Feasibility Study

FEASIBILITY STUDY OF
LOGISTICS BUSINESS IN
VIETNAM
5th March 2013
CONTENTS
Section 1
Legal Aspects of Logistics in Vietnam
Slide 1-19
Section 2
Macroeconomics of Vietnam
Slide 20
Section 3
Overview of Vietnam Logistics Industry
Slide 21-24
Section 4
Vietnam Transportation Sector
Slide 25-32
Section 5
Transportation by Truck
Slide 33-38
Section 6
Vietnam Warehousing & Distribution Sector
Slide 39-46
Section 7
Target & Potential Customers
Slide 47-66
Section 8
Financial Feasibility Study
Slide 67-76
Private & Confidential
Section 1
LEGAL ASPECTS OF LOGISTICS IN VIETNAM
GENERAL CONDITIONS FOR ENGAGING IN LOGISTIC SERVICE BUSINESS

GENERAL CONDITIONS FOR ENGAGING IN
MAJOR LOGISTICS SERVICES
a)
a)
Having lawful business registration or investment certificate under laws of Vietnam;
b)
The Company must satisfy the specific conditions for different transport business (See the following
details).
c)
For maritime transport services:
With respect to the Company in management and operation of a vessels fleet: (i) the required capital
Having lawful business registration or investment

certificate under Vietnam Law;
b)
GENERAL CONDITIONS FOR ENGAGING IN LOGISTIC SERVICES RELATING TO TRANSPORT
Having sufficient facilities, equipment and tools

meeting technical and safety standards and qualified
personnel (For example: facilities, equipment and
tools can be forklifts, chains, conveyors, labeling tools,
packing machines, encoding machine and especially
contribution percentage of the Company with foreign capital is under or equal to 49% of the charter
capital; and (ii) the Company with foreign capital shall only permitted to establish as from 01 January
qualified staff).
c)
2009;
For services of loading and unloading of goods, the

required foreign capital contribution percentage of the
Company is under or equal to 50% of the charter
contribution percentage of the Company with foreign capital is under or equal to 51% of the charter
capital. These restrictions will terminate in year 2012.
capital.
d)
For goods warehousing and storage services, the

required foreign capital contribution percentage of the
d)
For Internal waterways transport services, the required foreign capital contribution percentage of the
Company is under or equal to 49% of the charter capital.
e)
For air transport services, conditions shall be applied in accordance with the Vietnam Civil Aviation Law.
f)
For railway transport services, the required foreign capital contribution percentage of the Company is
Company is under or equal to 51% of the charter

capital; this restriction shall terminated in year 2014.
e)
For transport agency services, the required foreign

capital contribution percentage of the foreign
under or equal to 49% of the charter capital;
investors is under or equal to 51% of the charter

capital. This restriction shall terminate in year 2014.
f)
With respect to the Company in supplying international sea transportation services: the required capital
g)
For other subsidiary services, the required foreign
For road transport services, the required foregin capital contribution percentage of the Company is
under or equal to 49% of the charter capital; this restriction shall be 51% as from year 2010;
capital contribution percentage of the Company is

under or equal to 49% of the charter capital; this
restriction shall be 51% as from year 2010 and shall
terminate in year 2014.
h)
For pipeline transport services, the Company shall not be permitted to provide pipeline transport
services, except where an international treaty of which Vietnam is a member contains some other
provision.
SPECIFIC CONDITIONS FOR ENGAGING IN TRANSPORT BUSINESS

SPECIFIC CONDITIONS FOR ENGAGING IN ROAD TRANSPORT BUSINESS
According to the Article 11 of the Decree 91, the Company must fully meet the following conditions:
a) To register for road transport according to law of Vietnam;
b) To ensure the quantity, quality and life of means of transport suitable to types of business:
Having a business plan ensuring the time for performance of itineraries, the time for maintenance and repair to maintain the technical conditions of vehicles;
Having an adequate number of means of transport under the Companys ownership or lawful rights to use vehicles on financial lease of financial leasing organizations or
hired vehicles of organizations or individuals with the property leasing function under law. The quantity of means must meet the business plan; and the means of transport
remain in the prescribed lifetime; and they must go through technical safety and environmental protection inspection under regulations.
c) Means of transport must have itinerary supervision devices;
d) Drivers and attendants: drivers and attendants must possess written labor contracts signed with the Company; drivers must not be persons being in the period of professional
practice ban under law; taxi drivers, bus drivers and attendants must be trained and instructed in transport and traffic safety under regulations of the Ministry of Transport.
e) Persons directly administering transport activities of the Company (who hold any of the following posts: director, deputy director, manager or deputy manager, head of
transport administration section) must fully satisfy the following conditions:
Possessing the professional qualifications of intermediate level in transport or a collegial or university degree in other disciplines;
Having participated in transport management at other road transport enterprises for 3 (three) years or more;
Having adequate necessary time with proof for direct administration of transport activities.
f) Car parks or garage:
The Company shall arrange adequate areas for car parking in accordance with its respective business plans;
Units car parking areas may belong to the Companys ownership or be rented under contracts;
Car parking places must meet the requirements on traffic order and safety, fire and explosion prevention and fighting and on environmental sanitation.

SPECIFIC CONDITIONS FOR ENGAGING IN ROAD TRANSPORT BUSINESS (cont.)
According to the Article 47,48,49 of Circular 14, the Company uses the transport vehicles bearing name, telephone number, weights and permitted tonnage
on the outer sides of their cabin doors. Taxi trucks must have freight rates posted up on both sides of their bodies. Before putting the vehicles into use for
cargo transport, the Company shall send written notices to the local Transport Department in which they are headquartered or base their branches. During
transport on road, in addition to the transport contract or bill of lading and vehicle paper as prescribed, the driver shall carry along an ex-warehousing bill for
each trip (applicable only to case of ex-warehousing a cargo) issued by the transport hirer or the cargo owner suitable to the category of the transported
cargo.
When transporting the dangerous goods provided under the Appendix 1 of Decree 104/2009/ND-CP, the Company has to obey the provisions strictly on
packing, labeling, coloring and marking, labor safety and training, specialized facilities and obtain the transport license for dangerous goods from one or more
of the following Ministries such as Police, Health, Science and Technology, Agriculture and Rural Development, Natural Resources and Environment.

SPECIFIC CONDITIONS FOR ENGAGING IN OTHER DIFFERENT TRANSPORT BUSINESSES
a) Sea transport business:
Regarding the Decree No. 115, the Company must satisfy:
Conditions for providing shipping agency business services: The Company providing shipping agency business must establish an enterprise in accordance with law of Vietnam,
and in the case of an enterprise with foreign owned capital the ratio of capital contribution of the foreign parties must not exceed forty- nine (49) percent of the charter capital of
the enterprise.
Conditions for providing towage assistance business in Vietnamese seaports: The Company providing towage assistance business in Vietnamese seaports must establish an
enterprise in accordance with law of Vietnam, and in the case of an enterprise with foreign owned capital the ratio of capital contribution of the foreign parties must not exceed
forty-nine (49) per cent of the charter capital of the enterprise which must have a towing vessel registered to fly the Vietnamese flag.
Conditions for providing other sea shipment services: The provision of other sea shipment services by the Company shall be implemented in accordance with Vietnam's WTO
undertakings and international treaties of which Vietnam is a member.
b) Inland waterway transport

According to the Article 10 of Decree No.21, the Company must satisfy the following conditions:
Having registered for inland waterway transport business;
Vessels to be used in transport business fully meet the conditions for operation as prescribed in the Law on Inland Waterway Navigation;
Crewmembers and vessel operators must have professional diplomas or certificates compatible with their titles and be in the prescribed age group.

SPECIFIC CONDITIONS FOR ENGAGING IN OTHER DIFFERENT TRANSPORT BUSINESSES (cont.)
c) Air transport business:
Pursuant to the Article 5 and Article 11 of the Decree 30 and the Article 110 of the Vietnam Civil Aviation Law, the Company conducting air transport business must satisfy the following
conditions:
Having a business registration certificate showing that the major business line is air carriage; Having an organizational apparatus, employees who have appropriate permits and
Certificates and is capable of operating aircraft and dealing in air carriage;
Head office and principal place of the Company must be in Vietnam;
Having a plan on assurance of the availability of aircraft for operation; Having a business plan and a strategy on development of air carriage products in accordance with market demands
and complies with Vietnams aviation sector development plan and orientation;
Foreign capital must be less than and equal 30% of the required legal capital;
General director, legal representative of the Company must be a Vietnamese citizen. A number of foreigners account for not more than one third of the total number of members of its
executive apparatus.
Beside the above-mentioned conditions, the Company providing air transport services must meet the following minimum capital conditions of 100 billion dong.
d) Railway transport business:

According to the Article 12 of Decree No.109 detailing and guiding the implementation of a number of articles of Railway Law, the Company operating railway transport must satisfy the
following required conditions:
Having business registration compatible with railway transport field ; Having equipment and material foundation suitable to railway transport field; Having the valid certificate of quality,
technical safety and environment protection registry;
Signing contracts for provision of railway communication and transport operation services with railway communication and transport operation organization;
Persons assigned with the prime responsibility for technical management of transport operation must have a university degree and at least three (3) years' experience in railway transport
operation. Personnel directly involved in train operation must satisfy all the conditions prescribed in Article 46 of the Railway Law and must firmly grasp the railway process and
regulations.
For passenger transport and dangerous cargo transport by railways, the Company must have insurance contracts;
For urban railway transport business, the Company must also have plans on organization of train operation, ensuring safe, regular and punctual train operation according to the
announced train operation time tables.

SPECIFIC CONDITIONS FOR ENGAGING IN OTHER DIFFERENT TRANSPORT BUSINESSES (cont.)
e) Custom agent:
Conditions: Pursuant to the Article 2 of Decree No.14, the Company with a function of customs agent must meet fully the conditions:
Having a business registration or investment certificate under law.
Conducting the business line of forwarding imports and exports or providing the service of hired customs declaration indicated in its business registration certificate.
Having at least one (1) customs agent.
Having its computers connected to customs offices for carrying our e-customs procedures at Customs Departments of provinces or cities (below referred to as provincial-level
Customs Departments), which have applied e-customs procedures.
E-customs declaration: There have been a lot of changes in custom procedures with electronic-customs, one-stop customs, and tax claims The Decision No.87 on electronic
customs to be in effect on January 1st, 2013 will surely make great changes this year. With the target of having 100% of businesses doing export procedures with electronic
customs in 2013, the task is carrying out in the rest of 13 provincial customs agencies (in 2012, 21/34 provincial customs agencies have electronic customs). In 2013, the
Government should put more emphasis on reformations of administrative procedures related to manufacturing businesses (tax and customs procedures, paying tax through
bank systems, automating file-considering processes) and should give more trade incentives (reducing production coast, supporting packages). These things will help
businesses overcome obstacles, creating more employments. Vietnams Logistics Performance Index (LPI) has been low for weakness in clearance procedures and administrative
procedures on services, and business. With above changes, there will be a raise in Vietnam LPI in the year to come.
LAW ON MULTIMODAL TRANSPORT

CONDITIONS FOR INTERNATIONAL & DOMESTIC MULTIMODAL TRANSPORT
a) Conditions for international multimodal transport:
According to the Article 5 of the Decree No.87, the Company with foreign capital in Vietnam may conduct international multimodal transport business only when satisfying all
the following conditions:
Possessing an investment certificate, which covers the international multimodal transport business line;
Maintaining minimum assets equivalent to SDR 80.000 or providing an equivalent guarantee;
Having professional liability insurance for multimodal transport or providing an equivalent guarantee;
Possessing a license for international multimodal transport business.
b) Conditions for the domestic multimodal transport business:

According to the Article 9 of the Decree No.87, the Company with foreign capital in Vietnam may conduct domestic multimodal transport business only when satisfying all the
following conditions:
Having a business registration certificate that covers the multimodal transport business line;
Having a contract on professional liability insurance for multimodal transport;
Complying with business conditions provided for by law for each mode of transport.
RIGHTS & OBLIGATIONS OF THE COMPANY PROVIDING LOGISTIC SERVICES

Rights and obligations of the Company providing logistic services is one of the basic content of the laws on logistics services. Rights and obligations are scattered across the general
provisions and the specific provisions of Vietnam law system relating to logistic services. As stipulated in the Article 235 of the Commercial Law 2005, the involved parties have the
right to discuss with each other on the rights and obligations. It is meant that the laws always prefer the agreement of the involved parties for the subject to the forefront. In cases
where the involved parties cannot reach agreement, their rights and obligations are stipulated in the Article 235. Specifically:
a) To enjoy service charges and other reasonable expenses: service charges are agreed by the involved parties in the contract. The remuneration may be determined by the
absolute amount or as a percentage of value of goods. The remuneration is agreed by the involved parties and depends on the content, the level of complexity of the delivery of
goods to customers who do consignment goods to service providers. In addition to remuneration, the Company may require customers to pay the reasonable expenses related
to the implementation of the service if this is agreed upon in the contract.
b) Besides the right, the Company providing logistics service has the obligation to perform the works as agreed upon with the customers. This is considered the most fundamental
obligations of the Company to ensure the interests of customers. The works can be done as agreed upon in the contract of logistics service. In principle, the Company providing
logistics service obeys strictly the instructions of the customers. However, to ensure the customers benefits by the clause 1b,1c of the Article 235 of the Commercial Law 2005
provides: "In the course of the contract, if there is good reason for the benefit of customers, the Company providing logistics services can be done other than the customer's
instructions, but must inform the customers; When a case can not lead to the implementation of part or all of the customer's instructions, the Company must immediately
notify the customer to ask for advice.
c) The Company providing logistics services also have a duty to perform work for customers in a reasonable time when the parties have agreed. As for logistics services related to
transport, the Company is obliged to comply with the specific provisions of law and transport practices.
LIABILITY OF THE LOGISTICS COMPANY

LIABILITY LIMITS
The Article 238 of the Commercial Law 2005 specified Unless otherwise agreed, the full liability of the company providing logistic services shall not exceed the limits of liability for
the full loss of the goods. Under this provision, the limits of liability of damages the Company in providing logistic services is an exception to the remedy of damages in commercial
activity in general as defined in the Article 302 of Commercial Law 2005 The value of damages covers the value of the material and direct loss suffered by the aggrieved party due to
the breach of the breaching party and the direct profits which the aggrieved party would have earned if such breach had not been committed. Moreover, general principle of
liability for damages set forth in the Civil Code 2005, the breaching party causes how much damage they are responsible for such damage. In particularly for logistic services, the
company is entitled to limits of liability that shall not exceed the limits of liability for loss of goods. However, not all cases the Company is entitled to limit this liability. In the case of
"if customers having relevant rights and interests prove a loss, damage or delayed delivery of goods by the Company deliberately act or not to act," the Company providing logistic
services will not be entitled to limit liability damages.
According to the item 1, Article 8 of Decree No. 140, liability limits of the Company providing transport-related logistics services comply with relevant legal provisions on liability
limits in the transport field. It means that Where the company uses to ship cargo, the liability limits are specific provisions of the Maritime Code, the Decree 115 or in case they use
car to transport cargo, the liability limits are referable to the Road Traffic Law, Law on Road Transport.. In case, liability limits of the Company providing logistics services other
than those prescribed above (in the item 1, Article 8 of Decree No.140) shall be agreed upon by involved parties. In case, no agreement has been reached between involved parties,
the liability limits are implemented under: (i) If the customer has no advance notice of the cargo value, the maximum liability limit is VND 500 million for each claim for
compensation; and (ii) If the customer has an advance notice of the cargo value and that value was certified by the Company providing logistics services, the liability limit is the whole
value of the cargo.

