Vietnam Cold Chain Market: What's Driving the Projected 12.02% CAGR by 2029 Amid Investments and Growing Demand? : Makreo Research

According to Makreo Research, the Vietnam Cold Chain Market is a burgeoning yet relatively nascent sector that plays a pivotal role in preserving perishable goods by maintaining low temperatures. Cold storage warehouses, essential components of the cold chain, are designed to maintain optimal conditions to safeguard stored products. As of 2023, Vietnam is home to 101 commercial cold storage providers with a design capacity exceeding 1 million pallets. Despite rapid expansion, the full potential of this industry remains largely untapped, as only about 8.9% of domestic food manufacturers currently utilize cold chain systems.

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► Geographical Distribution of Cold Chain Facilities in Vietnam: Regional Trends and Developments
There are notable regional disparities in Vietnam's Cold Chain Market, with the southern region leading in terms of the number and scale of cold storage providers. The southern region, home to major fisheries and agriculture sectors, accounts for approximately 87% of the country's cold storage capacity. Long Province, located near Ho Chi Minh City and the Mekong Delta's agricultural heartland, plays a key role in this sector's development. However, recent years have witnessed a shift of both domestic and international cold storage providers towards the northern region, which is more driven by government-led initiatives, in contrast to the southern region's private-sector focus.

► Types of Cold Storage Facilities in Vietnam: From Cryogenic to Cooling Storage
In the Vietnam Cold Chain Industry, cold storage operations are divided into two primary categories: commercial and self-operated cold storage. Commercial cold storage serves multiple clients, providing storage space to businesses across various sectors, while self-operated cold storage is primarily used by large corporations for internal storage needs. These cold storage facilities cater to various temperature requirements, ranging from cryogenic storage (-40°C to -10°C) for deep freezing, refrigerated storage (-5°C to +10°C) for standard temperature needs, and cooling storage (+3°C to +15°C) for milder temperature requirements.

► Challenges in the Vietnam Cold Chain Market: Investment, Infrastructure, and Demand Fluctuations
The Cold Chain Market in Vietnam faces several challenges that hinder its growth. Establishing cold storage warehouses requires a significant upfront investment-often two to three times that of conventional warehouses-due to specialized equipment and high energy consumption. This financial burden discourages smaller businesses from entering the sector. The construction of cold storage facilities is also a lengthy process, often taking six months to a year, with long-term lease terms of 15 to 20 years, contributing to a scarcity of available supply. Additionally, small and medium-sized enterprises (SMEs) face financial constraints, limiting their competitiveness in a crowded rental market. Seasonal demand fluctuations, particularly in agriculture, also present challenges in ensuring consistent demand for cold storage.

► Cold-Chain Logistics: A Vital Solution for Reducing Food Loss in Vietnam
Vietnam faces a significant post-harvest food spoilage rate of 25.4%. More than 90% of agricultural products transported to wholesale markets lack proper refrigeration or cold storage. The absence of an efficient cold-chain logistics system contributes to high food loss in the supply chain. By implementing a robust cold-chain system, the country could reduce food waste to as low as 2%, greatly extending the shelf life of perishable goods. However, many shippers still view cold-chain logistics as an unnecessary cost, rather than a service that enhances product value, leading to transportation and storage of agricultural products at room temperature, which worsens spoilage.

► Vietnam Cold Chain Market Growth Trends: Robust Expansion and Future Prospects
The Vietnam Cold Chain Market experienced substantial growth in 2023, with an 11.83% year-on-year increase. The sector achieved a compound annual growth rate (CAGR) of 8.78% during the 2019-2023 period. Vietnam's cold storage real estate market grew by around 30% from 2017 to 2022, outpacing other real estate sectors. Despite facing challenges such as intensified competition and a slight decline in profitability, the market remains on a strong growth trajectory. Looking ahead, the Cold Chain Market in Vietnam is projected to grow at a CAGR of 12.02% from 2024 to 2029, signaling significant expansion opportunities.

