Demand for warehouse space will be strong after EVFTA

That was the forecast for warehousing market in Vietnam after the new FTA, given by speakers at Partner Day 2020 – Networking with strategic partners. The event was hosted by Long Hau Corporation (LHC) on 11/06/2020.

Partner Day is an annual event of LHC aimed to celebrate and give thanks to Long Hau industrial park’s partners for the grateful cooperation and support. It’s also an opportunity to connect and network with experts and businesses in Vietnam and the world, gain insight into market trends and explore practical solutions to catch the trends.

Partner Day 2020 brought together over 100 leaders and experts from trade and industry departments, international chambers of commerce, consultancy firms, banks, potential investors and manufacturers.

Titled “Logistics industry after EVFTA: Takeoff or takeover?”, this year’s event provided the overview, statements and forecast about Vietnam’s manufacturing and logistics after EVFTA comes into force.

Changes of logistics and warehousing to adopt EVFTA

Mr. Tobias Gruemmer, Area head of operations of A.P. Moller – Maersk said, the manufacturing and logistics in Vietnam has changed but it was not really clear. Compared with the EU population of about 500 million people, Southeast Asia with a population of 600 million, of which Vietnam is 100 million, is considered a potential consumer market.

Previously, Vietnam focused on export with the establishment of many export processing zones, but imports and domestic production has increased significantly. The main reason is due to the rise of middle class nowadays, causing consumer habits to change, leading to shifts in the supply chain.

The demand for storage and transportation has increased sharply, resulting in diversified warehousing and delivery solutions and attracting many businesses to participate. Logistics is considered a hotbed for investors in the near future.

Mr. Tobias Gruemmer stated that Vietnam is potential logistics market

Would warehouse space be in shortage?

Opposite views on a shortage in warehouse space made the discussion “hotter”. Mr. Tobias Gruemmer disagreed with the opinion. “Supply varies according to demand. For example, 10 years ago when the retail market was very exciting, many investors "poured money" into the retail space, causing the supply to increase and meet the market demand”, he said.

From another perspective, Mr. Bui Le Anh Hieu, Corporate development director of Long Hau Corporation assumed it will likely to happen. In Long Hau industrial park, there are many warehouses and cold storages operating very well.

“We planned to develop a logistics park in the phase 1 of Long Hau 3 industrial park, with great advantages of location and connectivity. The logistics park has received a strong attention from investors who are seeking land for storage and warehouse space. Therefore, I think a shortage would be would happen in the future”, he said.

LHC develops a logistics park in Long Hau 3 industrial park – Phase 1

Vietnam needs more qualified workers

With a wave of relocation of manufacturing facilities and new FTAs, Vietnam has many opportunities in attracting FDI. In particular, EVFTA is expected to create a change in the flow of FDI from the EU into Vietnam.

Mr. Marko Walde, Chief Representative of AHK Vietnam said, Vietnam is Germany’s second biggest trading partner in the ASEAN region with more than 4,000 German companies exporting to the country. To further promote the attraction FDI from EU, one of the most essential factors is high-skilled workforce for manufacturing and logistics sectors.

It’s also a current challenge because Vietnam is facing a big shortage of high skilled workers. Vietnam should improve its workforce quality by investing more on vocational training courses and centers, adapting to modern production processes that require expertise and high workmanship.

• Photos of Partner Day 2020: Please click here
• Business handbook: Successfully setting up in Vietnam's industrial parks
  • English version https://bit.ly/37koMD9
  • Vietnamese version https://bit.ly/2MKj446

We would like to thank to our sponsor Viet Engineering Value Construction Consultants JSC (VEV), Trung Hậu Construction Group, Hợp Nhất Construction and Environment Technology JSC, Lập Phát Power Consultant and Development Corporation for your contribution to make Partner Day 2020 even more successful.