LIABILITY LIMITS (cont.)
According to the Article 24 of the Decree 87, in the case, the Company acting as multimodal transport, the liability limits of the Company are stipulated as follows: (i) The Company
shall in no event be or become liable for any loss of or damage to the goods in an amount exceeding the equivalent of SDR 666.67 per package or unit or SDR 2 per kilogram of gross
weight of the goods lost or damaged, whichever is higher, unless the nature and value of the goods have been declared by the consignor before the goods have been taken in charge
by the Company and inserted in the multimodal transport document; (ii) In case in a container, pallet or similar article of transport is loaded with more than one package or unit, the
packages or other shipping units enumerated in the multimodal transport document as packed in such article of transport shall be deemed packages or shipping units. In other cases,
such container, pallet or article of transport or packaging shall be considered the package or unit; (iii) If a multimodal transport contract does not include carriage by sea or inland
waterways, the liability of the Company shall be limited to an amount not exceeding SDR 8.33 per kilogram of gross weight of the goods lost or damaged; (iv) When the loss of or
damage to the goods occurred during one particular stage of the multimodal transport, in respect of which an applicable treaty or national law would have provided another limit of
liability if a separate contract had been made for that particular stage of transport, then the limit of the Company's liability for such loss or damage shall be determined by reference
to such treaty or national law; (v) If the Company is liable in respect of loss following delay in delivery or consequential loss or damage other than loss of or damage to the goods,
his/her liability shall be limited to an amount not exceeding the equivalent of the freight under the multimodal transport contract; (vi) The aggregate liability of the Company shall
not exceed the limits of liability for total loss of the goods; and (vii) The Company is not entitled to the benefit of limitation of liability if it is proved by the person with related
interests that the loss, damage or delay in delivery resulted from a personal actor omission of the Company done with the intent to cause such loss, damage or delay or recklessly
and with knowledge that such loss, damage or delay would probably result.
10

LIABILITY EXEMPTION
The Company providing logistic services is exempt from liability in the following cases: (i) breach of contract is not their fault, and (ii) cases of force majeure (natural disasters,
sabotage, strikes, or due to changes in laws and policies beyond the control of the company.
According to the Article 22 of the Decree 87, in the case, the Company acting as the multimodal transport operator, the Company is not liable for loss, damage or delay in delivery
with respect to goods carried if he/she proves that the event which caused such loss, damage or delay occurred during that carriage is one or more of the following circumstances:
a) Force majeure;
b) Act or neglect of the consignor, the consignee or his/her representative or agent;
c) Insufficient or defective packaging, marking, or numbering of the goods;
d) Handling, loading, unloading, stowage of the goods effected by the consignor, the or his/ her representative or agent;
e) Inherent or latent defect in the goods;
f) Strike or lockouts or stoppage or restraint of labor, whether partial or general;
g) With respect to the goods carried by sea or inland waterways, when such loss, damage or delay during such carriage has been caused by: (i) Act, neglect or default of the master,
mariner, pilot or the servant of the carrier in navigation or in the management of ship; and (ii) Fire unless caused by the actual fault or connivance of the carrier.
In case loss or damage has resulted from un-seaworthiness of the ship, the Company is not liable for such loss or damage if he/she can prove that due diligence has been exercised to
make the ship seaworthy at the commencement of the voyage
11
FORMATION OF THE COMPANY

a) Forms of investment:
Pursuant to the Articles 21 of Investment Law 2005, foreign investors shall carry out the following main forms of investment by establishing shareholding company with 100%
foreign owned capital or making a Joint Venture with local investors. Moreover, foreign investors can buy shares, contribute capital; make investment in the merger or
acquisition of local logistic enterprises; buy shares or contributed capital for participation in management of investment; and invest in business development and make
investment in the form of BCC,BOT,BTO or BT contracts.
b) Forms of the Company:
Based on the Enterprise Law 2005, the Company can be established as a limited liability company, or shareholding company and the profits and risks of the Company are
distributed among the parties in proportion to their charter capital contributions.
In a limited liability company, investors (members) are only liable for debts of the Company to the extent of the capital contribution they have poured into the company. There
is usually no minimum capital requirement for foreign investors that intend to establish the Company in Vietnam, although authorities will expect the investor to commit a
reasonable amount of charter capital according to the scale and business scope of the project. The Company can consist of a single member or multiple members, but the total
number of members cannot exceed 50 . The Company cannot issue shares.
Investors (shareholders) can refer to establish a shareholding Company if they want to issue securities and bonds, then plan to go public in the future. The charter capital is
composed of shares belonging to founding shareholders in proportion to the capital they have subscribed. There is no minimum requirement for the charter capital of the
foreign investors. The established joint stock Company is required to have at least three shareholders. There is no limitation on the maximum number of shareholders.
12

RIGHTS & OBLIGATIONS OF THE COMPANY
a) Rights:
According to the Articles 13 to 18 of Investment Law 2005, the Company had the following its rights:
Right to autonomy in investment and business in term of domains and forms of investment, modes of capital mobilization, geographical areas, investment scale, investment
partners and operation durations of projects; register business in one or several branches or trades; set up enterprises under the provisions of law; and make their own
decisions on registered investment and business activities. Possessing an investment certificate, which covers the international multimodal transport business line;
Right to access and use investment resources such as assistance funds, capital sources, land and natural resources; hire or purchase equipment and machinery at home or
overseas for execution of investment projects; hire domestic, foreign labors, specialists for performance of managerial job.
Right to import (equipment, machinery, supplies, raw materials and goods for investment activities) and export products; advertise and market products or services directly sign
advertising contracts with organizations entitled to conduct advertising activities; undertake processing or reprocessing of products; and order processing or re-processing at
home or abroad;
Right to buy foreign currencies at credit institutions licensed to deal in foreign currencies in order to satisfy their current transactions, capital transactions and other transactions
in accordance with the provisions of foreign exchange management law; Right to assign or adjust investment capital or projects; Right to carry out mortgage of land use rights
and assets attached to l and with licensed credit organizations to borrow capital for execution of projects.
a) Obligations:
According to the Articles 20 of Investment Law 2005, the Company had the following its obligations :
To comply with the provisions of law on investment procedures; to carry out investment activities strictly according to contents of investment registration and their
investment certificates; and to be responsible for the accuracy and truthfulness of contents of registration, dossiers of investment projects and legality of documents of
certification.
To fulfill financial obligations and the provisions of law on accountancy, audit and statistics.; To perform other obligations in accordance with the provisions of law; To perform
obligations provided by insurance and labor laws; to respect the honor, dignity and ensure the legitimate interests of laborers.
To respect and create favorable conditions for laborers to establish and participate in political or socio- political organizations.
13

BUSINESS ACTIVITIES
Based on Decision No.10 and Decision No.337, the Company with foreign capital will be able to choose and apply some or all business activities below:
Business activity
Description
Code
Freight rail transport
Urban, rural & inter-province transport
4912
Freight transport by road
Transport by truck, container truck, specialized vehicles
4933
Transport via pipeline
Transport of water, gas, liquid, petrol
4940
Sea & coastal freight water transport
Fixed schedule or non-fixed schedule transport
5012
Inland freight water transport
Transport via waterways, river, canal, lake
5022
Air transport
Ordinary or non-ordinary transport
5120
Warehousing & storage
Storage of goods in silos, tanks, warehouse, cold storage, including bonded warehouse
5210
Cargo handling
Loading/unloading activities
5224
Sorting or organizing activities relating to rail, road, sea or air; freight-forwarding; collection and
Other transport support activities
distribution of shipping documents, B/L; customs agent, sea/air cargo agent, brokerage for
5229
vessel and aircraft leasing; packing, unloading, sampling and weighing.
14
THE NEW LABOR CODE ON THE COMPANY

THE NEW LABOR CODE ON THE COMPANY
The new Labor Code, which will take effect on May 1, 2013, will replace the current Labor Code of 1994, Labor Code 2002, and Labor Code 2006 with the stated aim of improving the
labor market and industrial relations in Vietnam. The new legislation introduces significant new developments relating to labor contracts, work hours, labor outsourcing, internal
labor rules, and foreign employees; each of will be discussed separately below.
Increasing the minimum salary level during probation from 70% to 85% of full salary;
Adding an extra day to the Lunar New Year holiday, bringing the total number of public holidays in Vietnam (during which employees are entitled to fully paid leave) to ten ;
Increasing maternity leave from four months to six months ;
Labor contracts must be signed between the Company and the employee before the employment begins.
Prohibiting the Company from keeping employees original identification cards and qualifications. Moreover, the Company may not require an employee to pay cash or provide
any assets to guarantee performance under the labor contract.
Working hours can be determined on a daily or weekly basis; if on a weekly basis, the normal working hours may not exceed 10 hours in one day and may not exceed 48 hours in
one week. With respect to overtime, employees are not allowed to work more than 50% of the official working hours in a day (in cases where weekly working hours are applied,
the total time of normal work and overtime work may not exceed 12 hours in one day), 30 hours in a month, or 200 hours in a year.
Introducing an entirely new section on labor outsourcing. This is good news for foreign-invested companies in the manufacturing and construction sectors, given that such
work often requires seasonal workers and/or limited-time workers during certain periods.
The new Labor Code reduces the maximum term of a work permit for foreign employees from three years to two years. As before, the domestic company is only permitted to
recruit foreign employees for jobs as managers, executives, experts, and technicians, provided that Vietnamese employees are not able to satisfy the production and business
requirements. However, now the Company may only recruit foreign citizens to work in Vietnam upon explaining their needs to employ the foreign workers and receiving prior
approval in writing from the competent Labor Department.
15
KEY TAXES AFFECTING THE COMPANY

The year 2012 also witnessed significant reforms in Vietnams tax environment. The National Assembly passed several changes in the Tax Administration Law, Personal Income
Tax Law, and Labor Code, which will be effective from 2013. The tax reforms were also brought by the release of various Decrees and Circulars on Corporate Income Tax (CIT),
Value Added Tax (VAT) and Foreign Contractor Tax (FCT), much of which continued the roadmap of tax reform announced earlier by the prime minister in 2011.
a) Corporate Income Tax: In July 2012, the Ministry of Finance issued Circular No.123, replacing several former Circulars. The Circular No.123 consolidated the tax rules and
interpretations provided in various Official Letters issued earlier and provided clarifications of the application of tax incentives, some of which were welcomed by businesses,
while others were received with much debate and mixed reaction. Much debate centered on the clarification of unavailability of tax incentives to income from expansion of
investment and investment in newly established enterprises, which have undergone changes in the legal form and ownership or which have inherited assets or other
commercial advantages of a former enterprise. The Circular No.123 determined 25% rate of corporate income tax applicable the Company (excluding petroleum enterprises in
prospecting, exploration and exploitation; trading in precious and rare natural ores). The Circular No.123 also confirms that no tax incentive is available to gains from real estate
transactions (derived by businesses other than eligible real estate businesses), and transfer of projects or mining rights. The Circular No.123 restricts the use of losses from
ordinary business activities to offset against other income to defer tax incentive period and/or to reduce tax liabilities. It also prohibits the distribution of tax losses to joint
venture partners after dissolution. However, the rules on carry-forward of tax losses were expanded to allow interim quarterly rollover of tax losses. Tax concessions for smalland medium-enterprises (SME) and labor-intensive enterprises. Incomes from capital transfer determined under the formula: (iii)Taxed income = Transfer price Purchase
price of the transferred capital Transfer expense.
b) Tax incentive adjustments for export company:Effective January 1, 2012, following Vietnams WTO commitments, export based tax incentives have been abolished. Taxpayers
who were granted export-based tax incentives might now elect an alternative tax incentive scheme and notify the tax authorities of their election. Detailed guidance for making
such an election is available in the Circular No.199 recently released by the Ministry of Finance on November 15, 2012.
16
KEY TAXES AFFECTING THE COMPANY

c) Value Added Tax: Effective March 1, 2012, the Circular No.06 took effect and introduced several key changes including: prescribing additional exempt transactions and services
(relating to insurance, financial services, security trading, debt factoring, currency trading, health, education and vocational training); introducing a new list of VAT-ignored
(rather than exempt) transactions whereby buyers may still claim the associated input tax, and hence a relief from VAT leakage; fine-tuning the VAT treatments for services
provided by non-residents, disposal of assets by non-business entities or individuals, disposal of mortgages held by credit institutions, and intercompany transfer of fixed assets
etc. The Circular No.06 also clarifies the application of 0% VAT to in-country import/export activities, prescribes specific VAT treatments for international transport and logistics
services, and allows input credit for VAT suffered by buyers in various situations, including natural shrinkages and damages of inventories, consumption of supplies for mixed
purposes, advertising, marketing and promotion, internal consumption.
d) Foreign Contractor Tax: The foreign contractor tax regime has also undergone several changes as a result of the changes in CIT and VAT regimes. The Circular 60 took effect on
27 May 2012 and introduced several changes including the imposition of Foreign contractor tax on cross-border trading transactions conducted in the forms of DDP/DAT/DAP of
INCOTERM and in-country import/export transactions. Also, several on-line transactions are now taxable including advertising, marketing, and training. Some of the deemed
withholding VAT and CIT rates have also been changed. For instance, the CIT withholding rates have reduced from 10 per cent to 5 per cent for interest and from 2 per cent to
0.1 per cent for overseas re-insurance commissions, while the deemed CIT rate for management services in hotels, restaurants and casino has increased from 5 to 10 per cent.
e) FDI profit remittance: According to Circular No.186/2010/TT-BTC dated 18.11.2010, and effective as of 02.01.2011, guiding the offshore remittance of profits earned by the
Company with foreign capital, profits are remitted abroad are lawful profits after fulfilling all their financial obligations towards the Vietnamese Government. Profits to be
remitted abroad from Vietnam may be (i) in cash complies with the law on foreign exchange management and (ii) offshore remittance of profits in kind and conversion of their
value comply with the law on goods import and export and relevant laws. Profits to be remitted abroad are determined based on audited financial statements and CIT
finalization declaration. The Company may not remit abroad profits they shared or earn from their direct investment in a year of profit generation in case that years financial
statements of the company in which they make investment still contain accumulative loses after such losses are carried forward.
17
ASEANS COMMITMENTS ON LOGISTICS

ASEANS COMMITMENTS ON LOGISTICS
It has been 6 years after accepting the Protocol 2007 on building a roadmap for fast integration of logistics services in ASEAN countries for an ASEAN single-market in 2015 by means
of liberalizing measurements in all services. Liberalizing trade and customs procedures includes removing most of tariff and non-tariff barriers. Right in 2006 Vietnam issued a list of
items and special preferential tariff rates to implement ASEANs Common Effective Preferential Tariff (CEPT) the period of 2006-2013. Vietnam has prepared and carried out seriously
the roadmap of reducing taxes and giving out tax incentives to encourage liberalization trade, investments and expand Vietnam import-export to regional countries. And it has had
achievements as improvements in clearance procedures, applying e-customs; approaching one-stop customsthese are premises for Vietnam to integrate to ASEAN regional
logistics. In the process of implementing ASEAN Protocol, Vietnam has actively approved issues related to free trade and customs to keep everything on track and to meet
requirements. Especially, the implementation of Greater Mekong Sub-Region Cross-border transport Facilitation Agreement and cross-border agreements with Laos, Cambodia, and
China has initially carried out effectively.
Implementing free trade and investments in logistics sector, offering investment chances for businesses in logistics sector. For ASEAN countries, 2013 is the time set for liberalization
most of substantial logistics services subsectors. Vietnam has conformed, encouraged and facilitated trade and investments in logistics sector. Many FDI businesses from other
ASEAN countries have been in many logistics sub-sectors in Vietnam and even hold great market shares. Vietnam has had a new appearance in its infrastructure and sea ports since
2009 today through the Governments processes of liberalization and diversify. Vietnam has contributed greatly to Roadmap Towards an Integrated and Competitive Maritime
Transport, ASEAN Multilateral Agreement on the Full Liberalization of Air Freight Services, as a base for ASEAN Open Skies in 2015.
Upgrading logistics management ability besides regulations of logistics services in Vietnam Commercial Law (2005), there are regulations of conditions for doing logistics businesses,
sea transport and multi-modal transport and other related law (Laws of Maritime, Road, Railway, Civil Aviation) Logistics management agencies (the Ministry of Trade and
Industry, the Ministry of Transport) have issued legal documents to serve the roadmap to regional and international logistics integration. In 2011 and 2012, Vietnam in turn
approved ASEAN Framework Agreement on Multi-modal Transport and on Facilitation of Cargo in Transit.
18
WTOS COMMITMENTS ON LOGISTICS

