Demand for cold storage is increasing sharply as consumers in Vietnam turn to online shopping. (Photo: Baodautu.vn) Nguyen Quoc Trinh, chairman of the Long An Dragon Fruit Association, said Juneis the peak harvest season for many agricultural products in Long An, butexports remain difficult and local consumers have tended to switch online dueto the COVID-19 epidemic, causing severe congestion and overload at coldstorages.
Seafood is the other product that requires the largest cold storage capacity.
Trang Bui, senior director of markets, JLL Vietnam, said in fact seafoodexports top the list.
During the peak COVID period, 30 - 50 percent of seafood export orders werecancelled, leading to an increase in inventories, forcing cold storages to workat maximum capacity.
Supply is constrained in part because cold storages take more time to buildthan other types of logistics facilities and more expensive than standardwarehouses, she said.
They cost two to three times more, and the lease term is usually only 15-20years, making the already scarce supply even scarcer, she said.
Besides, the industry requires expertise in temperature maintenance since eachfruit, vegetable, meat, and fish has its own temperature requirements, and thisexplains why of the thousands of companies in the logistics sector only a fewset up cold chains, she said.
JLL Vietnam said cold storage demand would continue to grow strongly for atleast the next half decade as global consumers change their shopping behaviourdue to the pandemic.
With its huge potential real estate for cold storage is now attracting theattention of investors, venture capital funds and lenders.
They are also considering it an alternative to traditional industrial realestate, while logistics companies looking to expand into new markets.
The Louis Holdings Group has invested 250 billion VND (10.7 million USD) invegetable processing and cold storage facilities in Long An province.
Huynh Quang Vinh, general director of the Louis Holdings Group, said the plantwould focus on exports of the main agricultural products of Long An provinceand surrounding areas such as jackfruit, dragon fruit, pineapple, and mango.
With a capacity of four tonnes per hour, it is expected that the plant willsupply 15,000-20,000 tonnes of agricultural products to the global food supplychain.
Ken Research, a global publisher of market intelligence, said that in 2016-21the Vietnam cold chain industry grew at a compound annual growth rate of 10.4 percent.
It expects the market to be worth 1.8 billion USD this year./.
VNA
