Académique Documents
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Culture Documents
LOGISTICS BUSINESS IN
VIETNAM
CONTENTS
Section 1
Slide 1-19
Section 2
Macroeconomics of Vietnam
Slide 20
Section 3
Slide 21-24
Section 4
Slide 25-32
Section 5
Transportation by Truck
Slide 33-38
Section 6
Slide 39-46
Section 7
Slide 47-66
Section 8
Slide 67-76
Section 1
LEGAL ASPECTS OF LOGISTICS IN VIETNAM
a)
b)
The Company must satisfy the specific conditions for different transport business (See the following
details).
c)
With respect to the Company in management and operation of a vessels fleet: (i) the required capital
b)
contribution percentage of the Company with foreign capital is under or equal to 49% of the charter
capital; and (ii) the Company with foreign capital shall only permitted to establish as from 01 January
qualified staff).
c)
2009;
contribution percentage of the Company with foreign capital is under or equal to 51% of the charter
capital. These restrictions will terminate in year 2012.
capital.
d)
d)
For Internal waterways transport services, the required foreign capital contribution percentage of the
Company is under or equal to 49% of the charter capital.
e)
For air transport services, conditions shall be applied in accordance with the Vietnam Civil Aviation Law.
f)
For railway transport services, the required foreign capital contribution percentage of the Company is
With respect to the Company in supplying international sea transportation services: the required capital
g)
For road transport services, the required foregin capital contribution percentage of the Company is
under or equal to 49% of the charter capital; this restriction shall be 51% as from year 2010;
h)
For pipeline transport services, the Company shall not be permitted to provide pipeline transport
services, except where an international treaty of which Vietnam is a member contains some other
provision.
on the outer sides of their cabin doors. Taxi trucks must have freight rates posted up on both sides of their bodies. Before putting the vehicles into use for
cargo transport, the Company shall send written notices to the local Transport Department in which they are headquartered or base their branches. During
transport on road, in addition to the transport contract or bill of lading and vehicle paper as prescribed, the driver shall carry along an ex-warehousing bill for
each trip (applicable only to case of ex-warehousing a cargo) issued by the transport hirer or the cargo owner suitable to the category of the transported
cargo.
When transporting the dangerous goods provided under the Appendix 1 of Decree 104/2009/ND-CP, the Company has to obey the provisions strictly on
packing, labeling, coloring and marking, labor safety and training, specialized facilities and obtain the transport license for dangerous goods from one or more
of the following Ministries such as Police, Health, Science and Technology, Agriculture and Rural Development, Natural Resources and Environment.
Conditions for providing shipping agency business services: The Company providing shipping agency business must establish an enterprise in accordance with law of Vietnam,
and in the case of an enterprise with foreign owned capital the ratio of capital contribution of the foreign parties must not exceed forty- nine (49) percent of the charter capital of
the enterprise.
Conditions for providing towage assistance business in Vietnamese seaports: The Company providing towage assistance business in Vietnamese seaports must establish an
enterprise in accordance with law of Vietnam, and in the case of an enterprise with foreign owned capital the ratio of capital contribution of the foreign parties must not exceed
forty-nine (49) per cent of the charter capital of the enterprise which must have a towing vessel registered to fly the Vietnamese flag.
Conditions for providing other sea shipment services: The provision of other sea shipment services by the Company shall be implemented in accordance with Vietnam's WTO
undertakings and international treaties of which Vietnam is a member.
Vessels to be used in transport business fully meet the conditions for operation as prescribed in the Law on Inland Waterway Navigation;
Crewmembers and vessel operators must have professional diplomas or certificates compatible with their titles and be in the prescribed age group.
conditions:
Having a business registration certificate showing that the major business line is air carriage; Having an organizational apparatus, employees who have appropriate permits and
Certificates and is capable of operating aircraft and dealing in air carriage;
Having a plan on assurance of the availability of aircraft for operation; Having a business plan and a strategy on development of air carriage products in accordance with market demands
and complies with Vietnams aviation sector development plan and orientation;
Foreign capital must be less than and equal 30% of the required legal capital;
General director, legal representative of the Company must be a Vietnamese citizen. A number of foreigners account for not more than one third of the total number of members of its
executive apparatus.
Beside the above-mentioned conditions, the Company providing air transport services must meet the following minimum capital conditions of 100 billion dong.
Having business registration compatible with railway transport field ; Having equipment and material foundation suitable to railway transport field; Having the valid certificate of quality,
technical safety and environment protection registry;
Signing contracts for provision of railway communication and transport operation services with railway communication and transport operation organization;
Persons assigned with the prime responsibility for technical management of transport operation must have a university degree and at least three (3) years' experience in railway transport
operation. Personnel directly involved in train operation must satisfy all the conditions prescribed in Article 46 of the Railway Law and must firmly grasp the railway process and
regulations.
For passenger transport and dangerous cargo transport by railways, the Company must have insurance contracts;
For urban railway transport business, the Company must also have plans on organization of train operation, ensuring safe, regular and punctual train operation according to the
announced train operation time tables.
Conducting the business line of forwarding imports and exports or providing the service of hired customs declaration indicated in its business registration certificate.
Having its computers connected to customs offices for carrying our e-customs procedures at Customs Departments of provinces or cities (below referred to as provincial-level
Customs Departments), which have applied e-customs procedures.
E-customs declaration: There have been a lot of changes in custom procedures with electronic-customs, one-stop customs, and tax claims The Decision No.87 on electronic
customs to be in effect on January 1st, 2013 will surely make great changes this year. With the target of having 100% of businesses doing export procedures with electronic
customs in 2013, the task is carrying out in the rest of 13 provincial customs agencies (in 2012, 21/34 provincial customs agencies have electronic customs). In 2013, the
Government should put more emphasis on reformations of administrative procedures related to manufacturing businesses (tax and customs procedures, paying tax through
bank systems, automating file-considering processes) and should give more trade incentives (reducing production coast, supporting packages). These things will help
businesses overcome obstacles, creating more employments. Vietnams Logistics Performance Index (LPI) has been low for weakness in clearance procedures and administrative
procedures on services, and business. With above changes, there will be a raise in Vietnam LPI in the year to come.
Possessing an investment certificate, which covers the international multimodal transport business line;
Having professional liability insurance for multimodal transport or providing an equivalent guarantee;
Having a business registration certificate that covers the multimodal transport business line;
Complying with business conditions provided for by law for each mode of transport.
a) To enjoy service charges and other reasonable expenses: service charges are agreed by the involved parties in the contract. The remuneration may be determined by the
absolute amount or as a percentage of value of goods. The remuneration is agreed by the involved parties and depends on the content, the level of complexity of the delivery of
goods to customers who do consignment goods to service providers. In addition to remuneration, the Company may require customers to pay the reasonable expenses related
to the implementation of the service if this is agreed upon in the contract.
b) Besides the right, the Company providing logistics service has the obligation to perform the works as agreed upon with the customers. This is considered the most fundamental
obligations of the Company to ensure the interests of customers. The works can be done as agreed upon in the contract of logistics service. In principle, the Company providing
logistics service obeys strictly the instructions of the customers. However, to ensure the customers benefits by the clause 1b,1c of the Article 235 of the Commercial Law 2005
provides: "In the course of the contract, if there is good reason for the benefit of customers, the Company providing logistics services can be done other than the customer's
instructions, but must inform the customers; When a case can not lead to the implementation of part or all of the customer's instructions, the Company must immediately
notify the customer to ask for advice.
c) The Company providing logistics services also have a duty to perform work for customers in a reasonable time when the parties have agreed. As for logistics services related to
transport, the Company is obliged to comply with the specific provisions of law and transport practices.
"if customers having relevant rights and interests prove a loss, damage or delayed delivery of goods by the Company deliberately act or not to act," the Company providing logistic
services will not be entitled to limit liability damages.
According to the item 1, Article 8 of Decree No. 140, liability limits of the Company providing transport-related logistics services comply with relevant legal provisions on liability
limits in the transport field. It means that Where the company uses to ship cargo, the liability limits are specific provisions of the Maritime Code, the Decree 115 or in case they use
car to transport cargo, the liability limits are referable to the Road Traffic Law, Law on Road Transport.. In case, liability limits of the Company providing logistics services other
than those prescribed above (in the item 1, Article 8 of Decree No.140) shall be agreed upon by involved parties. In case, no agreement has been reached between involved parties,
the liability limits are implemented under: (i) If the customer has no advance notice of the cargo value, the maximum liability limit is VND 500 million for each claim for
compensation; and (ii) If the customer has an advance notice of the cargo value and that value was certified by the Company providing logistics services, the liability limit is the whole
value of the cargo.
waterways, the liability of the Company shall be limited to an amount not exceeding SDR 8.33 per kilogram of gross weight of the goods lost or damaged; (iv) When the loss of or
damage to the goods occurred during one particular stage of the multimodal transport, in respect of which an applicable treaty or national law would have provided another limit of
liability if a separate contract had been made for that particular stage of transport, then the limit of the Company's liability for such loss or damage shall be determined by reference
to such treaty or national law; (v) If the Company is liable in respect of loss following delay in delivery or consequential loss or damage other than loss of or damage to the goods,
his/her liability shall be limited to an amount not exceeding the equivalent of the freight under the multimodal transport contract; (vi) The aggregate liability of the Company shall
not exceed the limits of liability for total loss of the goods; and (vii) The Company is not entitled to the benefit of limitation of liability if it is proved by the person with related
interests that the loss, damage or delay in delivery resulted from a personal actor omission of the Company done with the intent to cause such loss, damage or delay or recklessly
and with knowledge that such loss, damage or delay would probably result.