WTOS COMMITMENTS ON LOGISTICS
There are many different commitments on services sectors in the Commitment Schedule on Services. In this part, we take a quick look into the transport service sector only.
a) Maritime Transport Services: Vietnams commitments on the maritime transport services are considered as more favorable than that of other countries when having joined
WTO before, including China.
Establishment of registered companies for the purpose of operating a fleet under the national flag of Vietnam: after 2 years from the date of accession, foreign investors are
permitted to establish a joint-venture with foreign capital contribution not exceeding 49% of total charter capital. Foreign seafarers may be permitted to work in ships under the
national flag of Vietnam (or registered in Vietnam) owned by joint venture in Vietnam but not exceeding 1/3 of total employees of the ships. The master of first chief executive
must be Vietnamese citizen.
Upon accession, foreign shipping companies can establish a joint venture with 51% foreign ownership. After 5 years from the date of accession, foreign shipping companies can
establish 100% foreign-invested company.
b) Maritime Auxiliary Services:
Container handling services (CPC 7411): A joint venture with foreign capital contribution not exceeding 50% can be established.
Customs Clearance Services: In 2012, foreign investors can set up a 100% foreign owned company.
Container Station and Depot Services: In 2014, foreign investors can set up a 100% foreign owned company.
c) Air Transport Services: The main air transport services committed by Vietnam include marketing and sales of airline-related products services, computer-based reservation
services and aircraft maintenance and repair services (CPC 8868). Before January 11, 2012, a foreign investors can only establish a joint venture to provide aircraft maintenance
and repair services with a cap of 51% of the total charter capital. However, after that a foreign investor will be permitted to set up a 100% foreign invested company. Foreign
investors must use public telecommunication network under the management of Vietnam telecommunication authority to supply the computer-based reservation services.
Foreign airlines are permitted to provide marketing and sales of airline-related products service in Vietnam through their ticketing offices or agents in Vietnam.
d) Internal Waterways Transport and Rail Transport Services: foreign investors are permitted to establish a joint-venture and are entitled to own up to 49% of charter capital of
the joint-venture providing internal waterways transport and rail transport services in Vietnam.
e) Road Transport Services : Given that the local road transport market is at the initial stage of development, Vietnams commitments regarding these services are quite limited and
try to protect local business for a long term. According to the Commitment, foreign investors are entitled to own up to 49% of the charter capital of joint ventures. After 3 years
from the date of accession, subject to the market demand, joint ventures with foreign capital contribution not exceeding 51% may be established to provide freight transport
services. One hundred % of joint ventures drivers shall be Vietnamese citizen.
f) Services Auxiliary to all Modes of Transport: The foreign capital contribution in a joint-venture providing services auxiliary to all modes of transport will be increased gradually.
After January 11, 2014, foreign investors are permitted to set up 100% foreign owned company providing storage and warehouse services (CPC 742) and freight transport agency
services (CPC 748). No limitations will be imposed on foreign capital contribution in a joint venture providing other services auxiliary to all modes of transport, except for
container handling services (CPC 7411).
19
Section 2
MACROECONOMICS OF VIETNAM
MACROECONOMICS OF VIETNAM
Vietnam Real GDP Growth Rate & Nominal GDP
per capita
Economic growth rate: Vietnamese economy had

an average GDP growth rate of 5.8% in the last 5
years. In 2012, Vietnams GDP was 5.0%, slower
than 5.9% in 2011 and 6.8% in 2010 as

policymakers struggled to counter soaring inflation.
The outlook remains positive and the economy has
become much more stable since 2013
8.0%
7.0%
6.8%
6.2%
Vietnams Average Inflation
2,000
25.0%
1,500
20.0%
23.1%
5.9%
5.3%
6.0%
5.0%
5.2%
5.2%
5.0%
15.0%
4.0%
3.0%
1,000
2.0%
500
Inflation rate: along with the price increases in
1.0%
raw materials and dramatic inflows of foreign
0.0%
0
2008
investments, inflation has been a serious issue in
2009
2010
2011
2012
2013F 2014F
Nominal GDP per capita (USD per capita)
Vietnam with the peak of 23% in 2008. Thereafter,
12.0%
10.0%
5.0%
6.7%
10.3%
6.5%
5.0%
8.3%
0.0%
2007 2008 2009 2010 2011 2012 2013F
Real GDP (%)
Source: IMF
Source: IMF
Vietnamese government has implemented tight

Breakdown of Vietnams Export
money policy, dropping the inflation rate down to
US$bn
6.5% in 2012.
140
Others
120
Machinery, transport
equipment
Textiles, clothing, footwear
However, Vietnams inflation
landscape still remains highly volatile

After 20 years deficit, Vietnam has enjoyed trade
surplus in 2012. FDI saw high growth of US$72.29
100
Wood and paper products
80
Chemicals, rubber products
60
Mineral & Fuels
31.2% over last year, while export value from the
40
Food
domestic sector was US$42.33 billion, up only
20
billion in export revenue, accounting for more than

63% of the countrys total figure and an increase by
1.32%
Agricultural products
Others
120
Manufactures
100
Garment materials
80
Wood and paper

products
60
Chemicals, rubber
products
40
Mineral & Fuels

Food
20
Seafood & Fishery
Seafood & Fishery
2009
2010
2011
2012
Source: Vietnams General Custom
Breakdown of Vietnams Import

US$bn
2009 2010 2011 2012

Source: Vietnams General Custom
20
Section 3
OVERVIEW OF VIETNAM LOGISTICS INDUSTRY
OVERVIEW OF VIETNAM LOGISTIC INDUTRY

Despite of a weak transport infrastructure, Vietnam
ASEAN LOGISTICS PERFORMANCE INDEX (LPI)
is still perceived as one of the major logistics hubs
Although still being at an infancy stage, the potential

growth of Vietnams logistics market has been
Customs
Global ASEAN LPI

Rank Rank Score
for ASEAN in the near future
Infrastructure
International Logistics quality

shipments
& competence
Tracking &
tracing
Timeliness
Rank
Score
Rank
Score
Rank
Score
Rank
Score
Rank
Score
Rank
Score
Singapore
4.13
4.1
4.15
3.99
4.07
4.07
4.39
Malaysia
29
3.49
29
3.28
27
3.43
26
3.4
30
3.45
28
3.54
28
3.86
confirmed by many researches of well-known
Thailand
38
3.18
42
2.96
44
3.08
35
3.21
49
2.98
45
3.18
39
3.63
insitutions, for example, being placed 53rd out of
Philippines
52
3.02
67
2.63
62
2.8
56
2.97
39
3.14
39
3.3
69
3.3
155 countries in the ranking of the global logistic
Vietnam
53
3.00
63
2.65
72
2.68
39
3.14
82
2.68
47
3.16
38
3.64
sector in 2012 by World Bank, as well as ranked 6th
Indonesia
59
2.94
75
2.53
85
2.54
57
2.97
62
2.85
52
3.12
42
3.61
in the survey undertook by Transport Intelligence to
Cambodia
101
2.56
108
2.3
128
2.2
101
2.61
103
2.5
78
2.77
104
2.95
choose countries would emerge as major logistics
Laos
109
2.50
93
2.38
106
2.4
123
2.4
104
2.49
111
2.49
118
2.82
markets in the next 5 years
Myanmar
129
2.37
122
2.24
133
2.1
116
2.47
110
2.42
129
2.34
140
2.59
However,
Vietnam should put more effort to
improve its infrastructure and the efficiency of

transport and logistics management to decrease
logistics costs. Currently, Vietnams logistics costs
accounts for up to 25% of GDP, much higher than
15% of Thailand, 8% of Singapore or the world
average of 12%
Source: World Economic Forum, The Global Competitiveness Report, 2012-2013

Perceived major logistics markets for the future in rank
Logistics Cost as % of GDP
order
China
India
Brazil
Russia
Turkey
Vietnam
UAE
South Africa
Mexico
Singapore
2
8%
US
3
10%
Japan
11%
Malaysia
13%
India
13%
Thailand
15%
China
8
9
18%
Vietnam
25%
0%
Source: Transport Intelligence
World Average of
12% (IMF)
10%
20%
30%
Source: China Business Review 2012

21
OVERVIEW OF VIETNAM LOGISTIC INDUTRY

In Vietnam, the logistics costs make up 25% of
GDP, while transport costs account for 50-60% of
the logistics costs, much higher compared with
LOGISTICS INDUSTRY
the average rate of 15% in the world

Transportation and warehousing continues to be
the most outsourced basic services in Vietnam,
mostly
provided
by
TRANSPORTATION
FORWARDING
VALUE ADDED
SERVICE
WAREHOUSING
local and state-owned
enterprises, transport agencies, and warehouse
specialists.
RAILWAY
AIR
WATERWAY
ROAD
Dry storage
Cold storage
Specialized logistics services such as inventory

management,
vendor
management,
climiate
controlled transporation and warehousing services

in
contrast
are
exclusively
provided
Logistics Cost Breakdown
by
multinational 3PL logistics and freight forwarding

14%
companies such as FedEx, Maersk, APL, DHL and

Schenker to multinational end-user companies.
31%
55%
Most of these specialized services are generally not

outsourced as individual services, but as a part of
the complete 3PL package
Transportation
Warehousing
Logistics Outsourcing Trends

Climate controlled logistics
Reverse logistics
Custom information and support
Vendor management
Order processing
Warehouse management
Inventory management
Inbound warehousing
Inbound transportation
Outbound warehousing
Outbound transportation
Management
Source: Transport Intelligence, SCM Analysis
2012
2008
0%
20%
40%
60%
80%
100%
Source: Frost & Sullivan
22
KEY LOGISTICS HUBS

Hanoi, Da Nang, and Ho Chi Minh City are the
current major logistics hubs in Vietnam, in
Northern,
Central
and
Southern
regions,
respectively
Hanoi is highlighted by the presence of large
number of consumer goods manufacturers, textile
industries as well as construction activities which
are direct customers for the logistics industry.
Da Nang is also a logistic hub with an important

strategic location in central of Vietnam. It has a big
port, the Da Nang Port, which is a gateway to
central Vietnam. The city is home to agricultural
processing, software, and IT industries and is also a
key location for seafood exports.
Ho Chi Minh City is the biggest logistics hub in

Vietnam, making up 70% of freight transportation
and 60% of overall logistics industry share. The city
is noted by easy access to major seaports, airports,
and national highways as well as the comparatively
developed transport infrastructure in each of these
transportation modal.
23
KEY PLAYERS
THE PRESENT OF TOP 10 GLOBAL LOGISTICS COMPANIES IN VIETNAM
Market Share in Vietnam Logistics Industry
Established Year
DHL/Exel Supply Chain
1994
100%
100+
Motorola, Proter & Gamble, PMG
Kuehne + Nagel
1995
RO
100+
IKEA, Harman,Nortel, Siemens
Schenker/BAX
1990
JV
160
CEVA Logistics/EGL
1995
RO
20
UPS Supply Chain

Solutions
1999
JV
N.A
Abbott,
Toshiba
Panalpina
1992
JV
50+
Phillips Electronics, Chevron, Delphi
C.H.Robinson Worldwide
2004
RO
Geodis
1990
RO
20
N.A
Agility
2002
RO
10
N.A
Expeditors Intl of
Washington
2004
RO
20
Philips, Toyota, Aarons, Largo Intl
Domestic companies
70%
LIST OF JAPANESE LOGISTICS FIRMS OPERATING IN

VIETNAM
10
No.
Company
Employee
s
Companys Name
Foreign companies
30%
Source: VLA
Type
Number
of offices
Ranking
Main Customers
Fujitsu, Metro, Top of World

Ford, Honda, John Deere, Korg
Nestle,
Wal-Mart,
Nationbilt
Sony
Raymour
Erixsson,
Flanigan,
TYPICAL LOCAL LOGISTICS COMPANIES IN VIETNAM
Nippon Express (Vietnam) Co.,Ltd
Sagawa Express Vietnam Company Limited
Dragon Logistics Co., Ltd
Gemadept
JSC
CFS 8,828 m
Bonded warehouse - 74,000 m
Ecom Agroindustrial,
Schenker, Yamato Logistics,
Panasonic, Hitachi, Toshiba,
Birkart, UTI Worldwide
Sumitomo
Logitem Vietnam
Transimex-Saigon
JSC
12,000 m
N.A
N.A
Yusen Logistics International (Vietnam) Co., Ltd
Vietfracht
JSC
N.A
APL Logistics
Tn Cng, APL VietNam
Konoike Vinatrans Logistics Co., Ltd
Vinatrans
State-owned
CFS 2,500 m
Freezer warehouse- 2,800 m
N.A
Konoike Transportation
Japan Logistics Systems Corp

Sotrans
BAT Vinataba, Cargill

State-owned CFS + Bonded warehouse 12,000 m Group, Dutch Lady, PEPSI
IBC, Procter & Gamble
Companys Name
Type
Warehouse capacity (m)
Main Customers
Strategic Partners
Mitsubishi Logistics Corp
Nkv Logistics Ltd
VOSA Group
Public
CFS + Other Warehouses 81,130 m
N.A
NYK Logistics, China Shipping
10
Joint Venture Sunrise Logisticcs Co., Ltd
Vinafreight
JSC
CFS 3,000 m
Freezer warehouse 1,500 m
N.A
N.A
Minh Phuong Co Ltd.
Private
N.A
N.A
Nice Vina Container

Transportation
24
Section 4
VIETNAM TRANSPORTATION SECTOR
OVERVIEW OF VIETNAM TRANSPORTATION

Vietnam freight volume has seen a constant
growth during the period of 2005-2011, reaching
nearly 900 million tons of cargo in 2011
Road freight accounts for 74% of total freight
Volume of Freight in Vietnam (Unit: 1,000 tons)

1,000,000
14%
800,000
18%
16%
9%
600,000
10%
12%
12%
400,000
However, Vietnams infrastructure has not kept
6%
200,000
3%
pace with the rapid development of the economy.

World Economic Form scored the transport
12%
9%
volume in Vietnam, followed by waterway of 25%
24.
84
74.
%
33
%
15%
12%
0%
2005 2006 2007 2008 2009 2010 2011
infrastructure of Vietnam at 3.2, far below the
Road
Waterway
Railway
Air
world average of 4.3

Source: GSO 2012
Though road transport is the dominant force in

tonnage terms, road infrastructure in Vietnam
seems to be underdeveloped with the big gap in
quality score, standing at 2.7 as compared to the
Quality of overall infrastructure in South East Asian

countries
Quality of Vietnams freight infrastructure

5.0
Singapore
6.5
4.0
Malaysia
5.4
3.0
global average of 4.0

Thailand
4.9
Cambodia
2.0
4.2
Indonesia
3.7
Vietnam
1.0
World average
score of 4.3
3.2
0.0
Roads
Railroad
Vietnam score
Port
Air
Transport
Worldwide average score
Source: World Economic Forum, The Global Competitiveness Report, 2012-2013
25
ROAD FREIGHT INFRASTRUCTURE
Network: 250,000km
Map of Road System in Vietnam
Vietnams Road Infrastructure
km
160,000
Earth
40,000
Other
20,000
Provincial roads (23,000km): 24% earth or gravel
District roads (55,000km): 86% earth or gravel

Commune roads (141,000km): 79% earth or gravel
Urban roads and others (14,900km): 54% earth or
gravel
Vietnam does not have a modern expressway
linking the northern and southern parts of the
country. Route 1A running the length of the
country is of varying quality, with much of it being
a single lane road of insufficient width
Other road
Provincial highways and local roads
Gravel
60,000
DBST
80,000
Urban roads
Gravel surface: 6%
Cement concrete
100,000
Commune roads
43% good, 37% average, 20% bad/very bad
Asphalt concrete
120,000
District roads
7% are 4(+) lane
140,000
Provincial roads
National highways: 17,000km
National highways
Road
? National-highway
Source: Vietnam Road Administration

Main issues of road infrastructure in Vietnam
Inadequate road hierarchy: unclear functional
classification
and
corresponding
technical
standards
Poor secondary road network
Lack of maintenance
Poor construction quality
Sub-standard long-distance
transportation services
bus
and
truck
Mixture of long distance heavy-vehicle traffic (bus

and truck) and local traffic
Increasing traffice congestions around urban areas
Lack of sustainable funding
Source: VITRANSS 2
26
WATERWAY FREIGHT INFRASTRUCTURE
Volume of Freight by Waterway (Unit: 1,000 tons)
Vietnams dense river and canal network provides

the country with a highly developed inland
1,600,000
Freight - River
waterway system, especially in Mekong River
Delta. Inland waterway transport traditionally
Map of Port System in Vietnam
Freight - Sea
1,200,000
serves the key industries such as cold for power

generation, fertilizer and cemet, building materials
800,000
and agricultural products.
Vietnams 3,260 km coastline has 127 ports, of
400,000
which 25 handle ocean cargo. The five main

0
locations that receive regular container services in
2005
2006
2007
2008
2009
2010
2011E
Vietnam are Ho Chi Minh City (handles 72% of

Source: GSO 2012
total cargo throughput), Hai Phong (20%), Cai Lan

(4%), Da Nang (1%), Quy Nhon (1%). Two new big
ports in Ba Ria-Vung Tau province are expected to
Volume of Freight Traffic by Waterway

(Unit: mil tons.km)
show up as well among the major ones, after their
inauguration in 2010.
Freight trafic -River
200,000
Freight trafic - Sea
Waterway cargo handled in Vietnam is mainly via

inland transportation. However, the volume has
160,000
decreased significantly 88% from 2008 to 2011,
120,000
mainly due to the most common means of river

transport becoming old and unsafe and there was
80,000
a lack of specialized bulk cargo ships.
40,000
0
2005
2006
2007
2008
2009
2010
2011E
Source: GSO 2012

27
AIRWAY FREIGHT INFRASTRUCTURE
Volume of Freight & Freight Traffic by Air
Vietnam currently has 21 airports including 3
1,000 tons
international ones: Noi Bai in Hanoi, Da Nang in
200
Freight
Map of Airport System in Vietnam

mil tons.km
Freight trafic
500
Central Vietnam and Tan Son Nhat in HCMC. Tan

Son Nhat is the largest airport with a capacity of 17
million passengers and 1 million tonnes of cargo
400
150
300
100
200
per year
50
100
The most significant new airport project under

construction is a Long Thanh international airport
0
2005
with total capacity of 100 mn passengers and 5
2006
2007
2008
2009
The two principal airlines operating in Vietnam are

Vietnam Airlines and Jetstar Pacific Airlines, both
of them are state-owned
Total Area of Terminals in Vietnam Airport System

m2
Air cargo handled in Vietnam grew at the average
100,000
of 10.8% over 2005-2011, reaching the level of
80,000
199,200 tons in 2011. Air freight volume is
60,000
expected to continually increase in the coming
40,000
years thanks to the governments policy to attract

manufacturers
of
electronics
and
Northern
Central
20,000
high-tech
industries, which requires more sophisticated

transportation such as air freight
Southern
120,000
0
Noi Bai
Dien Bien
Cat Bi
Vinh
Dong Hoi
Da Nang
Phu Bai
Chu Lai
Cam Ranh
Phu Cat
Pleiku
Tuy Hoa
Tan Son Nhat
Phu Quoc
Can Tho
Con Dao
Ca Mau
Rach Gia
Lien Khuong
Buon Ma Thuot
2011E
Source: GSO 2012
million tonnes of cargo per year
2010
International airport
Domestic airport
Source: CAA 2012

28
RAILWAY FREIGHT INFRASTRUCTURE
(excluding sidings). It comprises 2,169 km of 1,000
Vietnams National Rail System
Volume of Freight by Railway (Unit: 1,000 tons)
Vietnams rail network totals about 2,600km
Freight
9,500
Growth rate
6%
mm gauge and 178 km of 1,435 mm gauge tracks,

the latter mostly located in the Northern part of
the country. The principal axis is Hanoi-HCMC
(1,726 km); other lines emanating from Hanoi are
to Hai Phong (102 km), Lao Cai (296 km) and Dong
4%
7,600
2%
0%
5,700
-2%
3,800
-4%
Dang (162 km)
-6%
1,900
The rail nework has a sole operator, the Vietnam
Railway Corporation (VRC)
-8%
0
-10%
2005
2006
2007
2008
2009
2010
The rail system has been focused on passenger
2011E
Source: GSO 2012
traffic due to the technical challenges facing the

movement of containers and bulk cargo. During
Volume of Freight Trafic by Railway
(Unit: mil tons.km)
the period of 2005-2011, rail freight volume in

tonnage had an average growth rate of -3%, and its
prospect for growth is not so optimistics due to
high costs and the poor system
4,500
3,600
2,700
1,800
900
0
2005
2006
2007
2008
2009
2010
2011E
Source: GSO 2012

29
TRANSPORTATION INFRASTRUCTURE INVESTMENT

Breakdown of Vietnam Transport Infrastructure
The majority of infrastructure investment in
years, accounting for 65% by the end of 2021.

