Hanoi, Vietnam, August 11, 2020—IFC,
a member of the World Bank Group, is providing a financing package of $70
million to Indo Trans Logistics Corporation of Vietnam. The aim is to support
the development of the logistics sector, thus facilitating trade and enhancing
competitiveness of the country’s economy in the time of COVID-19.
Vietnam’s logistics sector has enjoyed strong
growth over the past few years. This can be attributed to the record-high
foreign investment mainly in manufacturing and processing industries—both
require a strong logistics function—and booming local consumption.
However, the logistics sector is fragmented
with more than 95 percent of service providers being local small and medium
enterprises with modest operations and lower competitiveness. Consequently,
a few players with foreign investment lead the market, providing high value-added
services. In view of this, the government is implementing a comprehensive
plan to boost competitiveness of the domestic logistic segment.
IFC’s investment—first in the Vietnamese
logistics sector—is especially timely when long-term funding is not readily
available due to the COVID-19 situation. This funding will help ITL, one
of the leading domestic logistic companies in Vietnam, transform and grow
by acquiring new assets, developing new warehouses and facilities, and
deploying advanced information technology systems.
Further, this will enable ITL to provide
higher quality and sophisticated logistics services to its customers including
local manufacturers and small and medium enterprises.
“IFC’s long-term funding and international
expertise, especially in the context of the current pandemic, is a highly
valuable support which will certainly enable us to improve the efficiency
of ITL’s existing logistic assets and to expand our network and business
portfolio to serve our customers better,” said Ben Anh, ITL Chief Executive
In addition, IFC will also help the company
improve its environmental, social, and corporate governance standards for
High logistics costs impact the overall cost
of doing business and negatively affect Vietnam’s competitiveness both
globally and domestically. “This is why, despite uncertainties amid the
ongoing pandemic, IFC is steadfast in its commitment to support essential
investment in Vietnam’s logistics supply chain to help facilitate more
efficient and competitive trade,” said Kyle Kelhofer, IFC Country Manager
for Vietnam, Cambodia, and Lao PDR.
He added, “IFC’s investment in companies
like ITL aims to support the growth of domestic private logistics firms
capable of providing comprehensive and efficient logistics services. This
will help improve the sector’s capacity to serve the growing higher value-added
manufacturing and processing industries, which require a more sophisticated,
efficient, and lower-cost logistic function.”
IFC—a sister organization of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work in more than 100 countries, using our
capital, expertise, and influence to create markets and opportunities in
developing countries. In fiscal year 2019, we invested more than $19 billion
in private companies and financial institutions in developing countries,
leveraging the power of the private sector to end extreme poverty and boost
shared prosperity. For more information, visit www.ifc.org.