10
11
Pursuant to the Articles 21 of Investment Law 2005, foreign investors shall carry out the following main forms of investment by establishing shareholding company with 100%
foreign owned capital or making a Joint Venture with local investors. Moreover, foreign investors can buy shares, contribute capital; make investment in the merger or
acquisition of local logistic enterprises; buy shares or contributed capital for participation in management of investment; and invest in business development and make
investment in the form of BCC,BOT,BTO or BT contracts.
Based on the Enterprise Law 2005, the Company can be established as a limited liability company, or shareholding company and the profits and risks of the Company are
distributed among the parties in proportion to their charter capital contributions.
In a limited liability company, investors (members) are only liable for debts of the Company to the extent of the capital contribution they have poured into the company. There
is usually no minimum capital requirement for foreign investors that intend to establish the Company in Vietnam, although authorities will expect the investor to commit a
reasonable amount of charter capital according to the scale and business scope of the project. The Company can consist of a single member or multiple members, but the total
number of members cannot exceed 50 . The Company cannot issue shares.
Investors (shareholders) can refer to establish a shareholding Company if they want to issue securities and bonds, then plan to go public in the future. The charter capital is
composed of shares belonging to founding shareholders in proportion to the capital they have subscribed. There is no minimum requirement for the charter capital of the
foreign investors. The established joint stock Company is required to have at least three shareholders. There is no limitation on the maximum number of shareholders.
12
Right to autonomy in investment and business in term of domains and forms of investment, modes of capital mobilization, geographical areas, investment scale, investment
partners and operation durations of projects; register business in one or several branches or trades; set up enterprises under the provisions of law; and make their own
decisions on registered investment and business activities. Possessing an investment certificate, which covers the international multimodal transport business line;
Right to access and use investment resources such as assistance funds, capital sources, land and natural resources; hire or purchase equipment and machinery at home or
overseas for execution of investment projects; hire domestic, foreign labors, specialists for performance of managerial job.
Right to import (equipment, machinery, supplies, raw materials and goods for investment activities) and export products; advertise and market products or services directly sign
advertising contracts with organizations entitled to conduct advertising activities; undertake processing or reprocessing of products; and order processing or re-processing at
home or abroad;
Right to buy foreign currencies at credit institutions licensed to deal in foreign currencies in order to satisfy their current transactions, capital transactions and other transactions
in accordance with the provisions of foreign exchange management law; Right to assign or adjust investment capital or projects; Right to carry out mortgage of land use rights
and assets attached to l and with licensed credit organizations to borrow capital for execution of projects.
a) Obligations:
According to the Articles 20 of Investment Law 2005, the Company had the following its obligations :
To comply with the provisions of law on investment procedures; to carry out investment activities strictly according to contents of investment registration and their
investment certificates; and to be responsible for the accuracy and truthfulness of contents of registration, dossiers of investment projects and legality of documents of
certification.
To fulfill financial obligations and the provisions of law on accountancy, audit and statistics.; To perform other obligations in accordance with the provisions of law; To perform
obligations provided by insurance and labor laws; to respect the honor, dignity and ensure the legitimate interests of laborers.
To respect and create favorable conditions for laborers to establish and participate in political or socio- political organizations.
13
Business activity
Description
Code
4912
4933
4940
5012
5022
Air transport
5120
Storage of goods in silos, tanks, warehouse, cold storage, including bonded warehouse
5210
Cargo handling
Loading/unloading activities
5224
Sorting or organizing activities relating to rail, road, sea or air; freight-forwarding; collection and
Other transport support activities
distribution of shipping documents, B/L; customs agent, sea/air cargo agent, brokerage for
5229
14
labor rules, and foreign employees; each of will be discussed separately below.
Increasing the minimum salary level during probation from 70% to 85% of full salary;
Adding an extra day to the Lunar New Year holiday, bringing the total number of public holidays in Vietnam (during which employees are entitled to fully paid leave) to ten ;
Increasing maternity leave from four months to six months ;
Labor contracts must be signed between the Company and the employee before the employment begins.
Prohibiting the Company from keeping employees original identification cards and qualifications. Moreover, the Company may not require an employee to pay cash or provide
any assets to guarantee performance under the labor contract.
Working hours can be determined on a daily or weekly basis; if on a weekly basis, the normal working hours may not exceed 10 hours in one day and may not exceed 48 hours in
one week. With respect to overtime, employees are not allowed to work more than 50% of the official working hours in a day (in cases where weekly working hours are applied,
the total time of normal work and overtime work may not exceed 12 hours in one day), 30 hours in a month, or 200 hours in a year.
Introducing an entirely new section on labor outsourcing. This is good news for foreign-invested companies in the manufacturing and construction sectors, given that such
work often requires seasonal workers and/or limited-time workers during certain periods.
The new Labor Code reduces the maximum term of a work permit for foreign employees from three years to two years. As before, the domestic company is only permitted to
recruit foreign employees for jobs as managers, executives, experts, and technicians, provided that Vietnamese employees are not able to satisfy the production and business
requirements. However, now the Company may only recruit foreign citizens to work in Vietnam upon explaining their needs to employ the foreign workers and receiving prior
approval in writing from the competent Labor Department.
15
a) Corporate Income Tax: In July 2012, the Ministry of Finance issued Circular No.123, replacing several former Circulars. The Circular No.123 consolidated the tax rules and
interpretations provided in various Official Letters issued earlier and provided clarifications of the application of tax incentives, some of which were welcomed by businesses,
while others were received with much debate and mixed reaction. Much debate centered on the clarification of unavailability of tax incentives to income from expansion of
investment and investment in newly established enterprises, which have undergone changes in the legal form and ownership or which have inherited assets or other
commercial advantages of a former enterprise. The Circular No.123 determined 25% rate of corporate income tax applicable the Company (excluding petroleum enterprises in
prospecting, exploration and exploitation; trading in precious and rare natural ores). The Circular No.123 also confirms that no tax incentive is available to gains from real estate
transactions (derived by businesses other than eligible real estate businesses), and transfer of projects or mining rights. The Circular No.123 restricts the use of losses from
ordinary business activities to offset against other income to defer tax incentive period and/or to reduce tax liabilities. It also prohibits the distribution of tax losses to joint
venture partners after dissolution. However, the rules on carry-forward of tax losses were expanded to allow interim quarterly rollover of tax losses. Tax concessions for smalland medium-enterprises (SME) and labor-intensive enterprises. Incomes from capital transfer determined under the formula: (iii)Taxed income = Transfer price Purchase
price of the transferred capital Transfer expense.
b) Tax incentive adjustments for export company:Effective January 1, 2012, following Vietnams WTO commitments, export based tax incentives have been abolished. Taxpayers
who were granted export-based tax incentives might now elect an alternative tax incentive scheme and notify the tax authorities of their election. Detailed guidance for making
such an election is available in the Circular No.199 recently released by the Ministry of Finance on November 15, 2012.
16
(relating to insurance, financial services, security trading, debt factoring, currency trading, health, education and vocational training); introducing a new list of VAT-ignored
(rather than exempt) transactions whereby buyers may still claim the associated input tax, and hence a relief from VAT leakage; fine-tuning the VAT treatments for services
provided by non-residents, disposal of assets by non-business entities or individuals, disposal of mortgages held by credit institutions, and intercompany transfer of fixed assets
etc. The Circular No.06 also clarifies the application of 0% VAT to in-country import/export activities, prescribes specific VAT treatments for international transport and logistics
services, and allows input credit for VAT suffered by buyers in various situations, including natural shrinkages and damages of inventories, consumption of supplies for mixed
purposes, advertising, marketing and promotion, internal consumption.
d) Foreign Contractor Tax: The foreign contractor tax regime has also undergone several changes as a result of the changes in CIT and VAT regimes. The Circular 60 took effect on
27 May 2012 and introduced several changes including the imposition of Foreign contractor tax on cross-border trading transactions conducted in the forms of DDP/DAT/DAP of
INCOTERM and in-country import/export transactions. Also, several on-line transactions are now taxable including advertising, marketing, and training. Some of the deemed
withholding VAT and CIT rates have also been changed. For instance, the CIT withholding rates have reduced from 10 per cent to 5 per cent for interest and from 2 per cent to
0.1 per cent for overseas re-insurance commissions, while the deemed CIT rate for management services in hotels, restaurants and casino has increased from 5 to 10 per cent.
e) FDI profit remittance: According to Circular No.186/2010/TT-BTC dated 18.11.2010, and effective as of 02.01.2011, guiding the offshore remittance of profits earned by the
Company with foreign capital, profits are remitted abroad are lawful profits after fulfilling all their financial obligations towards the Vietnamese Government. Profits to be
remitted abroad from Vietnam may be (i) in cash complies with the law on foreign exchange management and (ii) offshore remittance of profits in kind and conversion of their
value comply with the law on goods import and export and relevant laws. Profits to be remitted abroad are determined based on audited financial statements and CIT
finalization declaration. The Company may not remit abroad profits they shared or earn from their direct investment in a year of profit generation in case that years financial
statements of the company in which they make investment still contain accumulative loses after such losses are carried forward.