Therefore, transport infrastructure industry is
expected to grow by an average of 3.5% yoy
between 2012 and 2016
Source: BMI, 2013
In 2011, transport infrastructure value was VND

Investment as % of Total Infrastructure
Breakdown of ODA in Infrastructure
raiways, 19% for port harbours & waterways and the
40%
rest of 12% for airports
35%
2,000
2,500
500
15%
of
for
10%
infrastructure would reach VND 2 trillion, in which
5%
transportation accounts for 53%, in period 2011-
0%
2006-2010.
MPI
2015.
forecasts
that
ODA
Roads & Bridges
Railway
Airports
Ports Harbours &

Waterways
Source: BMI, 2013

IT & Communication
20%
32%-33% of total ODA investment during the period
an
Urban, big city and rural
1,000
been
Healthcare
25%
investment area of Government, accounting for
always
Education & trainning
1,500
has
Water drain
30%
priority
Infrastructure
2011-2015
2016-2020
Water supply
2016f
Irrigration
2011
Electricity
52,406 billion, in which 48% for roads, 21% for
Roads and Bridges
Transportation
Railway
2016f
tendency is expected to continue over the next 10
Airport
2015f
investment in Vietnam was in transportation. This
Port Harbours & Waterways
2014f
According to BMI, in 2011, 68% of infrastructure
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
2013f
bvnd
2012e
for 68% by the end of 2011
2011
Vietnam was in the transport sphere, accounting
Source: MPI 2012

30
MODAL SHARES OF FREIGHT TRANSPORTATION IN VIETNAM

Road accounts for the largest share (88%) of
transportation
of
manufactured
goods
Modal shares by commodity, 2008 (ton/day)
Freight transportation volume (ton/day) by

trip distance, 2008
and
dominates short distance freight transportation of
Animal Meat & Others
1,800-2,000
Fishery Products
1,600-1,800
Manufactured Goods
1,400-1,600
less than 100km
A large proportion of manufactured goods (88%) is

transported by roads, while the bulk of heavy raw
materials, such as construction materials (73%) and
1,200-1,400
Industrial Crops
1,000-1,200
coal (79%) are shipped using inland waterways
Petroleum
900-1,000
Road transportation is dominated by short distance
Coal
freight transportation. The share of road freight
800-900
Fertilizer
700-800
Cement
600-700
Construction Materials
500-600
movements less than 100km trip distance is 73% of

the total road freight movements. Because of
topographical constraints, inland waterway freight
transportation is significantly limited to less than
400-500
Steel
200km trips
300-400
Wood
For 400-1,000km freight movements, (domestic)

coastal shipping competes with roads and equally
200-300
Sugarcane/sugar
shares freight movements. However, after 1,000km
Rice
distance, coastal shipping dominates roads, in
<100
0
particular for long-distance (1,400-1,600km) freight

transporation between the North (Hanoi) and the
100-200
Road
Rail
200,000
Inland Waterway
400,000
600,000
Coastal Waterway
Air
0
Road
Rail
200,000 400,000 600,000 800,000

Inland Waterway
Coastal Waterway
Air
South (HCMC)
Source: VITRANSS 2 (2009)
31
MAIN PATTERNS OF DOMESTIC FREIGHT MOVEMENTS IN VIETNAM

Around 87% freight transportation in Vietnam is
within 200km trip, mostly driven by the two
Distribution of Inter-provincial freight movements, 2008
dominant internal trade patterns centered around

Hanoi and Ho Chi Minh City (Southeast)
The Northest and Northwest regions are heavily

linked to the neighboring Red River Delta region:
about 76% and 88% of inter-provincial freight
movements go to the Red River Delta region, by
origin and destination respectively
Da Nang in the South Central Coast functions as a

regional growth pole connecting neighboring
regions, as well as the South and the North.
However, the inter-provincial freight movements as
of 2008 do not show much expected freight
movements around Da Nang. It could be explained
by the fact that the large markets of Hanoi and
HCMC are too far away to draw a significant size of

economic transactions, and neighboring local
markets are too small.
The freight movements from the Mekong Delta

region are equally split between Mekong River
Delta and the Southeast region, about 48% each
A majority (about 60%) of freight movements of

the two economic centers of the Red River Delta
and the Southest are intra-regional ones, leads to
the dominance of short distance freight movement
Source: World Bank calculation using data from VITRANSS 2, 2009

32
Section 5
TRANSPORTATION BY TRUCK
OVERVIEW OF ROAD FREIGHT IN VIETNAM

Road freight sector is expected to have positive
1,000,000
60,000
800,000
50,000
market share of domestic cargo, recording average
40,000
600,000
30,000
to the volume of 623 million tonnes. The high
20,000
200,000
10,000
809 million tonnes by 2015

0
and is forecasted to increase to 48,000 million
23% transportation volume by truck in Vietnam.

in Hanoi has
experienced an impressive CAGR of 33.8%, that

growth rate was 15.6% in HCMC and much lower
of 5.3% in Danang
HCMC
CAGR 15.6%
50,000
Central
Southern
25,000
60%
50%
20,000
40%
40,000
the road transportation industry in Vietnam. Most
10,000
of them are small to medium scale companies with
2015F
2014F
2013F
Northern
Growth rate - whole country
60,000
20,000
Danang
CAGR 5.3%
30%
15,000
20%
10,000
10%
0%
5,000
2005 2006 2007 2008 2009 2010

Hanoi
Danang
-10%
-20%
2007
HCMC
Source: GSO
2012F
2015F
2014F
2013F
70,000
There are 1,050 registered companies involved in
high tendency of privatization
Number of Trucks Sold in Vietnam

Hanoi
CAGR 33.8%
80,000
30,000
Source: BMI, 2013 & GSO
Road Freight in Metropolitan Regions

(Unit: 000 tonnes)
Hanoi, HCMC and Danang in total accounts for

Over 2005-2010, road freight
2012F
Source: BMI, 2013 & GSO
tons/km by 2015
2011E
traffic reached 37,000 million tons/km in 2011,
2010
2009
2008
In terms of tonnes/kilometres, the road freight
2007
2006
0
2011E
transportation by truck over 2013-2015, reaching
2010
CAGR of 6.57% is predicted by BMI for
400,000
2009
y-o-y growth of 13% during 2006-2011, equivalent
2008
In 2011, road transport accounts for around 74%
Road Freight, mn tonnes/km
2007
Road Freight, 000 tonnes
2006
outlook over the short-term period of 2013-2015
2008
2009
2010
2011
Source: VAMA 2012

33
ROAD INFRASTRUCTURE
Vietnams
Ministry
of
Transport
and
Cost to Build Expressway (US$mn/km)
Communications has estimated that the country

will require around US$60 bn in the period up to
2020 to fund new road infrastructure projects
Expressways, Vietnam
Expressways, Overseas
30
25
There
have
been
several
announcements
regarding new road projects being planned or

being developed in Vienam. However, there are
20
15
still on-going concerns about the viability of toll

roads in Vietnam, mainly due to high cost of
10
construction and unattractive toll fees
On 4th July 2012, MOF has approved the toll cut
for
trucks
using
the
HCMC-Trung
Cau Gie-Ninh
Binh
Luong
Ben Luc-Long
Thanh
HCMC-Long
Thanh-Dau Giay
HCMC-Trung
Luong
US
China
expressway by 25-30%, due to traffic volumes

Source: Vietnam The Business Times (May 3 2012)
falling sharply in this expressway once it required

commuters to pay a toll fee in Feb 2012. Once
Main factors contributing to high construction cost of toll roads in Vietnam
implemented, trucks weighing over 18 tonnes and

40-feet container trucks would pay around US$22-
Lack of project management expertise, resulting in site clearance delays and cost overruns
Corruption, around 30% of a projects value is pocketed by the contractor in order to pay bribes to relevant
23 per trip for using the 61.9km expressway,

compared with the current fee of US$31
parties
On 11th December 2011, the Vietnams Ministry of

Transport and Communcations announced to start
public interest with the need for expeditious provision of land for infrastructure development
collecting a fee for road maintenance from the

start of 2013, because currently state budget only
meets 40% of the fund needed for road
Deficiency in regulations and government institutions that effectively balance the need to safeguard the
Lack of specialised government institutions that can mediate between developers and landowners about
compensation
maintenance
Source: BMI, 2013
34
ROAD TRANSPORT COST & PRICE STRUCTURE

The average trucking unit price charged per tonkm is lowest in the Central region with VND1.3k,
being much higher in the North region (VND3.6k)
and at VND1.9k in the South
The national average trucking unit price charged

per ton-km is VND 2,800 (~US$0.144), however,
Transport price by city class and trip distance

US$/ton-km
0.9
0.7
0.6
varying significantly across different types of cities.
0.5
The ton-km unit price is lowest in class 1 cities (*)
0.4
(VND1,500). It is much higher in special cities
0.3
including Hanoi and HCMC (VND2,900) as well as
0.2
other lower tier cities (VND2,600)
0.1
Vietnams unit transport cost per ton/km to move
0.0
freights domestically is not high compared to

other developed countries of South Korea
International Comparison
0.8
Hanoi-short Hanoi-long HCMC-short HCMC-long

Class 1
Class 1 Other lower Other lower India, 2010
distance
distance
distance
distance cities-short cities-long tier cities- tier citiesdistance
distance
short
long
distance
distance
short
distance
(<100km)
long
South Korea, Japan, 2006 USA, 2007
distance
2007
(>100km)
Source: World Bank (2011) and Suh et al (2009)
(US$0.766), Japan (US$0.383), and the United

States (US$0.259). However, it is still higher than
Operating Cost Structure
India (only US$0.057)
About 65% of operating costs are attributable to

fuel costs, followed by salary (16%), maintenance
expenses (5%), official overhead costs of tolls and
road taxes (5%), and route allowances (1%).
Especially, about 8% of total operation costs pay
for informal facilitation payments such as bribes.
The reason is vehicle weight and height limits are
quite low in many corridors because of low
infrastructure quality. Moreover, road traffic rules
and regulations are, in many instances, open to
interpretation by police and other authorities,
leaving the door open for unpredictable stops for
trucks along their routes
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Informal facilitation payments (bride)

Offical overhead costs (tolls, road taxes)
Maintenance
Route allowance
Salary
Fuel
Hanoi-short Hanoi-long HCMC-short HCMC-long Class 1
Class 1 Other lower Other lower
distance
distance
distance
distance cities-short cities-long tier cities- tier citiesdistance
distance
short
long
distance
distance
(*) For criteria for classification of cities, pls see page 38
Source: World Bank (2011) and Suh et al (2009)

35
MAIN OBSTACLES TO INTER-CITY TRUCKING OPERATIONS
In the trucking survey conducted by World Bank in
Main obstacles to inter-city trucking operations, by region
December 2010 regarding the main obstacles to
North
inter-city trucking operation, the Southern region

(including the Southeast, the Central Highlands,
and the Mekong River Delta) scored the worst for
all five main constraints as listed in the graph. For
truckers
in
the
South,
the
constraint
of
corruption/road blocks scored 4.1 (out of 5),

compared to 3.4 for the North and 3.3 for the
Central region. The severity of poor road

conditions in the South region is 3.4, again higher
Central
South
1: no obstacle
5: very severe
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Poor road condition
than in the North (2.8) and the Central region (2.5),
Fuel costs
Lack of backload
Road accidents
Ranking
Corruption
Regulation and licenses
suggesting that significant improvements are

needed in the South
Main obstacles to inter-city trucking operations, by city class
Class 1 cities perform relatively better than other
Special cities
Class 1 cities
Other cities
classes. For example, truckers in class 1 cities score

(subjectively) the severity of corruption as 3.3 (out
of 5), better than special cities (3.8) and other
lower tier cities (3.7). At the same time, regarding
the severity of poor road condition, class 1 cities
score 2.9, a little better than special cities (3.1) and
others (3.5)
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Poor road condition
Fuel costs
Lack of backload
Road accidents
Corruption
Regulation and licenses
Source: World Banks Trucking Survey, Dec 2010

36
HAULAGE CHARACTERISTICS
Haulage characteristics captures the efficiency of
freight movements and
Haulage characteristics, by region and city class
indirectly measures the
By Regions
quality of transport infrastructure
Relatively larger trucks with more cargo capacity

operate in class 1 cities and the Central/South
regions.
However,
the
average
loading
By Region
Age of trucks, years
different classifications, suggesting a competitive

trucking market structure. The average trip speed
also does not change much across all classifications
Major differences are the empty backhaul rate

(percentage of trips returning without cargo) and
South
Special
cities
Class 1
cities
Other
cities
17.1
15.9
16.5
17.1
17.3
5.8
12.0
10.4
7.6
12.9
8.7
10.8
18.0
19.7
14.0
21.1
13.3
Average overload, ton (c)
6.5
6.1
9.9
8.3
8.5
5.8
Average load/truck weight (b/a)
1.5
1.6
1.9
1.6
1.5
1.8
Average overload/truck weight (c/a)
0.8
0.7
1.1
1.0
0.7
1.0
Number of turnarounds per year
40.6
54.7
55.5
45.0
79.8
65.1
Fraction of empty returns, %
27.1
3.5
31.0
27.3
40.2
28.5
Average trip distance, km
393.8
780.9
643.5
499.4
453.2
392.5
Average trip time, hours
11.0
20.9
17.9
14.1
12.0
9.3
Average speed, km/hr
35.8
39.8
30.8
33.7
35.9
32.1
22,858
34,424
32,216
26,750
31,338
24,582
Truck weight, without cargo, ton (a)

Average load, ton (b)
and is around 30-35km/hour
Central
17.1
and
overloading per truck weight are uniform across
North
By City Class
the yearly truck utilization (measured by yearly
mileage). Trucks in class 1 cities have relatively

higher empty backhaul rates (40%, compared to the
national average of 28% and the lowest rate of 3.5%
in Central region)
The average yearly mileage recorded by trucks

operating on each route, as a measure of truck
utilization, show quite distinct patterns. Trucks in
class 1 cities or in the Central/South regions are
used more extensively
Yearly mileage, km
Source: World Banks Trucking Survey, Dec 2010

37
CRITERIA FOR CLASSIFICATION CLASS 1 TO 5 CITIES

Indicators
Urban Class
Class 1
Population
Class 2
Central government run city

(CG): >1 million
Provincial
city:
Class 3
>300,000
Class 4
Class 5
>150,000
>50,000
>4,000
>70% for urban centers
6,000/km2
4,000/km2
2,000/km2
CG: >800 thousand