► Key Investments Shaping Vietnam's Cold Chain Industry
Several major investments are driving the growth of the Vietnam Cold Chain Industry, including those by large companies and international financial institutions. Notable investments include Hung Vuong Joint Stock Company's VND 1.3 trillion investment in a large-scale cold storage facility in Ho Chi Minh City, capable of storing 60,000 to 70,000 tons of goods. Other significant investments include Sao Ta and Khang An Food Joint Stock Company's 9,000-ton cold storage system in Soc Trang province and the International Finance Corporation's (IFC) USD 70 million loan to ITL Corp for a cold storage facility in Ho Chi Minh City. These investments are transforming the cold storage landscape and enhancing the market's capabilities.

► The Growing Need for Temperature-Controlled Transportation in Vietnam
As Vietnam continues to increase the production and export of perishable goods, including seafood and vegetables, the demand for reliable temperature-controlled transportation is surging. Refrigerated trucks and reefer containers equipped with advanced cooling systems are essential to maintain product freshness during transit. This demand for refrigerated transport is expected to rise, creating opportunities for growth within the Cold Chain Market in Vietnam.

► Comprehensive Analysis of the Vietnam Cold Chain Market
Makreo Research's in-depth report on the Vietnam Cold Chain Market provides a comprehensive analysis of the industry's historical performance and current status. The report examines Vietnam's economic, political, technological, and demographic factors and their impact on the cold chain sector. It explores the prevalence of cold storage facilities, rental rates, pallet capacity, and market segments. Furthermore, it highlights the challenges, opportunities, and growth drivers that will shape the future of the Cold Chain Market in Vietnam. The report also profiles major companies, detailing their mergers, acquisitions, and investment activities, while offering valuable insights into the competitive landscape.

► Competitive Landscape: Key Players in the Vietnam Cold Chain Market
The competitive landscape of the Vietnam Cold Chain Market is marked by intense competition among key players. The market is shaped by various factors, including pallet capacity, temperature ranges, refrigerated and frozen vehicle ownership, and certifications. The report compares major companies in the market, shedding light on their recent investments, mergers and acquisitions (M&A), and funding activities. This section offers detailed profiles of leading companies, covering their financials, services offered, and recent business developments.

► Period of Study -
2019 - 2023: Past and Present Scenario
2023: Base year of study
2024 - 2029: Future Prospects

► Companies Covered
• AJ Total Vietnam Company Limited
• Hung Vuong Corporation (Hung Vuong Limited Company)
• ABA Cooltrans
• CLK Cold Storage Company Limited
• Lineage Logistics
• SK Logistics
• Kuehne+Nagel Vietnam Company Ltd
• Vinafco Joint Stock Corporation
• Lotte Logistics Vietnam Company Ltd.
• Transimex Corporation (Công Ty Cổ Phần Transimex)
• Hoang Lai Group
• Meekong Logistics (Mekong International Transport Co., Ltd)
• Preferred Freezer Services, LLC
• ALS Aviation Logistics (Aviation Logistics Corporation (ALS)

Market Segmentation Covered
• Segmentation: by Type
• Segmentation: by Ownership
• Segmentation: by Type of Temperature Zone
• Segmentation: by Geography
• Segmentation: by Application

Key Questions Answered
• What is the current state of Vietnam's economy and political landscape, along with its technological and demographic factors, and how do these elements influence the cold chain market in Vietnam?
• How does Vietnam's trade performance appear?
• What has been the performance of the Vietnamese cold chain market, both historically and currently?

For more information:
Vietnam Cold Chain Market Size and Forecast (2019-2029)
https://www.makreo.com/report/vietnam-cold-chain-market-size-and-forecast-2019-2029

Vietnam Cold Chain Market Competitive Landscape - Edition 2024
https://www.makreo.com/report-store.php

UAE Cold Chain Market Size and Forecast (2019-2029)
https://www.makreo.com/report/uae-cold-chain-market-size-and-forecast-2019-2029

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