17
Implementing free trade and investments in logistics sector, offering investment chances for businesses in logistics sector. For ASEAN countries, 2013 is the time set for liberalization
most of substantial logistics services subsectors. Vietnam has conformed, encouraged and facilitated trade and investments in logistics sector. Many FDI businesses from other
ASEAN countries have been in many logistics sub-sectors in Vietnam and even hold great market shares. Vietnam has had a new appearance in its infrastructure and sea ports since
2009 today through the Governments processes of liberalization and diversify. Vietnam has contributed greatly to Roadmap Towards an Integrated and Competitive Maritime
Transport, ASEAN Multilateral Agreement on the Full Liberalization of Air Freight Services, as a base for ASEAN Open Skies in 2015.
Upgrading logistics management ability besides regulations of logistics services in Vietnam Commercial Law (2005), there are regulations of conditions for doing logistics businesses,
sea transport and multi-modal transport and other related law (Laws of Maritime, Road, Railway, Civil Aviation) Logistics management agencies (the Ministry of Trade and
Industry, the Ministry of Transport) have issued legal documents to serve the roadmap to regional and international logistics integration. In 2011 and 2012, Vietnam in turn
approved ASEAN Framework Agreement on Multi-modal Transport and on Facilitation of Cargo in Transit.
18
Establishment of registered companies for the purpose of operating a fleet under the national flag of Vietnam: after 2 years from the date of accession, foreign investors are
permitted to establish a joint-venture with foreign capital contribution not exceeding 49% of total charter capital. Foreign seafarers may be permitted to work in ships under the
national flag of Vietnam (or registered in Vietnam) owned by joint venture in Vietnam but not exceeding 1/3 of total employees of the ships. The master of first chief executive
must be Vietnamese citizen.
Upon accession, foreign shipping companies can establish a joint venture with 51% foreign ownership. After 5 years from the date of accession, foreign shipping companies can
establish 100% foreign-invested company.
Container handling services (CPC 7411): A joint venture with foreign capital contribution not exceeding 50% can be established.
Customs Clearance Services: In 2012, foreign investors can set up a 100% foreign owned company.
Container Station and Depot Services: In 2014, foreign investors can set up a 100% foreign owned company.
c) Air Transport Services: The main air transport services committed by Vietnam include marketing and sales of airline-related products services, computer-based reservation
services and aircraft maintenance and repair services (CPC 8868). Before January 11, 2012, a foreign investors can only establish a joint venture to provide aircraft maintenance
and repair services with a cap of 51% of the total charter capital. However, after that a foreign investor will be permitted to set up a 100% foreign invested company. Foreign
investors must use public telecommunication network under the management of Vietnam telecommunication authority to supply the computer-based reservation services.
Foreign airlines are permitted to provide marketing and sales of airline-related products service in Vietnam through their ticketing offices or agents in Vietnam.
d) Internal Waterways Transport and Rail Transport Services: foreign investors are permitted to establish a joint-venture and are entitled to own up to 49% of charter capital of
the joint-venture providing internal waterways transport and rail transport services in Vietnam.
e) Road Transport Services : Given that the local road transport market is at the initial stage of development, Vietnams commitments regarding these services are quite limited and
try to protect local business for a long term. According to the Commitment, foreign investors are entitled to own up to 49% of the charter capital of joint ventures. After 3 years
from the date of accession, subject to the market demand, joint ventures with foreign capital contribution not exceeding 51% may be established to provide freight transport
services. One hundred % of joint ventures drivers shall be Vietnamese citizen.
f) Services Auxiliary to all Modes of Transport: The foreign capital contribution in a joint-venture providing services auxiliary to all modes of transport will be increased gradually.
After January 11, 2014, foreign investors are permitted to set up 100% foreign owned company providing storage and warehouse services (CPC 742) and freight transport agency
services (CPC 748). No limitations will be imposed on foreign capital contribution in a joint venture providing other services auxiliary to all modes of transport, except for
container handling services (CPC 7411).
19
Section 2
MACROECONOMICS OF VIETNAM
MACROECONOMICS OF VIETNAM
Vietnam Real GDP Growth Rate & Nominal GDP
per capita
8.0%
7.0%
6.8%
6.2%
2,000
25.0%
1,500
20.0%
23.1%
5.9%
5.3%
6.0%
5.0%
5.2%
5.2%
5.0%
15.0%
4.0%
3.0%
1,000
2.0%
500
1.0%
0.0%
0
2008
2009
2010
2011
2012
2013F 2014F
12.0%
10.0%
5.0%
6.7%
10.3%
6.5%
5.0%
8.3%
0.0%
2007 2008 2009 2010 2011 2012 2013F
Source: IMF
Source: IMF
US$bn
6.5% in 2012.
140
Others
120
Machinery, transport
equipment
Textiles, clothing, footwear
100
80
60
40
Food
20
1.32%
Agricultural products
Others
120
Manufactures
100
Garment materials
80
60
Chemicals, rubber
products
40
20
Seafood & Fishery
2009
2010
2011
2012
Source: Vietnams General Custom
Section 3
OVERVIEW OF VIETNAM LOGISTICS INDUSTRY
Customs
Infrastructure
Tracking &
tracing
Timeliness
Rank
Score
Rank
Score
Rank
Score
Rank
Score
Rank
Score
Rank
Score
Singapore
4.13
4.1
4.15
3.99
4.07
4.07
4.39
Malaysia
29
3.49
29
3.28
27
3.43
26
3.4
30
3.45
28
3.54
28
3.86
Thailand
38
3.18
42
2.96
44
3.08
35
3.21
49
2.98
45
3.18
39
3.63
Philippines
52
3.02
67
2.63
62
2.8
56
2.97
39
3.14
39
3.3
69
3.3
Vietnam
53
3.00
63
2.65
72
2.68
39
3.14
82
2.68
47
3.16
38
3.64
Indonesia
59
2.94
75
2.53
85
2.54
57
2.97
62
2.85
52
3.12
42
3.61
Cambodia
101
2.56
108
2.3
128
2.2
101
2.61
103
2.5
78
2.77
104
2.95
Laos
109
2.50
93
2.38
106
2.4
123
2.4
104
2.49
111
2.49
118
2.82
Myanmar
129
2.37
122
2.24
133
2.1
116
2.47
110
2.42
129
2.34
140
2.59
However,
Singapore
2
8%
US
3
10%
Japan
11%
Malaysia
13%
India
13%
Thailand
15%
China
8
9
18%
Vietnam
25%
0%
Source: Transport Intelligence
Private & Confidential
World Average of
12% (IMF)
10%
20%
30%
LOGISTICS INDUSTRY
provided
by
TRANSPORTATION
FORWARDING
VALUE ADDED
SERVICE
WAREHOUSING
specialists.
RAILWAY
AIR
WATERWAY
ROAD
Dry storage
Cold storage
vendor
management,
climiate
contrast
are
exclusively
provided
by
31%
55%
Warehousing
2012
2008
0%
20%
40%
60%
80%
100%
22
Central
and
Southern
regions,
respectively
Hanoi is highlighted by the presence of large
number of consumer goods manufacturers, textile
industries as well as construction activities which
are direct customers for the logistics industry.
23
KEY PLAYERS
THE PRESENT OF TOP 10 GLOBAL LOGISTICS COMPANIES IN VIETNAM
Established Year
1994
100%
100+
Kuehne + Nagel
1995
RO
100+
Schenker/BAX
1990
JV
160
CEVA Logistics/EGL
1995
RO
20
1999
JV
N.A
Abbott,
Toshiba
Panalpina
1992
JV
50+
C.H.Robinson Worldwide
2004
RO
Geodis
1990
RO
20
N.A
Agility
2002
RO
10
N.A
Expeditors Intl of
Washington
2004
RO
20
Domestic companies
70%
10
No.
Company
Employee
s
Companys Name
Foreign companies
30%
Source: VLA
Type
Number
of offices
Ranking
Main Customers
Nestle,
Wal-Mart,
Nationbilt
Sony
Raymour
Erixsson,
Flanigan,
Gemadept
JSC
CFS 8,828 m
Bonded warehouse - 74,000 m
Ecom Agroindustrial,
Schenker, Yamato Logistics,
Panasonic, Hitachi, Toshiba,
Birkart, UTI Worldwide
Sumitomo
Logitem Vietnam
Transimex-Saigon
JSC
12,000 m
N.A
N.A
Vietfracht
JSC
N.A
APL Logistics
Vinatrans
State-owned
CFS 2,500 m
Freezer warehouse- 2,800 m
N.A
Konoike Transportation
Companys Name
Type
Main Customers
Strategic Partners
VOSA Group
Public
N.A
10
Vinafreight
JSC
CFS 3,000 m
Freezer warehouse 1,500 m
N.A
N.A
Private
N.A
N.A
24
Section 4
VIETNAM TRANSPORTATION SECTOR
800,000
18%
16%
9%
600,000
10%
12%
12%
400,000
However, Vietnams infrastructure has not kept
6%
200,000
3%
12%
9%
24.