>500
thousand
Ratio of nonagricultural labor
>80%
for
the
urban
centers
Population density
Socio-economic
infrastructure system
CG: 12,000/km2
CG: 10,000/km2
Provincial city: 10,000/km2
Provincial city: 8,000/km2
Integrated system in place
Urban
New factories equipped with

clean technology and old
factories
retrofitted
mitigation devices
System coverage
with
centers
infrastructure
with
partially
Individual
system
infrastructure
in
place
and
Individual
system
infrastructure
in
place
and
Individual
system
infrastructure
in
place
and
built for full integration
gradually integrated
New factories equipped
with clean technology and
old
old
old
old
factories
retrofited
with mitigation devices
Vietnam has two special cities including Hanoi and Ho Chi Minh City
Source: World Bank
38
Section 6
VIETNAM WAREHOUSING AND DISTRIBUTION CENTERS
CURRENT MAJOR DISTRIBUTION CENTERS (DC) IN VIETNAM

Bac Ninh (30km away from Hanoi)
Total DC supply of more than 200,000 sqm
Key players include Indo-Trans Keppel, DHL,
Mappletree, etc.
Ha Noi
Da Nang
Key players include DKSH, Indo-Trans Keppel, Kerry

Logistics, Dragon Logistics, etc.
Key players include Kerry Logistics, Vinafco, etc.
Binh Duong
Key players include DKSH, DHL, Mappletree, Damco,
Gemadept, Transimex, Vinafco, etc.
Ho Chi Minh City

Key players include Indo-Trans Keppel, Kerry
Logistics, etc.
39
KEY FOREIGN PLAYERS

COMPANY
HIGHLIGHTS
DKSH Vietnam
Since re-entered Vietnam in 1991, DKSH has been a leading player in providing Market
DC/WAREHOUSE INFORMATION
Type
Area
Location
Expansion Services for the consumer goods, healthcare, performance materials, and
technology industries
The Company has 10 distribution centers and logistics support centers nationwide
(Hanoi, Danang, HCMC, Binh Duong, Can Tho and Kien Giang), including:
12,000 sqm
Ha Noi
25,000 sqm
Binh Duong
12,000 sqm Distribution Center in Thach That Quoc Oai Industrial Zone (Hanoi)
with more than 7,000 high rack pallets, serving more than 5,500 healthcare
customers including hospitals, clinics, and pharmacies as well as over 20,000 retail
outlets and manufacturers throughout North Vietnam. Furthermore, the cold

chain storage facility at this DC is the largest one in the region and certified by
Vietnams Ministry of Health as Good Storage Practice (GSP) standard. DKSH is also
Distribution
Centers
the first healthcare distributor in the Vietnamese market to obtain ISO 13485
certification
25,000 sqm DC in Vietnam-Singapore Industrial Park in Binh Duong Province,

supplying storehouse for medicine and nutrition products with over 16.000 pallets
space and certified for ISO 9001:2000
Currently, the Company has a strong network of over 200 clients and 83,000 customers
such as Ajinomoto Pharmaceuticals, LOral ,Kraft, etc.
40
KEY FOREIGN PLAYERS

COMPANY
HIGHLIGHTS
Indo-Trans Keppel
Logistics
Being established in 1999 as a joint venture between Indo-Trans Logistics (Vietnam)
Type
Area
Location
and Keppel Logistics (Singapore)

The Companys logistics and distribution center (LDC) network includes Hiep Phuoc LDC
(HCMC, total area of 150,000 sqm, air conditioned storage available); Tan Binh LDC
(HCMC, total area of 32,000 sqm, air conditioned storage available), Tan Binh LDC
382,000 sqm
HCMC
22,000 sqm
Hanoi
140,000 sqm
Bac Ninh
new development (HCMC, total area of 200,000 sqm consisting of 4 seperating

facilities, air conditioned storage available), ICD My Dinh LDC (Hanoi, total area of
22,000 sqm), and Tien Son LDC (Bac Ninh, total area of 140,000 sqm, air conditioned
storage is available).
The Company focuses on providing the logistics services to high end products including
Logistics and
Distribution
dairy, pharmaceutical, electronics, IT and FMCG
Centers
Applying advanced Warehouse Management System (WMS)
Some famous customers could be named are Electrolux (total logistics services
including IOR, customs brokerage, warehousing, inventory management and
distribution), Unilever (distribution, forwarding and customs brokerage), Nokia
(warehousing POS and type approval services), Acer (total logistics including
warehousing
and
distribution),
Colgate-Palmolive
(total
logistics
including
warehousing, inventory management and distribution), Nortel (total logistics including
warehouse/distribution and custom brokerage) and IBM (wareshouse distribution)
41
KEY FOREIGN PLAYERS

COMPANY
DHL
HIGHLIGHTS
Entering into Vietnams market since 1998 and launching DHL Supply Chain in Vietnam since
Type
Area
Location
2001
10,000 sqm
The Company already has 1 distribution center of 15,000 sqm in Song Than ICD. The second
Distribution
10,000 sqm DC is underway in Bac Ninh province to meet the needs of customers in the
Centers
15,000 sqm
consumer, retail and technology industries.
Bac Ninh
Song Than ICD,
Binh Duong
The Company has announced a new investment plan worth US$13 million between 2013 and
2015 to widen its warehouse space in Vietnam to more than 141,000 sqm by 2015 and grow
the transportation fleet to more than 100 vehicles in the next two years
Other warehouses
76,000 sqm
Logistic Center
23,050 sqm
Nationwide
All vans, trucks and delivery motorbikes of DHL Vietnam have been supplied and maintained
by GB Vietnam
Mapletree
Mapletree started its investment in Vietnam since 2005 and has committed a total
investment of US$1 bn in Vietnam
VSIP1,
Binh Duong
Mapletrees logistics parks/centers include:

Mapletree Binh Duong Logistics Center is a 32,000 sqm site comprising 5 units of multitenanted single storey warehouses with mezzanine office, completed in 2007
130,000 sqm
Mapletree Binh Duong Logistics Park is a 680,000 sqm site consisting of ready-built and
VSIP 2,
Binh Duong
built-to-suit bonded and non-bonded warehouses. To date, 8 warehouse blocks (130,000

sqm) have been completed and are 50% occupied
Mapletree Bac Ninh Logistic Park is a 550,000 sqm site located within VSIP Bac Ninh ,
Logistic Parks
being developed over 5 phases. The 1st completed phase (54,000 sqm) comprises 3 blocks
of modular high quality warehouse spaces, and is already 60% occupied since its
inauguration in 2010. This logistics park is slated to house about 300,000 sqm of ready
54,000 sqm
VSIP, Bac Ninh
built and built-to-suit logistics facilities when fully developed
Well-know tenants include Nippon Express, Loscam, Nitto , Denjo, Cargo Int'l, Nissin, etc.
42
KEY FOREIGN PLAYERS

COMPANY
Damco
HIGHLIGHTS
Damco, a part of the A.P.Moller-Maersk Groups logistics activities, provides logistics
Type
Area
Location
solutions to customers from all industries: retail, chemicals, technology, government &
defence, food and beverage, automobile, pharmaceutical, fashion/textiles, etc.
Distribution
The Company currently has 9 sites equating to 37,000 sqm of warehouse facilities at key
Center
26,000 sqm
Binh Duong
37,000 sqm
N/A
10,700 sqm
Ha Noi
10,200 sqm
Da Nang
62,100 sqm
HCMC
gateways of Vietnam
Damcos 26,000 sqm distribution center has been opened in 2011, offering all-in-one
logistics solution: CFS , bonded and general warehouse. The distribution center is wellconnected by road transport and allows to serve both Cat Lai (in HCMC) and Cai Mep
General
ports. The Company also plans to further link the facility to barge infrastructure as a
supplement to truck transport
Kerry Logistics
The Hong Kong-based logistics company offers a full range of logistics services from
customs, shipping to freight forwarding, distribution and a diversified range of valueadded services to customers in various industries including electronics and hi-tech,
fashion and garments, food and beverage, and industrial sectors.
The Company has 3 logistics centers in Hanoi, Danang and HCMC in the total area of
83,000 sqm ; and licenses for bonded warehouse and CFS

Logistic Centers
Applying advanced warehouse management system
In 2013, Kerry Logistics has acquired majority stake in Tin Thanh Express, one of a
leading express company to offer one-stop-shop logistics solutions across the country.
Tin Thanh have 3 major hubs in Hanoi, HCMC and Danang where cargo and packages are
sorted consolidated and delivered by air and road freight. Together with a truck fleet of
more than 160 vehicles, the Company is handling over 10,000 shipments everyday
43
KEY LOCAL PLAYERS

COMPANY
Gemadept
HIGHLIGHTS
Being established in 2008 as a subsidiary of Gemadept Corporation - a leading company in
Type
Area
Location
shipping, port operation, cargo transportation and logistics
The Company has 3 distribution centers in Binh Duong with total area of 42,000 sqm. These
Bonded
37,000 sqm
Binh Duong
Domestic
10,000 sqm
Binh Duong
distribution centers are expected to accommodate up to 60,000 standard pallets, equivalent

to 90,000 CBM.
These centers are designed and built according to international standards such as C-TPAT
Security, TAPA System, FM Global Standards, Standard Green (Green Initiatives), HACCP
dedicated for food group
Having a strong list of customers including Ajinomoto, Vinamilk, Masan, Nestle, P&G, Vinh
Hao, Nissen, Sumitomo, Louis Dreyfus, Ecom, etc.
Transimex- Saigon
Net Sales (2012) :VND2,580.46bn; Profit Before Tax (2012): VND114.50bn
Being established and operated since 1983
Warehousing system including container freight station (7,000 sqm with over 10,000 pallets
Distribution Centers
Song Than I
42,000 sqm Industrial Zone,
Binh Duong
CFS
7,000 sqm
HCMC
Bonded
10,000 sqm
HCMC
Frozen/ Chilled
3,000 sqm
HCMC
capacity, located next to Hanoi Highway and Saigon Riverside), bonded warehouse (10,000
sqm, located inside ICD Transimex), and cold storage (3,000 sqm with over 5,000 pallets
capacity)
The Companys distribution center in Binh Duong with total investment capital of VND 80
billion has completed in the middle of April 2013
Main customers include Vissan, CP Vietnam, Nestle, Pepsico, Tan Hiep Phat, Shanghai Electric
Power Generation Group, etc. Moreover, in 2013, Transimex has cooperated with a Japanese
strategic shareholder to develop additional sources of Japanese customers
Song Than II
Distribution Center
18,000 sqm Industrial Zone,

Binh Duong
Sales Revenue(2012) :VND308.94bn; Profit After Tax (2012): VND67.31bn
44
KEY LOCAL PLAYERS

COMPANY
Vinafco JSC
HIGHLIGHTS
Having a network of more than 350,000 sqm of warehousing strategically located across all main economic areas of
Type
Area
Location
Vietnam such as Thanh Tri, Gia Lam, Hanoi Port (Hanoi), Tien Son Industrial Zone (Bac Ninh), Dinh Vu Industrial Zone
(Hai Phong), Hoa Cam Industrial Zone (Da Nang), Song Than Industrial Zone (Binh Duong), Hau Giang Industrial Park
(Can Tho)
Vinafco JSC has decided to build up distribution centers in Binh Duong, Da Nang and Hau Giang with total
Song Than II
Distribution
Center
10,000 sqm
Industrial
Zone, Binh
Duong
investment capital of VND336.16 bn to provide 3PL logistics (warehousing, value-added services, transport
distribution)
Having applied advanced information technology in professional operations such as Warehouse Management
System (WMS) and Transportation Management System (TMS, GPS)
19,000 sqm
Hoa Cam
Industrial
Zone, Danang
Logistics Park
20,000 sqm
Dong Phu
Industrial
Zone, Hau
Giang
Domestic
60,400 sqm
HCMC
Bonded
3,000 sqm
HCMC
Distribution
Center
The Company is investing to have a total of 500 new trucks by 2014, 15-20 container trailers, 10 tank trucks for the
transport of construction materials and powedered cements, and other special trailers for transporting overweight
goods
Having the long-term relationship with many big customers such as Akzo Nobel Paint (ICI Paints), Kimberly-Clark
Vietnam, Honda Vietnam, American Standard Vietnam, Huawei, Vinaphone, GTel , etc.
South Logistics
JSC
Net Sales ( 2012): VND 510.65 billion; Profit Before Tax (2012): VND1.52 billion
Being established in 1975 and officially transformed from a State Enterprise into a Joint Stock Company since 2007
Having a nationwide warehousing network of 230,000 sqm
Multi-modal transport capability: 150 TEU/day; bulk transport: 700 1,000 tons/day
The Companys main customers are import-export companies in HCMC, Dong Nai, Binh Duong, BaRia-Vung Tau,
Southeast and Southwest regions. Some major customers are Cargill, Scavi, Scancom, Friesland Campina, Pepsico,
P&G, Uni President, Holcim, Colgate Palmolive, etc.
Net Sales (2012): VND 607.33 bn; Profit before tax ( 2012): VND 24.80 billion
Rented
warehouses
HCMC,
72,000 sqm
Binh Duong,
Vung Tau
45
KEY LOCAL PLAYERS

COMPANY
Vinatrans
HIGHLIGHTS
Being established since 1975 as a state-owned company, thus the Company is exposed to
Type
Area
Location
the weakness inherent in state-owned enterprises, such as inefficiency and underfunding
CFS
2,500 sqm
N/A
Frozen & Chilled
2,800 sqm
N/A
3,000 sqm
Binh Duong
4,400 sqm
Ha Noi
32,600 sqm
N/A
50,000 sqm
N/A
50,000 sqm
Ha Noi
20,000 sqm
Dong Nai
8,000 sqm
Binh Duong
1,300 sqm
Bien Hoa
The firms warehousing and storage facilities in Vietnam include: a 2,500 sqm Container
Freight Station (CFS) for sea and air cargo; a joint-venture cold storage facility of 2,800
sqm, run by Vinatrans and Konoike Transport Company of Japan; 40,000 sqm of covered
warehousing; and 50,000 sqm of open storage
Several well- known strategic partners are Schneider Electrics, Sharp, Manuchar Viet
Nam, Sojitz Japan, etc.
Bonded
Net Sales ( 2012): VND 788 .69 billion; Profit Before Tax (2012): VND21.15 billion
General
Open Storage &
Concrete Yard
Dragon Logistic Co., Ltd
Being established in 1996 as a joint venture between Sumitomo Corporation, Suzuyo Co.,
Ltd , Vinafco and Hanel
Total area of self- owned and rented warehouse are 52,200 sqm and 16,150 sqm
Logistic Centers
respectively.
Operating Thang Long Logistics Center in Hanoi with total area of 50,000 sqm, of which
15,000 sqm general warehouse, 5,040 sqm bonded warehouse, and 15,000 sqm
container yard; and Thang Long Logistics Center in Dong Nai Province with total area of
20,000 sqm
Owning a facility of over 200 trucks, lorries, and modern loading/unloading equipments
General
warehouses
46
Section 7
TARGET & POTENTIAL CUSTOMERS

SEAFOOD/FISHERIES
Pangasius
Other
Growth rate
50%
40%
The major export commodity was shrimps, with a
Source: MARD & VASEP
total value of US$2.25 billion as of 2012, showing
Major Importers of Vietnams Seafood

In Terms of Value
a CAGR of 7.39% over the period of 2005-2012.
2020F
-10%
2015F
0
2013F
0%
2012
2011
10%
2010
2009
20%
2008
2007
centers and in turn a promising sign for the growth
30%
2006
1,000
2005
production for specialised seafood processing
2020F
since 2007, indicating the trend of increased
2013F
3,000
2,000
of cold storage in Vietnam.
4,000
2012
farmed seafood has surpased the caught seafood
5,000
2011
2012. It should be noted that the production of
10
Shrimp
6,000
2010
representing a rapid CAGR of 7.63% over 2005-
VND bn
12
Aquaculture
2009
fisheries from marine and inland wateres),
Seafood Export Value
7,000
2008
and 2.6 million tonnes from combined capture of
Wild catch
2007
(including 3.2 million tonnes from aquaculture
000 tons
8,000
2006
Vietnams fish production was 5.8 million tonnes
2005
Seafood Production
Source: MARD & VASEP

Top 10 Vietnams Seafood Exporters (2011)
Unit: million USD
Pangasius export reached US$1.74 billion in 2012,

representing an impressive CAGR of 14.19% during
Vietnams seafood has been exported to around
Cases
74
Japan
Phuong Nam
74
Korea
Anvifish
83
Fimex VN
87
US
the same period.
19%
38%
China
120 countries, in which US accounting for the
18%
largest market share of 19%, following by Japan
Germany
Australia
(18%), Korean (85) and China (5%)

2%3%
3% 5%
8%
Italia
Neitherlands
Spain
Agifish
93
Stapimex
98
Quoc Viet
102
Hung Vuong
122
Vinh Hoan
151
Minh Phu
334
0
Source: MARD
100
200
300
400
Source: VASEP
47

SEAFOOD/FISHERIES
Storage capacity of key players in Vietnam Seafood Industry
Can Tho Port is a key trade facility in the Southern

