Monday, August 19 2019

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Mekong Delta needs to develop logistics to cut export costs: conference

Update: April, 25/2019 - 10:28
Developing logistics is an urgent requirement to develop the Cửu Long (Mekong) Delta’s economy, a conference on improving its agriculture and aquaculture value chains heard in Cần Thơ City on Tuesday. — Photo dauthau.vn

CẦN THƠ — Developing logistics is an urgent requirement to develop the Cửu Long (Mekong) Delta’s economy, a conference on improving its agriculture and aquaculture value chains heard in Cần Thơ City on Tuesday.

Nguyễn Minh Toại, director of the city’s Department of Industry and Trade, told the conference that the delta, as a paddy and aquaculture hub of the country, accounted for 40 per cent of the country’s agriculture.

Over 50 per cent of the rice supply and 90 per cent of exports are from there as are 65 per cent and 70 per cent of the aquaculture and fruit production, he said.

The demand for transporting these products, some 17-18 million tonnes of them a year, is huge.

But 70 per cent of it is transported to ports in places like HCM City and Bà Rịa-Vũng Tàu for export, increasing costs by 10-40 per cent, the conference heard.

There is thus enormous potential to develop logistic centres in the area and attract investors to the sector, experts said.

Toại said: “Developing logistics in Cần Thơ is an urgent requirement to develop the regional economy.”

Hồ Thị Thu Hoà, head of the Việt Nam Logistics Research and Development Institute, said Cần Thơ City and provinces in the delta should make strong efforts to develop the logistics sector.

A national plan for logistics development by 2015 included two logistic centres in the region but they remain on paper, she said.

No logistics, higher costs

Companies blamed the logistic inadequacy in the region for pushing up costs.

Chu Văn An, permanent deputy general director of Minh Phú Seafood Corporation, said every year his company exports 7,000 containers of shrimp worth US$850 million.

It takes 30 hours to reach HCM City by river and so his company uses road transport for it, he said.

“It costs VNĐ11 million ($520) to transport a container from Cà Mau to HCM City and VNĐ7 million ($300) from Hậu Giang to HCM City. For 7,000 containers a year, we have to pay VNĐ60 billion.”

If the infrastructure sector is developed, companies can directly export from the delta and cut 30-40 per cent of their costs and become more competitive, he said.

Lê Duy Hiệp, chairman of the Việt Nam Logistics Business Association, told the conference that the delta is the country’s agricultural export hub but logistics cost them 20-25 per cent compared to 10-15 per cent in neighbouring countries.

But he warned that setting up a logistics system in the region would be highly challenging.  VNS

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