84
74.
%
33
%
15%
12%
0%
2005 2006 2007 2008 2009 2010 2011
Road
Waterway
Railway
Air
Singapore
6.5
4.0
Malaysia
5.4
3.0
4.9
Cambodia
2.0
4.2
Indonesia
3.7
Vietnam
1.0
World average
score of 4.3
3.2
0.0
Roads
Railroad
Vietnam score
Port
Air
Transport
25
Network: 250,000km
km
160,000
Earth
40,000
Other
20,000
Other road
Gravel
60,000
DBST
80,000
Urban roads
Gravel surface: 6%
Cement concrete
100,000
Commune roads
Asphalt concrete
120,000
District roads
140,000
Provincial roads
National highways
Road
? National-highway
bus
and
truck
26
1,600,000
Freight - River
Freight - Sea
1,200,000
800,000
400,000
2005
2006
2007
2008
2009
2010
2011E
inauguration in 2010.
200,000
160,000
120,000
80,000
40,000
0
2005
2006
2007
2008
2009
2010
2011E
27
1,000 tons
200
Freight
Freight trafic
500
400
150
300
100
200
per year
50
100
0
2005
2006
2007
2008
2009
100,000
80,000
60,000
40,000
of
electronics
and
Northern
Central
20,000
high-tech
Southern
120,000
0
Noi Bai
Dien Bien
Cat Bi
Vinh
Dong Hoi
Da Nang
Phu Bai
Chu Lai
Cam Ranh
Phu Cat
Pleiku
Tuy Hoa
Tan Son Nhat
Phu Quoc
Can Tho
Con Dao
Ca Mau
Rach Gia
Lien Khuong
Buon Ma Thuot
2011E
2010
International airport
Domestic airport
28
Freight
9,500
Growth rate
6%
4%
7,600
2%
0%
5,700
-2%
3,800
-4%
-6%
1,900
-8%
0
-10%
2005
2006
2007
2008
2009
2010
2011E
4,500
3,600
2,700
1,800
900
0
2005
2006
2007
2008
2009
2010
2011E
29
40%
35%
2,000
2,500
500
15%
of
for
10%
5%
0%
2006-2010.
MPI
2015.
forecasts
that
ODA
Railway
Airports
IT & Communication
20%
an
1,000
been
Healthcare
25%
always
1,500
has
Water drain
30%
priority
Infrastructure
2011-2015
2016-2020
Water supply
2016f
Irrigration
2011
Electricity
Transportation
Railway
2016f
Airport
2015f
2014f
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
2013f
bvnd
2012e
2011
of
manufactured
goods
and
1,800-2,000
Fishery Products
1,600-1,800
Manufactured Goods
1,400-1,600
1,200-1,400
Industrial Crops
1,000-1,200
Petroleum
900-1,000
Coal
800-900
Fertilizer
700-800
Cement
600-700
Construction Materials
500-600
400-500
Steel
200km trips
300-400
Wood
200-300
Sugarcane/sugar
Rice
<100
0
100-200
Road
Rail
200,000
Inland Waterway
400,000
600,000
Coastal Waterway
Air
0
Road
Rail
Coastal Waterway
Air
South (HCMC)
Source: VITRANSS 2 (2009)
Private & Confidential
31
Section 5
TRANSPORTATION BY TRUCK
60,000
800,000
50,000
40,000
600,000
30,000
20,000
200,000
10,000
HCMC
CAGR 15.6%
50,000
Central
Southern
25,000
60%
50%
20,000
40%
40,000
10,000
2015F
2014F
2013F
Northern
60,000
20,000
Danang
CAGR 5.3%
30%
15,000
20%
10,000
10%
0%
5,000
Danang
-10%
-20%
2007
HCMC
Source: GSO
2012F
2015F
2014F
2013F
70,000
80,000
30,000
2012F
tons/km by 2015
2011E
2010
2009
2008
2007
2006
0
2011E
2010
400,000
2009
2008
2007
2006
2008
2009
2010
2011
ROAD INFRASTRUCTURE
Vietnams
Ministry
of
Transport
and
Expressways, Vietnam
Expressways, Overseas
30
25
There
have
been
several
announcements
20
15
10
for
trucks
using
the
HCMC-Trung
Cau Gie-Ninh
Binh
Luong
Ben Luc-Long
Thanh
HCMC-Long
Thanh-Dau Giay
HCMC-Trung
Luong
US
China
Lack of project management expertise, resulting in site clearance delays and cost overruns
Corruption, around 30% of a projects value is pocketed by the contractor in order to pay bribes to relevant
parties
public interest with the need for expeditious provision of land for infrastructure development
Deficiency in regulations and government institutions that effectively balance the need to safeguard the
Lack of specialised government institutions that can mediate between developers and landowners about
compensation
maintenance
Source: BMI, 2013
Private & Confidential
34
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
International Comparison
0.8
short
distance
(<100km)
long
South Korea, Japan, 2006 USA, 2007
distance
2007
(>100km)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
North
in
the
South,
the
constraint
of
Central
South
1: no obstacle
5: very severe
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Poor road condition
Fuel costs
Lack of backload
Road accidents
Ranking
Corruption
Special cities
Class 1 cities
Other cities
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Poor road condition
Fuel costs
Lack of backload
Road accidents
Corruption
36
HAULAGE CHARACTERISTICS
Haulage characteristics captures the efficiency of
freight movements and
By Regions
However,
the
average
loading
By Region
Age of trucks, years
South
Special
cities
Class 1
cities
Other
cities
17.1
15.9
16.5
17.1
17.3
5.8
12.0
10.4
7.6
12.9
8.7
10.8
18.0
19.7
14.0
21.1
13.3
6.5
6.1
9.9
8.3
8.5
5.8
1.5
1.6
1.9
1.6
1.5
1.8
0.8
0.7
1.1
1.0
0.7
1.0
40.6
54.7
55.5
45.0
79.8
65.1
27.1
3.5
31.0
27.3
40.2
28.5
393.8
780.9
643.5
499.4
453.2
392.5
11.0
20.9
17.9
14.1
12.0
9.3
35.8
39.8
30.8
33.7
35.9
32.1
22,858
34,424
32,216
26,750
31,338
24,582
Central
17.1
and
North
By City Class
Yearly mileage, km
37
Urban Class
Class 1
Population
Class 2
city:
Class 3
>300,000
Class 4
Class 5
>150,000
>50,000
>4,000
6,000/km2
4,000/km2
2,000/km2
thousand
Ratio of nonagricultural labor
>80%
for
the
urban
centers
Population density
Socio-economic
infrastructure system
CG: 12,000/km2
CG: 10,000/km2
Urban
retrofitted
mitigation devices
System coverage
with
centers
infrastructure
with
partially
Individual
system
infrastructure
in
place
and
Individual
system
infrastructure
in
place
and
Individual
system
infrastructure
in
place
and
gradually integrated
gradually integrated
gradually integrated
old
old
old
old
factories
retrofited
Vietnam has two special cities including Hanoi and Ho Chi Minh City
38
Section 6
VIETNAM WAREHOUSING AND DISTRIBUTION CENTERS
Ha Noi
Da Nang
Binh Duong
Total DC supply of more than 300,000 sqm
Key players include DKSH, DHL, Mappletree, Damco,
Gemadept, Transimex, Vinafco, etc.
39
HIGHLIGHTS
DKSH Vietnam
Since re-entered Vietnam in 1991, DKSH has been a leading player in providing Market
DC/WAREHOUSE INFORMATION
Type
Area
Location
Expansion Services for the consumer goods, healthcare, performance materials, and
technology industries
The Company has 10 distribution centers and logistics support centers nationwide
(Hanoi, Danang, HCMC, Binh Duong, Can Tho and Kien Giang), including:
12,000 sqm
Ha Noi
25,000 sqm
Binh Duong
12,000 sqm Distribution Center in Thach That Quoc Oai Industrial Zone (Hanoi)
with more than 7,000 high rack pallets, serving more than 5,500 healthcare
customers including hospitals, clinics, and pharmacies as well as over 20,000 retail
Distribution
Centers
the first healthcare distributor in the Vietnamese market to obtain ISO 13485
certification
40
HIGHLIGHTS
DC/WAREHOUSE INFORMATION
Indo-Trans Keppel
Logistics
Type
Area
Location
(HCMC, total area of 150,000 sqm, air conditioned storage available); Tan Binh LDC
(HCMC, total area of 32,000 sqm, air conditioned storage available), Tan Binh LDC
382,000 sqm
HCMC
22,000 sqm
Hanoi
140,000 sqm
Bac Ninh
Logistics and
Distribution
Centers
Applying advanced Warehouse Management System (WMS)
Some famous customers could be named are Electrolux (total logistics services
including IOR, customs brokerage, warehousing, inventory management and
distribution), Unilever (distribution, forwarding and customs brokerage), Nokia
(warehousing POS and type approval services), Acer (total logistics including
warehousing
and
distribution),
Colgate-Palmolive
(total
logistics
including
41
HIGHLIGHTS
Entering into Vietnams market since 1998 and launching DHL Supply Chain in Vietnam since
DC/WAREHOUSE INFORMATION
Type
Area
Location
2001
10,000 sqm
The Company already has 1 distribution center of 15,000 sqm in Song Than ICD. The second
Distribution
10,000 sqm DC is underway in Bac Ninh province to meet the needs of customers in the
Centers
15,000 sqm
Bac Ninh
Song Than ICD,
Binh Duong
The Company has announced a new investment plan worth US$13 million between 2013 and
2015 to widen its warehouse space in Vietnam to more than 141,000 sqm by 2015 and grow
the transportation fleet to more than 100 vehicles in the next two years
Other warehouses
76,000 sqm
Logistic Center
23,050 sqm
Nationwide
All vans, trucks and delivery motorbikes of DHL Vietnam have been supplied and maintained
by GB Vietnam
Mapletree
Mapletree started its investment in Vietnam since 2005 and has committed a total
investment of US$1 bn in Vietnam
VSIP1,
Binh Duong
Mapletree Binh Duong Logistics Park is a 680,000 sqm site consisting of ready-built and
VSIP 2,
Binh Duong
Logistic Parks
being developed over 5 phases. The 1st completed phase (54,000 sqm) comprises 3 blocks
of modular high quality warehouse spaces, and is already 60% occupied since its
inauguration in 2010. This logistics park is slated to house about 300,000 sqm of ready
54,000 sqm
Well-know tenants include Nippon Express, Loscam, Nitto , Denjo, Cargo Int'l, Nissin, etc.