Mekong Delta. Though the port is near major
agricultural
and
seafood
production
Company
areas,
commodities of Mekong Delta region are still

shipped through ports 160km away in HCMC
because Can Thos passageway has dried up and
there is a lack of landside connections, including
modern road and rail links. Coastal waterway thus
only accounts for 17.66% of freight transportation
in this Southwest region as of 2009 (TDSI),
Storage
Capacity
2012
Volume
Value
Volume
Value
(tonnes)
(mn USD)
(tonnes)
(mn USD)
Location
(tonnes)
SHRIMP
Minh Phu Corp.
Stapimex
27,178.20
334.39
32,049.53
369.40
N/A
N/A
98.00
N/A
105.00
N/A
resulting in low supply of cold storage here.
Havico
4,607.00
52.70
4,514.00
56.04
10,000
Ba Ria, Vung Tau
Cold storage demand in Mekong Delta region is
Cuulong Seapro
5,552.90
60.83
4,425.00
40.70
1,500
Tra Vinh Province
N/A
150.79
N/A
154.90
800
Hung Vuong
47,242.04
122.33
N/A
111.90
42,000
Tan Tao IP, HCMC
Agifish
29,333.59
93.20
28,448.00
91.80
10,000
Dong Thap Province
Anvifish
24,807.00
83.00
25,323.00
77.90
40,000
Long Hau IP, Long An
Navico
N/A
53.70
N/A
73.00
4,900
An Giang
I.D.I Corp
N/A
51.35
N/A
58.20
4,600
Dong Thap
estimated to be around 1.1 million tons due to the

existence of a hundred of seafood processing
companies in this area. However, most of cold
storages of these companies are very small,
around 2,000-3,000 tonnes, not much cold
storage reaching the capacity of more than 5,000
tonnes, thus only enough to store goods
temporarily for short-term contracts.
2011
However, when Can Tho Ports efficiency is

improved, it is expected that there will be an
PANGASIUS
Vinh Hoan
Dong Thap Province
impressive growth of cold storages investment in

this area.
Source: RRC Collection
48
vegetables being distributed through supermarkets

while around 80% are sold at traditional markets
In Hanoi, the distribution network of agricultural
13,417
13,500
12,967
13,000
12,500
782.6
805.5
829.9
2010
2011
2012
12,000
products included 8 wholesalers, 402 wet retail
1,500
1,000
500
0
Grapefruit
market, in which there are only 5% of fruit and
14,000
Thous.ton
2,000
Banana
and vegetables was consumed in the domestic
13,992
Cultivation area
Production volume
Thous.ha
140
120
100
80
60
40
20
0
Pineapple
of 2012. Around 85-90% of Vietnamese fresh fruit
000 tons
14,500
Litchi,
rambutan
tonnes of vegetables and 10 mn tonnes of fruits) as
Production Volume
Orange,
mandarin
was around 24mn tonnes (including nearly 14 mn
Cultivation Area
000 ha
840
830
820
810
800
790
780
770
760
750
Mango
Vietnams fruit and vegetable production volume
Grape
Cultivation Area & Production Volume of

Some Main Fruit Crops
Longan
Cultivation Areas and Production Volume of

Vegetables in Vietnam
FRUIT/VEGETABLES
Source: MARD
Source: MARD
markets, 44 supermarkets and 78 stalls/shop by

Annual Fruit & Vegetables Consumption in
Hanoi, HCMC and Da Nang
2009. These figures in HCMC were 3 agricultural

product wholesale markets ( Thu Duc, Hoc Mon
and
Binh
Dien),
238
retail
markets,
78
supermarkets and hundreds of shops involved in

trading vegetables. However, the HCM City People
Committee
has
oriented
supermarket
development, from 78 in 2009 to 177 by 2015, to

gradually replace the urban markets
Among 3 metropolitan cities of Vietnam including

Hanoi, HCMC and Danang, it is estimated that the
annual fruit and vegetables consumption in Hanoi is

the largest with 950,000 tonnes, followed by HCMC
tons
1,000,000
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
HCMC
950,000
750,000
Hanoi
238
Retail Markets
402
Wholesale Markets
219,000
78
Supermarkets
Hanoi
HCMC
Danang
(750,000 tonnes) and Danang (219,000 tonnnes)

Vegetables Distribution Network in Hanoi and

HCMC (2009)
44
200
400
600
Source: Departments of Industry and Trade in Hanoi & HCMC
49

FRUIT/VEGETABLES
Fruit & Vegetables Export Value

US$ mn
Export portion of Vietnamese fruit and vegetables
1,200
accounts for less than 7% of the total production
1,000
volume. As of 2012, export turnover of Vietnam
800
vegetables & fruit recorded at US$ 0.83 billion, and

is expected to achieve the level of US$1 bn by 2013
40%
35%
30%
25%
600
20%
15%
400
However, the fresh proportion of fruit and

vegetables export is quite modest as compared to
the processed, frozen and dried ones. One of the
10%
200
396
438
460
623
829
1,000
2008
2009
2010
2011
2012
2013F
5%
0%
reasons is the fragemented and small-scale

Source: Vietnam Customs
production resulting in the lack of cool chain from

field to pack-house (i.e dedicated cold storage
facilities, refrigerated trucks), causing unnecessary
quality deterioration
It could be seen that post-harvest losses in fruits

and vegetables in Vietnam is pretty high as
compared to other Asian countries. The postharvest losses is estimated to be 20%-30% for
vegetables and 25%-40% for fruits
Top 10 Importers of Vietnams Fruit &

Vegetables (2012)
Singapore
19.84
Thailand
20.37
Holland
21.61
Vegetables
Korea
22.55
24.51
Taiwan
25.65
Russia
28.37
Japan
Philippines
Thailand
Malaysia
39.87
54.65
China
US$mn -
100
200
20%
25%
Vietnam
218.06
300
Source: MARD
Fruit
Indonesia
Indonesia
US
Post-harvest Losses in Fruits and

Vegetables in Selected Asian Countries
0%
20%
30%
40%
40%
60%
Source: Bautista (2001)

50

Main reasons for tomato post-harvest loss in Vietnam
TOMATO CASE STUDY
Reason
Mode of transport of tomato in Vietnam
Hot weather during harvest
69
15
Humid weather during harvest
46
25
Diseases
38
Damage during harvest
23
11
85
19
95
Poor packaging
23
20
14
High temperature in storage facility
15
30
14
High humidity in storage facility
15
30
11
Low humidity in storage facility
Poor hygiene conditions
Poor infrastructure facilities
15
43
Wholesaler
Cannot sell all vegetables
15
40
14
40
Collector
Poor quality of purchased vegetable crop
11
31
Other reason of spoilage
11
No loss
15
11
13
100
20
100
35
100
Wholesaler
Collector
Motorbike
Damage during transport
Bicycle
0%
50%
100%
Source: Surveys in collaboration between AVRDC and RIFAV, 2005, N=105

observations
Storage facilities for tomato in Vietnam
None
Retailer
Off-site
Retailer
Retailer
Mini truck
Wholesaler
Rented vehicle
Refrigerated
truck
Collector
Rented storage
Own
0%
20%
40%
60%
80%
Source: Surveys in collaboration between AVRDC and RIFAV, 2005, N=105

observations
Total
Source: Surveys in collaboration between AVRDC and RIFAV, 2005, N=68 observations
51

Measures to prevent loss of tomato along the supply chain in Vietnam
TOMATO CASE STUDY
Strategy
It could be seen that preservation plays an
Farmer
Trader
Retailer
Harvest during cool weather
14
38
Vietnam, most greenery products are kept at the
Careful harvest/demand careful harvest
21
57
27
original state, thus encouraging rapid bacteria
Store in cool area
20
54
15
20
Observe care during transport
19
51
24
73
23
Harvest after buyer has been identified
11
30
Collect during cool weather
27
Demand time of harvest
Observe care in packaging
11
33
Low humidity in storage area
Good hygiene conditions
Not buying more than what is needed
25
71
Buy high quality vegetable crop
18
13
37
Do nothing
Other preventive measure of spoilage
37
100
33
100
35
100
important role in maintaining the naturally fresh

looking of fruit and vegetables. However, in
multiplication. Therefore, there is a strong need of

cold storage to complete supporting infrastructure
system for agricultural production, from farmers to
retailers
Total
Source: Surveys in collaboration between AVRDC and RIFAV, 2005, N=105 observations. Values are
multiple responses
52

FRUIT SEASON CHART
Jan
Feb
Mar
Apr
May
June
Jul
OPTIMUM TEMPERATURE OF SOME FRUITS IN MEKONG

DELTA RIVER
Aug
Sep
Oct
Nov
Dec
Temperature
(Celsius Degree)
Fruits
Avocado
Banana
Dragon Fruit
Durian
Grape
Guava
Jackfruit
Lime
Longan
Storage Time
Ha Lc mango
12-13
4-5 weeks
Chu mango
12-13
3-4 weeks
6-8
25-30 days
4-5 weeks
3-4 weeks
Nm roi pomelo
12
3-3.5 months
Da xanh pomelo
12
3-3.5 months
Snh orange
8-9 weeks
Tiu da b longan
Xung
longan
cm
vng
Ch Go dragon fruit
Hng mandarin
7-8 weeks
Mango
ng mandarin
5-6 weeks
Mangosteen
Java rambutan
12
2 weeks
Orange
Rongrien rambutan
12
2 weeks
Papaya
Chn Ha durian
15
2 weeks
Persimon
Ri 6 durian
15
2 weeks
L Rn star apple
15
15 days
Mangosteen
10
2 weeks
Cayenne pineapple
10
3 weeks
Queen pineapple
15-20
2 weeks
Gi banana
18-20
2 weeks
Cau banana
15
3 weeks
Pineapple
Plum
Pomelo
Rambutan
Mandarin
53

VEGETABLES SEASON CHART
Jan
Feb
Mar
Apr
May
June
Jul
Aug
Sep
Oct
Nov
Dec
Tomato
Eggplant
Chilli
Hot pepper
Sweet pepper
Radish
Carrot
Muskmelon
Squash
Pumpkin
Chayote
Lettuce
Onion
Water morning glory
Cabbage
Cauliflower
Bamboo shoot
Common bean
China bean
Ginger
Straw mushroom
54

COMPANY
Metro
Cash & Carry Vietnam
HIGHLIGHTS
WAREHOUSE INFORMATION
Starting operation since 2002
A leading modernized wholesaler in Vietnamese market with 19 stores from North to South Fruit & Vegetables
and more than 1,000 suppliers
Currently owned 4 METRO Distribution Centers (DC) throughout Vietnam and in charge of
Type
Area
Location
N/A
Lam Dong
Fresh DC
N/A
Binh Duong
Dry DC
N/A
HCMC
N/A
Ha Noi
DC
dozens of delivery vehicles from DCs.
Dry & Non food

products DC
Co.op Mart
Being established since 1989 and operated by Saigon Union of Trading Cooperatives
Up to 2011, Co.opMart chain has 59 supermarkets throughout Vietnam and is well positioned
for strong performance during periods of low consumer confidence thanks to low-cost
strategy and increasing private lable goods
Since 2005, Co.opmart has opened a distribution center located in Song Than Industrial Park,
Distribution
Center
8,000 sqm
Binh Duong
27,768 sqm
HCMC
Binh Duong province with the total area of 8,000 sqm
In 2013, Co.opmart has cooperated with NTUC Fair Price to established a joint venture
company to develop a chain of hypermarkets in Vietnam
Satra
Being established since 1995, SATRA Group has developed aggressively from a state-owned
enterprise into a holding company with over 60 subsidiaries, affiliates and joint-ventures
Developing modern retail trade system including convenience stores (SatraFoods), trade
centers (SatraMart).
Cold storage
Some major suppliers are Vissan, Cau Tre, APT, Cofidec, AGREX Saigon, Nhabexim (food
processing products); Binh Dien wholesale market (fresh fruit, vegetables, meat, poultry and
sea foods), etc.
The Company has started to construct a distribution center since 2013
55

PACKAGED FOOD
Retail sales volume of Vietnams packaged food
600,000
recorded at nearly 457,000 tons as of 2012,
500,000
300,000
increasing tendency of urbanization and better
200,000
6,000
800
5,000
600
4,000
3,000
400
2,000
exposure to the Western culture. In 2012, selling
Source: Euromonitor 2013
2017F
volume of this type of foodstuff was 4,758 tonnes,

equivalent to the value of VND620bn. Chilled
2016F
2007
2017F
2016F
2015F
2014F
2013F
2012
2011
2010
2009
2008
2007
in Vietnams community because of the greater
0
2015F
0
2014F
Chilled processed food is gaining more popularity
200
2013F
1,000
2012
100,000
2017.
1,000
7,000
2011
economics conditions, reaching 545,000 tons by
bn VND
1,200
Value
8,000
400,000
packaged food is expected to grow in line with
Volume
2010
2012. Over the forecast period of 2013-207,
tons
9,000
2009
showing an impressive CAGR of 8% during 2007-
Sales of Chilled Processed Food
2008
Sales of Packaged Food by Volume
Market shares of key players
Sales of Frozen Processed Food
processed food is forecasted to record a volume

tons
45,000
for improvement and innovation.
40,000
3,500
35,000
3,000
25,000
Vietnam. This segment of packaged food has
20,000
achieved the sales volume of 25,502 tonnes in
15,000
Company
% share
% share
Vissan
23.1%
Hien Thanh
11.5%
Halong
21.6%
10,000
1,000
San Miguel
10.0%
Cautre
12.5%
5,000
500
Halong
9.8%
Agifish
11.0%
Duc Viet
7.9%
Cholimex
2017F
2016F
2015F
2014F
2013F
0
2012

Company
1,500
2011
a constant CAGR of 8% of over 2013-2017.
Frozen Processed Food
37.4%
2,000
2010
volume of frozen processed food is expected to see
Chilled Processed Food
Vissan
2,500
2009
2012, bringing retail value of VND2,560bn. Sales
bn VND
4,000
Value
30,000
also driven the growth of frozen processed food in
2008
In addition, busy lifestyles and urbanization has
Volume
2007
CAGR of 10% over 2013-2017 as there is still space
6.7%

56

Sales of Chilled Processed Food by
Distribution Format
PACKAGED FOOD
In terms of distribution format for chilled/frozen

packaged food, Euromonitor forecasts that modern
retailing will gradually take over traditional
retailers share in the near future. Currently
modern channels account for 34% of chilled
processed foods retail sales value and 31% of
Sales of Frozen Processed Food by

Distribution Format
100%
100%
80%
80%
60%
60%
40%
40%
20%
27%
28%
29%
34%
32%
20%
34%
0%
23%
25%
26%
31%
31%
31%
2007
2008
2009
2010
2011
2012
0%
2007 2008 2009 2010 2011 2012
frozen processed food
As
supermarkets/hypermarkets
Source: Euromonitor, 2013
aiming
Highlights of some key players in Vietnams Packaged Food Industry
at
providing good quality products to the customers
Name of company
Storage Capacity
( tonnes)
Sales Value
with the lowest possible price, thus indicating the

potential growth for distribution center as well as
Vissan Co. Ltd.
Besides, it can be seen that cold storage capacity
Ha Long Canfoco Foods
2,000
2011: VND828 bn
250
N/A
2011: VND745 bn
N/A
86 distributors and 38 agents including 29

supermarket systems (~280 supermarket units) and
more than 1,000 retailers. Cau Tres products are
more available in modern channels rather than small
neighbourhood stores
N/A
1,500- 2,000
N/A
2011: VND488 bn
1,000
of some key players in Vietnams packaged food is

quite low as compared to their production
Cau Tre Export Goods Processing

JSC
capacity, thus there is undoubted demand for cold

storage outsourcing in this industry
San Miguel Pure Foods

Cholimex Food JSC
Duc Viet Food JSC
100 distributors, 11 direct stores, more than 600

retailing points at key wholesale markets, and 100
product showrooms in HCMC. Besides, the Company
also distributes its products in popular supermarkets,
hypermarkets and independent small grocers
2011: VND4,374 bn
cold chain management
Distribution Network
2009: VND145 bn
N/A
60 distributors
Wide distribution network mainly in Hanoi and other
big cities including HCMC, Da Nang, Hai Phong, etc.
Their products are distributed in supermarkets
(Metro, Big C), beer stores, hotels, food stores (over
1,500), schools, hospitals (over 300)

57

DAIRY PRODUCTS
VND bn
Domestic dairy industry posted a growth rate of

24% from a year earlier to reach sales value of
VND52,100 billion as of 2012. The figure is
expected to continue increasing in the future as
Vietnams milk consumption per capita of 5.8 liters
is still fairly low compared to others Asian countries
such as Indonesia (12 liters), China (20 liters),
Thailand (30 liters) and Malaysia (44 liters)
13%
240,000
220,000
200,000
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
-
3,600
3,300
3,000
2,700
2,400
2,100
1,800
1,500
1,200
900
600
300
-
16%
23%
Unit: VND billion
mn liters
6%
7%
10%
80,000
Vinamilk dominates the market with 45.5% market

shares. Together with Friesland Campina Vietnam
Value
30,000
20,000
subsidiary company, operating in Hanoi and HCMC
30%
20%
60 outlets and nearly 200,000 retail points. The
10%
outlet to 500 in the next 5 years
12,300
2010
2011
15,600
2008
2009
2012
2013
Sweetened Condensed Milk
Milk Powder
Liquid Milk
Drinking Yoghurt
2014
Source: GSO, MARD, Nielsen, Tetra Pak

