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Maersk opens new facility in Vietnam to handle new sourcing demand

DANISH shipping giant Maersk has opened a new logistics centre in North Vietnam as it looks to capitalise on the dominant 'China plus one' sourcing strategy in South-east Asia

17 December 2019 - 19:00

DANISH shipping giant Maersk has opened a new logistics centre in North Vietnam as it looks to capitalise on the dominant 'China plus one' sourcing strategy in South-east Asia.

The new 11,000 sq metre facility is located at the Vietnam Singapore Industrial Park (VSIP) in Bac Ninh, around 20km from Hanoi, and will provide customers with end-to-end warehousing and distribution solutions.



Approximately 40 per cent of the new warehouse is occupied by Turkish home appliance company Vietbeko, while the remaining capacity is filled by customers from various segments, including automotive and FMCG, Maersk said, according to the UK's The Loadstar.



Marco Civardi, Maersk Vietnam managing director, said the US-China trade tensions were accelerating the 'movement of the pendulum' towards increased sourcing in South-east Asia.



'Thanks to the China plus one diversification strategy that has been in place for some years, Vietnam is getting into a position where investment and manufacturing are becoming much easier to establish.'



Vietnam, he noted, was considered the most liberal country within ASEAN, having signed the highest number of free trade agreements, while it also 'offers stability and a sound legal framework'.



Maersk's new Bac Ninh facility is 120km from Hai Phong port, which has undergone significant development and gained its first direct transpacific service to the US in April, courtesy of THE Alliance.



'We see strong demand growth toward the US market,' said Mr Civardi. 'North Vietnam is continuously attracting FDI as a result of China plus one and the increased sourcing will act as a further constructive push toward improving the competitiveness of the logistics 'hardware'.



Some commentators have pointed to Vietnam's rising labour costs as a potential hurdle as more hi-tech players follow Samsung's lead in setting up production bases. But Mr Civardi said labour cost arbitrage was increasingly less of a critical factor.



However, if Vietnam is to continue its current trade growth trajectory, infrastructure challenges remain.



'Such as a weak rail integration for cargo connecting industrial zones with port ecosystems, as well as a current port system that is based on dated ship sizes, where building longer consecutive berths with modern equipment would be one step to improve throughput per terminal and deliver cost improvements,' said Mr Civardi.



Vietnam's road network is being upgraded quicker in the north than the south, he added, and furthermore, he said, the country's logistics costs as a percentage of GDP is higher than in other countries in Asia, and this should be an 'alarm-bell to ensure improvements occur as fast as possible, so that Vietnam can cope with additional waves of growth in the years to come'.


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