42
HIGHLIGHTS
DC/WAREHOUSE INFORMATION
Type
Area
Location
solutions to customers from all industries: retail, chemicals, technology, government &
defence, food and beverage, automobile, pharmaceutical, fashion/textiles, etc.
Distribution
The Company currently has 9 sites equating to 37,000 sqm of warehouse facilities at key
Center
26,000 sqm
Binh Duong
37,000 sqm
N/A
10,700 sqm
Ha Noi
10,200 sqm
Da Nang
62,100 sqm
HCMC
gateways of Vietnam
Damcos 26,000 sqm distribution center has been opened in 2011, offering all-in-one
logistics solution: CFS , bonded and general warehouse. The distribution center is wellconnected by road transport and allows to serve both Cat Lai (in HCMC) and Cai Mep
General
ports. The Company also plans to further link the facility to barge infrastructure as a
supplement to truck transport
Kerry Logistics
The Hong Kong-based logistics company offers a full range of logistics services from
customs, shipping to freight forwarding, distribution and a diversified range of valueadded services to customers in various industries including electronics and hi-tech,
fashion and garments, food and beverage, and industrial sectors.
The Company has 3 logistics centers in Hanoi, Danang and HCMC in the total area of
In 2013, Kerry Logistics has acquired majority stake in Tin Thanh Express, one of a
leading express company to offer one-stop-shop logistics solutions across the country.
Tin Thanh have 3 major hubs in Hanoi, HCMC and Danang where cargo and packages are
sorted consolidated and delivered by air and road freight. Together with a truck fleet of
more than 160 vehicles, the Company is handling over 10,000 shipments everyday
43
HIGHLIGHTS
DC/WAREHOUSE INFORMATION
Type
Area
Location
The Company has 3 distribution centers in Binh Duong with total area of 42,000 sqm. These
Bonded
37,000 sqm
Binh Duong
Domestic
10,000 sqm
Binh Duong
These centers are designed and built according to international standards such as C-TPAT
Security, TAPA System, FM Global Standards, Standard Green (Green Initiatives), HACCP
dedicated for food group
Having a strong list of customers including Ajinomoto, Vinamilk, Masan, Nestle, P&G, Vinh
Hao, Nissen, Sumitomo, Louis Dreyfus, Ecom, etc.
Transimex- Saigon
Warehousing system including container freight station (7,000 sqm with over 10,000 pallets
Distribution Centers
Song Than I
42,000 sqm Industrial Zone,
Binh Duong
CFS
7,000 sqm
HCMC
Bonded
10,000 sqm
HCMC
Frozen/ Chilled
3,000 sqm
HCMC
capacity, located next to Hanoi Highway and Saigon Riverside), bonded warehouse (10,000
sqm, located inside ICD Transimex), and cold storage (3,000 sqm with over 5,000 pallets
capacity)
The Companys distribution center in Binh Duong with total investment capital of VND 80
billion has completed in the middle of April 2013
Main customers include Vissan, CP Vietnam, Nestle, Pepsico, Tan Hiep Phat, Shanghai Electric
Power Generation Group, etc. Moreover, in 2013, Transimex has cooperated with a Japanese
strategic shareholder to develop additional sources of Japanese customers
Song Than II
Distribution Center
44
HIGHLIGHTS
Having a network of more than 350,000 sqm of warehousing strategically located across all main economic areas of
DC/WAREHOUSE INFORMATION
Type
Area
Location
Vietnam such as Thanh Tri, Gia Lam, Hanoi Port (Hanoi), Tien Son Industrial Zone (Bac Ninh), Dinh Vu Industrial Zone
(Hai Phong), Hoa Cam Industrial Zone (Da Nang), Song Than Industrial Zone (Binh Duong), Hau Giang Industrial Park
(Can Tho)
Vinafco JSC has decided to build up distribution centers in Binh Duong, Da Nang and Hau Giang with total
Song Than II
Distribution
Center
10,000 sqm
Industrial
Zone, Binh
Duong
investment capital of VND336.16 bn to provide 3PL logistics (warehousing, value-added services, transport
distribution)
Having applied advanced information technology in professional operations such as Warehouse Management
System (WMS) and Transportation Management System (TMS, GPS)
19,000 sqm
Hoa Cam
Industrial
Zone, Danang
Logistics Park
20,000 sqm
Dong Phu
Industrial
Zone, Hau
Giang
Domestic
60,400 sqm
HCMC
Bonded
3,000 sqm
HCMC
Distribution
Center
The Company is investing to have a total of 500 new trucks by 2014, 15-20 container trailers, 10 tank trucks for the
transport of construction materials and powedered cements, and other special trailers for transporting overweight
goods
Having the long-term relationship with many big customers such as Akzo Nobel Paint (ICI Paints), Kimberly-Clark
Vietnam, Honda Vietnam, American Standard Vietnam, Huawei, Vinaphone, GTel , etc.
South Logistics
JSC
Net Sales ( 2012): VND 510.65 billion; Profit Before Tax (2012): VND1.52 billion
Being established in 1975 and officially transformed from a State Enterprise into a Joint Stock Company since 2007
Multi-modal transport capability: 150 TEU/day; bulk transport: 700 1,000 tons/day
The Companys main customers are import-export companies in HCMC, Dong Nai, Binh Duong, BaRia-Vung Tau,
Southeast and Southwest regions. Some major customers are Cargill, Scavi, Scancom, Friesland Campina, Pepsico,
P&G, Uni President, Holcim, Colgate Palmolive, etc.
Net Sales (2012): VND 607.33 bn; Profit before tax ( 2012): VND 24.80 billion
Rented
warehouses
HCMC,
72,000 sqm
Binh Duong,
Vung Tau
45
HIGHLIGHTS
Being established since 1975 as a state-owned company, thus the Company is exposed to
DC/WAREHOUSE INFORMATION
Type
Area
Location
CFS
2,500 sqm
N/A
2,800 sqm
N/A
3,000 sqm
Binh Duong
4,400 sqm
Ha Noi
32,600 sqm
N/A
50,000 sqm
N/A
50,000 sqm
Ha Noi
20,000 sqm
Dong Nai
8,000 sqm
Binh Duong
1,300 sqm
Bien Hoa
The firms warehousing and storage facilities in Vietnam include: a 2,500 sqm Container
Freight Station (CFS) for sea and air cargo; a joint-venture cold storage facility of 2,800
sqm, run by Vinatrans and Konoike Transport Company of Japan; 40,000 sqm of covered
warehousing; and 50,000 sqm of open storage
Several well- known strategic partners are Schneider Electrics, Sharp, Manuchar Viet
Bonded
Net Sales ( 2012): VND 788 .69 billion; Profit Before Tax (2012): VND21.15 billion
General
Open Storage &
Concrete Yard
Being established in 1996 as a joint venture between Sumitomo Corporation, Suzuyo Co.,
Ltd , Vinafco and Hanel
Total area of self- owned and rented warehouse are 52,200 sqm and 16,150 sqm
Logistic Centers
respectively.
Operating Thang Long Logistics Center in Hanoi with total area of 50,000 sqm, of which
15,000 sqm general warehouse, 5,040 sqm bonded warehouse, and 15,000 sqm
container yard; and Thang Long Logistics Center in Dong Nai Province with total area of
20,000 sqm
Owning a facility of over 200 trucks, lorries, and modern loading/unloading equipments
General
warehouses
46
Section 7
TARGET & POTENTIAL CUSTOMERS
Pangasius
Other
Growth rate
50%
40%
2020F
-10%
2015F
0
2013F
0%
2012
2011
10%
2010
2009
20%
2008
2007
30%
2006
1,000
2005
2020F
2013F
3,000
2,000
4,000
2012
5,000
2011
10
Shrimp
6,000
2010
VND bn
12
Aquaculture
2009
7,000
2008
Wild catch
2007
000 tons
8,000
2006
2005
Seafood Production
Cases
74
Japan
Phuong Nam
74
Korea
Anvifish
83
Fimex VN
87
US
19%
38%
China
18%
Germany
Australia
8%
Italia
Neitherlands
Spain
Agifish
93
Stapimex
98
Quoc Viet
102
Hung Vuong
122
Vinh Hoan
151
Minh Phu
334
0
Source: MARD
Private & Confidential
100
200
300
400
Source: VASEP
47
agricultural
and
seafood
production
Company
areas,
Storage
Capacity
2012
Volume
Value
Volume
Value
(tonnes)
(mn USD)
(tonnes)
(mn USD)
Location
(tonnes)
SHRIMP
Minh Phu Corp.