Market share by retail value in 2012
Others (small enterprises and import)
Vinamilk
19.7%
Mead Johnson Nutrition
33%
35%
38%
41%
41%
41%
Hanoi Milk JSC

Nestle VN
Friesland Campina Vietnam
4%
8%
2007
2008
14%
14%
15%
2010
2011
2012
3.3%
45.5%
3.7%
7.4%
20.4%
10%
0%
2009

1,667
9,634
18,900
Eating Yoghurt
Yoghurt & Sour Milk
40%
Park. The Company now has about 250 distributors,
Company is going to increase the number of its
1,413
7,452
1,938
10,000
Volume
Drinking Milk
50%
warehouse of 30,000 pallet (~30,000 tons of milk)

in the area of 5,000 sqm in My Phuoc Industrial
1,204
5,890
1,745
% Sales Value of Dairy Products Through

Supermarkets/Hypermarkets & Convenience
Stores
Vinamilk has a warehousing and transportation
Company is investing in a totally-automatic
1,154
2,770
22,800
2,326
3,873
40,000
3,349
2,791
5,422
50,000
Source: GSO, MARD, Nielsen, Tetra Pak
taken approximately 75% total market share
with the fleet of 300 trucks. Moreover, the
8,133
60,000
and Nestle Vietnam, those companies have already
12,199
70,000
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Sales Value of Vietnam Dairy by Products
Sales Value & Sales Volume of Dairy

Products

58

COSMETIC PRODUCTS
Breakdown of Vietnams Cosmetics

Revenue
Vietnam has experienced a steady increase in

cosmetics consumption,
12%
reaching a record of
US$410 million in 2011 from US$ 337 million in
Makeup
2008. A robust growth continues to be expected for
Skin care& Body

care
Nail
the coming years which was attributed to Vietnams

young population, higher disposable income and
38%
38%
Hair care
untapped markets in rural areas
Perfumes
4% 4%
4%
There are only a few major distributors of beauty

and
personal
care
products
in
Toiletries
Import value of Different Cosmetic Segments

US$ mn
90
80
70
60
50
40
30
20
10
0
Perfumes
Hair care
Skin care
Toiletries
Color cosmetics
2009
Sales Value (2011) = US$410 mn
2010
2011
Vietnam.
Source: GSO
Multinational corporations such as Unilever, P&G,
Source: Vietnams General Department of Customs
Beiersdorf usually distribute their own products.

Retail Structure Number of stores
Smaller distributors normally perform better in the

regions that they are based in
Channel
Cosmetic products are distributed under different
Modern trade (supermarkets, modern markets)
2009
2010
2011
537
642
811
89,584
91,515
97,221
methods, including wholesaling, setting up stands
Traditional grocery stores
in the supermarkets, department store or individual
Personal store
4,082
3,779
3,785
shops.
Market stall mix business
3,378
3,138
3,207
Market stall health & personal care
3,672
3,223
2,986
577
1,045
1,230
Modern
supermarkets
and
retail
channels
hypermarkets
including
seem
to
outperform the traditional channels such as

independent small grocers and outdoor markets
Cosmetic store
due to their easy accessibility, wide range of
Pharmacy
9,010
10.114
11,119
products and reliable product origins
Maternity & Baby shop
1,791
1,997
2,376
Source: Vietnam Pocket Reference Guide 2012 - Nielsen

59

COMPANY
HIGHLIGHTS
Unilever
Unilever was one of the earliest multinational companies to be
WAREHOUSE INFORMATION
Type
Area
Location
65,000 sqm
Binh Duong
established in Viet Nam.

In 2007, Unilever Vietnam has opened its largest distribution
center in Vietnam Singapore Industrial Park , Binh Duong Province,
with total investment of US$ 20 million. This 65,000 sqm center
comprises of 51 goods-delivering gates and 12 goods-receiving

gates, which are managed by Australia-based Linfox Logistics
The DC aims to meet the growing development of Unilever s Distribution
logistics in the next 5 years and Unilevers service in product
Center
distribution to southern customers, stocks for Unilever Vietnams

secondary distribution centers and to 18 countries in the world
60

MAJOR COMPANIES WITH LARGE IMPORT VALUE IN COSMETIC SECTOR
SKINCARES
Importers
Brands
TOILETRY
Import value
(USD, 2011)
Beiersdorf Vietnam
Nivea
17,960,457
Procter&Gamble Vietnam
Olay
7,212,398
AA Pharmaceutical Co., Ltd
Clear&Clear
4,917,630
LG Vina Co., Ltd
Ohui
3,300,671
LOreal Vietnam Co., Ltd
Maybelline
2,748,293
Unilever Vietnam
Hazeline
2,563,906
Phytopharma Co., Ltd
Cetafil
2,122,570
Johnson&Johnson Vietnam
Johnson &Johnson (baby)
2,025,024
Shiseido Vietnam Co., Ltd
Shiseido
1,732,864
Thuong Xuan Cosmetics
Oriflame
1,117,847
Viet Lotus Co., Ltd
The Face Shop
1,100,962
Importers
Beiersdorf Vietnam
Nivea
AA Pharmaceutical Co., Ltd
Johnson & Johnson
4,976,079
Johnson&Johnson Vietnam
Johnson&Johnson for baby
4,638,992
Unilever Vietnam
Rexona, Axe
2,176,072
Vietnam Australia Trading Co., Ltd
Babycare
1,892,874
SC Johnson&Johnson Vietnam
Glade
1,453,920
Nhan Loc Trading & Manufacturing
Leivy
1,443,425
Procter&Gamble Vietnam
Amby, Gilette
1,284,506
Song Hang Trading Co., Ltd
Dial
1,234,364
Kim Lien Trading Co., Ltd
Monsavon
HAIRCARES
Importers
Brands
22,770,165
757,018
PERFUMES
Import value
(USD, 2011)
Procter & Gamble Vietnam
Pantene, Head&Shoulder
6,748,027
Nature Creative Group
Davines
2,157,858
F.C.Co., Ltd
Bigen
1,357,076
Nam Dao Co., Ltd
Wella
1,323,546
Unilever Vietnam
Clear, Sunsilk, Dove
An Thinh Phat Trading Co., Ltd
Artego, Livegain
Import value
(USD, 2011)
Brands
Brands
Import value
(USD, 2011)
Brands
Import value
(USD, 2011)
Chanel
2,398,671
Armani
247,784
Bvlgari
1,034,700
Burberry
210,669
Christian Dior
832,471
Givenchy
171,244
1,267,075
Lancome
426,008
Versace
151,510
1,143,301
Gucci
248,265
CK
142,684

61

LIST OF MAJOR IMPORTERS AND DISTRIBUTORS OF COSMETICS IN VIETNAM
Name of
importers/distributors
Address
An Thinh Phat Trading Co.,

Ltd
ATP Building, 56/1 Tran Quang Dieu, O Cho Dua Ward, Dong Da District,
Hanoi
Tel: (84-4) 3766 5129 3766 5169
Fax: (84-4) 3766 5216
Email: sonngoc@hn.vnn.vn
Salonzo Cosmetics Company
192 Mai Anh Tuan, Ba Dinh District, Hanoi

Tel: (84-4) 3519 0242
Fax: (84-4) 3519 0243
Email: contact@salonzo.com
Gobal Idea Company Ltd.
16/8 117 Lane, Thai Ha Street, Dong Da District, Hanoi

Tel: (84-4) 3537 6626
Fax: (84-4) 3537 6625
Email: info@inebrya.vn
Website: www.inebrya.it
Mrs. Vu Ngoc Quyen

Title: Director
Email: ngocquyen@globalideavn.com
Phone: +84 912 018 688
Perfect Beauty Company Ltd.
Ngoi Sao Xanh Building, 57 Xa Dan 2 Street, Dong Da District, Hanoi

Tel: (84-4) 2246 6407
Fax: (84-4) 3719 1092
Email: contact@perfectbeauty.com.vn
Website: www.perfectbeauty.com.vn
Mr. Tran Binh (Eric)

Title: Business Director
Phone: +84 903 455 571
Mirato Vietnam JSC
57 Tue Tinh Street, Hai Ba Trung District, Hanoi

Tel: (84-4) 6282 7676
Fax: (84-4) 6282 7711
Email: miratovn@mirato.vn
Website: www.mirato.vn
Mr. Vu Huu Hung

Title: Vice General Director
Email: vh@mirato.vn
Phone: +84 942 827 676
S-Net Vietnam JSC
169B Nguyen Thai Hoc Street, Ba Dinh District, Hanoi

Tel: (84-4) 3734 7502
Fax: (84-4) 3734 7501
Email: info@cosmart.com.vn
Website: www.cosmart.com.vn
Ms. Nguyen Huong

Title: Assistant to Director
Email: huongnguyen2110@gmail.com
Contact Details
Mr. Hoang Thanh Son
Title: General Director
Email: sonngocatp@yahoo.com.vn
Phone: +84 903 226 281
Mr. Tran Hoan Sinh
Title: Director
Email: hoansinh@salonzo.com
Phone: +84 914 383 846

62

Name of
Address
Contact Details
Tititi Cosmetics Co., Ltd
66 Hoa Cuc, Ward 7, Phu Nhuan District, HCMC

Tel: (84-8) 3517 2259
Email: an_le@affinage-vietnam.com
Website: www.affinage.com
Nam Tran Pharma Trading

Co., Ltd
21 Ha Huy Tap, Phu My Hung Town, Tan Phong Ward, District 7, HCMC
Tel: (84-8) 5412 1664
Fax: (84-8) 5412 1665
Email: contact@namtranpharma.com
Website: www.namtranpharma.com
Creative Nature Group
10A1 Ly Nam De, Hoan Kiem District, Hanoi

Tel: (84-4) 3747 4179
Fax: (84-4) 3747 4178
Email: phamtrong@davines.com.vn
Website: www.davines.com
Mr. Pham Trong

Title: Operation Director
Email: phamtrong@davines.com.vn
Nam Dao Company Ltd.
777 Le Hong Phong Street, Ward 12, District 10, HCMC

Tel: (84-4) 3862 6288
Fax: (84-8) 3862 9898
Email: marketing@namdao.com.vn
Website: www.namdao.com.vn
Mrs. Nguyen Thuy Lieu

Four Seasons Co., Ltd.
182A Nguyen Van Troi, Ward 8, Phu Nhuan District, HCMC

Tel: (84-8) 3997 9926
Fax: (84-8) 3997 9889
Email: info@pevonia.com.vn
Website: http://fourseasons.com.vn
Ms Quach Kim Mai

Title: Director
Natural JSC
234 Ngo Tat To, Ward 22, Binh Thanh District, HCMC
Tel: (84-8) 3514 2882
Fax: (84-8) 3514 2883
Email: www.spasvietnam.com
Website: www.spasvietnam.com
Mr Le Trong An
Title: Director
Email: an_le@affinage-vietnam.com
Mobile: +84 916 006 006
Mr Pham Tam Hoang
Mrs Nguyen Ngoc Lan

Title: Managing Director
Email: nnl@spasvietnam.com

63

Name of
Address
Contact Details
Phu Thanh Cosmetics Trading

Production Co., Ltd
282/48 Bui Huu Nghia, Ward 2, Binh Thanh District, HCMC

Tel: (84-8) 2247 9947
Fax: (84-8) 3551 0540
Email: tran@phuthanhdistributor.com
Website: www.phuthanhdistributor.com
Mr. Tran Huu Chan

Title: Director
Phone: +84 903 996 818
Viet Lotus Co., Ltd
294-296 Hai Ba Trung, Tan Dinh Ward, District 1, HCMC

Tel: (84-8) 3829 3105
Fax: (84-8) 3820 9873
Email: thanhmy@thefaceshop.com.vn
Website: www.thefaceshop.com
Ms Huynh Thanh My
Title: Managing Director
Phone: +84 909 193 922
Vinh Hanh Co., Ltd
11 Street 55A, Quarter 9, Tan Tao Ward, Binh Tan District, HCMC
Tel: (84-8) 3754 5259
Fax: (84-8) 3754 5258
Email: vinhhanhcoltd@vnn.vn
Mr Nguyen Tang Vinh

Title: Director
Email: vinhhanhcoltd@vnn.vn
Phone: +84 903 316 678
Ky Phong Import-Export &

Trading Co., Ltd
1/24/14A Road No. 2, Go Vap District, HCMC

Tel: (84-8) 5427 3110
Fax: (84-8) 5427 3110
Email: tu_t_phong@yahoo.com.vn
Website: www.lanopearl.com.au
Mr Tu Thanh Phong
Title: Executive Director
Phone: +84 122 475 2812
Daicata International Co., Ltd
88 Ba Thang Hai Street, District 10, HCMC

Tel: (84-8) 3868 2994
Fax: (84-8) 3868 2997
Email: lan.pp@daicata.com
Website: www.daicata.com
Mrs Pham Phong Lan

Title: Vice Director
Phone: +84 918 907 336
Thuy Duong Trading Co., Ltd
240Ter Tran Hung Dao Street, Nguyen Cong Tru Ward, District 1, HCMC
Tel: (84-8) 3838 5017
Fax: (84-8) 3838 5018
Email: ctthuyduong@hcm.vnn.vn
Ms. Duong Hong Bich Thuy


64

Name of
Address
Contact Details
Thuy Loc Trading Co., Ltd
Floor 8, Saigon Paragon Building, 3 Nguyen Luong Bang, District 7, HCMC

Tel: (84-8) 5410 2102
Fax: (84-8) 5416 0360
Email: info@thuyloc.com.vn
Website: www.thuyloc.com.vn
Mrs. Le Hoai Anh

C.T.Group
Floor 2, 139 Pasteur, District 1, HCMC

Tel: (84-8) 2242 8253
Fax: (84-4) 6297 2000
Email: info@ctgroupvietnam.com
Website: www.ctgroupvietnam.com
Mr Nguyen Quang Hoang Long

Title: Assistant to General Director
Phone: +84 989 309 080
Lyna Trading Co., Ltd
324 Tran Hung Dao Street, Nguyen Cu Trinh Ward, District 1, HCMC
Tel: (84-8) 3914 0669
Fax: (84-4) 3920 3667
Email: info@lyna.com.vn
Website: www.lyna-azim.com
Mr Nguyen Minh Hai

Title: Vice Director
Email: hainguyen_minh@yahoo.com
Phone: +84 938 006 990
Khuong And Le Investment

Trading Co., Ltd
Floor 8th, VMT Building, Lot A1F, Industrial Zone, Dich Vong, Cau Giay,
Hanoi
Tel: (84-4) 3795 1701
Fax: (84-4) 3795 1703
Email: van.ka@vmt.vn
Website: www.menard-cosmetic.com
Mr Khuong Anh Van

Title: President CEO
Email: van_ka@vmt.vn
Phone: +84 989 746 666

65

PHARMACEUTICAL
Vietnams Pharmaceutical Sector

US$ mn
3,500
Vietnams pharmaceutical domestic consumption
3,000
has posted an impressive CAGR of 18% over the
2,500
last 5 years to reach US$2.6 billion as of 2012.
2,000
However, domestic production only meet around
1,500
46% of total medical demand, thus Vietnams

pharmaceutical industry still depends heavily on
import
Import
Domestic Consumption
Domestic Production
1,750
1,500
1,252
1,170
1,000
500
650
710
817 395
956 475
923
810
1,136 600
1,425 715
1,696 931
1,913 919
2,400 1,100
2,600 1,200
2007
2008
2009
2010
2011
2012
0
2005
2006
A positive outlook continues to be expected for
Source: DAV
pharmaceutical sector due to higher disposable

income and living standards of Vietnamese
people, as well as Vietnams health expenditure
Average Health Expenditure Per Capita

2008-2012
Top 10 Pharma Companies have largest

revenues in 2012
per capita still being pretty low compared to

other Asian countries such as Thailand (US$2012)
and Malaysia (US$346)
Singapore
2,286
Korea
1,616
Malaysia
Hau Giang Pharma is the biggest player in this
China
sector with revenues and net profit being
Thailand
VND2,932 bn and VND491 bn as of 2012, followed

by Traphaco, Domesco and Mekophar
346
278
202
Indonesia
95
Vietnam
95
Cuu Long Pharma
612
Meedipharco-Tenamy
645
Ha Tay Pharma
677
HD Pharma
684
Namha Pharma
739
Imexpharm
Mekophar
Domesco
Cambodia
51
Traphaco
Myanmar
23
Hau Giang Pharma
USD 0
500
1,000
1,500
2,000
2,500
VND bn 0
818
1,101
1,261
1,401
2,932
2,000
4,000
Source: cafef.vn
66
Section 8
FINANCIAL FEASIBILITY STUDY

