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Foreign companies optimistic about the potential of the warehouse sector in Vietnam | Business

Foreign companies optimistic about the potential of Vietnamof the warehouse sector. (Photo: VNA)

Hanoi (VNA) – Despite the negative impacts of the COVID-19 pandemic, Vietnam continues to be an attractive destination for foreign investors, especially those operating in the warehouse sector thanks to its geographic and workforce advantage qualified, according to BW Industrial Development JSC CEO Lance Li.

As the pandemic has left the world grappling with supply chain and logistics disruptions, demand for warehouses has skyrocketed due to overloaded transportation networks and a surplus of raw materials to avoid inventory shortages, Thailand’s quoted Li in his November article. 28 as saying.

The pandemic has certainly led to a series of unfortunate events, however, from a business perspective, it has been an accelerator for deposit request, Li said.

With a skilled and relatively inexpensive labor force, rapidly improved infrastructure and a growing number of trade agreements to which Vietnam is a party, including the ASEAN Free Trade Area, the Comprehensive and Progressive Agreement of Trans-Pacific Partnership (CPTPP), the European Union -Vietnam Free Trade Agreements (EVFTA) and the Comprehensive Regional Economic Partnership (RCEP), Vietnam continues to be a attractive destination for foreign investments, he stressed.

The growth of e-commerce will lead to increased demand for warehouses in Vietnam, which is still at a relatively nascent stage and accounts for only 5.5% of total retail sales, he said.

Modern multi-story warehouses are also expected to be deployed more quickly over the next few years, especially around Hanoi and Ho Chi Minh City, where land prices are high and strategic locations are scarce, he said. declared.

Vietnam has been a major beneficiary of the reallocation of manufacturing and supply chain activities to Southeast Asia, he noted.

The huge growth potential of e-commerce and the high inflow of FDI to Vietnam has given foreign investors a lot of confidence, he added.

The demand for warehouses has exploded in the past due to the overloaded transportation network and an excess of raw materials to avoid stockouts.

According to Li, the second year of the COVID-19 pandemic has been an active year for BW. At the start of 2021, the company recorded a threefold increase in rental requests compared to the same period last year.

The company recently entered into an agreement with J&T, a company specializing in logistics and parcel delivery, for a 5 hectare warehouse in a strategic location in Ho Chi Minh City.

Meanwhile, Wanek Furniture, a key manufacturing company in the supply chain of one of the largest furniture retailers in the United States, Ashley Furniture, has leased another 4 acre site to BW in the southern province. by Binh Duong.

Market demand has skyrocketed over the past two years, causing BW’s factory in VSIP 2A industrial park in northern northern Hai Phong city to be fully occupied already after the completion of its construction in early June 2021.

The health crisis is an opportunity for manufacturers and warehouse operators to rethink their inventory strategy, Li said.

The global shipping industry’s lack of containers left warehouses cluttered with goods for some time before exporters could load them onto ships, Li said, adding that the circumstances had increased demand for warehouses. like never before./.