Stapimex
27,178.20
334.39
32,049.53
369.40
N/A
N/A
98.00
N/A
105.00
N/A
Havico
4,607.00
52.70
4,514.00
56.04
10,000
Cuulong Seapro
5,552.90
60.83
4,425.00
40.70
1,500
N/A
150.79
N/A
154.90
800
Hung Vuong
47,242.04
122.33
N/A
111.90
42,000
Agifish
29,333.59
93.20
28,448.00
91.80
10,000
Anvifish
24,807.00
83.00
25,323.00
77.90
40,000
Navico
N/A
53.70
N/A
73.00
4,900
An Giang
I.D.I Corp
N/A
51.35
N/A
58.20
4,600
Dong Thap
2011
PANGASIUS
Vinh Hoan
48
13,417
13,500
12,967
13,000
12,500
782.6
805.5
829.9
2010
2011
2012
12,000
1,500
1,000
500
0
Grapefruit
14,000
Thous.ton
2,000
Banana
13,992
Cultivation area
Production volume
Thous.ha
140
120
100
80
60
40
20
0
Pineapple
000 tons
14,500
Litchi,
rambutan
Production Volume
Orange,
mandarin
Cultivation Area
000 ha
840
830
820
810
800
790
780
770
760
750
Mango
Grape
Longan
FRUIT/VEGETABLES
Source: MARD
Source: MARD
Binh
Dien),
238
retail
markets,
78
has
oriented
supermarket
tons
1,000,000
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
HCMC
950,000
750,000
Hanoi
238
Retail Markets
402
Wholesale Markets
219,000
78
Supermarkets
Hanoi
HCMC
Danang
44
200
400
600
49
1,200
1,000
800
40%
35%
30%
25%
600
20%
15%
400
10%
200
396
438
460
623
829
1,000
2008
2009
2010
2011
2012
2013F
5%
0%
19.84
Thailand
20.37
Holland
21.61
Vegetables
Korea
22.55
24.51
Taiwan
25.65
Russia
28.37
Japan
Philippines
Thailand
Malaysia
39.87
54.65
China
US$mn -
100
200
20%
25%
Vietnam
218.06
300
Source: MARD
Private & Confidential
Fruit
Indonesia
Indonesia
US
0%
20%
30%
40%
40%
60%
Reason
69
15
46
25
Diseases
38
23
11
85
19
95
Poor packaging
23
20
14
15
30
14
15
30
11
15
43
Wholesaler
15
40
14
40
Collector
11
31
11
No loss
15
11
13
100
20
100
35
100
Wholesaler
Collector
Motorbike
Bicycle
0%
50%
100%
None
Retailer
Off-site
Retailer
Retailer
Mini truck
Wholesaler
Rented vehicle
Refrigerated
truck
Collector
Rented storage
Own
0%
20%
40%
60%
80%
Total
Source: Surveys in collaboration between AVRDC and RIFAV, 2005, N=68 observations
51
Strategy
It could be seen that preservation plays an
Farmer
Trader
Retailer
14
38
21
57
27
20
54
15
20
19
51
24
73
23
11
30
27
11
33
25
71
18
13
37
Do nothing
37
100
33
100
35
100
Total
Source: Surveys in collaboration between AVRDC and RIFAV, 2005, N=105 observations. Values are
multiple responses
52
Feb
Mar
Apr
May
June
Jul
Sep
Oct
Nov
Dec
Temperature
(Celsius Degree)
Fruits
Avocado
Banana
Dragon Fruit
Durian
Grape
Guava
Jackfruit
Lime
Longan
Storage Time
Ha Lc mango
12-13
4-5 weeks
Chu mango
12-13
3-4 weeks
6-8
25-30 days
4-5 weeks
3-4 weeks
Nm roi pomelo
12
3-3.5 months
Da xanh pomelo
12
3-3.5 months
Snh orange
8-9 weeks
Tiu da b longan
Xung
longan
cm
vng
Ch Go dragon fruit
Hng mandarin
7-8 weeks
Mango
ng mandarin
5-6 weeks
Mangosteen
Java rambutan
12
2 weeks
Orange
Rongrien rambutan
12
2 weeks
Papaya
Chn Ha durian
15
2 weeks
Persimon
Ri 6 durian
15
2 weeks
L Rn star apple
15
15 days
Mangosteen
10
2 weeks
Cayenne pineapple
10
3 weeks
Queen pineapple
15-20
2 weeks
Gi banana
18-20
2 weeks
Cau banana
15
3 weeks
Pineapple
Plum
Pomelo
Rambutan
Mandarin
53
Feb
Mar
Apr
May
June
Jul
Aug
Sep
Oct
Nov
Dec
Tomato
Eggplant
Chilli
Hot pepper
Sweet pepper
Radish
Carrot
Muskmelon
Squash
Pumpkin
Chayote
Lettuce
Onion
Water morning glory
Cabbage
Cauliflower
Bamboo shoot
Common bean
China bean
Ginger
Straw mushroom
54
HIGHLIGHTS
WAREHOUSE INFORMATION
A leading modernized wholesaler in Vietnamese market with 19 stores from North to South Fruit & Vegetables
Currently owned 4 METRO Distribution Centers (DC) throughout Vietnam and in charge of
Type
Area
Location
N/A
Lam Dong
Fresh DC
N/A
Binh Duong
Dry DC
N/A
HCMC
N/A
Ha Noi
DC
Co.op Mart
Being established since 1989 and operated by Saigon Union of Trading Cooperatives
Up to 2011, Co.opMart chain has 59 supermarkets throughout Vietnam and is well positioned
for strong performance during periods of low consumer confidence thanks to low-cost
strategy and increasing private lable goods
Since 2005, Co.opmart has opened a distribution center located in Song Than Industrial Park,
Distribution
Center
8,000 sqm
Binh Duong
27,768 sqm
HCMC
In 2013, Co.opmart has cooperated with NTUC Fair Price to established a joint venture
company to develop a chain of hypermarkets in Vietnam
Satra
Being established since 1995, SATRA Group has developed aggressively from a state-owned
enterprise into a holding company with over 60 subsidiaries, affiliates and joint-ventures
Developing modern retail trade system including convenience stores (SatraFoods), trade
centers (SatraMart).
Cold storage
Some major suppliers are Vissan, Cau Tre, APT, Cofidec, AGREX Saigon, Nhabexim (food
processing products); Binh Dien wholesale market (fresh fruit, vegetables, meat, poultry and
sea foods), etc.
55
600,000
500,000
300,000
200,000
6,000
800
5,000
600
4,000
3,000
400
2,000
2017F
2016F
2007
2017F
2016F
2015F
2014F
2013F
2012
2011
2010
2009
2008
2007
0
2015F
0
2014F
200
2013F
1,000
2012
100,000
2017.
1,000
7,000
2011
bn VND
1,200
Value
8,000
400,000
Volume
2010
tons
9,000
2009
2008
40,000
3,500
35,000
3,000
25,000
20,000
15,000
Company
% share
% share
Vissan
23.1%
Hien Thanh
11.5%
Halong
21.6%
10,000
1,000
San Miguel
10.0%
Cautre
12.5%
5,000
500
Halong
9.8%
Agifish
11.0%
Duc Viet
7.9%
Cholimex
2017F
2016F
2015F
2014F
2013F
0
2012
Company
1,500
2011
37.4%
2,000
2010
Vissan
2,500
2009
bn VND
4,000
Value
30,000
2008
Volume
2007
6.7%
PACKAGED FOOD
100%
100%
80%
80%
60%
60%
40%
40%
20%
27%
28%
29%
34%
32%
20%
34%
0%
23%
25%
26%
31%
31%
31%
2007
2008
2009
2010
2011
2012
0%
2007 2008 2009 2010 2011 2012
As
supermarkets/hypermarkets
aiming
at
Name of company
Storage Capacity
( tonnes)
Sales Value
2,000
2011: VND828 bn
250
N/A
2011: VND745 bn
N/A
N/A
1,500- 2,000
N/A
2011: VND488 bn
1,000
2011: VND4,374 bn
Distribution Network
2009: VND145 bn
N/A
60 distributors
Wide distribution network mainly in Hanoi and other
big cities including HCMC, Da Nang, Hai Phong, etc.