TRANSPORTATION BUSINESS
Unit of Work in Vietnam
2014
2015
2016
2017
2018
Unit Truck value

Annual Cost
VND/USD
Cost 1 L / Diesel / VND
Liter Diesel consumption 1 KM / Truck
DIESEL COST /KM
25,000
5,000
21,500
20,000
0.10
0.09
25,000
5,000
22,000
20,600
0.10
0.09
25,000
5,000
22,500
21,200
0.10
0.09
25,000
5,000
23,000
21,800
0.10
0.09
25,000
5,000
23,500
22,400
0.10
0.10
Operating day / year

Nbr KM / Day
Km / truck / year
365
100
36,500
365
100
36,500
365
100
36,500
365
100
36,500
365
100
36,500
TIRE COST / KM
0.02
0.02
0.02
0.02
0.02
REPAIR & MAINTENANCE
0.05
0.05
0.05
0.05
0.05
TOLL FEE + MISCELLANEOUS

+ Toll: US$2/100km
+ Misc: 300kVND/3 times a month/truck
0.03
0.03
0.03
0.03
0.03
UNIT OF WORK /KILOMETER (CK)
0.20
0.20
0.20
0.20
0.20
Driver salary
Drivers (Social benefit)
DRIVER COST
UNIT OF WORK / Hour (CC/H)
279
74
353
2.01
287
76
364
2.07
296
79
375
2.13
305
81
386
2.19
314
83
398
2.26
5,000
25,000
20,000
800,000
1,000
1,500
7,500
21
255,000
94,238
8
5,000
20,000
15,000
600,000
800
1,560
7,360
20
264,960
100,077
8
5,000
15,000
10,000
400,000
600
1,560
7,160
20
272,080
105,718
8
5,000
10,000
5,000
200,000
400
1,560
6,960
19
271,440
108,607
8
5,000
5,000
200
1,560
6,760
19
270,400
111,527
8
28
28
27
27
26
Depreciation
Loan (over 5 Y) - calculation base
Residual Value
Residual Loan Value
Finance Cost
Insurance cost
Total VEHICLE COST
TOTAL VEHICLE COST / Day (CV)
Vehicle cost
Structurue cost
HEAD OFFICE COST (CS)
UNIT OF WORK / Daily
1,000,000
67

TRANSPORTATION BUSINESS
Benchmark Europe
Assessment Vietnam
2014
2015
2016
2017
2018
0.20
Unit of work
Unit of KM
USD
0.20
0.20
0.20
0.20
Unit of Hour
USD
2.01
2.07
2.13
2.19
2.26
Unit of Day
USD
28.14
27.78
27.24
26.70
26.16
Trip Distance (KM)
KM
50
50
50
50
50
Truck Capacity
Ton
Average load
Ton
1.00
1.01
1.02
1.03
1.05
Rate of load
Percent
66%
66%
66%
66%
66%
Average speed
KM/H
30
30
30
30
30
Stoppover Time (load/unload Timing)

Number of hours / Per Day / Truck
operate
Rate of margin
Hour
1.33
1.33
1.33
1.33
1.33
Hour
20%
20%
20%
20%
20%
Percent
Cost of a truck tour

Nbr of KM / Tour
KM
50
50
50
50
50
Time to complete a Tour
Hour
3.00
3.00
3.00
3.00
3.00
Time to complete a tour
day
0.33
0.33
0.33
0.33
0.33
KM term cost
USD
10
10
10
10
10
Hour term cost
USD
Daily term cost
USD
Total Cost
USD
25
25
25
25
25
Unit cost/ton
USD
25.19
25.01
24.79
24.57
24.37
Margin
USD
6.30
6.25
6.20
6.14
6.09
Selling Price / Ton
USD
31.49
31.27
30.99
30.72
30.46
Selling Price
68

INCOME STATEMENT FOR TRANSPORTATION BUSINESS
Income Statement - Transportation
2014
2015
2016
2017
2018
1,177,975
1,250,968
1,321,481
1,357,593
1,394,087
37,411
40,007
42,648
44,199
45,773
31.49
31.27
30.99
30.72
Direct Cost / as % of KM
368,967
391,255
413,579
425,041
436,506
Direct cost / Periodic
224,175
244,483
265,807
280,986
296,836
Insurance Cost
51,000
56,160
59,280
60,840
General & Admin
94,238
100,077
105,718
108,607
111,527
EBIDTA
439,595
458,994
477,096
482,119
486,817
Depreciation
170,000
180,000
190,000
195,000
200,000
34,000
28,800
22,800
15,600
235,595
250,194
264,296
271,519
278,817
Tax (25%)
58,898.77
62,548.42
66,074.05
67,879.63
69,704.37
Net Profit
176,696
187,645
198,222
203,639
209,113
365
365
365
365
365
1,095
1,095
1,095
1,095
1,095
34
36
38
39
40
Net Sales
Ton Transported
Selling Price Per ton
Interest
Gross Profit
30.46
62,400
8,000
Operation Hypothesis
Number of operating day
Nbr of Truck Tour/Year
Truck in service
69

WAREHOUSING BUSINESS
Revenues Assumptions
Storage Revenue
Storage rate / ton / day
Occupational space
Utilise Capaciy
Operating Day
7,050
Handling Revenue
Handling fee / Ton / Day
2014
2015
2016
2017
2018
1,175,332
0.81
5,288
75%
365
1,257,435
0.82
5,429
77%
365
1,343,459
0.84
5,570
79%
365
1,433,528
0.85
5,711
81%
365
1,419,326
0.86
5,640
80%
365
270,316
0.75
284,925
0.75
299,919
0.75
315,297
0.75
307,560
0.75
Cost Assumptions
Cost breakdown/Storage Industries
% Benchmark Europe
% Assumption VN
22%
32%
10%
15%
4%
6%
4%
6%
40%
12%
5%
7%
5%
7%
4%
6%
6%
9%
100%
100%
Rent/Depre
Maintenance
Equipement
Loading charge
Labour cost
Consumable
GA - indirect
Labor head office /head office
Others
Loan
(2 MUSD/ 7 y)
Anuity
Acumulated
Residual
interest
Interest PA
Cost
Assumption VN
373,549.60
169,795.27
67,918.11
67,918.11
135,836.22
84,897.64
84,897.64
67,918.11
101,877.16
1,154,607.86
Y1
Y2
Y3
Y4
Y5
Y6
Y7
2,000,000
285,714.29
285,714.29
1,714,285.71
100,000.00
5%
2,000,000
285,714.29
571,428.57
1,428,571.43
85,714.29
2,000,000
285,714.29
857,142.86
1,142,857.14
71,428.57
2,000,000
285,714.29
1,142,857.14
857,142.86
57,142.86
2,000,000
285,714.29
1,428,571.43
571,428.57
42,857.14
2,000,000
285,714.29
1,714,285.71
285,714.29
28,571.43
2,000,000
285,714.29
2,000,000.00
14,285.71
70

INCOME STATEMENT FOR WAREHOUSING BUSINESS
Income Statement Warehousing Business

Net Sales
Storage Sales
Handling Sales
Direct Cost
G&A
EBITDA
Amortisation
Interest
Gross Profit
Tax (28%)
Net Profit
Rate of Gross Profit
2014
2015
2016
2017
2018
1,445,648
1,542,360
1,643,377
1,748,825
1,726,886
1,175,332
1,257,434.88
1,343,458.57
1,433,527.98
1,419,325.98
284,925.36
299,918.90
315,296.89
307,559.84
440,205.10
469,036.43
499,132.18
492,870.56
154,344
155,887
157,446
159,021
947,811
1,018,454
1,092,246
1,074,995
443,675
445,893
448,123
450,364
85,714
71,429
57,143
42,857
418,422
501,132
586,981
581,774
117,158
140,317
164,355
162,897
301,264
360,815
422,626
418,877
27%
30%
34%
34%
270,316
412,603
152,816
880,230
441,468
100,000
338,762
94,853
243,909
23%
71

INCOME STATEMENT FOR LOGISTICS VALUE-ADDED SERVICES
Income Statement Logistics VAS
2014
2015
2016
2017
2018
5%
72,282.4
77,118.0
82,168.9
87,441.2
86,344.3
Direct Cost / (% of Storage Revenue )
40%
28,913.0
30,847.2
32,867.5
34,976.5
34,537.7
G&A / (% of Storage Revenue )
20%
14,456.5
15,423.6
16,433.8
17,488.2
17,268.9
28,912.96
30,847.20
32,867.55
34,976.50
34,537.72
Tax (28%)
8,095.63
8,637.22
9,202.91
9,793.42
9,670.56
Net Profit
20,817
22,210
23,665
25,183
24,867
40%
40%
40%
40%
40%
Net Sales Logistique sevices / (% of Storage Revenue )
Gross Profit
72

CONSOLIDATED INCOME STATEMENT
Consolidated Income Statement
2014
2015
2016
2017
2018
Net Sales
2,695,906
2,870,447
3,047,027
3,193,859
3,207,317
Direct cost
1,085,658
1,162,950
1,240,570
1,300,975
1,323,151
261,510
269,845
278,040
283,542
287,817
1,348,738
1,437,652
1,528,417
1,609,341
1,596,350
Depreciation
611,468
623,675
635,893
643,123
650,364
Interest
134,000
114,514
94,229
72,743
50,857
Gross Profit
603,270
699,463
798,295
893,476
895,129
Tax (28%)
161,848
188,344
215,594
242,028
242,272
Net Profit
441,422
511,119
582,702
651,448
652,857
22%
24%
26%
28%
28%
Rate of Net Profit
16%
18%
19%
20%
20%
General & Admin

EBIDTA
73

CONSOLIDATED BALANCE SHEET
Consolidated Balance Sheet
12/31/2013
12/31/2014
12/31/2015
12/31/2016
12/31/2017
12/31/2018
3,000,000
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
Depreciation
611,468
623,675
635,893
643,123
650,364
Accumulated Depreciation
611,468
1,235,143
1,871,036
2,514,159
3,164,523
Net Book Value
3,388,532
2,764,857
2,128,964
1,485,841
835,477
Total Fixed Assets
3,388,532
2,764,857
2,128,964
1,485,841
835,477
449,318
478,408
507,838
532,310
534,553
Fixed Assets (Gross Book Value)
Inventory
Account Receivable
Cash
1,000,000
1,230,188
1,857,450
2,568,258
3,358,761
4,174,585
Total Assets
4,000,000
5,068,038
5,100,715
5,205,060
5,376,911
5,544,615
Capital
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
441,422
511,119
582,702
651,448
652,857
441,422
952,541
1,535,243
2,186,691
Profit
Retained earnings
Equity
2,000,000
2,441,422
2,952,541
3,535,243
4,186,691
4,839,549
LT loan
3,000,000
2,514,286
2,028,571
1,542,857
1,057,143
571,429
112,329
119,602
126,959
133,077
133,638
Account Payable
Liabilities
3,000,000
2,626,615
2,148,173
1,669,817
1,190,220
705,067
Total Liability + Equity
5,000,000
5,068,038
5,100,715
5,205,060
5,376,911
5,544,615
74

CONSOLIDATED CASH FLOW STATEMENT
Consolidated Cash Flow
2014
2015
2016
2017
2018
1,000,000
1,230,188
1,857,450
2,568,258
3,358,761
Net Profit
441,422
511,119
582,702
651,448
652,857
Depreciation
611,468
623,675
635,893
643,123
650,364
(+) Var Account Payable
112,329
7,273
7,358
6,118
561
(449,318)
(29,090)
(29,430)
(24,472)
(2,243)
715,902
1,112,976
1,196,522
1,276,217
1,301,539
(485,714)
(485,714)
(485,714)
(485,714)
(485,714)
(485,714)
(485,714)
(485,714)
(485,714)
(485,714)
Investment
Capital increase
1,230,188
1,857,450
2,568,258
3,358,761
4,174,585
Cash beginning of the year

Cash from operation
(-) Var Account Receivable

Cash generated from operation
Cash from financing
Loan Repayment
Borrowing
Cash generated form Financing
Cash from Investment
Cash generated from Investment

Cash end of the year
75

FINANCIAL DATA
Financial Data
2014
2015
2016
2017
2018
Net Profit
441,422.45
511,119.01
582,701.62
651,448.09
652,857.49
Depreciation
611,467.71
623,675.05
635,893.42
643,122.89
650,363.51
(+) Var Account Payable
112,329.42
7,272.53
7,357.53
6,117.97
560.78
(-) Var Account Receivable
(449,317.67)
(29,090.11)
(29,430.12)
(24,471.88)
(2,243.13)
Cash generated from ops
717,915.91
1,114,991.48
1,198,538.45
1,278,234.07
1,303,556.66
(485,714.29)
(485,714.29)
(485,714.29)
(485,714.29)
(485,714.29)
232,201.62
629,277.20
712,824.16
792,519.78
817,842.37
Loan Repayment
Free Cash Flow
Terminal Value
6,815,353.09
FCF
232,201.62
629,277.20
712,824.16
792,519.78
7,633,195.46
1.00
0.87
0.76
0.66
0.57
232,202
547,198
538,997
521,095
4,364,304
Present value factor

Present value
Net Present Value
6,203,796
IRR
Return desire
Timing ground
Cap rate on term value
IRR
46%
15%
TBA
0
12%
TBA
(2,000,000.00)
232,201.62
629,277.20
712,824.16
792,519.78
7,633,195.46
76
DISCLAIMER
Rock River Capital Ltd. has performed certain feasibility review procedure solely to assit the internal decision making process of
Toda Industries, in relation to their contemplated logistics business in Vietnam.
Our work is based on publicly available information and the expected results of the unforeseen future business operation.
Accordingly, we do not express any opinion or assurance on any of the information contained in our report, and there is no any
compensation directly and indirectly relate to the investment decision making based on the content of the report.
Our report is solely for the purpose of assisting Toda Industries for the feasibility analysis of logistics business in Vietnam. In
addition, this report should not be used, circulated, quoted, or otherwise referred to, for any other purposes, nor should it be
made available to any parties without our prior consent in writing.
67

Feasibility Study

Hochgeladen von

Dokumentinformationen

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Feasibility Study

Hochgeladen von

Copyright:

Verfügbare Formate

FEASIBILITY STUDY OF

5th March 2013

Legal Aspects of Logistics in Vietnam

Overview of Vietnam Logistics Industry

Vietnam Transportation Sector

Vietnam Warehousing & Distribution Sector

Target & Potential Customers

Financial Feasibility Study

Private & Confidential

GENERAL CONDITIONS FOR ENGAGING IN LOGISTIC SERVICE BUSINESS

Having lawful business registration or investment certificate under laws of Vietnam;

For maritime transport services:

Having lawful business registration or investment

GENERAL CONDITIONS FOR ENGAGING IN LOGISTIC SERVICES RELATING TO TRANSPORT

Having sufficient facilities, equipment and tools

For services of loading and unloading of goods, the

Company is under or equal to 50% of the charter

For goods warehousing and storage services, the

Company is under or equal to 51% of the charter

For transport agency services, the required foreign

under or equal to 49% of the charter capital;

investors is under or equal to 51% of the charter

For other subsidiary services, the required foreign

capital contribution percentage of the Company is

SPECIFIC CONDITIONS FOR ENGAGING IN TRANSPORT BUSINESS

Private & Confidential

SPECIFIC CONDITIONS FOR ENGAGING IN TRANSPORT BUSINESS

Private & Confidential

SPECIFIC CONDITIONS FOR ENGAGING IN TRANSPORT BUSINESS

b) Inland waterway transport

Having registered for inland waterway transport business;

Private & Confidential

SPECIFIC CONDITIONS FOR ENGAGING IN TRANSPORT BUSINESS

Head office and principal place of the Company must be in Vietnam;

d) Railway transport business:

Private & Confidential

SPECIFIC CONDITIONS FOR ENGAGING IN TRANSPORT BUSINESS

Having a business registration or investment certificate under law.

Having at least one (1) customs agent.

Private & Confidential

LAW ON MULTIMODAL TRANSPORT

Maintaining minimum assets equivalent to SDR 80.000 or providing an equivalent guarantee;

Possessing a license for international multimodal transport business.

b) Conditions for the domestic multimodal transport business:

Having a contract on professional liability insurance for multimodal transport;

Private & Confidential

RIGHTS & OBLIGATIONS OF THE COMPANY PROVIDING LOGISTIC SERVICES

Private & Confidential

LIABILITY OF THE LOGISTICS COMPANY

Private & Confidential

LIABILITY OF THE LOGISTICS COMPANY

Private & Confidential

LIABILITY OF THE LOGISTICS COMPANY

Private & Confidential

FORMATION OF THE COMPANY

b) Forms of the Company:

Private & Confidential

FORMATION OF THE COMPANY

Private & Confidential

FORMATION OF THE COMPANY

Freight rail transport

Urban, rural & inter-province transport

Freight transport by road

Transport by truck, container truck, specialized vehicles