Viet Nam's cold storage segment is growing and is forecast to be worth US$295 million by 2025 with an annual growth rate of 12%. Despite growing demands, APAC cold storage supply is still limit  ed;  in 2019 Viet Nam only had 48 facilities with a capacity of 600,000 shelves.

APAC commodity market growth in 2019  

In 2018, Japan had the highest capacity in the region of 0.315 cubic meters/person, which is still significantly lower than North America or the UK. 

APAC cold storage capacity by country in 2018 

Mr. John Campbell, Manager of Industrial Services, Savills Vietnam said, “Modern commercial retail is a key driver for the industry, as about 80% of demand comes from the food industry. Although the market is currently fragmented, increased demand is likely to lead to consolidation in the refrigerated transport sector with the rise of leading players such as ABA Cooltrans and Tan Bao An.”  

Southern Viet Nam’s cold storage scene is more developed due to higher demands from food, seafood, and retail processing in the region. However, between 2015 and 2018, Northern Viet Nam saw an enormous increase in capacity from 26,750 shelves to 71,750 shelves.

In terms of developers,  domestic companies provide the most supply.  In 2019, 16 Mekong Logistics of Minh Phu – Gemadept, ABA Cooltrans, and Hoang Lai Group were the leading cold storage suppliers, with a capacity of 45,000–50,000 shelves per the warehouse. This being said, foreign companies, such as Emergent Cold, PFS, and LOTTE Logistics, are superior in terms of quality, management, and value-added services. Some of the services include warehouses with more diverse temperature ranges (chilled to frozen) and barcode and inventory management systems and inventory management systems. 

Cold storage developers by shelf in 2019  

Within the cold storage and self-managed facilities are the main components. The seafood processing sector dominates the self-managed market. From 2009 to 2019, the total import value of frozen fish increased from about US$195 million to US$828 million, and that of frozen shrimp and shrimp increased from US$72 million to US$705 million, showing that Viet Nam has the potential to become a regional seafood processing hub. 

Import value of seafood, 2009-2019 

Challenges Facing Cold Storage 

The rise of e-commerce platforms is putting a lot of pressure on cold storage facilities in Viet Nam due to limit  ed supply. Despite the increasing investment and expansion of cold storage facilities by domestic and international developers over the past three years, rents rose from US$52 per tonne in early 2020 to US$87 per tonne in 2021. 

While some large corporations are investing in their storage systems, most small and medium-sized companies still depend on the overcrowded rental market.

Assessing the development potential of the cold storage segment, Mr. Campbell said, “Viet Nam has a fast-growing economy with a population with increasing spending power. This means that people have more money to spend, as well as access to food products that might have previously been out of reach. We also have to consider that the pandemic has altered consumer behavior, with more customers now shopping online. All of these factors mean that demands for cold storage will only increase, meaning there is .great potential for investors to develop this market to cater to upcoming demands.”