Their products are distributed in supermarkets
(Metro, Big C), beer stores, hotels, food stores (over
1,500), schools, hospitals (over 300)
57
13%
240,000
220,000
200,000
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
-
3,600
3,300
3,000
2,700
2,400
2,100
1,800
1,500
1,200
900
600
300
-
16%
23%
mn liters
6%
7%
10%
80,000
Value
30,000
20,000
30%
20%
10%
12,300
2010
2011
15,600
2008
2009
2012
2013
Milk Powder
Liquid Milk
Drinking Yoghurt
2014
Vinamilk
19.7%
Mead Johnson Nutrition
33%
35%
38%
41%
41%
41%
4%
8%
2007
2008
14%
14%
15%
2010
2011
2012
3.3%
45.5%
3.7%
7.4%
20.4%
10%
0%
2009
1,667
9,634
18,900
Eating Yoghurt
40%
1,413
7,452
1,938
10,000
Volume
Drinking Milk
50%
1,204
5,890
1,745
1,154
2,770
22,800
2,326
3,873
40,000
3,349
2,791
5,422
50,000
8,133
60,000
12,199
70,000
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
12%
reaching a record of
Makeup
38%
38%
Hair care
Perfumes
4% 4%
4%
personal
care
products
in
Toiletries
90
80
70
60
50
40
30
20
10
0
Perfumes
Hair care
Skin care
Toiletries
Color cosmetics
2009
2010
2011
Vietnam.
Source: GSO
Channel
2009
2010
2011
537
642
811
89,584
91,515
97,221
Personal store
4,082
3,779
3,785
shops.
3,378
3,138
3,207
3,672
3,223
2,986
577
1,045
1,230
Modern
supermarkets
and
retail
channels
hypermarkets
including
seem
to
Cosmetic store
Pharmacy
9,010
10.114
11,119
1,791
1,997
2,376
59
HIGHLIGHTS
Unilever
WAREHOUSE INFORMATION
Type
Area
Location
65,000 sqm
Binh Duong
Center
60
Brands
TOILETRY
Import value
(USD, 2011)
Beiersdorf Vietnam
Nivea
17,960,457
Procter&Gamble Vietnam
Olay
7,212,398
Clear&Clear
4,917,630
Ohui
3,300,671
Maybelline
2,748,293
Unilever Vietnam
Hazeline
2,563,906
Cetafil
2,122,570
Johnson&Johnson Vietnam
2,025,024
Shiseido
1,732,864
Oriflame
1,117,847
1,100,962
Importers
Beiersdorf Vietnam
Nivea
4,976,079
Johnson&Johnson Vietnam
4,638,992
Unilever Vietnam
Rexona, Axe
2,176,072
Babycare
1,892,874
SC Johnson&Johnson Vietnam
Glade
1,453,920
Leivy
1,443,425
Procter&Gamble Vietnam
Amby, Gilette
1,284,506
Dial
1,234,364
Monsavon
HAIRCARES
Importers
Brands
22,770,165
757,018
PERFUMES
Import value
(USD, 2011)
Pantene, Head&Shoulder
6,748,027
Davines
2,157,858
F.C.Co., Ltd
Bigen
1,357,076
Wella
1,323,546
Unilever Vietnam
Artego, Livegain
Import value
(USD, 2011)
Brands
Brands
Import value
(USD, 2011)
Brands
Import value
(USD, 2011)
Chanel
2,398,671
Armani
247,784
Bvlgari
1,034,700
Burberry
210,669
Christian Dior
832,471
Givenchy
171,244
1,267,075
Lancome
426,008
Versace
151,510
1,143,301
Gucci
248,265
CK
142,684
Address
ATP Building, 56/1 Tran Quang Dieu, O Cho Dua Ward, Dong Da District,
Hanoi
Tel: (84-4) 3766 5129 3766 5169
Fax: (84-4) 3766 5216
Email: sonngoc@hn.vnn.vn
Contact Details
Mr. Hoang Thanh Son
Title: General Director
Email: sonngocatp@yahoo.com.vn
Phone: +84 903 226 281
Mr. Tran Hoan Sinh
Title: Director
Email: hoansinh@salonzo.com
Phone: +84 914 383 846
Address
Contact Details
21 Ha Huy Tap, Phu My Hung Town, Tan Phong Ward, District 7, HCMC
Tel: (84-8) 5412 1664
Fax: (84-8) 5412 1665
Email: contact@namtranpharma.com
Website: www.namtranpharma.com
Natural JSC
234 Ngo Tat To, Ward 22, Binh Thanh District, HCMC
Tel: (84-8) 3514 2882
Fax: (84-8) 3514 2883
Email: www.spasvietnam.com
Website: www.spasvietnam.com
Mr Le Trong An
Title: Director
Email: an_le@affinage-vietnam.com
Mobile: +84 916 006 006
Mr Pham Tam Hoang
Title: General Director
Address
Contact Details
Ms Huynh Thanh My
Title: Managing Director
Phone: +84 909 193 922
11 Street 55A, Quarter 9, Tan Tao Ward, Binh Tan District, HCMC
Tel: (84-8) 3754 5259
Fax: (84-8) 3754 5258
Email: vinhhanhcoltd@vnn.vn
Mr Tu Thanh Phong
Title: Executive Director
Phone: +84 122 475 2812
240Ter Tran Hung Dao Street, Nguyen Cong Tru Ward, District 1, HCMC
Tel: (84-8) 3838 5017
Fax: (84-8) 3838 5018
Email: ctthuyduong@hcm.vnn.vn
Address
Contact Details
C.T.Group
324 Tran Hung Dao Street, Nguyen Cu Trinh Ward, District 1, HCMC
Tel: (84-8) 3914 0669
Fax: (84-4) 3920 3667
Email: info@lyna.com.vn
Website: www.lyna-azim.com
Floor 8th, VMT Building, Lot A1F, Industrial Zone, Dich Vong, Cau Giay,
Hanoi
Tel: (84-4) 3795 1701
Fax: (84-4) 3795 1703
Email: van.ka@vmt.vn
Website: www.menard-cosmetic.com
3,500
3,000
2,500
2,000
1,500
Import
Domestic Consumption
Domestic Production
1,750
1,500
1,252
1,170
1,000
500
650
710
817 395
956 475
923
810
1,136 600
1,425 715
1,696 931
1,913 919
2,400 1,100
2,600 1,200
2007
2008
2009
2010
2011
2012
0
2005
2006
Source: DAV
Singapore
2,286
Korea
1,616
Malaysia
China
Thailand
346
278
202
Indonesia
95
Vietnam
95
612
Meedipharco-Tenamy
645
Ha Tay Pharma
677
HD Pharma
684
Namha Pharma
739
Imexpharm
Mekophar
Domesco
Cambodia
51
Traphaco
Myanmar
23
USD 0
500
1,000
1,500
2,000
2,500
VND bn 0
818
1,101
1,261
1,401
2,932
2,000
4,000
Source: cafef.vn
66
Section 8
FINANCIAL FEASIBILITY STUDY
2014
2015
2016
2017
2018
25,000
5,000
21,500
20,000
0.10
0.09
25,000
5,000
22,000
20,600
0.10
0.09
25,000
5,000
22,500
21,200
0.10
0.09
25,000
5,000
23,000
21,800
0.10
0.09
25,000
5,000
23,500
22,400
0.10
0.10
365
100
36,500
365
100
36,500
365
100
36,500
365
100
36,500
365
100
36,500
TIRE COST / KM
0.02
0.02
0.02
0.02
0.02
0.05
0.05
0.05
0.05
0.05
0.03
0.03
0.03
0.03
0.03
0.20
0.20
0.20
0.20
0.20
Driver salary
Drivers (Social benefit)
DRIVER COST
UNIT OF WORK / Hour (CC/H)
279
74
353
2.01
287
76
364
2.07
296
79
375
2.13
305
81
386
2.19
314
83
398
2.26
5,000
25,000
20,000
800,000
1,000
1,500
7,500
21
255,000
94,238
8
5,000
20,000
15,000
600,000
800
1,560
7,360
20
264,960
100,077
8
5,000
15,000
10,000
400,000
600
1,560
7,160
20
272,080
105,718
8
5,000
10,000
5,000
200,000
400
1,560
6,960
19
271,440
108,607
8
5,000
5,000
200
1,560
6,760
19
270,400
111,527
8
28
28
27
27
26
Depreciation
Loan (over 5 Y) - calculation base
Residual Value
Residual Loan Value
Finance Cost
Insurance cost
Total VEHICLE COST
TOTAL VEHICLE COST / Day (CV)
Vehicle cost
Structurue cost
HEAD OFFICE COST (CS)
UNIT OF WORK / Daily
1,000,000
67
Assessment Vietnam
2014
2015
2016
2017
2018
0.20
Unit of work
Unit of KM
USD
0.20
0.20
0.20
0.20
Unit of Hour
USD
2.01
2.07
2.13
2.19
2.26
Unit of Day
USD
28.14
27.78
27.24
26.70
26.16
KM
50
50
50
50
50
Truck Capacity
Ton
Average load
Ton
1.00
1.01
1.02
1.03
1.05
Rate of load
Percent
66%
66%
66%
66%
66%
Average speed
KM/H
30
30
30
30
30
Hour
1.33
1.33
1.33
1.33
1.33
Hour
20%
20%
20%
20%
20%
Percent
KM
50
50
50
50
50
Hour
3.00
3.00
3.00
3.00
3.00
day
0.33
0.33
0.33
0.33
0.33
KM term cost
USD
10
10
10
10
10
USD
USD
Total Cost
USD
25
25
25
25
25
Unit cost/ton
USD
25.19
25.01
24.79
24.57
24.37
Margin
USD
6.30
6.25
6.20
6.14
6.09
USD
31.49
31.27
30.99
30.72
30.46
Selling Price
68
2014
2015
2016
2017
2018
1,177,975
1,250,968
1,321,481
1,357,593
