics services for seafood processing and export in central Vietnam. The park has advanced refrigeration facilities and automated systems to meet the storage and processing needs of various seafood products. A product inspection center is also available to ensure that exported products meet international standards.
3.2 Investment Incentives
DCLP benefits from several incentives from the Da Nang government, including a three-year tax exemption and a 50% reduction in income tax for the next seven years. The park also enjoys land lease fee reductions and duty exemptions on imported equipment.
3.3 Rental Rates
DCLP’s cold storage rental rates are relatively low, generally ranging from $0.6 to $0.9 per square meter per day. Customized pricing plans are available for large clients and long-term partners.
4.Can Tho Agricultural Products Cold Chain Center (CACC)
CACC is located in Can Tho City, southern Vietnam, and is the largest agricultural cold chain logistics center in the Mekong Delta region. It was developed jointly by the Vietnamese Ministry of Agriculture and Can Tho municipal government, with a total investment of about $50 million, covering 8 hectares with a cold storage capacity of 20,000 tons.
4.1 Function
CACC provides specialized cold chain logistics services for agricultural products in the Mekong Delta region, including fruits, vegetables, and aquatic products. The center is equipped with modern pre-cooling facilities, cold storage, and sorting and packaging lines to extend the shelf life of agricultural products and enhance their market value.
4.2 Investment Incentives
As a government-led project, CACC enjoys several benefits, including a five-year tax exemption and a 50% reduction in income tax for the next ten years. The center also receives subsidies for infrastructure development and farmer training.
4.3 Rental Rates
CACC’s cold storage rental rates are favorable, generally ranging from $0.5 to $0.8 per square meter per day, with additional discounts available for local farmer cooperatives.
5.Hai Phong Port Cold Chain Logistics Center (HPLC)
HPLC is located in Hai Phong City, northern Vietnam, near Hai Phong Port. It was jointly developed by the Vietnam Hai Phong Port Authority and a Korean logistics company, with a total investment of about $100 million, covering 12 hectares with a cold storage capacity of 50,000 tons.
5.1 Function
HPLC provides specialized logistics services for the import and export of cold chain products in northern Vietnam. The center is equipped with advanced refrigerated container handling facilities and automated storage systems to efficiently manage the loading, unloading, storage, and transfer of various temperature-controlled goods.
5.2 Investment Incentives
HPLC enjoys several incentives from the Hai Phong municipal government, including a four-year tax exemption and a 50% reduction in income tax for the next nine years. The center also benefits from reduced port facility usage fees and employee training subsidies.
5.3 Rental Rates
The rental rates for cold storage at HPLC are moderate, generally ranging from $0.7 to $1.1 per square meter per day. For large import and export enterprises, the center offers discounted packages for full cold chain solutions.
Challenges and Opportunities in Vietnam’s Cold Chain Logistics Industry
Despite the rapid development of Vietnam’s cold chain logistics industry in recent years, several challenges remain. First, infrastructure is still lacking, particularly in rural and remote areas where cold chain facility coverage is low. Second, there is a shortage of skilled professionals, with many cold chain companies facing a shortage of technical and managerial personnel. Third, high energy costs are a challenge, as cold chain logistics heavily depends on electricity, and electricity prices in Vietnam are relatively high, increasing operational costs. Finally, there is a lack of standardization, with varying cold chain operation standards across companies and regions, affecting overall efficiency.
However, these challenges also present significant growth opportunities. The Vietnamese government has recognized the importance of cold chain logistics for enhancing the value of agricultural products and ensuring food safety and is increasing policy support. For example, the government aims to raise cold chain coverage to 50% by 2025 and 70% by 2030. This indicates that Vietnam’s cold chain logistics industry is set for a new phase of substantial investment and development in the coming years.
Conclusion
Vietnam’s cold chain logistics industry is currently in a phase of rapid development, facing numerous challenges but also offering immense potential. With ongoing economic growth, rising consumer demand, and increased government support, Vietnam’s cold chain logistics market is poised for further expansion. For investors and companies looking to enter the Vietnamese market, understanding the current landscape, policy environment, and future trends in cold chain logistics is essential. The Vietnamese market offers significant opportunities for both domestic and international investors, particularly in the following areas:
- Cold Chain Infrastructure Development: Investment and construction in cold storage facilities, pre-cooling facilities, and refrigerated transport vehicles.
- Adoption and Localization of Cold Chain Technology: Introduction and application of temperature control technology, smart monitoring systems, and energy-saving technologies.
- Training Cold Chain Professionals: Collaborating with local institutions to offer specialized education and training in cold chain logistics.
- Establishment of Cold Chain Standards: Participating in the development and promotion of Vietnam’s cold chain standards to improve overall industry levels.
- Cold Chain Financial Services: Developing financial products tailored to cold chain companies and farmers, such as equipment leasing and agricultural product collateral loans.
