Fiingroup’s latest report reveals that the cold chain market in Vietnam has experienced robust growth, resulting in a 25.2 per cent surge in the designed capacity of cold storage facilities as well as the growing fleet size of cold transportation providers during 2020-2022, driven by increasing demand for cold storage facilities and transportation providers.

The market has been fuelled by the demand for seafood export, raw food imports, and domestic distribution, including modern trade retail and food services.

The report highlights that Vietnam's cold chain logistics market is estimated to be worth $203 million in 2022, with 75 commercial cold storage providers with a total designed capacity of over 1.0 million pallets and 31 professionally managed cold truck providers.

The market's dynamic growth has seen both local and foreign investors ardently participating and expanding their presence. By 2026, the total designed capacity of cold storage in Vietnam is predicted to hit over 1.7 million pallets, with 23 projects scheduled to be completed from 2023 to 2026.

Notably, the demand for cold chain logistics in Vietnam is driven by seafood export, raw food import, and domestic distribution, including modern trade retail, food service, and catering. Seafood exports, in particular, achieved a new milestone of $11 billion, registering a staggering 24 per cent growth rate in 2022.

Meanwhile, raw food imports continued their robust growth of 28.3 per cent during the review period. Moreover, the retail market experienced a vibrant development with a compound annual growth rate of 7.8 per cent from 2012 to 2022, with further growth predicted for the future.

The top 10 players in the market accounted for a significant proportion of the market share, with the top 10 cold storage providers and cold transportation providers having 49 per cent and 70 per cent of the market share, respectively. However, cold transportation has also witnessed fierce competition from small-scale providers, including individuals and household businesses owning one to three cold trucks.

Finally, the cold chain logistics sector experienced a dip in profitability from 2020-2021, owing to a surge in administrative expenses, with the sector's average net profit margin dropping from 6.6 per cent to 5.5 per cent. This was due to Covid-19 testing and the “3 on-site” production solution required to comply with the Vietnamese government’s pandemic prevention measures.

However, sector average profitability is expected to improve in 2022, given the increasing demand from robust seafood exports and the ease of pandemic restrictions.