The chilly storage trade might quickly outgrow its area of interest market standing and turn out to be a key industrial area inside just a few years.
Vietnam’s chilly storage market is about to hit the US$295-million mark by 2025, due to booming demand for distribution of vaccines and excessive development within the seafood trade, in response to actual property consulting agency Cushman & Wakefield (C&W) Vietnam.
A chilly storage facility of Tan Lengthy Mechanic Electrical Refrigeration Firm. Supply: Tan Lengthy Firm
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For the previous two years, the chilly storage market in Vietnam has recorded robust development consistent with the rise of the meals supply sector and e-commerce actions, estimated to achieve $15 billion by 2025.
In the meantime, native shoppers are beginning to flip to natural and high quality merchandise, which prompted excessive demand for chilly storage and additional investments within the chilly storage provide chains.
The C&W Vietnam’s report additionally talked about a big influx of funding capital from rising economies in Asia which are on the lookout for enterprise alternatives on this area of interest market by way of new tasks or M&A actions.
Common Director of C&W Vietnam Trang Bui stated the native chilly storage market stays within the early growth stage, estimated at round $169 million in 2019.
So a market dimension of $295 million by 2025 would imply an annual development fee of 12%, which stays possible resulting from excessive demand for vaccine distribution and shopper consumption, Trang stated.
The report recognized the southern area as a possible hub for the chilly storage market, with the excessive focus of agricultural and aquaculture manufacturing, particularly in Lengthy An Province with shut proximity to Ho Chi Minh Metropolis.
Chilly storage is often dearer in comparison with conventional storage by 50-100%. The leasing costs for chilly storage of frozen merchandise are estimated at round $45-09 per sq. meter and $45-160 for medical merchandise.
Regardless of the large potential, specialists at C&W Vietnam identified the shortage of sufficient logistics infrastructure, particularly distribution hubs and multimodal transportation choices, might hinder the event of the sector.
Even after the pandemic, the report anticipated the sector to proceed rising, due to excessive shopper demand for recent merchandise and the emergence of superior medical therapies.
“There may very well be a change for the chilly storage trade from a distinct segment market to a key one in only a few years,” it stated.
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