FM Logistic breaks ground on US$30m DC in Vietnam

52,000sqm distribution centre near Hanoi will increase French group’s warehousing space in the country almost tenfold at a time class A warehousing is in high demand.

French logistics and freight transport company FM Logistic has begun construction of first owned warehouse in Vietnam, a US$30 million warehouse and distribution centre in Bac Ninh, 20km northeast of Hanoi, to tap into the fast-growing outsourced logistics market in Vietnam. 

Once completed, the new multi-client facility will employ around 300 people and provide 52,000 sqm (560,000 sq ft) of storage space for up to 70,000 pallets. Completion of the first phase of 21,000 sqm is expected in spring 2020.

“The Bac Ninh warehouse and distribution centre will support the development of food, retail, FMCG, industrial and cosmetics companies on the booming Vietnamese market,” said Hamza Harti, country managing director for Vietnam at FM Logistic. “It will also increase FM Logistic’s warehousing space in Vietnam almost tenfold, at a moment when class A-warehousing is in high demand. This testifies to our commitment to investing in Vietnam.”

The facility has been designed by FM Logistic’s sister company NG Concept, a logistics real estate company,to handle a wide range of items, including temperature-sensitive products, fast-moving consumer goods, electronic appliances, spare parts and hazardous products. Services offered at the warehouse will include storage according to the products’ temperature requirements, handling, co-packing – or ‘value-added services’, as they are called in Vietnam – and distribution.

The flow optimisation inside and outside the facility make it suitable for high-demanding modern retail operations, FM said.

Among the customers interested in the Bac Ninh distribution centre is Brenntag, a global market leader in chemical distribution. “After one year of satisfying collaboration with FM Logistic in Bac Ninh, we have decided to expand the cooperation to temperature-controlled products,” said Vuong Le Minh, supply chain senior manager for Brenntag Vietnam. “The new distribution centre will provide us with more space to absorb our important growth.”

FM said the demand for logistics services is rising in Vietnam, one of the world’s fastest growing economies with a GDP growth of 7% in 2018. “The increasing domestic manufacturing, the rise in wages and consumption, the young population and booming e-commerce are also driving the Vietnamese logistics market,” the company added. “This presents opportunity for international 3PL companies providing value-added logistics services and last-mile delivery.”

The company began operations in Vietnam in August 2017, and in 2018 it started providing nationwide transport services, using a network of partners. Its operations in Vietnam include a rented 5,000 sqm temperature-controlled warehouse in Hanoi, and from May 2019, FM Logistic will also start operating a rented 6,500 sqm warehouse in An Phu, Binh Duong, less than 30km north of Ho Chi Minh City.

The ambitious logistics group last month announced plans to invest US$150 million in India over the next five years in building up its stock of warehouses and distribution centres, tapping into growth stimulated by India’s recent indirect tax reform.The logistics group’s expanded focus on India follows its acquisition of Pune-based Spear Logistics in 2016, with the latest investment “partly motivated by the growth potential in logistics offered by the Goods and Services Tax, or GST, implemented by the Indian authorities”.

As part of the investment, FM Logistic will start operating a multi-client facility in Delhi National Capital Region in April 2019 and enlarge its multi-client warehouse in Mumbai. It is also planning to build a 70,000 sqm warehouse in in Jhajjar, near Gurugram. The expansion is expected to lead to the creation of almost 500 jobs.

And in February, the French logistics and transport services provider opened a €20 million dedicated cold storage warehouse in Bucharest to meet demand from the growing pharma and healthcare industry in Romania.The facility provides an area of 10,000 sqm for the receipt, storage and distribution of temperature-sensitive materials, such as vaccines, pharmaceuticals and medical supplies.

Founded in France in 1967, FM Logistic is a family-owned independent logistics company with revenues of €1.2 billion in the fiscal year to March 2018, two-thirds of which made outside of France. It is active in 14 countries across Europe, Asia and Latin America (Brazil) and employs about 28,000 people.

Source: Lloyd’s