1,394,087
37,411
40,007
42,648
44,199
45,773
31.49
31.27
30.99
30.72
Direct Cost / as % of KM
368,967
391,255
413,579
425,041
436,506
224,175
244,483
265,807
280,986
296,836
Insurance Cost
51,000
56,160
59,280
60,840
94,238
100,077
105,718
108,607
111,527
EBIDTA
439,595
458,994
477,096
482,119
486,817
Depreciation
170,000
180,000
190,000
195,000
200,000
34,000
28,800
22,800
15,600
235,595
250,194
264,296
271,519
278,817
Tax (25%)
58,898.77
62,548.42
66,074.05
67,879.63
69,704.37
Net Profit
176,696
187,645
198,222
203,639
209,113
365
365
365
365
365
1,095
1,095
1,095
1,095
1,095
34
36
38
39
40
Net Sales
Ton Transported
Selling Price Per ton
Interest
Gross Profit
30.46
62,400
8,000
Operation Hypothesis
Number of operating day
Nbr of Truck Tour/Year
Truck in service
69
7,050
Handling Revenue
Handling fee / Ton / Day
2014
2015
2016
2017
2018
1,175,332
0.81
5,288
75%
365
1,257,435
0.82
5,429
77%
365
1,343,459
0.84
5,570
79%
365
1,433,528
0.85
5,711
81%
365
1,419,326
0.86
5,640
80%
365
270,316
0.75
284,925
0.75
299,919
0.75
315,297
0.75
307,560
0.75
Cost Assumptions
Cost breakdown/Storage Industries
% Benchmark Europe
% Assumption VN
22%
32%
10%
15%
4%
6%
4%
6%
40%
12%
5%
7%
5%
7%
4%
6%
6%
9%
100%
100%
Rent/Depre
Maintenance
Equipement
Loading charge
Labour cost
Consumable
GA - indirect
Labor head office /head office
Others
Loan
(2 MUSD/ 7 y)
Anuity
Acumulated
Residual
interest
Interest PA
Private & Confidential
Cost
Assumption VN
373,549.60
169,795.27
67,918.11
67,918.11
135,836.22
84,897.64
84,897.64
67,918.11
101,877.16
1,154,607.86
Y1
Y2
Y3
Y4
Y5
Y6
Y7
2,000,000
285,714.29
285,714.29
1,714,285.71
100,000.00
5%
2,000,000
285,714.29
571,428.57
1,428,571.43
85,714.29
2,000,000
285,714.29
857,142.86
1,142,857.14
71,428.57
2,000,000
285,714.29
1,142,857.14
857,142.86
57,142.86
2,000,000
285,714.29
1,428,571.43
571,428.57
42,857.14
2,000,000
285,714.29
1,714,285.71
285,714.29
28,571.43
2,000,000
285,714.29
2,000,000.00
14,285.71
70
2014
2015
2016
2017
2018
1,445,648
1,542,360
1,643,377
1,748,825
1,726,886
1,175,332
1,257,434.88
1,343,458.57
1,433,527.98
1,419,325.98
284,925.36
299,918.90
315,296.89
307,559.84
440,205.10
469,036.43
499,132.18
492,870.56
154,344
155,887
157,446
159,021
947,811
1,018,454
1,092,246
1,074,995
443,675
445,893
448,123
450,364
85,714
71,429
57,143
42,857
418,422
501,132
586,981
581,774
117,158
140,317
164,355
162,897
301,264
360,815
422,626
418,877
27%
30%
34%
34%
270,316
412,603
152,816
880,230
441,468
100,000
338,762
94,853
243,909
23%
71
2014
2015
2016
2017
2018
5%
72,282.4
77,118.0
82,168.9
87,441.2
86,344.3
40%
28,913.0
30,847.2
32,867.5
34,976.5
34,537.7
20%
14,456.5
15,423.6
16,433.8
17,488.2
17,268.9
28,912.96
30,847.20
32,867.55
34,976.50
34,537.72
Tax (28%)
8,095.63
8,637.22
9,202.91
9,793.42
9,670.56
Net Profit
20,817
22,210
23,665
25,183
24,867
40%
40%
40%
40%
40%
Gross Profit
72
2014
2015
2016
2017
2018
Net Sales
2,695,906
2,870,447
3,047,027
3,193,859
3,207,317
Direct cost
1,085,658
1,162,950
1,240,570
1,300,975
1,323,151
261,510
269,845
278,040
283,542
287,817
1,348,738
1,437,652
1,528,417
1,609,341
1,596,350
Depreciation
611,468
623,675
635,893
643,123
650,364
Interest
134,000
114,514
94,229
72,743
50,857
Gross Profit
603,270
699,463
798,295
893,476
895,129
Tax (28%)
161,848
188,344
215,594
242,028
242,272
Net Profit
441,422
511,119
582,702
651,448
652,857
22%
24%
26%
28%
28%
16%
18%
19%
20%
20%
73
12/31/2013
12/31/2014
12/31/2015
12/31/2016
12/31/2017
12/31/2018
3,000,000
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
Depreciation
611,468
623,675
635,893
643,123
650,364
Accumulated Depreciation
611,468
1,235,143
1,871,036
2,514,159
3,164,523
3,388,532
2,764,857
2,128,964
1,485,841
835,477
3,388,532
2,764,857
2,128,964
1,485,841
835,477
449,318
478,408
507,838
532,310
534,553
Inventory
Account Receivable
Cash
1,000,000
1,230,188
1,857,450
2,568,258
3,358,761
4,174,585
Total Assets
4,000,000
5,068,038
5,100,715
5,205,060
5,376,911
5,544,615
Capital
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
441,422
511,119
582,702
651,448
652,857
441,422
952,541
1,535,243
2,186,691
Profit
Retained earnings
Equity
2,000,000
2,441,422
2,952,541
3,535,243
4,186,691
4,839,549
LT loan
3,000,000
2,514,286
2,028,571
1,542,857
1,057,143
571,429
112,329
119,602
126,959
133,077
133,638
Account Payable
Liabilities
3,000,000
2,626,615
2,148,173
1,669,817
1,190,220
705,067
5,000,000
5,068,038
5,100,715
5,205,060
5,376,911
5,544,615
74
2014
2015
2016
2017
2018
1,000,000
1,230,188
1,857,450
2,568,258
3,358,761
Net Profit
441,422
511,119
582,702
651,448
652,857
Depreciation
611,468
623,675
635,893
643,123
650,364
112,329
7,273
7,358
6,118
561
(449,318)
(29,090)
(29,430)
(24,472)
(2,243)
715,902
1,112,976
1,196,522
1,276,217
1,301,539
(485,714)
(485,714)
(485,714)
(485,714)
(485,714)
(485,714)
(485,714)
(485,714)
(485,714)
(485,714)
Investment
Capital increase
1,230,188
1,857,450
2,568,258
3,358,761
4,174,585
75
Financial Data
2014
2015
2016
2017
2018
Net Profit
441,422.45
511,119.01
582,701.62
651,448.09
652,857.49
Depreciation
611,467.71
623,675.05
635,893.42
643,122.89
650,363.51
112,329.42
7,272.53
7,357.53
6,117.97
560.78
(449,317.67)
(29,090.11)
(29,430.12)
(24,471.88)
(2,243.13)
717,915.91
1,114,991.48
1,198,538.45
1,278,234.07
1,303,556.66
(485,714.29)
(485,714.29)
(485,714.29)
(485,714.29)
(485,714.29)
232,201.62
629,277.20
712,824.16
792,519.78
817,842.37
Loan Repayment
Free Cash Flow
Terminal Value
6,815,353.09
FCF
232,201.62
629,277.20
712,824.16
792,519.78
7,633,195.46
1.00
0.87
0.76
0.66
0.57
232,202
547,198
538,997
521,095
4,364,304
6,203,796
IRR
Return desire
Timing ground
Cap rate on term value
IRR
46%
15%
TBA
0
12%
TBA
(2,000,000.00)
232,201.62
629,277.20
712,824.16
792,519.78
7,633,195.46
Private & Confidential
76
DISCLAIMER
Rock River Capital Ltd. has performed certain feasibility review procedure solely to assit the internal decision making process of
Toda Industries, in relation to their contemplated logistics business in Vietnam.
Our work is based on publicly available information and the expected results of the unforeseen future business operation.
Accordingly, we do not express any opinion or assurance on any of the information contained in our report, and there is no any
compensation directly and indirectly relate to the investment decision making based on the content of the report.
Our report is solely for the purpose of assisting Toda Industries for the feasibility analysis of logistics business in Vietnam. In
addition, this report should not be used, circulated, quoted, or otherwise referred to, for any other purposes, nor should it be
made available to any parties without our prior consent in writing.
67